Traditional Marketing vs. Internet Marketing

[Pages:45]EFO703: Bachelor Thesis in Business Administration 300 Basic Level M?lardalen University Supervisor: Leif Sanner

Traditional Marketing vs. Internet Marketing

A comparison

2008-06-05

Group 1931: Alfa Shima 820103 Mona Varfan 820721

Abstract

Date: Level: Authors:

2008-06-05 Bachelor Thesis in Business Administration, 15 ECTS credits

Alfa Shima (820103-8588) Pettersbergsgatn 24,8tr 72463 V?ster?s 076 2740308

Mona Varfan (820721-7004) Sor?gatan 29, 2tr 16447 Kista 073 7336006

Supervisor: Leif Sanner

Title:

Traditional marketing vs. Internet marketing: A comparison

Problem:

Marketing is an important strategy for businesses and it contains numerous effective tools. Traditional marketing has been in use for many years and nowadays Internet has brought new ways of doing business for companies and that has affected marketing. What are the main differences between Internet marketing and traditional marketing? Which one of the two approaches contains the most used and effective marketing tools according to chosen companies in this thesis?

Purpose:

The aim of this study is to compare traditional marketing and Internet marketing and show the differences of characteristics between them. And to find out what marketing tools are effective for some chosen companies in the fashion industry.

Method:

The information gathered in this study was obtained through qualitative research from textbooks, websites, articles and interviews. Some quantitative data such as statistics were also gathered. The authors conducted interviews with few companies operating in the fashion industry to collect information needed for the analysis in this study.

Conclusion: By analysing different aspects of theory, comparison and interview answers, the authors came to a conclusion. Using the advantages of both Internet marketing and traditional marketing according to the goals of the company, is considered to be the most effective way of marketing. Comparing the two approaches, Internet seemed to be a complementary tool to traditional marketing.

Acknowledgement

We are grateful to our tutor for the helpful advice and guidance that he has given us. The feedbacks that we have received in the seminars have helped us towards the right direction.

We are also thankful to those managers at Heart of Brands, Tiger of Sweden, H&M, VeroModa, Polarn & Pyret, who took time to give us interviews.

We are thankful to our friends and families for their understanding and support during this process.

Table of contents :

1 INTRODUCTION.............................................................................................................. 1 1.1 Research problem ........................................................................................................ 1 1.2 Study aim ..................................................................................................................... 2 1.3 Target group ................................................................................................................ 2 1.4 Delimitations ............................................................................................................... 3 1.5 Structure of thesis ........................................................................................................ 3

2 METHODOLOGY ............................................................................................................. 4 2.1 Selection of research problem ..................................................................................... 4 2.2 Selection of research method....................................................................................... 5 2.3 Qualitative research ..................................................................................................... 5 2.4 Performance of study................................................................................................... 5 2.5 Validity & Reliability .................................................................................................. 7 2.6 Methodology critique .................................................................................................. 7

3 LITERATURE REVIEW................................................................................................... 8 3.1 Traditional marketing .................................................................................................. 8 3.1.1 Product ................................................................................................................. 9 3.1.2 Price...................................................................................................................... 9 3.1.3 Place ................................................................................................................... 10 3.1.4 Promotion ........................................................................................................... 10 3.2 Internet Marketing ..................................................................................................... 13 3.2.1 Product ............................................................................................................... 14 3.2.2 Price.................................................................................................................... 14 3.2.3 Place ................................................................................................................... 15 3.2.4 Promotion ........................................................................................................... 15 3.3 Traditional Marketing VS Internet Marketing........................................................... 16 3.3.1 Product ............................................................................................................... 16 3.3.2 Price.................................................................................................................... 17 3.3.3 Place ................................................................................................................... 18 3.3.4 Promotion ........................................................................................................... 18 3.3.5 Comparison model ............................................................................................. 20

4 EMPIRICAL DATA ........................................................................................................ 22 4.1 Vero Moda ................................................................................................................. 22 4.1.1 Company background ........................................................................................ 22 4.1.2 Interview answers............................................................................................... 22 4.2 Heart of Brands.......................................................................................................... 23 4.2.1 Company background ........................................................................................ 23 4.2.2 Interview answers............................................................................................... 23 4.3 Tiger of Sweden......................................................................................................... 24 4.3.1 Company background ........................................................................................ 24 4.3.2 Interview answers............................................................................................... 24 4.4 Polarn & Pyret ........................................................................................................... 25 4.4.1 Company background ........................................................................................ 25 4.4.2 Interview answers............................................................................................... 25 4.5 H & M........................................................................................................................ 25 4.5.1 Company background ........................................................................................ 26 4.5.2 Interview answers............................................................................................... 26

5 STATISTICAL DATA .................................................................................................... 26 6 ANALYSIS ...................................................................................................................... 27

6.1 Analysis of empirical data relative theory ................................................................. 27 6.1.1 Internet marketing .............................................................................................. 28 6.1.2 Traditional marketing ......................................................................................... 29 6.1.3 Reflection on the comparison model.................................................................. 32

