Introduction
Marketing entails making products that are desired by a certain section of the target population or consumer. Marketing has been viewed as an ongoing dynamic process involving a set of interacting activities dealing with a market offering by producers to consumers based on reliable marketing anticipation (sales or demand forecast). Most organizations are turning on efficient ways that can improve their corporate objectives towards attaining a wider market share. One of such strategies is the use of Internet.
Many companies in the world are using internet-based systems that are cheap and simplify the information management process by removing the marketing management complexity, making the organization more responsive and as result generating more profit through revenue and saving. In addition, companies are trading together in electronic marketplaces that provide cost-effective goods and services which are of benefit to customers and act as means to fast economic recovery and development. Thus, internet marketing, also associated with e-commerce, is the conducting of business electronically using a communication link. It provides exchange of goods and services by use of electronic means, especially the World Wide Web and other computer networks (Coupey). Acquiring an e-commerce system enhances the way business is carried out and therefore gaining a competitive advantage. In light of this, this paper focuses on the best internet marketing strategies. Furthermore, it bases its survey on the American Airlines and its internet marketing strategies.
Competitive advantage and the Internet
Companies frequently incorporate innovations to attain competitive advantages. One such innovation is the use of internet. According to Porter (1985), competitive forces model and value chain model are used to describe how the organization can formulate its strategies for competitive advantage. Competitive forces include “the bargaining influence of buyers and suppliers, threats of alternate products and new participants”. And on the other hand, the competitive strategies include cost control, differentiation, originality, growth and coalition. Therefore in the value chain model, the internet can be used by a company to obtain a competitive advantage in the following ways:
- Managers can use e-mail and other internet communication capabilities to oversee larger number of employees, manage many tasks and subtasks in projects, and coordinate the work of multiple teams in different parts of the world.
- The internet can alter the current distribution channels, creating openings for drawing and serving customers who otherwise would not patronize the company. For instance, web-based discount brokerages have drawn new clients who could not afford to pay high fees charged by usual brokerage firms.
- For e-commerce, the internet offers businesses an even easier way to link with other businesses and individuals at a very low cost hence improving alliances. For example, Cisco Systems sell switches and routers through telecommunications network in the Business to Business (B2B) space. Cisco has been a leader in utilizing the direct sell model over the internet (Haag, Cummings and McCubbrey 245).
- Internet cuts transaction costs of searching buyers and sellers, gathering information on products, bargaining, writing and enforcing contracts, and transforming merchandise. A company can be able to lower its market cost for products and services, hence gaining a competitive advantage.
- Through Automated Just-in-Time warehousing, the internet or rather intranet can be used in coordinating the flow of information between inventory systems and controllers, making warehousing information more accessible to different parts of the organization, hence increasing precision and lowering costs.
In this light, businesses can counter the pressure of competitive forces by implementing a good internet infrastructure.
American Airlines
Looking at American Airlines (AA) with its set of customer-specific goals, best internet strategies can be emulated. American Airlines (AA) offers products and services that are mostly flight-specific to its passengers. Even though the AA is a global largest airline in passenger fleet size and transportation, it is constantly looking for ways to serve its passengers and reviewing many new ideas to cater to its customers; especially through internet marketing. Therefore, the AA products and services are mainly depicted in its airline destinations, onboard services, service line (AA Cargo), products and gifts and new ideas for quality improvement.
The AA operates in four continents. Dallas and Miami hubs act as entries to the Americas, while for Europe, Chicago hub acts as the gateway. On the other hand, the main entry for the Americas and Europe is the NY Kennedy, while St. Lous and La Guardia are local hubs. Thus AA is deemed as the largest airline with highest number of destinations, preceded by the Continental Airlines. Among the planned flights which the airline operates in international locations include Bolivia, Saint Vincent, Anguilla and Uruguay. According to the American Airlines website, non-stop airline services include the operation from Chicago to Shangai, Chicago to Beijing, Miami to Salvador and Horizonte, Dallas to San Salvador and Fort Worth to Madrid. All these flight destinations are accompanied by well-trained flight attendants who ensure that customers’ requirements are met; the company views the flight attendants as an important part of its quality product. Therefore concerning customer behavior and satisfaction, the company seeks to treat each customer with much respect and dignity. Customers are able to book flights through the company’s website and also they can buy products online.
