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Application of Internet Marketing as a Customer-Oriented Marketing Approach in New Economy Rashad Yazdanifard1 Faculty of Management, Multimedia University, Cyberjaya, Malaysia [email protected] com Azade Dehghan Pour 3 Center of Post Graduate Studies, Limkokwing University of Creative Technology, Cyberjaya, Malaysia [email protected] com Wan Fadzilah Wan Yusoff 2 Faculty of Management, Multimedia University, Cyberjaya, Malaysia [email protected]

edu. my Ludovic Froget4Center of Post Graduate Studies, Limkokwing University of Creative Technology, Cyberjaya, Malaysia ludovic. [email protected] com believed that since consumers with more knowledge will feel more powerful the enterprises? competitive focus will therefore be rearranged towards consumers’ subjective valuations. Enterprises today are confronted by a shift from mass production to a customer-driven economy [7].

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This article elaborates on the internet as a means of customer empowerment.We will then highlight the new ways for approaching the empowered customer by discussing customer advocacy, customization and personalization. This will be followed by an approach on the impact of customer empowerment on the 4P? s classification and finally we will elaborate on consumer empowerment as an enduring structural change. II. INTERNET AS A MEANS OF CUSTOMER EMPOWERMENT The internet in many ways has become a daily reality for over a billion users worldwide[1]. The youth and welleducated individuals world-wide, regard internet as the natural source for finding information [8].According to Schibrowsky, Peltier and Nill[9] the number of websites increased from 23,000 in 1995 to over 55 million in 2005. Statistics of internet driven sales over this period are also meaningful: in the US it has grown from an insignificant amount in 1995 to $50 billion in 2004 and it is expected to rise at an annual rate of over 20%.

In 2008, a Global Nielsen survey brought to attention, the fact that 85% of the global population has, at least once, purchased products and services online resulting in the number of Internet shoppers going up by 40% in two years[6].The internet is transforming “information scarcity” into “information democracy” or “transparency”[2]. According to Constantinides[1] transparency and abundant information, more alternatives and choice, easy contacts and business deals and control over the transaction process made possible by exploiting the Internet as a market place has changed the power structure of the markets. The increasingly informed and educated consumers have gained more power to negotiate and voice their opinions [1].Abstract– Internet marketing is a hot topic for researchers in the marketing field due to the ubiquity of the internet in the new economy and especially because of its increasing roles on various markets and industries. In this paper we try to explain how internet marketing is applied as a customeroriented approach of marketing in the new economy.

This article is based on a literature review that highlights the intimate relationship between internet marketing and customer-oriented concepts such as customer advocacy and customer empowerment.Keywords – Internet Marketing, customer power, customer empowerment, customer advocacy I. INTRODUCTION Market dynamics have been continuously changing as a result of fast transformation of information and communication technologies (ICT) combined with significant developments on the socio-economic, political and demographic landscape.

Consumer behavior is a domain that has been undergoing major transformation over the last fifteen years[1]. According to Pires, Stanton and Rita [2] and Constantinides[1] market power traditionally held by the producers/sellers has migrated towards the consumers/customers. The customer is becoming the center of the entire business universe,” Port [3]. On April 2005 the weekly The Economist, under an article titled “Crowned at Last”, explained how technology has changed the market dynamics and how market power is migrating towards the consumer. Moreover, the TIME magazine assigned the title of the Man of the Year 2006 to the anonymous yet empowered contemporary consumer who has increasingly become an influential player in the business practice of the twentyfirst century[1].

Consumer empowerment is a consequence of broadening issemination of information that can be accessed fast and easily via the Internet [4],[5]. As suggested by Kovacs [6] the new consumer filters out and decides “what marketing data he will receive about the products and services that interest him, as well as the way through which that data is received”. Foucault[2] According to Constantinides[1] the roles of the internet in that respect are as follows: -Transparency and abundant information: Easy, fast and inexpensive access to information about businesses, products, persons and services required for making sound purchasing decisions. Higher number of options and alternatives: Consumers? engagement in commercial transactions with producers around the world, Purchase of the products/services of the highest possible value. – Easy and safe business transactions and contacts: Advanced technology provides easy and fast transactions, Public trust in online business is increased, Online payments have gained more trust from customers.

