CHAPTER 2 The Internet microenvironment

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CHAPTER 2The Internet micro-environment
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Learning objectives

• Identify the different elements of the Internet
  environment that impact on an organisations
  Internet marketing strategy
• assess competitor, customer and intermediary use
  of the Internet
• evaluate the relevance of changes in trading
  patterns and business models enabled by
  e-commerce.

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Questions for marketers

• How are the competitive forces and value chain
  changed by the Internet?
• How do I assess the demand for Internet services
  from customers?
• How do I compare our online marketing with that
  of competitors?
• What is the relevance of the new intermediaries?

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The Internet marketing environment
Figure The Internet marketing environment
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Porters five forces
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Alternative models of the value chain
Figure 2.2 Two alternative models of the value
chain (a) traditional value chain model, (b)
revised value chain model
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A value network
Figure Members of the value network of an
organisation Source Adapted from Deise et al.
(2000)
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Disintermediation
Figure Disintermediation of a consumer
distribution channel showing (a) the original
situation, (b) disintermediation omitting the
wholesaler, and (c) disintermediation omitting
both wholesaler and retailer
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Example Vauxhall
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Reintermediation
Figure Reintermediation process (a) original
situation, (b) reintermediation contacts
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Example - Priceline
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Assessing demand

• Need to assess
• Access to Internet
• Proportion of customers influenced by channel
• Proportion of customers who buy direct

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Global population with Internet access
Figure Percentage of global population with
Internet access (based on Nua and Cyberatlas
compilations at www.nua.ie/surveys and
www.cyberatlas.com)
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Global variation in Internet access
Figure Global variation in number of PCs per
hundred population and percent Internet
access in 2000 Source ITU (www.itu.int)
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UK adoption of different media
Figure UK rate of adoption of different new
media, base c. 4000 GB adults aged 15 (
2001) Source e MORI Technology Tracker, January
2002. See http//www.e-mori.co.uk/tracker.shtml
for details
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Internet user demographics
Figure Summary of current demographic
characteristics of Internet users, base 1673 GB
Internet users aged 15, January 2002 Source e
MORI Technology Tracker, January 2002. See
http//www.e-mori.co.uk/tracker.shtml for details
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Variations in access to new media social group
Figure 2.16 Summary of variation in different
access to new media according to social group,
base 4222 GB adults aged 15, January
2002 Source e MORI Technology Tracker, January
2002. See http//www.e-mori.co.uk/tracker.shtml
for details
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Different types of Internet access location
Figure 2.17 Different types of Internet access
location Source The Internet Monitor, BMRB,
www.bmrb.co.uk
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A pyschographic segmentation
Figure 2.18 Psychographic segmentation for Web
users Source Netpoll (www.netpoll.net)
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Percentage of online shoppers by product category
Figure 2.19 Percentage of online purchasers by
product category Note There are 9.9 million
online shoppers (54 of Internet users aged
15) Source The Internet Monitor, BMRB, November
2001 (www.bmrb.co.uk)
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Percentage of businesses with Internet access
Figure 2.20 Percentage of businesses with
Internet access Note that results are weighted by
business size and that some countries are
included for different years Source DTI, 2001
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Businesses that identify suppliers online
Figure 2.21 Percentage of businesses that
identify suppliers online by business
size Source DTI, 2001
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Hitwise competitive ranking
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Intermediaries
Table 2.5 The most visited sites in the UK