In recent years, several large Internet marketing systems have failed because of a lack ol' subscribers or coo little use, or because consumers found the buying procedures baffling and returned to the familiarity of conventional buying channels. The online information and shopping services industry has its roots in the United States. Although still in their infancy, Internet usage and online marketing are growing explosively. According to a recent study, 23 per cent of people 16 or older in the United States and Canada - more than 50 million people - have used the Internet in the last month, up from just 1 million people in late 1994, An additional 12 per cent of adults use commercial online services such as America Online and CompuServe. Currently, there are some 105 million Internet users globally. Figure 22.1 shows Internet usage (users as a percentage of population) for the top ten countries in the world. Internet usage is estimated to be increasing at a rate of 12,000 new users per day, and some analysts predict that there will be more than a billion users, with Internet transactions totalling 850 billion, by the year 2000.
Although most of the world's online marketing takes place in the United States and the Internet is still some way from becoming a major promotion medium, European marketers can no longer ignore the technology,31 There may now be as many as 4 to 6 million Web sites worldwide, and this number is growing by as many as 400 new sites each week.22 Figure 22.2 shows that Internet users go online for a number of reasons, ranging from browsing, work and education to entertainment, and not just for buying things. In time, the biggest opportunity will
World Wide Web (WWW or the Web) A pan of [he internet that uses a standard computer language to allow documents containing text, images, sound and video to be sciif across the Internet.
Main Uses of the Internet electronic commerce A general term for a buying and setting process that is supported by electronic means.
he for sales or service delivery across national borders. For example. 27 per cent df the sales of the US Internet bookshop Amazon.com are abroad, frequently to customers who would otherwise be unable to find the book they were looking for." Virgin Radio, which launched Europe's first online radio station, offers a live audio-feed direct to the computers of Internet users visiting the radio station's Web site. The service (www.virginradio.eo.uk) is a live relay of Virgin via the Internet, which can be accessed from anywhere in the world. It uses state-of-the-art RealAudio software, which allows the users to download free from the Virgin Radio site. Rut instead of downloading (he file to the computer and then replaying it, using RealAudio allows them to hear the material played to them direct over the Net.24
Just as television hurst on to the media scene and dramatically revolutionized marketing 40 years ago, so the explosion of Internet usage heralds the dawning of a new world of electronic commerce. Electronic commerce is the general term for a buying and selling process that is supported by electronic means. Electronic markets are 'market spaces' in which sellers offer their products and services electronically, and buyers search for information, Identify what they want and place orders using a credit card or other means of electronic payment. For example, a reporter wants to buy a 35 mm camera. She turns on her computer, logs on to the Shopper's Advantage Web site, clicks on cameras, then clicks on 35 mm cameras. A list of all the major brands appears, along with information about eaeh brand. She can retrieve a photo of each camera and reviews by experts. Finding the camera she wants, she places an order by typing in her credit card number, address and preferred shipping mode.
The electronic commerce explosion is all around us, as more and more businesses begin to recognize the vast potential of electronic technology (sec Marketing Highlight 22.2). A recent study found that 39 per cent of all Net users have searched for product information online prior to making a purchase. Fifteen per cent of Net users have purchased a product or service online, and the percentage is growing daily. Early attempts to develop online shopping and electronic shopping malls had been held hack by consumers' concerns about security, fraud and missing or damaged products. But consumer confidence is expected to grow, as improvements in technologies, standards and services are being achieved to make online transactions a mainstav of twentv-first centurv commerce.25
Demographics of Internet Users
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