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A STUDY ON ONLINE MARKETING
1. INTRODUCTION
Over the past few years, there has been an explosion in the online world - an explosion
that is also a harbinger of how business will operate in the future. Supply chains are being
rethought, products and services reconfigured, and business models revamped. As such, the
Internet is having a profound impact on the way business is being conducted in ways that are
often disruptive to traditional methods. This is creating new challenges and opportunities. The
Internet provides the opportunity for companies to reach a wider audience and create compelling
value propositions never before possible (e.g. Amazon.com range of 4.5 million book titles),
while providing new tools for promotion, interaction and relationship building. It is empowering
customers with more options and more information to make informed decisions. The Internet
also represents a fundamental shift in how buyers and sellers interact, as they face each other
through an electronic connection, and its interactivity provides the opportunity for brands to
establish a dialogue with customers in a one-on-one setting. As such, the Internet is changing
fundamentals about customers, relationships, service and brands, and is triggering the need fornew brand-building strategies and tools.
In the midst of this, aggressive Internet start-ups have emerged, creating strong brands
that are putting established brands at risk. Internet companies such as Yahoo!, Amazon.com,
America Online (AOL) and eBay have been able to build powerful brands in a few years,
whereas it has taken decades for traditional companies to achieve the client base, customer
affiliation and level of sales, which these Internet start-ups have achieved.
As a result, harnessing the reach and interactivity of the Internet to build and maintain
brands has become extremely important. For pure online players, who are essentially intangible,
brands are even more critical as customers have little to go on other than a recognised brand.
Given the tremendous clutter in today's e-commerce marketplace, and the high cost of acquiring
online customers, the most successful sites will be those that can attract customers and build
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brand loyalty and enthusiasm that extends the brand-customer relationship beyond a single
transaction. A Business Week survey found out that 57% of Internet users go to the same sites
over and over again, rather than drifting from site to site1. Therefore, building awareness,
attracting traffic or eyeballs, turning browsers into buyers, and turning first-time buyers into
loyal repeat customers has become the Holy Grail of online marketing strategies. However, as
the need to build brand loyalty online is reaching a peak, there is a growing recognition that
traditional methods are no longer suited to this new interactive environment. As such, companies
lack a coherent framework and concrete methods to build an online brand. In light of this, this
dissertation seeks to explore how companies should go about building a successful Internet brand
and to identify the critical factors that must be considered.
During the last 3 years, there has been a rupture on the bubbles of the Dotcom industry.
The disruption of the global Dotcom industry, the loss of investors confidence, the assai lance
from hackers and code-breakers, the bankruptcy of many start-up giants (including Boo.com and
Goodsonline.com) made many pessimistic souls believe at the doomsday of the industry in a not-
too-distant future. But according to experts, Dotcom industry is still a fledging and promising
one. According to Hoffman, the online purchase will occupy up to 35% of the total figure in the
next 30 years. By the way, the competition between the start-ups will be more fiercely than ever.
In the era of digital technology, companies compete not only in price and quality, but also in
brand name. Therefore, building a successful brand name on Internet is a vital task, especially to
cyber companies.
ANALYSIS DONE BY KALAM SOFTWARE TECHNOLOGY
This chapter provides an analysis of six companies. Each case is presented in the same format
including, a company overview, its value proposition, the sources of added value (using the 7Cs
Framework), its brand-building strategy (how it generates traffic), and other key factors that havecontributed to its success (or failure).
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COMPANY OVERVIEW
In April 1994, Yahoo! was founded by David Filo and Jerry Yang, two PhD students at
Stanford University, who started an online guide as a way to keep track of their personal interests
on the Internet. The concept exploded (through word-of-mouth) and in less than six months, the
site was receiving 1 million hits per day. Yahoo! has since promoted from an ordinary search
service into a global Internet communications, commerce and media company that offers a
comprehensive branded network of services and information to more than 145 million
individuals each month world-wide, and is one of the few Internet companies to turn a profit
early in the development of the Internet.
As the first online navigational guide to the web, Yahoo! is a leading guide in terms of
traffic, advertising, household and business user reach. Yahoo! is one of the most recognised
brands on the Internet and is the 53rd most valuable brand in the world. The company's global
web network includes 23 world properties outside the US.
VALUE PROPOSITION
At the core of Yahoos value proposition, lies the directory - a hand tailored and easy-to-
use guide to the Internet that becomes more useful each day as Internet penetration, the amount
of information, and the number of websites continues to explode. According to CEO of Yahoo!,
We've set out to make Yahoo! the only place anyone needs to go to get connected to anything.
There's nothing in the real world to compare to that1. As such, Yahoo! offers a range of
supporting services that add value, from e-mail services to stock quotes and much more, all in a
single location.
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SOURCES OF VALUETHE 7Cs FRAMEWORK
Convenience
Central to Yahoos success, is the way it has structured and displayed information. Their
goal is not to list everything under the sun, but instead to be selective and to display the best the
web has to offer in a hierarchical framework that makes sense to customers. They have kept the
design of the site simple and clean to appeal to customers and avoid slow-to-load graphics. More
recently, Yahoo! extended its convenience through its Yahoo! Everywhere service, to allow
access, regardless of platform (i.e. mobiles, TVs, Palm computers).
Content
Yahoo! has pursued a broad range of deals with content and commerce companies. These
have helped Yahoo! become the place to track down a broad range of valuable information and
resources, ranging from daily news and weather reports to road maps and books, and have been
at the heart of Yahoos growth and development. They have formed multiple alliances and
partnerships with leading online companies such as Amazon.com and CD-now. Their thrust has
been to provide valuable content to customers, while providing partners access to a large
customer base. This creates a win-win situation as it satisfies Yahoo!, the partner, and more
importantly, the end-user.
