Managing Electronic Commerce and On-Line Marketing 325
stores, airports, and other locations. For example, the Florsheim Shoe Company
includes a machine in selected stores to allow the customer to indicate the type of shoe
he or she wants (dress, sport), along with the color and size. Pictures of Florsheim
shoes that meet the criteria appear on the screen. If the particular shoes are not avail-
able in that store, the customer can order by dialing an attached phone and typing in
a credit-card number and an address where the shoes should be delivered.
MANAGING ELECTRONIC COMMERCE AND
ON-LINE MARKETING
Technology is expanding direct marketing into new electronic arenas. Electronic com-
merce (e-commerce)describes a wide variety of electronic platforms, such as the sending of
purchase orders to suppliers via electronic data interchange (EDI); the use of fax and
e-mail to conduct transactions; the use of ATMs, electronic point-of-sale terminals, and
smart cards to facilitate payment and obtain digital cash; and the use of the Internet
and on-line services. All of these involve doing business in a “marketspace” as compared
to a physical “marketplace.”^14 Although consumer buying over the Internet is growing
rapidly—driven by purchases of computers and related products, books, CDs, toys, and
videos—the volume of business Internet transactions is growing even faster: By 2003,
U.S. business-to-business e-commerce is projected to reach $2.8 trillion.^15
Commercial on-line servicesoffer on-line information and marketing services to
paid subscribers. The largest and best-known is America Online (AOL), which has 19
million subscribers and holds 50 percent of the market.^16 AOL and other on-line ser-
vices offer proprietary channels featuring information (news, libraries, education,
travel, sports, reference), entertainment (fun and games), shopping services, dialogue
opportunities (bulletin boards, forums, chat rooms), and e-mail capabilities.
TheInternetis an international web of computer networks that has made instan-
taneous and decentralized global communication possible. Internet usage has surged
with the development of the user-friendly World Wide Web and browser programs
such as Netscape Navigator and Microsoft Internet Explorer. Internet users can now
experience fully integrated text, graphics, images, and sound; send e-mail and visit
chat rooms to exchange views; shop for products; and find information of all kinds.
To target and reach these Internet users, marketers need to understand the char-
acteristics and behavior of the on-line consumer.
The On-Line Consumer
As a whole, the Internet population is younger, more affluent, and better educated
than the general population, with an almost equal number of men and women.^17 But
as more people find their way onto the Internet, the cyberspace population is becom-
ing more mainstream and diverse. Internet users in general place greater value on
information and tend to respond negatively to messages aimed only at selling. They
want to decide what marketing information they will receive about which products
and services and under what conditions. In on-line marketing, it is the consumer, not
the marketer, who gives permission and controls the interaction.
Internet consumers have around-the-clock access to varied information sources,
making them better informed and more discerning shoppers. They can (1) get objec-
tive information about multiple brands, including costs, prices, features, and quality,
without relying on manufacturers or retailers; (2) initiate requests for advertising and
information from manufacturers and retailers; (3) design the offerings they want; and
(4) use shopping agents to search for and invite offers from multiple sellers.