Tuesday, February 8, 2011

Dissertation on Online Shopping

Dissertation on Online Shopping

In this century, many believe technology will triple. This means that we will have more technological advances than in the past. We already have the ability to buy groceries, cars, clothing, and even houses without going anywhere. This remarkable invention is know to us as the internet. Billions of U.S. dollars is spent on online advertising and shopping every year. This is because of intergrated marketing communications. While every manager knows single focus, clear cut company strategies and selling messages are important, most firms, because of their functional organizational structures, still tend to send disparate messages to the outside world. Worse, they miss the opportunity to gain the full value for their marketing dollar that intergrated programs can provide (Schultz 3).

Purpose and Scope
From looking at statistics and percentages, and gatherings of scholary journals, its is a fact that in today’s age, marketing departments of large retailers must be on the web. It would be detrimental to a company’s business if they didn’t offer this fast and effective way to their products. This paper will discuss the developments of intergrated marketing communications with online shopping and advertising.


Online Shopping
Competing with In-store shopping
Call it laziness, call it what you will, but more and more Americans are shopping while sitting down. Online shopping now accounts for as much as 23% of sales and the sales are growing 30%-40% a year while offline retail has only grown about 4% (Vogelstein, para.2). Catalouges are now out and the trendy thing to do is shop online. Many large retail chains are using the web to promote their store and vice versa. Barry Judge, vice-president for consumer marketing at Best Buy explains, “That’s the future. In order to be world-class, we need to be the best in both the physical and virtual space” (Tsao, para.7).

Educated Customers
Wal-Mart directs its in-store shoppers to its web site where they can choose from 100,000 music titles versus the 3,000 in store. They can also order tires, pictures, and set up car appointments (Tsao, para.11). This convience and customer service is what pleases the consumer and brings back business. More than 80% of sales revenue comes from satisfied customers versus new accounts. Like said before, many people are lazy and this is a way to service them. Sears’ introduced and option to buy products online and pick them up at the store. Thus 30%-40% of Sears’ sales occur this way (Tsao, para.12). Retailers have also discovered the Web is “ideal for publishing reams of information to win over customers (Tsao, para. 13).”

Black Friday
Monday, the New Black
Most dread the Friday after Thanksgiving for its reputation as being the biggest shopping day in the year. Hence the name “Black Friday.” However, researchers have found that “Black Monday is the day that workers set aside their job duties to surf for gifts online” (Ebenkamp, para. 1). Not dealing with crowded parking lots, or long winding lines, these online shoppers paid “$380 million on Monday, December 2, 2002 (Ebenkamp, para 2).” On the contrary, Black Friday only rung up half that amount-$196 million. According to comScore analysts, this is because Internet users are taking advantage of generally higher Internet speeds to view sluggish sites at the workplace, which also serves as a place to secretly shop (Ebenkamp, para. 3).

A Growing Trend
Because online shopping is growing, AOL is pushing a 100% guarantee for shoppers using their retail area (Cuneo, para.4). Many search engines are experiencing such a dramatic jump from previous years. Yahoo! Reported a 75% jump in post-Thanksgiving shopping sales; MSN Eshop reported a 150% increase in that same week and 188% increase in shoppers in October compared with the same month in 2000 (Cuneo, para. 8). With the dramatic showings, many companies are expecting ad revenue and sales revenue to skyrocket within the next few years.

Online Advertising
Rich Media
Online advertising is progressing everyday. People are beginning to tire with the annoying banner ads and cookies. Many advertisers are now turning to a whole new approach. Rich media advertising-ads that dance across the screen or appear with full-motion video and audio is soaring (Williamson, para. 2). Web publishers are yearning for ad revenue and rich media is the answer. It allows for creativity and is more costly than the regular banner ads. Yahoo’s chief sales officer, Wenda Harris Miller, said “We’re not selling buttons and banners for a living. We are selling marketing programs that leverage these new technologies” (Williamson, para. 3). Not all companies are eager to jump on the rich media bandwagon.” Rich media is the beginning of the process of healing that will have to happen before marketers allocate serious money to this medium” one advertising executive said. Others just say they want to keep up with the speed of the computers people are using and they fear that rich ads will be above that. (Williamson, para.20). Some are waiting for costs to come down and technology to become simpler. Other marketers fear the potential bottleneck from trying to shove a high-brandwith creative down a dial-up connection (Williamson, para. 16). If a company spent a lot on the advertisement, but the computer user couldn’t receive it, what good is that doing the company. Researchers predict that twenty million homes will have the fast paced modem in their home in the next few years compared to the seven million now.

Money in Advertising Online
Online advertisers are quickly adjusting to new, fast paced market that is turning to the Web for its shopping needs. The report titled “ Interactive Marketing: Stats, Strategies, and Trends, “ projected online advertising will reach $6.7 billion in 2003, up 5% from expected spending of $6.4 billion this year. By 2005, online advertising is said to reach $8.1 billion (Maddox, para. 1). Most advertisers are now willing to give up more of their advertising budget toward online than in the past because of proof that online ads are effective at branding. The Interactive Advertising Bureau published several studies in conjunction with major advertisers that showed the effectiveness of online advertising in improving brand awareness and other brand metrics (Maddox, para. 3). Web users mostly think that advertisements are a nusence because they slow the downloading time and take up space. But it’s a price they’ll have to pay if they want freely accessible content sites (Callaghan, para.14).

Clearly, online shopping is a very lucrative industry. Whether the company offers their business only online or offers many outlets, this method of retailing is expanding rapidly. This then leads to another prosperous business, online advertising. It has been shown that consumers pay billions of dollars shopping on the web and advertisers spend even billions more advertising to them. It has been said that soon we will be so technologically advanced, we won’t have to leave our house for anything. We will be able to do just about anything from our computer. If that happens, marketers will have to brainstorm more ideas to advertise and service the consumer who buys everything needed sitting down!

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