COMPARATIVE STUDY OF ONLINE MARKETING AND

TRADITIONAL MARKETING IN INDIAN SCENARIO

SUBMITTED BY

ADESH NARAYAN
A3906414098
BBA (Gen)

AMITY SCHOOL OF BUSINESS

AMITY UNIVERSITY, UTTAR PRADESH

1
 ACKNOWLEDGEMENT

It gives me great pleasure to express my heart felt gratitude towards all

those who guided me in formulation of this project report. There are
several people who deserve more than a written acknowledgement of
exemplary help. In my efforts to accomplish this task I have received a
great amount of help and guidance from some individuals who I wish to
thank from the bottom of my heart.

I am grateful to Faculty, ASB, Amity University, Noida who has always

encouraged me a lot. His continuous support has lead me to formulate my
project in a right way.

Although I have tried to express our gratitude to every person but there
still maybe some hiding veils of unknown who we might have not been
able to recognize, we would like to thank all of them.

ADESH NARAYAN
 EXECUTIVE SUMMARY

Marketing has pretty much been around forever in one form or another. Since the day when
humans first started trading whatever it was that they first traded, marketing was there.
Marketing was the stories they used to convince other humans to trade. Humans have come a
long way since then, and marketing has too. The methods of marketing have changed and
improved, and weve become a lot more efficient at telling our stories and getting our
marketing messages out there. eMarketing is the product of the meeting between modern
communication technologies and the age-old marketing principles that humans have always
applied. So before going deep into other information let us know what actually marketing
means and its definition. From a societal point of view, marketing is the link between a
societys material requirements and its economic patterns of response. Marketing satisfies
these needs and wants through exchange processes and building long term relationships.
Marketing in India can be looked at as an organizational function and a set of processes for
creating, delivering and communicating value to customers, and managing customer
relationships in ways that also benefit the organization and its shareholders. Marketing is the
science of choosing target markets through market analysis and market segmentation, as well
as understanding consumer buying behaviour and providing superior customer value.

In this day and age, we basically have two categories of marketing

Traditional marketing and

Internet marketing

There is an ongoing battle between these types of marketing. Which is better? Which offers
greater benefit and value? The truth is, both methods can be useful. However, the key to
making the right allocation of marketing funds is properly understanding your target market
and the pros and cons of each type of marketing. India is an emerging market in and hence we
are going to study the comparison of these both marketing modes in Indian scenario.
Serial Chapter Title
No.
1 Chapter -1
2 1.0 Introduction
3 1.1 Need & Relevance of the Study
4 1.2 Objective of the Study
5 Chapter - 2
6 2.1 Literature Review
7 Chapter - 3
8 3.0 Method of study
9 3.1 Research Statement
10 3.2 Tools for data collection
11 3.3 Statistics
12 Chapter - 4
13 4.1 Results
14 4.2 Discussions
15 Chapter - 5
16 5.1 Limitations
17 5.2 Implications
18 Chapter - 6
19 6.1 Summary
20 6.2 Conclusion
21 References
 CHAPTER 1

1.0 Introduction
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Marketing has pretty much been around forever in one form or another. Since the day when
humans first started trading whatever it was that they first traded, marketing was there.
Marketing was the stories they used to convince other humans to trade. Humans have come a
long way since then, and marketing has too. The methods of marketing have changed and
improved, and weve become a lot more efficient at telling our stories and getting our
marketing messages out there. EMarketing is the product of the meeting between modern
communication technologies and the age-old marketing principles that humans have always
applied. So before going deep into other information let us know what actually marketing
means and its definition.

Marketing

Marketing is the process of communicating the value of a product or service to customers, for
the purpose of selling that product or service.

From a societal point of view, marketing is the link between a societys material requirements
and its economic patterns of response. Marketing satisfies these needs and wants through
exchange processes and building long term relationships. Marketing can be looked at as an
organizational function and a set of processes for creating, delivering and communicating
value to customers, and managing customer relationships in ways that also benefit the
organization and its shareholders. Marketing is the science of choosing target markets
through market analysis and market segmentation, as well as understanding consumer buying
behaviour and providing superior customer value.

In this day and age, we basically have two categories of marketing:

Traditional marketing and

Internet marketing

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There is an ongoing battle between these types of marketing. Which is better? Which offers
greater benefit and value? The truth is, both methods can be useful. However, the key to
making the right allocation of marketing funds is properly understanding your target market
and the pros and cons of each type of marketing.

