Management Of Internet Marketing Marketing Essay

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Firstly, Boo.com failed to implement a good business plan, making errors such as failing to realise the importance of marketing through the use of internet, instead opting to use other channels to communicate the boo.com proposition which often incurred high promotional cost, Such as the use of "extensive "high impact" marketing campaigns on TV and newspapers... lavish online fashion magazine" (Chaffey 2006, p142). Ultimately, boo also assumed conversion rates would be good and the demand for their online services would be high, this contributed to boo.com inevitable failure.

Boo.com failed to address the technological problem with the slow page download which gave rise to negative user's experience that made Boo.com interface unattractive. A critic explained how he waited, "Eighty-one minutes to pay too much money for a pair of shoes..." (Chaffey 2006, p143). As a result Boo.com reached a through of disillusionment phase, demonstrated by (Chaffey 2006) in the hype cycle where the technology fails to meet the expectations and becomes unfavourable inevitable lead to boo.com failure.

An on-line journal written by (Laing 2006) explains how the dot-com bubble involved the internet sector going through a boom and bust cycle that eventually crash, during 1995 to 2002.

Boo.com was a significant part of the bubble that failed along with other dot.com casualties like Webvan (1999-2001) an online grocery business that filed bankruptcy in 2001. Webvan couldn't attract enough customers to substantiate its huge expenditure. A similar contrast to Boo whom had "investors... invest $130 million in the company" (Chaffey 2006, p143) then failed.

A dot.com era survivor who is still in business is Amazon, boo.com elected to "open its virtual doors in both Europe and America" simultaneously (Chaffey 2006, p142) in contrast "Amazon did not launch simultaneously in all markets. Rather it became established in the US before providing local European distribution through acquisition and re-branding of other e-retailer..." (Chaffey 2006, p143). A strategic decision assuring Amazon of long-term survival and success.

MIM, Assignment 1

2. Using the framework of the marketing mix (ref. chapter 5), analyse the marketing tactics of Boo.com in the areas of product, pricing, place and promotion.

Product

Boo e-retailed prestigious leisure and sportswear brand was there core product. Many of these fashion and sports names such as Nike, Lacoste and Adidas already have brand awareness, the product could sell itself even though items were premium priced. However, they had limited their target audience narrowing to only "young, well-off and fashion-conscious' 18 to 24 year olds" (Chaffey 2006, p142).

Price

Boo couldn't apply downward pressure on price, even though they had no physical presence and the associated overheads such as operating stores. Instead items had premium pricing and discount couldn't be offered because suppliers declined afraid their product could be purchased on an online "bargain bucket" (Chaffey 2006, p142). (Chaffey 2006) also pointed out boo.com faced a pricing issue where in different markets, local or zone pricing existed, for example there are price variations in different European countries and lower price often exist in the US.

Place

The place of purchase can be exhibited by Boo.com which was a Seller-oriented site characterise by a controlling third party that represents the sellers. Boo was an online "retailer of prestigious brand leisure and sportswear names" (Chaffey 2006, p143). Through Boo.com marketing tactics that employed the internet, they were able to achieve a global reach and distribution a view supported by (Allen and Fjermestad, 2001) arguing that the internet has the most implication in the marketing mix for place given that internet has a Global reach. However this added significantly more cost such as delivery & returns cost.

Boo.com was able address different language and cultural barriers, through localisation of the website making boo.com available in UK English, US English, German, Swedish, Danish and Finnish, France, Spain and Italy. "The web site was tailored for individual countries using the local language and currency and also local prices" (Chaffey 2006, p143)

Promotion

Boo used "extensive "high impact" marketing campaigns on TV and newspapers... lavish online fashion magazine" (Chaffey 2006, p142) the marketing tactics could be measured by its initial success shown in (Chaffey 2006) article recognising the PR initiative that received 350,000 e-mail pre-registrations interest of the launch. However, eventually low conversion rates and high cost per customer acquisition figure gave rise to negative comment on the initial PR campaign being to overambitious.

Process, people and physical evidence

Negative user experience, ultimately lead to low conversion rates and management failed to factor in the cost in providing customer service into the business model

MIM, Assignment 1

3. In many ways, the vision of Boo's founders was 'ideas before their time'. Give examples of e-retail techniques used to create an engaging online customer experience which Boo adopted, that are now becoming commonplace.

Boo introduced numerous e-retailing techniques that created an engaging online customer experience. A new online customer service was introduced that can be explained in (Chaffey 2006, p143) case study is how boo developed a virtual salesperson named Miss Boo that help user through the website. Another innovative tool that boo developed was the virutual-3D wardrobe where user could drag selected product on to a model allowing user to visualise the product selection in advanced 3D image. Other included customer email registration, "…350,000 e-mail pre-registrations interest…" (Chaffey 2006, p142) and the localisation in different languages and currency explained in place.

Unfortunately, boo had "ideas before their time" (Chaffey 2006, p143). Internet speed had yet to matured, subsequently boo was criticized for its speed. It was noted that "Today, the majority of European users have broadband, but in the late 1990s the majorities were on dial-up…" (Chaffey 2006, p143). However, many internet businesses now have taken advantage of the innovation pioneered by boo.com and with the introduction of broadband and larger bandwidth speed is not comprised. Allowing company's like inkitsd to optimise profit potential with the use of a virtual salesperson in the home page giving an introduction of the company and website. BMV has also utilized the technology that allows user build their ideal BMV and visualise it in 3D. (Refer to reference for the example to the websites link).

Refernence

Books

Chaffey, D Ellis-Chadwick , F & Johnston , K Mayer, R (2006) Internet Marketing . 3rd ed. England : Pearson Education .

Internet Websites

Chaffey, D (2001) Boo.com case study Pearson Education, Available: http://www.davechaffey.com/E-commerce-Internet-marketing-case-studies/Boo.com-case-study [Last accessed 10th March, 2010]

Smith, S What was the Dot-com Bubble? conjecture corporation , Available: http://www.wisegeek.com/what-was-the-dot-com-bubble.htm [Last accessed 10th March, 2010]

Sandoval, G Austria Farmer, M (2001) Webvan delivers its last word: Bankruptcy cnet news, Available: http://news.cnet.com/2100-1017-269594.html [Last accessed 10th March, 2010]

Example

Anything you can think of with your logo on it. Ink-it, Available: http://inkitsd.com/ [Last accessed: 10th March, 2010]

BMW: home BMV Group Australia, Available: http://www.bmw.com.au/com/en/bmwrange/BMWproducts/BuildyourBMW.html [Last accessed: 10th March, 2010]