Customisation
My Yahoo! allows surfers to customise their view of Yahoo! and pick favourite topics,
from stocks and sports results to weather and air fares, and is similar to a custom tailored
newspaper. By tailoring the information to users' preferences, Yahoo! has increased customer
loyalty and retention rates.
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Community
Yahoo! has developed customisable web communities called Yahoo! Clubs, where
groups of people with shared interests can communicate through chat, message boards, and e-
mail. In 1999, Yahoo! acquired Geo-Cities, (one of the largest online communities) which
provide easy-to-use and innovative tools to allow users to publish content on the site. Yahoos
recent acquisition of e-Groups (an e-mail group communication service) will provide consumers
with powerful new ways of communicating one-to-one, one-to-many, and many-to-many.
One of the most recognized Yahoo! communities is the famous Yahoo! Messenger. Built
from 1995, with more than 100,000 chat rooms and widely varying topics, from public health to
movies, from sports to politics, Yahoo! Messenger attracts more than 1 million chatters daily,
and spreads its communication through word-of-mouth faster than anything else. In some
countries like Vietnam and China, Yahoo! Messenger has become a cultural phenomenon, where
an ordinary chatter spends no less than 3 hours daily on Yahoo! Messenger to meet his or her e-
pals.
Connectivity
Connectivity is Yahoos core product, and the nature of the navigation business, and is
driving Yahoos multiple partnerships and alliances, to provide its customer base with access to
useful links and content. In addition, Yahoo! has also implemented campaigns to persuade users
to bookmark the site, or to make it their home page.
Customer Care
Yahoo! responds to customer inquiries via e-mail, fax, telephone and even traditional
mail, and plans to incorporate other features such as online chat to facilitate communications.
Yahoo! spends more on customer support than most companies, reinforcing the brand customer
relationship, and contributing to their reputation as a quality service provider.
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Communication
By positioning itself as a site that users frequently visit, and through communications via
email, Yahoo! maintains close contact with customers. Yahoo! also encourages customers to e-
mail ideas and feedback.
BRAND-BUILDING STRATEGY
Yahoo! is a marketing machine. It is often highly praised for its brand-building ability
and promotion strategies through the use of traditional (offline) media and guerrilla marketing
techniques to build awareness, and according to Intellect-quest, 82% of Internet users and 23%
of people intending to go online, recognise the name Yahoo!.
Yahoos brand-building success starts with its name, and its implications of a good time.
Given the unease with which the average consumer approaches technology, Yahoo! avoided
characterising itself as a technology-oriented company, and the company has always
communicated the utility of its service in a way that reinforces other.
Core brand attributes a sense of irreverence, an approachable nature, and an inherent
friendliness. While Internet companies were targeting existing Internet users through the use of
online promotion methods, Yahoo! extended beyond this to use traditional offline media. At the
time this was considered a breakthrough, and it formed a critical link in Yahoos brand building
strategy. Their strategy was to target near surfers - people who are not yet online but are likely
to use the Internet in the near future. These near surfers represented (and still do) a large and fast
growing group and, therefore, by building a recognised brand name, Yahoo! would be one of the
first sites that they visited. This was especially important, as experience surfers tend to be loyal
to their search engine. As a result, Yahoo! aggressively promoted the site through public
relations, TV commercials and radio spots during drive time. In 1996, they hired Black Rocket to
create a brand awareness campaign that became very successful through the development of the
tag line Do You Yahoo!? which conveyed the brand's irreverent personality.
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In addition, Yahoo! adopted guerrilla marketing techniques - with its name being
plastered on everything, from the Zamboni ice-shaving machine of the San Jose Sharks (Ice
Hockey Team) to over 120 products, including backpacks, T-shirts, breath mints, parachutes,
snowboards, sailboats, and yo-yos, as well as TV shows (Ally, ER) and Hollywood movies.
They even have a barter deal with the San Francisco 49ers, which has fans screaming Yahoo! to
cheer their team as the Yahoos logo flashes across the football stadium screen. They also
teamed up with publisher Ziff-Davis Co. to create Yahoo! Internet Life, a monthly magazine
guide to what's new on the web and it has co-branded products, services and contests with well
known brands such as Ben & Jerry's, Visa and MCI. Yahoo! has paid little for this exposure,
which has been instrumental in establishing Yahoo! as a household name. Although this seems
like a shotgun approach, it is in fact a carefully orchestrated campaign that requires each
branding opportunity to meet one strict test - it must reinforce the image of the company as a
service that is fun, a little wacky and inviting. Once customers access the site, customers
quickly discover its value and through a high quality experience (7Cs), Yahoo! has managed to
cultivate high brand loyalty. According to a recent study, 92% of Yahoo! users rate the service as
excellent or very good which is significantly higher than those of other sites, and 76% turned
to Yahoo! before visiting another search engine or navigational site. In addition, the research
shows that 73% of Yahoo! users bookmark the service - higher than all other services.
According to Karen Edwards, VP-Brand Marketing, Yahoo's ability to quickly pick up on
users interests has been a key factor contributing to their success, stating that if we wait to hear
about it in the news, it's too late. We need to be one step ahead in order to have a better service
than our competition. Their innovation, new services and customised features highlight their
ability to relate to customers' needs.
The nature of brands
Introduction
Brands are made up of many layers and dimensions. In this chapter, these layers are
unravelled to reveal the nature of brands and their reason for existence. The chapter proceeds to
describe the influence of brands on the buying process, and the importance of customer
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satisfaction and brand loyalty. The concept of brand equity is outlined, explaining the value of
brands, both to customers, and to companies. These concepts are central to brands and brand-
building, whether online or offline and they form the backbone of this dissertation.
