Dollinger index

(Kiana) #1
Marketing the New Venture 233

at a recent meeting of the Word-of-Mouth Marketing Association, the message was
clear—Don’t advertise!—because viral marketing is the only way to go!^27
Marketing on the Internet removes any geographic disadvantages a venture may face.
Street Story 6.3 shows how firms can use the Internet to go global, sometimes without
even intending to.
The Net is especially revolutionary in information-intensive industries where the
costs noted in the list above constitute the greatest percentage of overall cost.^28 For
example:



  • Financial services. Most financial service transactions can be delivered electronical-
    ly (indeed electronic fund transfers have been in use for years). In many ways, finan-
    cial services are ideal for the Internet because there is no physical product; howev-
    er, banks have not yet perfected the process of online bill paying.

  • Entertainment. Much entertainment can be digitized, which is ideal for the
    Internet because one customer’s consumption of entertainment services does not
    affect another customer’s ability to consume the same services. There may be a lim-
    ited number of seats in a theater, but a virtually unlimited number of viewers can
    watch a performance on the Web. Again, no ideal business model has yet been con-
    structed.

  • Health care. Delivery of actual health-care services requires person-to-person
    contact, but much of the business end concerns patient information and insurance
    application and payment. The Internet can handle these, but who benefits? Service
    providers? Insurers? Patients?

  • Education. Online learning is a growing business. Many students already use the
    Internet to apply for admission, register for classes, check grades, and pay tuition
    and fees. This is clearly beneficial, but observers worry that online classes will deper-
    sonalize the educational experience.

  • Government. Taxes can be filed online now, and constituents can contact their rep-
    resentatives and other officeholders by email, but there are broader possibilities.
    With the right infrastructure and education, government could deliver a great deal
    of information about services, laws, taxes, and defense, and citizens could offer feed-
    back and input. To create a really effective network, however, would cost the
    government billions, and there are other priorities that may take precedence.


The Internet affects some industries only incrementally, generally those industries that
involve the creation, transformation, and transportation of an irreducible physical entity.
Whether this is an immutable reality remains to be seen. Somewhere out there an e-entre-
preneur may be devising ways to adapt such products to the world of Internet business.



  • Retailing. Elaborate Web sites and graphics received much attention during the
    original e-tailing revolution, but success was actually determined by back-of-the-
    house logistics and the ability to “move the boxes around” more efficiently than the
    competition. Even in a high-tech world, the basics remain important.

  • Manufacturing. There is no substitute for high-quality manufactured goods.
    Intranet communications and supply chain management are important areas for
    electronic commerce, but the key is still the high-quality product, not the Web site.

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