The Information Technology Boom

The Information Technology Boom

The explosive growth in computer, telecommunications and information tech­ nology has had a major impact on the way companies bring value to their customers. The technology boom has created exciting new ways to learn about and track customers, create products and services tailored Co meet customer needs, distribute products more efficiently and effectively, and communicate with customers in large groups or one­to­one. For example, through videoconfer­ encing, marketing researchers at a company's headquarters in Mew York can look in on focus groups in Chicago or l j aris without ever stepping on to a plane. With only a few clicks of a mouse button, a direct marketer can tap into online data services to learn anything from what car you drive to what you read to what flavour of iee cream you prefer.

Using today's vastly more powerful computers, marketers create detailed databases and use them to target individual customers with offers designed to

internet (the Net) meet their specific needs and buying patterns. With a new wave of communica­

A <oast global computer tion and advertising tools ­ ranging from eel! phones, fax machines and CD­ROMS network that enables

to interactive TV and video kiosks at airports and shopping malls ­ marketers can computers, with the

zero in on selected customers with carefully targeted messages. Through elec­ right software and a

tronic commerce, customers can design, order and pay for products and services ­ modem (a

all without ever leaving home. From virtual reality displays that test new products telecommunications

to online virtual stores that sell them, the boom in computer, telecommunications device that sends data

and information technology is affecting every aspect of marketing. across telephone lines),

to be linked together so that their users can

• The Internet

obtain or share information and interact

Perhaps the most dramatic new technology surrounds the development of the •with other users.

Information Superhighway and its backbone, the Internet. The Internet is a vast and burgeoning global Web of computer networks, with no central management or

Marketing Challenges into the Next Century • 27

ownership. It was created during the late 1960s by the UK Department of Defense, initially to link government labs, contractors and military installations. Today, the Internet links computer users of all types around the world. Anyone with a PC and modem ­ or TV and set­top 'Web box' ­ and the right software can browse the internet to obtain or share information on almost any subject and to interact with

other users. 19 Companies are using the Internet to link employees in remote offices, distribute sales information more quickly, build closer relationships with customers and suppliers, and sell and distribute their products more efficiently and effectively. Internet usage surged in the 1990s with the development of the user­friendly World Wide Web. More than 50 million people surf the Internet each month, up from just 1 million people in late 1994. There may be as many as 4­6

million Web sites worldwide, and these numbers are growing explosively. 20 The

advent of the World Wide Web has given companies access to millions of new customers at a fraction of the cost of print and television advertising. Companies of all types are now attempting to snare new customers in the Web. For example:

Car makers like Toyota (www.Toyota.com) use the Internet to develop relationships with owners, as well as to sell cars. Its site offers product information, dealer services and locations, leasing information and much more. For example, visitors to the site can view any of seven lifestyle magazines ­ altlerrain, A Man's Life, Women's Web Weekly, Sportzine,

Living Arts, Living Home and Car Culture ­ designed to appeal to Toyota's well­educated, above­average­income target audience.

Sports fans can cosy up with Kike by logging on to www.nike.com, where they can check out the latest Nike products, explore the company's history, down­load Michael Jordan's latest stats, or keep up with Tiger Woods' latest movements. Through its Web page, in addition to its mass­media presence, Nike relates with eustomers in a more personal, one­to­one way.

The Ty Web site (www.ty.com) builds relationships with children who collect Beanie Babies by offering extra information, including the 'birth date' of the 50­plus toys, highlights on special Beanie Babies each month, promotion of newly developed Beanie Babies, and even a role of honour section that includes a child's photo and grades. Is it effective? In less than a year, based on the counter on the site, Ty.com received over 266 million visitors.

The very small retail ohain Next Stop North Pole (NSNP) sells only penguin­related products ­ T­shirts, plush toys, porcelain reproductions, books and others. A search for 'penguins' on the Web yields Pete & Barbara's Penguin Page ('the best source for information about penguins'), which contains a link to the NSNP Web site. The Web site contains pages from the store's direct­mail catalogue and a link to its e­mail mailbox, where visitors can request the full printed catalogue. The Internet gives

tiny Next Stop North Pole access to consumers around the world at very little cost. 21

It seems that almost every business, from garage­based start­ups to estab­ lished giants, is setting up shop on the Internet. All are racing to explore and exploit the Web's possibilities for marketing, shopping and browsing for infor­ mation. However, for all its potential, the Internet does have drawbacks. It's yet to

be seen how many of the millions of Web browsers will become actual buyers. Although the value of a Web site is difficult to measure, the actuality is that few companies have made any money from their Internet efforts. And the Web poses

28 • Chapter I Marketing in a Changing World

security problems. Companies that link their internal computer networks to the outside world expose their systems to possible attacks by vandals. Similarly, consumers are wary about sending credit card account numbers or other confi­ dential information that may he intercepted in cyberspace and misused. Finally, using the Web can he costly. For companies to make the most of the Internet, they must invest heavily in leased telephone lines, powerful computers and other tech­ nologies, and Internet specialists.

However, given the lightning speed at which Internet technology and applica­ tions are developing, it's unlikely that these drawhacks will deter the millions of businesses and consumers who are logging on to the Net each day. 'Marketers aren't going to have a choice about being on Internet,' says Midori Chan, vice president of creative services at Interse, which helped put Windham Hill Records and Digital Equipment Corp. on the Internet. 'To not be on the Internet... is going

to be like not having a phone.' 32 We will examine these online marketing develop­

ments more fully in Chapter 22.