– Controlled transactions: The buyers? bsolute control on commercial transactions without intervention of middle-men o Information search o Product comparison o Purchasing o Delivery o Payment The consumers? power to influence other consumers who are interested in similar products by posting reviews on product and producer, personal experiences and giving feedbacks on forums and blogs. According to Pires et al. [2]the degree of customer empowerment is dependent on how well they are able to extract accurate information which can help them compare the products/ services offered to them by different producers.The extent to which an offer will satisfy their needs with the least waste of time and effort depends on[2]: The number and quality of the same products/services that are available in the market, Consumer? s knowledge regarding the value of products/services available in the market, Consumer’s ability to search for and collect new market information, Consumer’s ability to take advantage of alternative options. III. NEW WAYS OF APPROACHING THE EMPOWERED CUSTOMER A. Personalization and Customization According to [4] new ICT empowered consumers have the power to demand being treated as individuals.

The internet allows for mass customization, so individuals can now contact firms electronically over the internet and receive responses customized to their needs. Businesses can also customize and personalize products and communications to strengthen long-term relationships with customers[2]. 1. Personalization For Internet Marketing to satisfy the new generation of empowered customer, personalization is the key [10]. Personalization marketing refers to such things as web pages that greet users by name or e-mail that is automatically sent to individuals with personal account information[2].

. Customization Customization refers to much more than automated personalization[2]. In order to relate to customers via the web, companies need to shift their focus from web presence and low price to delivering electronic service quality[8]. To do so, it is vital that the services are customized and personalized[8]. In the Internet Marketing context, the concept of product configuration can become quite literal through the mechanism of a configuration engine.For instance, Dell Computer offers a configuration engine at its site that can be used by the customer to designate changes to a basic computer model to include a different disk drive size, processor speed, screen size, memory size, operating system, software footprint and so on [10]. B.

Customer Advocacy Winning and retaining the empowered customer calls for winning his trust by applying a strategy known as customer advocacy[1]. Customer advocacy refers to the process of obtaining consumers? trust and making sure that positive word-of-mouth will travel around[1].According to Constantinides[1] consumers should be treated as efficient decision makers rather than people who are incapable of sensibly concluding on their own thus pushing and guiding them towards a specific direction. Implementation of customer advocacy strategy requires new ways of communicating with the consumer on an individual basis based on dialogue in order to have a better understanding of the customer’s needs and motives while making it clear for him that the company intends to be the customer’s advocate helping him make the best choice[1].The steps that companies can take when adopting a policy of customer advocacy include: Online presence must become part of the total marketing and communication plan, Design of a web site that delivers the highest possible online experience to the consumer, o Characteristics of a web site that will contribute to customer advocacy: ? Simplicity: make the life of your customer easy, ? Benevolence: show your customers that you are willing and able to help them, ? Transparency: do not be afraid to compare your product with the competitor, ?Trustworthiness: always do what is right and honor your promises.

Being close to customers to learn about their needs, Listening to the customer’s voice , Making it simple for customers to find them, interact and complain. IV. THE IMPACT OF CUSTOMER EMPOWERMENT ON 4PS CLASSIFICATION The 4Ps classification (proposed by E. Jerome McCarthy, 1960) of marketing mix applies to the contemporary theory and practice of internet marketing. However, practice of each strategy (Price, Product, Place, and Promotion) in Internet Marketing differs from traditional implementation of the same strategy [11].As we continue, the impact of customer empowerment on each element of the 4Ps classification in the context of internet marketing will be discussed: Product The internet provides producers with cross-cultural and internationally located customers. Hence marketers must consider cultural differences of customers when developing products [12]. According to Moen et al.

[13], the products that are expected to benefit most from the Internet are digital products or services with high productcustomization potential , such as CD, VCD and DVD, air ticket reservation and related services.Price The empowered customer significantly affects price setting[6], [11], [14]. The Internet helps customers gain access to the prices of products of the same kind. Hence, setting up a right price becomes an important consideration of sellers, especially to those who are used to take advantage of favorable prices [11]. Consumers can further influence market prices by rating firms? products. Furthermore, they have access to feedback and satisfaction ratings provided by other customers [14].

Place Enterprises can set up virtual stores, using 3D multimedia to set up a different shopping environment.The virtual stores can be personalized, and show different atmosphere according to the changes of time, season, promotion and different consumer groups to attract more customers[11]. Promotion According to Allen, E. and Fjermestad J.