WHAT IS A BRAND?
A mixture of tangible and intangible attributes symbolised in a trademark, which, if
properly managed, creates influence and generates value
This definition truly captures the essence of a brand, and highlights the importance of
brand management. Branding is about creating value, both for customers, and for the
company. This value stems from the products and services that companies create and bring to the
market, but extends further to encompass added values derived from factors such as the brand-
customer relationship, the brand's emotional benefits and its self-expressive benefits.
THE LAYERS OF A BRAND
Brands are made up of four layers - the core product or service, the basic brand, the
augmented brand and the potential brand.
The core Product / Service
At the most basic level, customers buy products to meet certain functional needs.
However, most products and services cannot survive on functionality alone as this is usually
matched in time. The most common barrier to competition is building a brand.
The Basic Brand
The basic brand consists of the name, term, sign, symbol, or design, or a combination of
them, intended to identify the goods and services of one seller or group of sellers and to
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differentiate them from those of competitors2. Essentially, this should support the offering's
performance and differentiate the brand from those of competitors.
The Augmented Brand
Successful companies seek a competitive edge through the enlargement of the core
product or service, with supplementary products and services (e.g. information, quick delivery)
that enhance the customers total purchasing and use experience. These products and services
add value and make the offering much more difficult for competitors to emulate.
The Potential Brand
A brand achieves its potential when added values are so great that customers will not
willingly accept substitutes, even when the alternatives are substantially cheaper or more readily
available (e.g. Coca-Cola, Kodak, Levi's).
PRODUCT AND SERVICE BRANDS
Product brands are the original brand carriers. They are the historical core of branding
because they are the most prevalent, and because they most readily come to mind when
consumers are asked to recall brands. For instance: Ford, Motorola, Coke, Honda, etc.
Service Brands (intangible) are much less numerous than their product counter parts.
Intangible services are also more challenging to package and sell to consumers who often have
difficulty conceptualising, preferring things they can see and touch. Certain service brands, such
as in retailing, actually sell products, but the brand itself is the store, not the products it sells -
The Gap stores, Southwest Airlines and Amazon.com are examples. In fact, this is the case with
all Internet companies, as they essentially perform the function of a virtual intermediary or
infomediary and are intangible.
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Need for the Study
The study concentrates on the field of global Dotcom industry, the significance of brand
name to a cyber company, and how to build up a successful brand.
The study also shows the perception and awareness of people towards some brand names,
and which brand they want to deal with most. The study reveals the dotcoms chance of viability
in the market to tap the potential customers and to increase their market share, as well as its
position in the customers mind.
The need of the study emphasises on the market research of the brands. The study helps
in analysing the viability of some brand names.
During the study, I tried to find out the potential customers and collect relevant
information, as well as to analyze the information which may help cyber companies to formulate
their brand building strategies in accordance with customers mind and perception, therefore
make contribution to their market share increase in the future.
Scope of the Study
To understand what vital role a brand name might play in contributing to the success of a
cyber company, it will be necessary to understand the context of current issues within the
Dotcom industry and to identify the main players within the Dotcom industry, their brand
building strategies, their successes and failures, and lessons from them.
The project work covers brand building strategies with special reference to six typical cyber
companies, including:
Amazon.com
Fashion mall.com
CD-now
EBay
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Conclusion: Discusses the key findings and areas for further research.
Methodology Assumption
This section outlines the procedure followed in collecting data and analyzing it.
a). Method of collection:
The survey was conducted to collect primary data both quantitative and qualitative. Data was
sought from cyber companies and e-customers.
b). Type of data used:
Both primary data and secondary data where used. Primary data was obtained from direct
interviews with e-customers, web-users, and potential purchasers. Secondary data was obtained
from sources like brochures of cyber companies, Web sites, Magazines, and Books etc.
c) Tools for data collection:
The primary data was collected with the help of questionnaire. The questionnaire was designed
to obtain necessary information that can help me to fulfill this study. The questionnaire was
administered by me through direct visit to institutes, companies, administration offices, and
residences, and by collecting them from the respondents at a later date in some cases.
d) Sample size:
Keeping in mind the budgetary, time and manpower constraints, the total sample selected was
100 all of them were conducted in Chennai,
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e) Assumption:
The information from the respondents has been treated as the correct information. Though the
sample size is limited to 100, I felt it is good enough to come to conclusion about how to build a
recognized brand name on Internet.
To analyze and interpret the primary data, I had used percentage analysis, which suits the
best.
INTRODUCTION
The Internet is transforming the business environment, creating new challenges and
opportunities. This chapter provides an overview of the Internet and its defining characteristics,
highlighting the key developments that have contributed to its explosive growth and its impact
on the business environment.
OVERVIEW OF THE INTERNET
The Internet is a world-wide network of networks. In essence, it is a common technology
platform that allows computing devices to communicate with each other. In doing so, it offers a
number of alternative channels that enable businesses and people to communicate. The three core
channels include e-mail (the most common), news groups and mailing lists, and the world wide
web (www).
The World Wide Web (www) is a large network of documents, which contain hypertext
and pictures, and provides the opportunity for dynamic interaction. Hypertext allows information
to be organised in a user-friendly way that is easily accessible. Information is becoming a major
part of the products and services that people buy, and a critical source of added value
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each other through an electronic connection. There is no need to travel to a physical location, no
order book, and no cash register. Instead there is a website.
The value of e-commerce transactions and market forecasts vary widely among research firms
and government agencies. However, they all project the value e-commerce transactions to grow
at unprecedented rates.
