INMA_A01.QXD

CHAPTER 4· INTERNET MARKETING STRATEGY

The general options for the mix of ‘bricks and clicks’ are shown in Figure 4.19. The

online revenue contribution estimate is informed by the customer demand analysis of

propensity to purchase a particular type of product. A similar diagram was produced by

de Kare-Silver (2000) who suggested that strategic e-commerce alternatives for companies

should be selected according to the percentage of the target market using the channel

and the commitment of the company. The idea is that the commitment should mirror

the readiness of consumers to use the new medium. If the objective is to achieve a high

online revenue contribution of greater than 70% then this will require fundamental

change for the company to transform to a ‘bricks and clicks’ or ‘clicks-only’ company.

Kumar (1999) suggests that a company should decide whether the Internet will pri-

marily complementthe company’s other channels or primarily replaceother channels.

Clearly, if it is believed that the Internet will primarily replace other channels, then it is

important to invest in the promotion and infrastructure to achieve this. This is a key

decision as the company is essentially deciding whether the Internet is ‘just another

communications and/or sales channel’ or whether it will fundamentally change the way

it communicates and sells to its customers.

Figure 4.20 summarises the main decisions on which a company should base its com-

mitment to the Internet. Kumar (1999) suggests that replacement is most likely to

happen when:

customer access to the Internet is high;

the Internet can offer a better value proposition than other media;

the product can be delivered over the Internet (it can be argued that this condition is

not essential for replacement, so it is not shown in the figure);

the product can be standardised (the user does not usually need to view to purchase).

Only if all four conditions are met will there be primarily a replacement effect. The fewer

the conditions met, the more likely is it that there will be a complementary effect.

Figure 4.20Flow chart for deciding on the significance of the Internet to a business

Source: After Kumar (1999)

Low High

No Ye s

Start

Customer

access to

Internet?

Primarily

complementary

effect

Internet

value proposition

similar?

Can product

be standardised?

Primarily

complementary

effect

No Yes

Primarily

complementary

effect

Primarily

replacement

effect