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THE INTERNET: KEY TO SUCCESSWant to find the cheapest price for a new car, computer, hotel room, or insurance? How about movie reviews and a schedule of what’s playing in your night borhood? Suppose you want to sell a product to Mexico but don’t know the size of the market or the relevant export regulations. Just go online. With a few clicks of your computer’s mouse, you can find the answer to just about any question using the Internet and World Wide Web. While many people think of the Internet as fairly recent development of Defense experiment networking four computers to facilitate communications in the event of a nuclear war. Until about 1993, the Internet (or Net) was an obscure computer network with few commercial applications. Today, however, this all-purpose, global network of networks allows computer users anywhere to send and receive data, sound, and video data. Its growth has been phenomenally, with host computers doubling annually to over 25 million in 1998; about 88 million people around the world use the Internet and online service like America Online. A major facture in the Internet’s growth was the introduction of Brower technology that provided point-and-click access to the World Wide web (WWW or Web). The Web is actually an interlinked collection of graphically rich information sources within the larger Internet .Web documents are organized into Web sites. Composed of web pages that integrate text, graphics, audio, and video elements. Today the web is the most popular Internet resource. The number of Web sites grew from just over 100 in 1993 to over 700,000 by 1998.This activity continues to double about every 6 months. Of this number, about two-thirds are commercial sites.
Who’s on the Net?People in almost 200 countries throughout the world currently use the Internet. As figure, shows about two-thirds of all net users live in the United States, Canada, and Mexico.
Recent studies of Internet users in the United States reveal some major trends: Ø The gender gap is narrowing, and women now represent over 40 present of Internet users. This change is an important development for businesspeople, given women’s role as key purchasing decision makers. Ø The averages age of users is rising. The average age of Net users is now in the mid-30s, and almost half are over 40. The arrival of more mainstream users, not just young, tech-savvy web surfers, will change the future product mixes of online services. Ø Net users tend to be more affluent and tend to attain higher levels of education than the general population. Ø Time spent online is rising, taking away from television, magazines, and newspapers.
v Using the NetWhat do these Netizens do online? Despite advances in the multimedia resources, the Internet remains primarily a communications and information service’s-mail, the most popular use, and chat rooms are rapidly replacing postal and telephone service form many users’ personal correspondence. Between 1992 and 1997,e-mail users grew from 2 percent to 15 percent of the population, and this proportion could reach 50 percent by 2001. E-mail volume is already huge over 100 million messages each day. In fact, consumers responding to a recent survey said that they spend at least one third of their online time on e-mail. Beyond that correspondence function, the top four reasons people use the Internet or online services are research, education, news, and entertainment. Online shopping remains low on the list. Only about 10 percent on Net surfers consider themselves online shoppers, although about one- quarter has bought something online. Cyber shopping is increasing, however, with development of methods to reduce online security problems. The most popular site categories are shown in this figure Business uses the Internet and web in more specific ways than consumers. Executives turn to the web to gather information about their rivals or to assess industry trends. Te business tool kit titled ”Navigating the Net” relates some tips for navigation techniques. For example, executives can visit competitors ‘Web sites to learn about new- product announcements and check financial reports. Company web sites help marketing managers to collect valuable data about potential customers by asking visitors for personal information through the registration or sweepstakes entry forms. With demographic data, marketers can develop personalized content, services, and advertising geared to their typical web site users.
v ELECTRONIC COMMERCEWhen buyers for Fujitsu business Communications in Anaheim, California, need office supplies, they simply log on to Boise cascade Office Products’ extranet a secure, specialized network linking the firm and its customers. The electronic system automates the entire ordering process, obtaining necessary internal approvals for orders and providing overnight delivery, eliminating previous delays of 3 to 5 days. The system benefits both customers and vendor the reduced handling and paperwork from Internet orders save Boise Cascade about 45 cents per product. Like Fujitsu and Boise Cascade, companies around the world are discovering the advantages of electronic commerce (e-commerce) Marketing goods and
Services through computers by exchanging information between buyers and sellers, in the process minimizing paperwork and simplifying payment procedures. Like other types of buyers-seller interaction’s-commerce involves a chain of events for customer and seller. It starts with product information; moves through the order, invoicing and ends with customer service.
v Profiting from E-CommerceWhile much of the above e-commerce centers on sales of goods and services over the World Wide Web, online product sales represent only one of several ways to generate revenue online. In fact, although most companies have found only limited Web relating profits, everyday business-to business transactions account for most e-commerce revenues. Although most people associate e-commerce with selling, web advertising currently generates the most business-to-consumer revenues over $1 billion each year. This number will reach $5 billion by 2000. Internet product sales rank second in importance as a WWW revenue producer. So far, however, only a very small percentage of companies report profits from their web sites. Microsoft closed many of its Web sites, revamped its Network sites, and dropped plans to charge for an online political journal. Time Warner’s Pathfinder site, which features online version of magazines like time, fortune, people, and Money, has been a money –loser since birth, but management knows the importance of establishing its presence early in the race for cyber business. But e-commerce is not just about revenue generation Equally important benefits include expanded marketplace reach, cost savings, and improved customer relationships. Putting massive industrial catalogs on the web, for example, saves publishing and postage costs. With a few keystrokes, customers can send orders and service requests directly from their computers to the seller’s computer- cutting out the need for intermediaries, including telephone order takers and customer service representatives.