THE IMPACT OF THE INTERNET ON BUSINESS
The Internet has had a profound impact on the way business is being conducted - how companies
operate, how they compete and how they serve their customers - and revolutionary new business
models are emerging, which are often disruptive to traditional business models. Although the
particular impact will differ between industries, a number of sweeping impacts are identifiable:
The Development of Electronic Intermediation
The Internet is enabling companies to break through organisational and geographic boundaries to
create new structures that link businesses virtually (electronically) with customers, suppliers,
partners and other corporate constituencies.
Improved Core Business Processes
The use of Internet-based technologies as the platform, over which the organisations processes
flow, represents a level of efficiency and integration previously unattainable. For example,
CISCO e-enabled its financial systems and now has the capability to close its financial year
within one day.
Globalisation of Business
The Internet facilitates the globalisation of business by providing access to a global audience. A
virtual presence can mitigate the cost of having to invest in physical facilities. The Internet
also facilitates the development and co-ordination of global activities (e.g. through the use of
extranets).
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value through the provision of information on the products or services they buy, as well as on
topics of interest related to the brand and product characteristics.
Traditionally, brands have been developed in an environment whereby a company creates a
brand, and projects it onto a third party intermediary (the media). In response, many unnamed
customers develop a relationship with the brand. The Internet, on the ot her hand, offers
interactivity, whereby the company can establish a dialogue and interact with individual
consumers on a one-to-one basis. In doing so, a company can listen, learn, understand and relate
to customers, rather than simply speaking at customers. This creates the opportunity for
companies to build stronger relationships than previously attainable. However, this also poses a
challenge as these relationships may take on a life and character of their own.
THE IMPORTANCE OF ONLINE CUSTOMER LOYALTY
According to a recent study8, 75% of senior executives believe the success of an e-business
initiative depends entirely on its ability to build customer loyalty. In fact, it could be argued that
customer loyalty is even more critical online. Which identified the following factors?
- Companies will not break-even on one-time shoppers - often, customer acquisition costs are
high, and to recover their investment, companies need to retain customers so that they return to
the site repeatedly. Many e-retailers ('e-retailers') are averaging more than $100 to acquire a new
customer, and some are spending over $500. Therefore, it is very unlikely that an online retailer
can break even on a one-time shopper, unless they are selling high-price, high-margin items.
- Repeat purchasers spend more and generate larger transactions - due to morefrequent shopping and larger purchases.
- Repeat customers refer more people and bring in more business - word-of-mouthis the single most effective and economical way online businesses grow their
sites.
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- Loyal customers are more willing to buy other products from the company. Forexample, almost 70% of The Gap online shoppers said that they would consider
buying furniture from The Gap. Repeat purchasing not only binds trust, but also
provides more opportunities for cross-selling.
These points stress the importance of online customer loyalty, and with customers holding all the
power, companies must ensure that they provide a completely satisfying end-to-end customer
experience. This is further reinforced by the fact that, on average, a disgruntled online customer
tells 10 people about a poor experience.
CASE STUDY: GAP.COM
COMPANY OVERVIEW
Gap opened its first store in San Francisco in 1969, and today it is the 29 th most valuable
brand in the world. The Gap offers a balance of modern and seasonal styles of clothing, from
jeans and T-shirts to khakis and jackets. Its reach extends across more than 1,800 stores in the
US, Canada, UK, Germany and Japan. This success is largely due to their simple formula to
deliver style, service and value to everyone. In late 1997, Gap started selling items online - an
early convert to the then-revolutionary idea of clothes retailing on the Internet. Currently, online
sales are only available to US customers, and are still relatively small compared to Gap's $9
billion in annual sales; however, the growth prospects are enormous. Gap's online sales tripled in
1998 alone, and sales in 1999 amounted to $80 million, up from $20 million in 1998. Even the
collapse of the global Dotcom industry in middle 2000 showed a very little effect to Gap.com.
During the period of 2000-2001, Gap.com was the only cyber company who could claim profit.
Gap.com is an example of successful crossover marketing, and provides useful insight into howtraditional brands can leverage their strength online.
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Unlike the case of Boo.com, Gap's simple, standard styles are well suited to online clothes
shopping, and goods bought online get returned at the same rate as store purchases - as most Gap
online shoppers have a good idea of how Gap clothes fit. In order to integrate its offline and
online operations and logistics, Gap made a decision to charge sales tax on online sales. By
doing so, customers can return goods purchased online to their neighbourhood store, without
causing complications. This level of customer care is an important factor in making customers
feels more comfortable with online purchasing. In addition, Gap.com allows customers to track
the status of online purchases and provides contact information on the nearest store.
Gap does not provide any community features on its site. However, once customers are
registered online, Gap communicates with customers through customised e-mails, twice a month,
promoting its specials and including links directly to items on Gap's website. Gap.com also
provides a Gift Central feature which offers gift suggestion from Gap, GapKids, and BabyGap,
and customers can register to get e-mail reminders of upcoming holidays and birthdays.
The Gap site connects to other Gap online stores including GapKids and BabyGap. Gap has also
developed an affiliate programme, and had recently established marketing deals with AOL and
CDnow.
BRAND-BUILDING STRATEGYEXTENSIVE INTEGRATION
Gap.com has been able to piggy-back on The Gap's offline advertisements (in TV, Magazines,
billboards, etc.) that also promote the online store. In addition, it is fully leveraging its offline
presence to build awareness, by displaying the URL in store windows with the slogan
surf.shop.ship, on counter cards, on shopping bags and even on the cash register, which
displays Shop online at www.gap.com" on the display screens between transactions.
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Store clerks are also trained to look for products online for their customers if the store does not
have them in stock, or to refer shoppers to Gap's website. In certain high traffic Gap and
GapKids stores, the retailer has installed Web lounges that lure buyers with comfortable
couches and terminals hooked up to Gap.com. To convert walk-in shoppers to cybershoppers,
Gap has held in-store campaigns to get customers to submit their e-mail addresses, by offering a
10% discount and free shipping on their first online purchase. These efforts doubled the size of
Gap's e-mail database, providing a useful way to directly reach customers.
