Of course, the markets transformed most by the Internet are those where products
themselves can be transformed into digital services. Such products include music (down-
load or streaming of digital tracks – see the Napster case study at the end of the chapter),
books (electronic books), newspaper and magazine publishing (online access to articles)
and software (digital downloads and online subscription services).
Rayport and Sviokla (1994) describe transactions where the actual product has been
replaced by information about the product, for example a company providing oil drilling
equipment focusing instead on analysis and dissemination of information about drilling.
The Internet also introduces options for mass customisationof products. Levi’s pro-
vide a truly personal service that dates back to 1994, when Levi Strauss initiated its
‘Personal Pair’ programme. Women who were prepared to pay up to $15 more than the
standard price and wait for delivery could go to Levi’s Stores and have themselves digi-
tised – that is, have their measurements taken and a pair of custom jeans made and then
have their measurements stored on a database for future purchases.
The programme achieved a repeat purchase rate significantly higher than the usual
10–12 per cent rate, and by 1997 accounted for a quarter of women’s jeans sales at Levi’s
Stores. In 1998 the programme was expanded to include men’s jeans and the number of
styles for each was doubled – to 1500 styles. This service has now migrated to the web
and is branded as Original Spin.
Mass customisation or personalisation of products in which a customer takes a more
active role in product design is part of the move to the prosumer. An example is pro-
vided in Figure 5.2. Further details are given in the box.CHAPTER 5· THE INTERNET AND THE MARKETING MIX
Mass customisation
Using economies of
scale enabled by
technology to offer
tailored versions of
products to individual
customers or groups of
customers.
Prosumer
‘Producer + consumer’.
The customer is closely
involved in specifying
their requirements in a
product.
Figure 5.2 Customising maps according to customers’ preferences
Source: Ordnance Survey OS Select (www.osselect.co.uk)