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Business-to-Business Exchanges
Lead the Way Transaction between businesses is driving e-commerce growth three times faster than transactions between business and unlimited consumers. The business-to-business online sector is expected to account for over $325 billion in sales by 2002. Internet commerce: Internet-based commerce is still in its early stages, even for business-to- business transactions, thus far, most activity has focused on delivering product information and customer service. The Internet most companies discover, givens more help for saving money than for making it. Extranets Internet commerce also offers an efficient way for business to collaborate with supplier, partners, and customers through extranets, secure networks used for electronic commerce and accessible through the firm’s web site by external customers or other authorized users. v Security for Internet Payment Systems In response to consumer concerns about sending credit-card numbers over the Internet, companies have developed secure payment systems for e-commerce. Netscape communications is one of several organizations that encrypt any sensitive information. Encryption is the process of encoding data for security purpose. When such a system is active, users see a special icon that indicates that they are at a protected Web site. To increase consumer security a consortium of companies including Visa, MasterCard, and various technology suppliers, created secure electronic Transaction (SET), an industry wide standard for secure Internet payment transaction. SET buyers register with a bank and pay for purchases with digital certificates that verify their identities. Adopting a standard technology provide consistency. Technology provides consistency. Among merchants, card companies, software developers, and financial institutions.
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Problems Facing
Internet Marketers As noted earliest, e-commerce is not without its problems. In the business-to-business sector, reliability issues and distribution channel conflicts affects the rate of acceptance. In business-to-consumer markets, the key issues include transaction security, consumer attitudes and difficulty in measuring the effectiveness of Internet-based promotion. v
Channel conflicts
The Internet adds another channel through which business can distribute their products. In many instances, a direct route from buyer to seller creates conflicts with current distribution channel partners. At great time and expense, companies nurture their distributor relationships, and they don’t want to damage them when sales shift to the Web. The success of direct PC marketers like Dell Computer and Gateway 2000 has captured the attention of other C manufacturers, now considering direct sales over the Internet themselves. Retailers, for the most part, do not approve of suppliers competing with them by selling directly to customers. v
Internet Security
Online security poses a major roadblock to the acceptance of consumer-oriented e-commerce in three areas: payment, privacy, and credibility. As the earlier discussion explained, many companies now offer secure payment systems to web consumers. However, online merchants still battle against relatively low creditability, since the Internet is fairly new to most consumers. Established brand names and companies that are familiar to online shoppers have greater credibility than do newcomers to the Internet. Customers also want to know that they can browse the web without leaving trails of personal information about buying and viewing habits. They want assurances that any information they provide won’t be sold to others without their permission. In response to these concerns, online merchants are taking steps to protect consumer information. Internet companies that display the Trust logo must disclose how they collect personal data and what they do with it; they also agree to TRUSTe audits of their complince with the stated policy. v
Developing Successful
Web Sites When judging Web Sites, success means different things to different businesses. On firm might feel satisfied by maintaining a popular site that conveys information or reinforces name recognition- just as a billboard or magazine ad does-without requiring any immediate sales activity. For example, web sites like those of the New York Times and USA Today draw many visitors who want the latest news. The web sites of Yahoo! Netscape, CNet, and ESPNSportsZone are successful, because they attract millions of visitors. High-traffic sites like these add another dimension to their success by selling advertising space to other business. Internet merchants need to attract customers who transact business on the sport. Some companies find success by hosting Web site that offer some value-added service to create goodwill for potential customers. Organizations like the Mayo Clinic and accounting giant Ernst & Young provide useful information or links to related sites that people frequently visit. v
Cost and Maintenance As with any technological investment, web site costs are an important consideration. The highly variable cost of a web site includes not only development expenses but also the cost of placing the site on the site on web server, maintaining and updating it, and promoting it. Although developing a commercial web site typically cost between $30,000 and $100,000 it can cost as little as $19,95 for a monthly subscription to a web server such as American Online. In addition to installation and connection fees, managers must ensure that their company’s web site stays current over time. Visitors don’t return to site if they know the information never changes. Consequently, updating design and content is another major expense.
The remarkable changes in people’s lives today can be traced to technological breakthroughs that were the stuff of dreams just a century ago. The advances of the 20th century-from an age of automation to an era built out of zeros and ones- are outlined in.
How The Internet Provides New Routes To Business Success ??? The Internet, a worldwide network of interconnected computers, removes limitations of time and place so that transaction can occur 24 hours a day between people in different countries. It creates opportunities for companies that provide Internet infrastructures, access content, as well as for firms that use its resources in their business operations. The Internet offers a cost – effective way for managers t gather competitive intelligence; perform market research; showcase, sell, and in some cases distribute products; and offer customer service and technical support. How companies develop and manage successful web sites ! ? ? ? Businesses establish web sites to expand their customer bases, increase consumer awareness of their products, improve customer communications, and provide customer service. Before designing a Web site, a company’s decision makers must first determine what they want to achieve with the site. Other important decisions include who should create, host, and manage the site; how to promote it; and how much funding to allocate. Successful Web sites contain informative, up-to-date, and visually appealing content. Sites should also download quickly and allow easy navigation. Finally, management must develop ways of measuring how well a site accomplishes its objectives.
Salam Saif Said AL-Riyami Sultanate
of Oman
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