Most of Gap's online traffic is generated by leveraging its physical presence, however, Gap has
also supplemented this with online promotions:
-year commerce and marketing agreement with AOL that
gives Gap more visibility on the Internet by linking to the world's largest online shopping
destination: Shop@AOL marketplace.
flooded with e-mails form customers asking how they could buy a recording of the music played
in Gap TV commercials.
ncouraging sites to establish links to
gap.com in return for a 5% commission on every sale referred through the site.
-Card, whereby for every $100
a customer spends at Gap Online, they send the customer a $20 Gap Shop-Card, which can be
used towards future purchases, either online or in stores.
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Source: Survey
Interpretation: From the above table, it is clear that the majority of respondents have surfed on
Internet to check their e-mail (91%), searched for general information (78%), and attended
recreational activities (reading, surfing, hobbies, chatting, entertainment, etc). Out of
100respondents, only 70 logged on cyber companies for purchasing, and only 36 had the real
intention to buy or sell online.
Figure 1: What are people doing online
0.00%10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
General Information
Surfing
Reading
Hobbies
Product Information
Travel Information
Business / Work
Entertainment
Purchasing
Stock Quotes
Job Search
Chat Rooms
Homework
Auctions
Banking
Trading stocks
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Table No.2: Number of respondents who really carried out business transactions on Internet
SL. No. Particulars No. of Respondents Percentage
1 Yes 18 18%
2 No 82 82%
Total 100 100%
Source: Survey
Interpretation: It is evident from the above table that the minority 18% of the respondents has
actually bought or sold on Internet. The other majority 82% surfed on the World Wide Web for
other activities (reading, surfing, hobbies, chatting, entertainment, product searching, etc).
Advertisement should be aimed at this small potion of customers rather than pursuing the whole
vast market.
Figure 2: Number of respondents who really carried out business transactions on Internet
Real E-purchaser
Ordinary surfer
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Figure 3: Name of cyber companies that you actually dealt with
Table No.4: Number of e-purchasers who want to come back for future transactions
SL. No. Particulars No. of Respondents Percentage
1 Yes 34 94.4%
2 No 2 5.6%
Total 36 100%
Source: Survey
Interpretation: Among the real e-purchaser, the majority of 94.4% wants to come back to
respective cyber companies they dealt with before. It shows the solidity of business transactions
and relations on the Internet. Once customers are satisfied, they intend to keep the nexus with the
company they know, rather than shifting from company to company. It highlights the
significance of keeping up with customers standard and perception right in the first transaction
(the moment of truth)
Amazon.com
Boo.com
Cdnow
eBay
Gap.com
Yahoo!
Others
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Figure 4: Number of e-purchasers who want to come back for future transaction.
Table No. 5: Standards for a good online company
SL. No. Particulars No. of Respondents Percentage
1 Brand 30 30%
2 Cost 13 13%
3 Convenience 16 16%
4 Means of payment 5 5%
5 Variability 9 9%
6 Promotion & discount 16 16%
7 Others 11 11%
Total 100 100%
Source: Survey
Yes
No
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Table No.8: Things you want to buy online
SL. No. Particulars No. of Respondents Percentage
1 Consumable 75 75%
2 Luxury 16 16%
3 Interior 26 26%
4 Garments & footwear 67 67 %
5 Vehicle 24 24%
6 Real estate 7 7%
7 Antiquities 31 31%
8 Others 40 40%
Source: Survey
Interpretation: From the above table, we can see the tendency of what people want to buy on
Internet. Out of 100 respondents, most of them (75% & 67%) chose consumable and
garments & footwear respectively. Whereas goods with high value like real estate, vehicles, and
luxury were hardly chosen.
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creating community activities and spreading public relationship, including viral effect and word-
of-mouth.
Table No. 10: Do you usually read chain mails & bulk mails?
SL. No. Particulars No. of Respondents Percentage
1 Yes 19 19%
2 No 81 81%
Total 100 100%
Source: Survey
Interpretation: Chain-mails and bulk-mails are often used to get customer awareness and
attention. But as time goes by, bulk-mails do not have the same significance like before, and
customers usually refer bulk-mails as garbage and try to delete them without casting a single
glance at. It is called as self-protection reaction. Cyber companies should develop other kinds
of promotion and brand building rather than relying on chain-mails.
Key factors that contribute to building a successful online brand
There is no one-size-fits-all solution for building a successful brand on the Internet, however, the
extensive research and in-depth case studies provided in this dissertation indicate certain
common underlying characteristics which can be summarised as follows:
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A Compelling Value Proposition
Successful online brands are exploiting every capability offered by the Internet to deliver
compelling value propositions that appeal to customers, by offering more value than attainable
through traditional bricks-and-mortar establishments. They are providing greater convenience
(24x7), lower prices, wider selections, and access to more information on the products or
services being provided, and enhancing this with layers of added-value through the '7Cs' -
Convenience, Content, Customisation, Community, Connectivity, Customer Care and
Communication. Successful brands recognise that the value proposition must more than
compensate for the loss of in-person contact.
Key factors that contribute to building a successful online brand
There is no one-size-fits-all solution for building a successful brand on the Internet, however, the
extensive research and in-depth case studies provided in this dissertation indicate certain
common underlying characteristics which can be summarised as follows:
Successful online brands are exploiting every capability offered by the Internet to deliver
compelling value propositions that appeal to customers, by offering more value than attainable
through traditional bricks-and-mortar establishments. They are providing greater convenience
(24x7), lower prices, wider selections, and access to more information on the products or
services being provided, and enhancing this with layers of added-value through the '7Cs' -
Convenience, Content, Customisation, Community, Connectivity, Customer Care and
Communication. Successful brands recognise that the value proposition must more than
compensate for the loss of in-person contact.