American Airlines fleet is about 620 aircraft, with phone handsets and full in-flight internet service using the Wi-Fi technology on its United States flights. This is a marketing strategy that enhances the services offered to its customers, especially the first-class passengers on very long flights; many of whom are business people whose high-priced tickets pay most of the freight. Since marketing aims to meet and satisfy target customers’ needs and wants, there is a need to understand consumer behavior about their buying process (Kotler 182). Thus, the AA invented the AAdvantage flyer service so as to reward constant clients and improve brand loyalty. One such invention occurred in the early 1980s, when AA decided to offer free mileage credit to its customers by pioneering a frequency program.
The AAdvantage program is a traveler’s awards program in which the registered members earn miles every time they buy a genuine published fare ticket and fly on AA or any other subsidiary of the company; like the American Connection and the American Eagle. Customers can also gain bonus miles up to 25% for Business Class or 50% for First Class. However, because not every individual is a constant traveler, miles can also be received from non-travel-related partners including retail partners. For instance, AA has moved towards partnership marketing by working closely with Boeing in designing airplanes that fully satisfy American’s requirements. Other business partners include Air Pacific, Jet Airways, Alaska Airlines, and Gulf Air. This strategy has dramatically improved the image of the airline.
Furthermore, AA is concerned with offering products and gifts to its customers in order to enhance the business objectives in a competitive marketing environment. Firstly, the Admiral Club Membership enables customers to have privileges like reservation assistance, computer and internet access, and exclusive special offers from other companies like Hertz and the Sky Mall. Secondly, the credit card offered by the company presents customers with easiness of purchasing goods and services from AA. Thirdly, AA gift cards are essential for customers who would prefer sending gifts to their beloved ones. The gift card is purchased and redeemed through the company’s website, AA.com. And, fourthly, the airline’s museum gift shop is a good place for selecting various gift products like jewelry, books, toys, prints and many more.
In the process of enhancing customer loyalty to its products and brands, AA has been able to implement new ideas in recent years. Among these ideas are: (1) to supply a power plugin first class so that the business person could work on the computer longer than two hours normally provided by a battery. (2) to supply an Internet connection with limited access to web pages and e-mail messaging. (3) to offer 24 channels to satellite cable TV. And (4) to offer several CD audio systems that let each passenger create a customized playlist of music and movies to enjoy during the flight.
Internet Marketing Strategies
Through the analysis of American Airlines and the way it uses the internet to support many of its organizational processes, the following internet marketing strategies are essential to improve an organization’s performance:
Finding new target market
To successfully find new target market, a company will need to make sense of a lot of complex information which will need to be structured into an organized pattern that gives a good overview of the marketplace. The marketer will require detailed pictures of the environment in which the organization operates. Thus, there are several strategies for finding new target market: Firstly, improving search engine ranking/optimization enables an organization to enhance the way customers navigate through their website and hence having most return customers. Since most people rely on search engines for their information needs, a search engine should be optimized so that the most relevant information about the company is readily available through search engines. In this case, a company must be able to choose the right search terms, allocate them to suitable web pages, and organize links from other websites to fit the target search words and their pages. For the case of American Airlines, the company uses search terms like “AA” or “American Airlines” to improve its ranking. Secondly, a company may establish a pay-per-click (PPC) campaign to monitor visits to the website. This is a form of advertising in which a company pays for every click that leads to its website. PPC campaign requires selection of proper keywords so as to improve on traffic that achieves the organizational goal of having many customers or visitors.
Another target market strategy is setting up a high-quality site with specific traffic and high frequency, this enables visitors to navigate through the website easily and make proper buying decisions. Furthermore, high-quality content is a key to customer confidence in the company’s products and services. Organizations like American Airlines are required to be informative and well connected to their customers, to avoid questioning and challenges from the customer who are connected, informed (through the internet which gives access to all kinds of information), and active.
