Comparison and analysis of traditional marketing and electronic marketing in China
The Internet has become an significant part for economy
development. It strongly impact on marketing. Since the emergence of electronic marketing, it has been a threat to traditional marketing.To understand the current status and development of Chinese online marketing communications, this dissertationexplicitly introduces how electronic marketing more effective than traditional marketing in current China.
Marketing plays an important role in people’s daily life and global economy.Marketing is considered to be a process of exploring, creating, and delivering value to satisfy
the needs and wants of a target market at a profit.(Kolter 2003) Along with the development of China’s economy in recent years, marketing produced fundamental changed from the traditional way evolved to the electronic marketing.Internet is a new marketing tool that can be used by companies in order to reach their
customers.(Hoffman and Novak, 1995) Electronic marketing has brought a great impact on traditional marketing. In the Age of Information, the rapid development of electronic commerce, online marketing has led the current marketing. Electronic marketing combat traditional marketing with their unique superiorities, like the way of electronic marketing is flexible and changeable, the marketing scope is widely, the effect is obvious and the network is used as a marketing medium. Traditional marketing is a rather broad category that incorporates many forms of advertising and marketing.Traditional marketing stresses as many products and services available to as many customers as possible.Most traditional marketing strategies in the light of one of four ways: print, broadcast, direct mail, and telephone.Consumers have been accustomed to the traditional marketing model, because consumers in this process has a strong communication, they can see the appearance of the product and enjoy shopping, and earned the trust of the public.Manufacturers sales products through manufacturers, wholesalers, retailers and then to the consumers.Therefore, products have to go through several links to reach consumers. With this long supply chain, not only reduces the timeliness of the product, but also increased the cost of the product. However, in electronic marketing model, consumer could reach their products faster. Electronic marketing refers to the application of marketing principles and techniques via electronic media specifically the Internet. Rivad Eid(2002) has noted “The Internet leads to faster discovery of customer needs, greater customization of theproducts to the customer needs, faster product testing, and shorter product life cycles.” Electronic marketing also be called eMarketing, Internet marketing and online marketing. eMarketing is the process of company using the Internet and a range of technologies to help connect businesses to their customers. Flexibility, low cost of product, specific communication, and no limit time are the advantages of eMarketing.Time poverty has made consumers very responsive to marketing innovations which helps them to save time. New online marketing concepts based on improved delivery are popping up through the web(Solomon 2013). When implemented correctly, the return on investment (ROI) from eMarketing can far exceed that of traditional marketing strategies.Whether you’re a “bricks and mortar” business or a concern operating purely online, the Internet is a force that cannot be ignored. It means to interact millions of customers every year.
In the 1960s, the American marketeer, E. Jerome McCarthy, provided a framework by means of the marketingmix – 4 P’s. The 4 P’s include Price, Promotion, Product and Place. Thefigure below demonstrates the 4 Ps of marketing mix theory.
Figure1 The Four-P Framework
(Kotler 1999, Kolter on Marketing)
This theory of marketing mix has been analysed and rewritten aboutby many different authors through time. One of the authors that have written about this theoryand explained his point of view about the elements of marketing is Philip Kotler, whosemarketing mix is presented in this thesis. He considers the marketing mix, a mixture ofdifferent tools or instruments for pursuing a marketing plan.(van Waterschoot Walter, Van den Bulte Christophe, Journal of marketing 1992) There aredifferent aspects of product that needs to be considered. Some examples of these are thedesign, function and quality of the product. The marketer needs to know what kind ofappearance such as size, colour and generally design of product is wanted or needed. It is alsoimportant to know what kind of functions the customer is looking for in the product. To knowwhat is required by the market, there is a need for research and studying the market. There are 5 product levels, which create the customer value hierarchy. These levels are calledcore benefit, basic product, expected product, augmented product and potential product. Corebenefit is the benefit of the product which the customer would be buying. Compared to other Ps in the marketing mix, pricing is easiest and quickest to adjust. AsKotler(2003) presents it is an important part of the marketing strategy and it sends out a messageabout the product, company and the image. The decision of pricing is dependenton whatgoals the company wants to achieve.Setting a price is a process and based on the marketing mix theory there are 6 steps in thisprocess. These are Selection of pricing objectives, Determination of demand, Estimation ofcosts, Analysing competitors’ costs, prices and offers, Selection of pricing method and Selection of final price. Place in marketing can be about location in the means of store, factory and storage. Also thedecisions on distribution channels and transport are part of it.(Kotler 2003) The choice of place can bevery radical for the success of the business.Promotion is one of the important element of 4 Ps of marketing mix theory. It covers all those communication tools that send a message to a target customers.(Kolter1999) Such as, advertising, personal selling, sale promotion, publicity, public relations, displays, credit card,etc.
When it comes to promotion, one thing is clear in difference between the communication
through traditional tools and Internet and that is the speed. Low cost is another advantage for eMarketing, and it is the important problem in traditional marketing. Information shared thought the Internet, it can be passed to anywhere in the world with the network. Therefore, the time cost of electric marketing is very little. Moreover, the seller could offer the information to the costumer in 24 hours. It also makes online marketing intentional, because there is no time limit. Electric marketing maintain a good relationship with consumer. Bob Wayland noted that “The paradigm has shifted. Products come and go. The unit of value today is the customer relationship”(Kolter 1999). In traditional manner, the message would receive attention during a limited amount of time, for example as it is aired on TV or sent out as paper advertising.A company could represent itself in many different ways through the internet for consumer get to know them well, but it is not possible for traditional marketers in the same way. For example, an online market company could present them by online advertising, TV commercial, etc. The tools for traditional promotion can be used mainly in communicating the message shortly and sample.After more than ten years of development and exploration, China’s network marketing has been a great development, and achieved good achievements. Network marketing has become an important part of the marketing strategy of many enterprises.As of December 2013, China’s online shopping users reachedthree hundred and two million people, compared with the previous year increased by 24.7%, the growth rate of fifty-nine million eight hundred and seventy thousand people, the use rate increased from 42.9% to 48.9%(CNNIC: 2014 China’s Internet Development Statistics Report of the 33rd chapter of Internet users Internet application status). These data indicates that consumer become more and more interested inonline shopping, because it is more convenient to contact with the seller and reduce the waiting time.Alibaba Group(China’s largest online marketing company) released as of 2016 fiscal first quarter earnings June 30, 2015.Revenues is 20.245 billion yuan (about 3.265 billion US dollars), 28 percent increase from the same period last year. Growth in the number of active buyers retail platform to promote China’s Gross Merchandise Volume(GMV) reached 673 billion yuan; Taobao and Tmall quarterly turnover reached RMB 427 billion, respectively, and 246 billion yuan. As of June 30, 2015, annual active buyers on the Chinese retail business platform reached 367 million, andit increases by 32 percent year-on-year(http://tech.sina.com.cn/i/2015-08-12/doc-ifxftvni9002400.shtml). Foshan Haitian Flavouring and Food Co.,Ltd.(One of the traditional marketing company) show their operating income from January to September in 2015 is 8,122,389,141.21yuan, it increased by 11.61%(http://app.finance.ifeng.com/data/stock/ggzw.php?id=15314861&symbol=603288).Electronic marketing is more efficient than traditional marketing in these ways. Many enterprises have turned to the network marketing instead of focus on the traditional marketing.