[15]promotion via the Internet happens in form of online communication which comprises of advertisements, interactivities and sale promotions. The empowered consumer is now in control of the message and the communication process. He is able to ignore the marketer and make decisions based on high quality information, any alternatives and new forms of transactions [1]. A relevant, expected and high-valued message is likely to start a fruitful relationship between buyer and supplier. On the other hand, an irrelevant and pointless message carries the risk of alienating the customer [16]. V. CONSUMER EMPOWERMENT AS AN ENDURING STRUCTURAL CHANGE As stated in Pires et al. [2], the trend seen in history suggests that as technology has had an impact on understanding the turn in the market, now customer empowerment has the same importance and reflects on the policies on which businesses make their progress.

As Turnquist [2] suggests, employee empowerment is not a response to the demands of ICT driven consumers. Turnquist further proposed the idea of the empowered store where increasing control will be given to consumers by retailers at the purchase point of decision – through customer self-service (CSS), empowered employees, empowered suppliers and accessible back office system [2]. There are still cost saving objectives behind the notion of the empowered store, but the implication behind seeking customer loyalty, is that the response to consumer empowerment, enhances the empowerment itself.According to Newell[2] virtual corporations only staffed by customers can be developed from a combination of ICT together with comprehensive CSS and enhanced consumer empowerment. Although this is an extreme and unlikely scenario, it provides a futuristic image where enhanced relationships with consumers substitute for managerial prescriptions of consumer behavior. The emphasis, however, may not be on traditional customer relationship management (CRM) approaches but on the customer management of relationships (CMR).

CMR is a process that seeks to personalize interaction with individual consumers, as decided and guided by each consumer to find out what the customers are interested or not interested in, what kind of information and level of service they want, and how frequently they wish to engage with business communications. Aligned with such change of approach Slywotzky’s[2] proclaimed that age of the choice board is approaching which will bring about interactive online systems that can collect data about the customers? preferences and behavior in order to turn them from a “product taker” to a “product maker”. VI.DISCUSSION A literature review of the internet marketing literature reveals that internet marketing is intimately related to the concept of customer empowerment. This paper shows how the internet empowers the customer and this in turn creates a power shift from a market where once the seller had the power to a global market where the consumer has the power. As Constantinides[1] explains, The increasingly informed and educated consumers have gained more power to negotiate and voice their opinions.

If the customers are increasingly informed and educated today it is partly due to the internet and its global reach.The customers know how to use this powerful tool to search for information on products /services and thus make informed decisions about their purchases. Marketers have to deal with this new reality and this trend had been foreseen by marketing scholars. Deshpande, Farley and Webster [17] in 1993, proposed a customer orientation perspective of marketing. According to this perspective “customer orientation is the set of beliefs that puts the customer’s interest first, while including those of all other stakeholders such as owners, managers, and employees, in order to develop a long-term profitable enterprise” [17].

This is exactly what internet marketing does through the use of customer advocacy and customer empowerment more generally. In the description of the 4P? s given in this paper the impact of internet marketing on the 4P? s are described and it is observed that each element of the marketing mix is centered on the customer which influence each element through his power. REFERENCES 1. Constantinides, E. , The empowered customer and the digital myopia. BUSINESS STRATEGY SERIES, 2008. 9(5).

2. Pires, G. D. , J. Stanton, and P.

Rita, The internet, consumer empowerment and marketing strategies. European Journal of Marketing, 2006. 40(9/10). 3. Stewart, D. W. and Q.

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With this empowerment customers seek to satisfy more of their needs and wants in a more individualistic manner. To attract and retain the empowered customer firms provides a personalized and customized experience for this consumer. Furthermore, practicing customer advocacy helps maintaining the customer? s trust and hence ensures a long – term relationship.The article also elaborates on how customer empowerment has influenced the 4P? s classification of the marketing mix.

The 4P? s classification is molded to fit the requirements of the new empowered customer who plays a significant role in setting the market prices and seeks more personalized products/services. Study of trends seen in history reveals a shift from the impact of technology to influence of customer empowerment on marketing. Aligned with the new trend the structure of businesses is to undergo significant changes towards further empowerment of consumers.These changes lead towards a more self-serving customer and a more consumer-oriented producer which was discussed through introducing the notions of „empowered store? and „corporation only staffed by customers?. Therefore internet marketing can be considered as a customer-oriented marketing approach. 9.

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