Developments in ICT influence all marketing
functions and the electronic marketplace brings new ways of
marketing. It is obvious that ICT slashes marketing cost, removes
intermediaries, and redefines marketing relationships (Rayport & Jaworski,
2001).
The potential
benefits resulting from e-commerce can be grouped into two categories:
- Improved effectiveness of
current activities
- Broaden opportunities and new
activities.
E-commerce has been defined as being "every kind of commercial contact or transaction between two or more parties, being done with electronic means and network, and having as direct or indirect aim to sell products and services" (Demetriades & Baltas, 2003: 40).
It seems that this definition encompasses all marketing activities.
Rayport & Jaworski (2001) suggest that in order to
compete in the electronic era, businesses must be prepared to use
technology-mediated channels, create internal and external value, formulate
technology convergent strategies, and organise resources around knowledge and
relationships. On the marketing side, communication and customisation are among
the new demands of the knowledge economy, whereby mass markets are a phenomenon
of the past and interactive markets are the future (Wind & Mahajan, 2001).
ICT INFLUENCES ON MARKETING MIX
Evidence shows that ICT influences nearly every aspect of services
marketing and the main stages in the marketing mix (Middleton, 2001). Kotler
has restated the “Ps” (Product, Price, Promotion and Place) as “Cs” to reflect the consumer
orientation that is central to modern services marketing thinking in an era of
growing competition (Kotler & Armstrong, 1999). Product means Customer
value; Price means Cost to the consumer; Promotion means Communication; and
Place means Distribution, access or Convenience.
Moreover, the original four variables have been expanded to encompass
People, Process (of service delivery) and Physical Evidence or design. These new marketing orientations are particularly relevant
in the tourism field (Law, 2002a).
ICT has various influences in the fields of tourism and marketing. The
Internet constitutes a medium of interactive communication and offers multiple
uses for marketing purposes. Technological developments enable customers and
businesses alike to change the way that they conduct exchange transactions,
which are the core of all marketing (Hanson, 2000; Middleton, 2001).
The main implications of ICT on the principal processes in marketing
include:
- Market research and marketing
information systems.
- Customer Relationship Marketing
(CRM): The Internet has a catalyst
role in CRM applications. The e-CRM tools contribute
to the implementation of various marketing activities (Demetriades & Baltas, 2003;
Vlachopoulou, 2003).
- Strategic Planning and
Networking: Virtual marketing companies provide distribution and marketing
services. They facilitate and provide a platform for the exchange of
information and for e-commerce transactions for a wide range of products.
The Internet also allows the creation of virtual enterprises in which ICT
provides the linkages – especially networks for micro-businesses.
- Advertising and Public
Relations: The Internet provides a completely new medium to communicate to
targeted customer groups.
- Information materials: The
commercial developments of Web sites made the Internet an excellent and
relatively low-cost medium for creating customer awareness using
multimedia methods.
- Sales Promotion and Pricing:
The Internet is an ideal medium for communicating prices, special offers
and late availability of product. Through connectivity between databases
and yield management programmes, sales promotions can now be customized to
individuals.
- Distribution and access: ICT
has come to dominate the industry’s way of thinking regarding the role and
costs of distributing travel products. As a new channel for direct
marketing communications, the Internet is also reinventing distribution.
Distribution channels are the new forums for product innovation and
development; they establish the parameters for pricing against competitors
and are becoming the most important tool for sales promotion and
merchandising.
- Consumer behaviour: The
Internet - as a communication and promotional tool - is important, not
only because customers buy products and services via electronic channels,
but also due to its extensive use as an information medium (Turban et al., 2000).