Download Module 1 – What Is Electronic Marketing

Module 1 – Fall 2008
What Is Electronic Marketing
Professor Charles Hofacker
MAR 4721-01 Fall 2008
Welcome to MAR 4721 Electronic Marketing. The course is divided into modules, with
each module representing a single lecture. The modules will be on the course Web site in
time for you to read them before class. Do so! Note that at the end of each module you
will see a set of class discussion questions. These are designed to create active verbal
class participation. From time to time, this participation will be graded.
Preliminary Definitions
We need to start with some definitions of key concepts that pertain to the subject matter
of this course. The popular press often refers to ecommerce, but typically the word
“commerce” refers to transactions. As you have learned in Basic Marketing, transactions
are only a small part of marketing. In marketing we focus on relationships rather than
transactions. Nevertheless, let’s define ecommerce as
The marketing, buying and selling of goods and services on the Internet.
Now we turn our attention to the phrase electronic marketing. There are two pieces to the
phrase: electronic and marketing. I have no problem with the word marketing – there are
lots of good definitions to fit the bill here and any one of them could be mashed together
with the word electronic to create a good definition of electronic marketing. But why
electronic? To pick just one problem with this word, fiber optic cables are not electronic
at all. So do we need a new word for marketing over fiber networks as compared to
marketing over copper networks? That would be silly. A second problem is that the
word electronic focuses on hardware. But what makes electronic marketing work, is
software not hardware. In any case, here is my definition of electronic marketing:
Electronic marketing is the use of networks created from hardware and software
in the process of marketing.
Electronic marketing happens over a network, and the network is built from both
hardware and software. So now let’s move on and talk about networks and software.
The Internet is a network and it based on software protocols. The full name of the
Internet is actually Internetwork. Whatever we call it, the
Internet is the sum total of devices interconnected using the Internet Protocol.
So now we have to define the Internet Protocol, often referred to as IP. The
Internet Protocol is a set of arbitrary rules for how devices interconnect.
It is useful to understand some basic information about IP, and what it implies for the
process of marketing. The Internet Protocol is an open protocol, meaning that it is not
controlled by any company. As such, it is the opposite of a proprietary protocol.
As a network, the Internet is an open network. This means that anyone can attach
anything to the network. The only requirement is that the attached device "speak" IP.
Otherwise the device will not be able to communicate with any other device. But now
you can see why I want to de-emphasize hardware and to emphasize software. The key is
the protocol. The actual hardware used is irrelevant, as long as it uses IP.
We can also say that the Internet creates an interactive medium that is user-driven. We
might contrast this with television or radio, for example. The user-driven nature of the
Internet implies that it tends to work best as a pull medium rather than a push medium.
Three Contexts for Electronic Marketing
The Internet and other electronic networks are largely “built” from software, which
means that it can be made to do almost anything. We might describe it as almost
chameleon like. We can think of it as a communications medium or a distribution
channel. In addition, it is a network, so that means it is ideal for connecting businesses to
consumers, businesses to businesses, but also consumers to consumers. The ease with
which the net creates complex connections, including C2C connections, makes the
Internet different than mass media like TV or radio.
When we think of the Internet as a communications medium, we can make an analogy
with advertising that is done on other media. However, the existence of more complex
communications patterns online as compared to television and the mass media, means
that the Internet is ideal for establishing and enhancing relationships between us and our
customers. Beyond communication, we can use the Internet to provide various
supplementary services to our customers.
When we think of the Internet as a distribution channel, we might consider examples
where there is a physical good involved, like Amazon, that ships books or maybe an
example where the good or service being sold is purely digital. For example, AVG
provides virus protection for computers. You can buy the AVG product directly online
and it is "shipped" to your computer over the Internet.
Finally, the Internet allows us to create a new category of business. The network can be
used to create platforms by which different users can connect to each other. There are
platforms that connect buyers and sellers (eBay, B2B hubs), there are platforms that
connect email users and advertisers (Yahoo! Mail). We can connect friends, and also
advertisers (Facebook). There are lots of examples where we connect readers, writers
and advertisers (Blogspot.com, Slate).
History of the Internet
Here are some key years in the development of one important electronic network used in
marketing – the Internet (Hobbes Internet Timeline 2008).
1945
Vannevar Bush contemplates linked documents
1965
Ted Nelson coins expression hypertext
1965
The Pentagon’s DARPA studies cooperative networks
1969
First packetized message sent: UCLA to Stanford
1970’s Net adopted by computer science departments at larger US universities
1973
Bob Metcalf’s thesis on Ethernet
1977
The Apple II is introduced
1984
Apple’s Hypercard program is introduced
1986
NSF takes over from DARPA
1988
NSF begins to privatize the net
1980’s Net diffuses through more American universities
1989
Tim Berners-Lee proposes HTTP
early 1990’s Net adopted by more non computer science departments
1991
WWW invented by Tim Berners-Lee
1993
Mosiac written by Marc Andreasen
1995
NSF privatizes net backbone
Late 1990’s Net goes world wide
late 90’s – 2001 Speculative financial bubble centered on Internet companies grows and
bursts
2000 – the present Many social networking sites garner huge success
An interesting side note on the development of electronic networks is the role played by
Xerox’s Palo Alto Research Center, known as Xerox PARC. Researchers there invented
many of the key technologies used by Internet adopters including the graphical interface,
the mouse, and Ethernet. Xerox did not commercialize these products. The classic
computer based graphical user interface is becoming more prevalent on a variety of
devices and has changed how television programs are broadcast as well.
We finish this section with a quote from economist George Gilder, who proclaimed in
1994 that:
The computer industry is converging with the television industry in the same
sense that the automobile converged with the horse.
Class Discussion Questions
1. What is your preferred definition of marketing?
2. What is a network?
3. What is a protocol?
4. Do a competitive analysis of presidential candidates John McCain’s and Barack
Obama’s Web sites*.
References
Gilder, George (1994), Life After Television, Updated Forbes ASAP, February 23, 1994
Hobbes Internet Timeline v8.2 (2008), http://www.zakon.org/robert/internet/timeline/.
Accessed on 18 Aug 2008
*Written homework assignment. See syllabus for due date.