Compelling Value Proposition
Strong Internet brands are those that create a high quality engaging online customer experience.
The 7Cs framework allows companies to deliver a tangible customer experience. Successful
online brands meet the demands inherent in each of the 7C categories, by ingraining convenience
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to the brand community. Properly orchestrated guerrilla marketing ploys can also be effective
in building awareness and reinforcing brand image.
Unique Positioning Concept & Distinct Brand Image
Strong brands are developing unique positioning concepts, to distinguish themselves from
competitors. Yahoo's success can be largely attributed to its unique positioning strategy and
distinct image that appeals to its target market. By distinguishing their offering and focusing on
unique sources of value-added, brands are harder for competitors to emulate.
In addition, these companies must have an inherent understanding of their brand identity and
core values, to maintain consistency, as well as determine how far the brand can be meaningfully
stretched to other products and market segments, before it fractures.
Strong Partnerships and Strategic Alliances
Rather than doing everything on their own, leading brands have focused on building strong
partnerships and alliances, particularly to secure content and widen reach to new customer
segments and niches. As a result, these companies are creating even stronger value propositions,
offering customers the best in quality, variety, content, and convenience. Alliances and
partnerships play an important role in achieving speed and momentum, and by partnering with
well-known brands, a company can leverage the partner's brand and reputation to reinforce its
own. Alliances with leading portals and popular sites are important to generate traffic and brand
visibility, and exclusive alliances can lock out competitors from valuable content or online real
estate. The most successful partnerships are symbiotic matches, whereby each party benefits
from the other's expertise or skills, while ultimately benefiting the end-customers.
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Intense Customer Focus
Leading online brands have an intense customer focus, and develop a detailed understanding of
their customers' needs. These brands are accumulating knowledge about customers, through past
transactions and solicited input, and by focusing on customer needs, are leveraging this customer
knowledge (learning) to nurture relationships (relate), by providing better services, customisation
and customer care. Customer focus builds trust and credibility that is central to developing a
strong brand-customer relationship.
First-Mover & Early-Mover Advantage
Most of the successful online brand leading online brands have an intense customer focus, and
develop a detailed understanding of their customers' needs. These brands are accumulating
knowledge about customers, through past transactions and solicited input, and by focusing on
customer needs, are leveraging this customer knowledge (learning) to nurture relationships
(relate), by providing better services, customisation and customer care. Customer focus builds
trust and credibility that is central to developing a strong brand-customer relationship.
Identified a market opportunity early and moved quickly to capitalise on the potential they saw.
A first-mover advantage is an important asset for an online brand. By getting to market early, the
company benefits from the buzz, and traffic, that comes with innovation, and it can acquire
customers while it is still inexpensive to do so. It locks up important content and distribution
partnerships, and it aligns itself with the most influential venture capital sources. Getting to
market quickly can provide an Internet company with significant momentum and a valuable
boost over the competition. The challenge then lies in keeping up the momentum. Many strong
online brands were also early-movers on the internet, and benefited from additional hype, and
extensive word-of-mouth due to its novelty. As Internet penetration exploded, these well-
publicised brands also took off.
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The Emerging Brand-building Environment
Traditional Approach One-to-One Approach
Monologue Dialogue
Public Private
Mass Individual
Anonymous Named
Adversarial Collaborative
Focus primarily on one-off transaction Focused on relationship over time
Remote research Intimate learning
Manipulative, stimulus-response
approach
Genuine needs driven, service approach
Standardised Customised
Given that the commercial Internet only began to take off in 1994, there has been a limited time
horizon to evaluate the durability of Internet brands. In addition, with the emergence of wireless
access and new platforms, new opportunities and dynamics will emerge as companies develop
innovative ways of acquiring customers, building relationships and satisfying needs. Therefore,
ongoing research would be necessary to build on the findings of this dissertation. Nevertheless, it
that the core concepts and key factors identified that contributes to successful online brands is
likely to persist.
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Figure c.2: Effectiveness of methods
From the above table, it is clear that some usually used promotion methods like banners and e-
mail showed little effect towards customers. Therefore, to enhance awareness and brand image,
company should increase the use of:
- Affiliate programs: with other already-recognised online companies like Yahoo!, Amazon.com,
or AOL. It is the way has been chosen by many successful ones like Gap.com, or eBay.
- Public relation and outdoor activities.
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
Banners
E-mails to customers
Buttons
Public relations
Magazines
Sponsorships
NewspapersRadio
Direct mail
Television
E-mail to opt-in lists
Outdoor
Affiliate programs
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Convenience, Content, Customization, Community, Connectivity, Customer Care and
Communication. Successful brands recognize that the value proposition must more than
compensate for the loss of in-person contact.
A High Quality Online Experience
Strong Internet brands are those that create a high quality engaging online customer experience.
The 7Cs framework allows companies to deliver a tangible customer experience. Successful
online brands meet the demands inherent in each of the 7C categories, by ingraining convenience
and making the site easy-to-use, quick-to-load and easy-to-navigate, delivering compelling
content, customizing the experience, developing a community feel, making connectivity easy,
integrating customer care, and establishing two-way communication. By placing emphasis on
different 'Cs', they are differentiating their experience from those of competitors. A well
executed customer experience that satisfies customer Strong Internet brands is those that create a
high quality engaging online customer experience. The 7Cs framework allows companies to
deliver a tangible customer experience. Successful online brands meet the demands inherent in
each of the 7C categories, by ingraining convenience and making the site easy-to-use, quick-to-
load and easy-to-navigate, delivering compelling content, customizing the experience,
developing a community feel, making connectivity easy, integrating customer care, and
establishing two-way communication. By placing emphasis on different 'Cs', they are
differentiating their experience from those of competitors. A well executed customer experience
that satisfies customers, results in higher brand equity.