6.2 Discussion.................................................................................................................. 33 7 CONCLUSION ................................................................................................................ 35

7.1 Suggestions for further research ................................................................................ 36 REFERENCES ......................................................................................................................... 37 APPENDIX .............................................................................................................................. 39

Appendix A .......................................................................................................................... 39 Appendix B .......................................................................................................................... 39

List of figures:

Figur 1 Research plan................................................................................................................ 4 Figur 2 Promotion mix model ................................................................................................. 11 Figur 3 The Comparison Model ............................................................................................... 21

1 INTRODUCTION

When companies start business, their main goal is to make profit and accomplish a successful growth. Therefore different strategies are used to sell products or services that they offer. Companies try to create, promote and sell products or services that could satisfy their target customers. Marketing is a strategy that can make a business grow and thereby become more powerful. It is crucial to know what kind of marketing to use in every area to achieve high sales rate, market share and the wanted image.

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.1 When Neil Borden introduced the concept of the "4 P's" of the marketing mix (Product, Price, Place, and Promotion), marketers were offered opportunities to exploit each aspect of those elements and thereby satisfy their customers' needs and wants.

Marketing has to some extent stayed the same in many years but as technology has developed, it has had its affects on marketing. Entrance of Internet into our lives has brought many possibilities and that has also affected marketing. Since the evolution of Internet, the Internet selling or e-selling has become ever more established in every day life in the society and is even replacing the traditional medium, to some degree. It is a new channel for communication which brings along new opportunities for marketing.

The concept of marketing is extensive and there is high number of studies done on this subject. These studies discuss different tools of marketing and how to use them to guide businesses to success.

1.1 Research problem

Different tools of traditional marketing have been used by marketers for a long time. The marketers have been using the traditional channels such as face to face communication, TV, radio and magazines etc. to communicate to the customers. Nowadays there is a new communication channel, Internet, added to these traditional channels, which have brought lots of opportunities for marketers. Internet has affected marketing process by providing opportunities that were not available by using traditional marketing tools. All of the communication channels have an important function of their own but Internet is a channel that has developed and is continuously developing which has got a lot of attention from everyone. Knowing the differences advantages and disadvantages between traditional and Internet marketing, a marketer can be more capable to make the right decision when choosing the marketing strategy.

1 Philip Kotler 2003, Marketing Management

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Some interesting questions related to Internet marketing and traditional marketing are: What is the most beneficial marketing approach comparing traditional and Internet marketing? Which marketing tools are the most used ones in practice and which are preferred by "real life companies"? Is Internet marketing a contemporary version of traditional marketing and are the two kinds of marketing independent of or complementary to each other? These issues are considered interesting by the authors of this thesis since choosing a specific marketing method can be a difficult decision for a new company entering the market. The results of this thesis might help that company to successfully prioritize their marketing tools. There also might be some indistinctness about different marketing tools and their benefits or drawbacks for others interested in the subject, such as students studying marketing. The information provided in this thesis can create an understanding of the subject in focus, by presenting and analysing the theory of 4 Ps of marketing mix, both in traditional and Internet marketing, comparing them and giving examples.

1.2 Study aim

The aim of this study is to: ? Compare traditional marketing and Internet marketing and show the differences of characteristics between them. ? Find out what marketing tools are effective for some chosen companies in the fashion industry.

1.3 Target group

This thesis will target the managers of start-up companies that need to make a decision about the selection of their marketing methods. The studies that are done on marketing theories, the comparisons between them, point of view of marketing managers of the companies that were interviewed and the analysis made based on these would be useful to a business entering the market. Other target group for this thesis is other students and anyone who is interested in this subject and needs the gathered information for some reason.

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1.4 Delimitations

Due to the time limit and inaccessibility to all needed sources, the research for this thesis had to be limited. Therefore this study is based on the Swedish market. The marketing managers of the chosen companies are working in Sweden and their answers are related to the Swedish market as well. This study is also focused mainly on the business to individual consumers rather than business to business. Also because of the different cultures, economies and regulations in different parts of the world, the results from this thesis will mainly be valid in Sweden.

1.5 Structure of thesis

Chapter 1 ? Introduction In this chapter, the authors present some introduction and discuss the research problem. Chapter 2 ? Method In this chapter, methodology used to build up the research of this thesis is presented. Chapter 3 ? Literature review In this chapter, the theoretical background is described and a comparison of the different theories presented is made. Chapter 4 ? Empirical data In this chapter, the authors present the empirical data that is defined as data gathered on interview subjects. Chapter 5 ? Statistical data In this chapter, statistical data which is referred to in this thesis is presented. Chapter 6 ? Analysis In this chapter, analysis of all the gathered data relative the presented theories is presented. Chapter 7 ? Conclusion In this chapter, the authors have come to a conclusion and present suggestions for further studies.

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