Automated Home Based Business
Due to the internet automation technologies, an automated business is a strategy that enables firms to do more research on how their products and services are fairings. This strategy requires a careful consideration of the traffic and the website content. E-business technologies enable automation of front-office and backroom tasks like counter operation, billing, security and order taking which enable an organization to do without clerical or accounting and facilitates a self-service for the organization’s customers (Feng Li). The strategy orientation to customer experience uses supportive component of experience environment that are customer communities and set of connected companies which enables unique value for each customer. Customers can request information from the company and receive automated responses through an automated responder system. Since American Airlines enables users to make reservations remotely, home-based resources are expanded hence creating business flexibility.
Selling products when people are online
This involves selling products through the company’s website. Customers can purchase items or make an inquiry online. Selling in this concept requires a user-friendly website with great sales letters having high conversation rates. More so, a mailing list is incorporated so as to provide sales online and use the customer information to perform such transactions in the future. Looking at the way American Airlines sells its products online, the company focuses on flight-specific customers by enabling them to book reservations for their flight tickets.
Self-improved business
To succeed in enhancing an organization’s performance in the market environment, marketers should consider rethinking and redesigning their market structures. They should master the way of dealing with threats and opportunities in the market, join forums on marketing, learn new ideas through books. This is a gateway to improvement on the way marketing is carried out over the internet, hence internet marketing strategy.
Benefits of Internet Marketing Strategies
Taking advantage of internet opportunities has become a major objective of companies involved in internet marketing. Thus, organizations can realize the following benefits by applying the strategies described in the previous section:
- Decreased transaction costs. Through implementing an online selling system, the costs incurred in trading goods or services can be reduced. It is easy for a company to decrease the following costs: search and information costs, negotiating and assessment costs, policing and enforcement costs. For instance, advertising a company’s products and services through the internet enables it to reach many customers therefore enhancing product awareness.
- Disintermediation. Through the internet marketing, a business institution can be able to reach its consumers directly because the internet spans the world. In this case, intermediaries such as suppliers, distributors and retailers have reduced hence an easy management of the supply chain.
- Decreased use of cash. Handling cash poses a threat to many business organizations. But through online marketing, a firm can be able to implement electronic methods of money transfer. For instance, most supermarkets have implemented the use of credit cards for customers purchasing products online.
- Speed. Electronic communications facilitate quick delivery of data from the source to the destination. Since electronic messages are instantaneous, a customer may not wait for long in order to get the order details by post.
- 24*7 Operations. E-commerce systems have the capability of operating daily at any time. A company’s physical stores or markets do not need to be open daily for the consumers and suppliers to engage in electronic business.
- Enhances telecommuting. Employees and other staff can be able to work away from their workplaces. This is enhanced through the advent of intranets and the Virtual Private Networks (VPN).
Conclusion
Companies invest in internet technologies since such strategies are presumed to be much profitable in the long run. Internet marketing has resulted in several effects that have changed the way marketing is done; by creating opportunities and challenges for organizations, industries and their market. The impact of internet on business includes: reduction of importance of economy of scale, lowing of market communication cost, provided a great prices standardization, reduction in the information float time, temporary synchronicity, increase contact between seller and buyer, and change in the intermediary relationship. Basing on American Airlines Company, this paper has discussed the various internet marketing strategies that can be adopted by organizations to improve on their overall performance and corporate objectives. The best internet marketing strategies discussed are: finding a new target market through proper search terms, using an automated home-based business, selling products online, and implement self-improved business.
Works Cited
American Airlines. American Airlines Advantage; Products and Gifts. 2009. Web.
Coupey, E. Digital Business: Concepts and Strategies. 2nd Ed. New Jersey: Prentice Hall, 2004. Print.
Feng Li. What is e-business?: how the internet transforms organizations. New Jersey: Wiley-Blackwell, 2006. Print.
Haag, S., Cummings, M. & McCubbrey, D., Management Information Systems, 3rd Ed. New York: McGraw-Hill, 2002. Print.
Kotler, Philip. Marketing Management. 11th Ed. Ney York: Prentice Hall, 2003. Print.
Porter, M. Competitive Advantage: Creating and Sustaining Superior Performance. New York: Free Press, 1985. Print.