A Reputation for Excellence (Delivering on their e-Promises)
Fulfillment and delivering on e-promises is the acid test of online brands. The successful brands
are those who are investing heavily in logistics, distribution centers, and customer care to ensure
a completely satisfying end-to-end customer experience. In doing so, they are cultivating a
reputation for excellence, which builds confidence and trust that not only entices customers to do
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repeat business with the company, but leads them to spread positive word-of-mouth, attracting
other customers to the site.
Strong Communications Programmed & Efficient Customer Acquisition Strategy
The key Internet brands have made major commitments to building awareness and have
developed multifaceted, integrated customer acquisition strategies, ranging from online methods
to traditional offline media. They are targeting their promotions to attract quality customers and
to keep customer acquisition costs down. Quality customers who are heavy users of the brand are
important as they not only offset the cost of customer acquisition, but also provide added value
to the brand community. Properly orchestrated guerrilla marketing ploys can also be effective
in building awareness and reinforcing brand image.
Unique Positioning Concept & Distinct Brand Image
Strong brands are developing unique positioning concepts, to distinguish themselves from
competitors. Yahoos success can be largely attributed to its unique positioning strategy and
distinct image that appeals to its target market. By distinguishing their offering and focusing on
unique sources of value-added, brands are harder for competitors to emulate.
In addition, these companies must have an inherent understanding of their brand identity and
core values, to maintain consistency, as well as determine how far the brand can be meaningfully
stretched to other products and market segments, before it fractures.
Strong Partnerships and Strategic Alliances
Rather than doing everything on their own, leading brands have focused on building strong
partnerships and alliances, particularly to secure content and widen reach to new customer
segments and niches. As a result, these companies are creating even stronger value propositions,
offering customers the best in quality, variety, content, and convenience. Alliances and
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partnerships play an important role in achieving speed and momentum, and by partnering with
well-known brands, a company can leverage the partner's brand and reputation to reinforce its
own. Alliances with leading portals and popular sites are important to generate traffic and brand
visibility, and exclusive alliances can lock out competitors from valuable content or online real
estate. The most successful partnerships are symbiotic matches, whereby each party benefits
from the other's expertise or skills, while ultimately benefiting the end-customers.
Intense Customer Focus
Leading online brands have an intense customer focus, and develop a detailed understanding of
their customers' needs. These brands are accumulating knowledge about customers, through past
transactions and solicited input, and by focusing on customer needs, are leveraging this customer
knowledge (learning) to nurture relationships (relate), by providing better services, customization
and customer care. Customer focus builds trust and credibility that is central to developing a
strong brand-customer relationship.
First-Mover & Early-Mover Advantage
Most of the successful online brand leading online brands have an intense customer focus, and
develop a detailed understanding of their customers' needs. These brands are accumulating
knowledge about customers, through past transactions and solicited input, and by focusing on
customer needs, are leveraging this customer knowledge (learning) to nurture relationships
(relate), by providing better services, customization and customer care. Customer focus builds
trust and credibility that is central to developing a strong brand-customer relationship.
s identified a market opportunity early and moved quickly to capitalize on the potential they saw.
A first-mover advantage is an important asset for an online brand. By getting to market early, the
company benefits from the buzz, and traffic, that comes with innovation, and it can acquire
customers while it is still inexpensive to do so. It locks up important content and distributionpartnerships, and it aligns itself with the most influential venture capital sources. Getting to
market quickly can provide an Internet company with significant momentum and a valuable
boost over the competition. The challenge then lies in keeping up the momentum. Many strong
online brands were also early-movers on the Internet, and benefited from additional hype, and
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Focus primarily on one-off transaction Focused on relationship over time
Remote research Intimate learning
Manipulative, stimulus-response
approach
Genuine needs driven, service approach
Standardized Customized
Given that the commercial Internet only began to take off in 1994, there has been a
limited time horizon to evaluate the durability of Internet brands. In addition, with the emergence
of wireless access and new platforms, new opportunities and dynamics will emerge as companies
develop innovative ways of acquiring customers, building relationships and satisfying needs.
Therefore, ongoing research would be necessary to build on the findings of this dissertation.
Nevertheless, it that the core concepts and key factors identified that contributes to successful
online brands is likely to persist.
Brands and brand-building tools tend to be associated with consumer markets; however,
they are equally important in business markets. As such, the concepts, tools and key factors
outlined in this dissertation are also applicable to business markets. Nevertheless, an in-depthanalysis, drawing on several case studies from business markets, would represent an exciting
opportunity for further research.
Having established a strategic perspective on building online brands, this dissertation
would benefit from complementary in-depth research in the social and psychological dynamics
of the Internet and its impact on consumer behavior.
Based on my own research and survey, I had recognized the often used brand promotion
method, their popularity, and their respective effectiveness.
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Table No. 12: Popularity and effectiveness of brand building methods
Method Popularity Effectiveness (rank from 0.0 to 5.0)
Banners 89% 2.8
E-mails to customers 77% 2.3
Buttons 55% 3.2
Public relations 45% 4.1
Magazines 34% 3.4
Sponsorships 34% 3.3
Newspapers 32% 2.6
Radio 32% 3.4
Direct mail 30% 3.4
Television 30% 4.0
E-mail to opt-in lists 23% 3.5
Outdoor 17% 3.7
Affiliate programs 17% 4.3
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Figure c.1: Popularity of methods
0%
10%
20%
30%
40%
50%
60%
70%80%
90%Banners
E-mails to customers
Buttons
Public relations
Magazines
Sponsorships
Newspapers
Radio
Direct mail
Television
E-mail to opt-in lists
Outdoor
Affiliate programs
Figure c.2: Effectiveness of methods
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5 Banners
E-mails to customers
Buttons
Public relations
Magazines
Sponsorships
Newspapers
Radio
Direct mail
TelevisionE-mail to opt-in lists
Outdoor
Affiliate programs
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From the above table, it is clear that some usually used promotion methods like banners and e-
mail showed little effect towards customers. Therefore, to enhance awareness and brand image,
company should increase the use of:
- Affiliate programs: with other already-recognised online companies like Yahoo!, Amazon.com,
or AOL. It is the way has been chosen by many successful ones like Gap.com, or eBay.
- Public relation and outdoor activities.
- E-mail to op-in list: bulk-mails are sent to an interested group of customers only, instead of
viral chain-mails and bulk-mails. For instance: sending e-mails to a regular patron informing
about goods available in which he or she may be interested.
Supply relevant and accurate info.
When a customer posts Further, there are some more suggestions from this study to cyber
companies regarding how to create a strong brand name on Internet:
Have a credible logistics with acceptable quality of goods and service. Make sure that the
availability of goods and variability of categories are ensured.
Build a simple website with humble graphic and accessible info. Site must be easily used
and navigated. Avoid the mistake by Boo.com of building a website that requires a powerful
computer configuration and a wide Internet runway. The result is website is too slow to load, and
leads to nothing but frustration of customers.
His or her mail to ask some question with regard to product info search, feedback must be
given within 48 hours.
When using credit card as the most popular means of payment, company must ensure the
privacy of customer. Beware o hackers at the top most level.
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SUGGESTION
In this way, the advertisers obtain useful leads and take them into sales process or lead
conversion process. The newly launched brands get an edge in the industry after these effective
services.
The climate of the current economic environment is forcing franchised hotels to become
more involved in their brands marketing strategies and seek untapped, low-cost Internet revenue
opportunities. In the first half of 2008, occupancy rates in North America fell by 2.4%; in Europe
by 1.3% and in the Asia Pacific by 3.9%, compared to the same period a year ago Franchisees
are starting to realize that the hotel chains e-Commerce departments cannot possibly capture all
available online revenue opportunities for their property, especially on the local level, and are
looking for new and innovative ways to generate incremental online revenues. Hubs believes that
launching a robust Local Internet Marketing Strategy, as described here, will help weather the
economic storm and complement their traditional revenue sources and brand contributions.
Internet Marketing Strategies
Surveys show that up to 84% of travel research and planning in the U.S. is conducted via
the Web (e-Marketer/TIA). The Internet has become the single most important travel planning
and distribution channel in hospitality. In 2009, over 40% of all revenues in hospitality will be
generated by the Internet, and another third of hotel bookings will be influenced by the Internet
but done offline. Each year since 2004, Internet bookings have surpassed GDS hotel bookings.
So how does this apply to major hotel chains? Over the past 5-6 years, most of the
leading hotel brands have become proficient national and international e-Marketers, and have
learned how to build brand equity on the Web.
This CRS distribution ratio shows rapid growth in the Internet channel, a flat GDS
channel, and a declining voice channel. There was a further acceleration of these trends in Q1
2008: Internet bookings comprised 47% of CRS bookings (41.8% in Q1 2007); GDS was 32.2%
(34.1% in Q1) and voice 20.8% (24.1%).
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www.interbrand.com
www.mckinseyquarterly.com
www.nua.com
www.pwcglobal.com
www.yahoo.com
Magazines
Monthly business magazines in Chennai:
The Economist
The Wall Street Journal
The Week
The Financial Times
Forbes
Business Week
Sales and Marketing Management
Computer World
Far Eastern Economic Review
Advertising Age
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Books
Kotler, P., Marketing Management the Millennium Edition
Aaker, D Managing Brand Equity: Capitalizing on the Value of a Brand Name.
Aaker, D. Building Strong Brands
Clifton, R. & Maugham, E., The Future of Brands
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SECTION B
1. What are you usually doing on Internet?
Reading and writing email
Searching for general information
Surfing
Reading
Hobbies
Searching for product information
Travel information
Doing your business / work
Entertainment
Purchasing
Stock quotes
Job search
Chatting
Doing your homework / assignment
Auctions
Banking
Trading stocks
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2. How long you usually spend on Internet
Less than 7 hours per week
8-14 hours per week
15-28 hours per week
3. Have you ever carried out your business transaction(s) on Internet?
Yes
No
4. If yes, name the company that you dealt with
Amazon.com
Boo.com
CDnow.com
eBay.com
Gap.com
Yahoo.com
Others
5. Do you want to come back to those companies for further transactions?
Yes
No
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6. According to you, what is/are the most important element(s) for a good online company?
Brand
Cost
Convenience
Means of payment
Variability of items
Promotion & discount
Others
7. According to you, what is the key to Web brand loyalty?
Ease of use and navigation
Fast response time
Familiarity
Relevant and accurate information
8. According to you, what is the killer of Web brand loyalty?
Outdated information
Slow response time
Site downtime
Poor customer service
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9. Things you want to buy online
Consumable
Luxury
Interior
Garments & footwear
Vehicles
Real estate
Antiquities
Others
10. Rank six below companies from 1 to 6 in order of the most to the least recognized brand
Yahoo!com
Amazon.com
Gap.com
Boo.com
CDnow
eBay.com
11. Do you usually read chain mail or bulk-mail?
Yes
No
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