Emergence of eMarketing

At the beginning of the century, social life was mostly local. It was followed by a period in
which commodities were produced on a mass scale. Technological change has moved steadily
back focusing on the individual. Kotler formalized this evolution with his book "Marketing
Management." His key stages are production, sales and brand management. Each of these is
strongly motivated by technological opportunities, which permit new methods and new
opportunities. As the new technology of the Internet develops, it reinforces the new
marketing emphasis. In todays technology driven world, a new fast paced digital economy is
emerging. It is e-marketing that is changing the way products and services are conceived,
manufactured, promoted, priced, distributed and sold.

The Internet is an increasingly expanding medium of interaction that has virtually eliminated
geographical boundaries and overcoming previously existing obstacles of global business. It
can be considered to be an accidental mega-market born out of technology and that of
economic needs. The Internet, the single most sophisticated on line service, is relatively
simple and immediate to use; however, these attributes may not enjoy a perceived status of
usability for those new to and somewhat hesitant of advances in computer technology. The
Internet today offers India best opportunity to expand its market on an even more global
scale. This network of computers represents a perpetually open market without geographical
barriers to prevent any business from reaching customers all over the world via a virtual
market where trade, transactions, cash and commodities flow in the form of electronic
consumption.

The Internet is an inter-networked system of computers linked by telephones that allow free
flow of information from one part of the network to any other, provided the information is
packaged according to certain conventions. It was born out of a vision of universal

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connectivity and global community. Created as a data link among a sprinkling of academic
communities, the Internet has fast been embraced by business. Companies are using it to link
employees in remote areas, stay in touch with customers and suppliers, and distribute sales
information more quickly, as well to sell and distribute goods and services. The Internet
began to grow dramatically in 1994 with the advent of a new, more user friendly application
-- The World Wide Web -- which provides companies access to millions of new customers at
a fraction of the cost of print or television advertising, and in many cases, distribution. The
Web uses a technology called hypertext which allows users to leap from one computer data
base to another by simply clicking on highlighted images or text. It employs easy-to-use
browsers to capture the public's imagination with the promise of a navigable world of a
seemingly infinite amount of information. The World Wide Web's popularity, in turn, has
caused the entertainment media and the communication industries to revaluate their business
models. The use of the Internet to carry real time data, such as voice and video, in addition to
traditional forms of data, which lent themselves more readily to packet switching technology,
is on the horizon.

The number of computers in the world grew from less than half a million two decades ago to
200 million in 1996. The number of websites are doubling every 53 days and the number of
non-U.S. users is projected to grow from an estimated 40 million in 1997 to 500 million in
the year 2000. In India, the Internet subscribers in August 1995 were only 703, but by June
1998 the number had grown to 1, 20,000 . However, Jay Forrester, the inventor of random
access memory, expects that for at least three four generations, people will use computers for
what they've always done, only faster. A profession, no less than a craft, is shaped by its tools.
The profession of marketing, its theories, practices, and even the basic sciences that it draws
upon, are determined by the tools at its disposal at any moment. When the tools change, the
discipline adjusts, sometimes quite profoundly and usually quite belatedly.

1.1 Need and Relevance

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The boom in computer, telephone and television technologies, has had a major impact on the
way businesses produce and market their products. As technology has delivered new and
better foods, clothes, housing, vehicles and entertainment possibilities, our lives have
changed dramatically. Telecommunications is the driving force that is simultaneously creating
the huge global economy and making its parts smaller and more powerful. At the heart of this
phenomenon is the Information Superhighway and its backbone, the Internet. Philip Kotler,
one of the most prominent figures of marketing, warns that even though the alert marketers
see this technology as producing an endless stream of opportunities, taking advantage of it
entails walking a thin line.

Impact of internet on marketing

Clearly, marketing's tool kit is experiencing an unsettling amount of change. The boom in
direct and database marketing, the dawning of electronic commerce, new ways to automate
sales force management, and the sudden blossoming of the World Wide Web all suggest that
the discipline is under pressure to redefine itself. The stock market is well aware that
something important is developing; venture capitalists and technology companies are making
large bets; and students at business schools, alert to any hint that their investment in the
development of personal skills might have to pay off in a changed environment, show
particular interest in new methods of market making. Mass marketing concepts and practices
are taking advantage of new ways to become more customized, more responsive to the
individual. The challenge facing the companies today is how to take strategic advantage of
these opportunities to build more desirable products and services, build brand equity and
increase revenues and profits. The Internet represents new opportunities for the marketers and
sales people because it provides a wide reach for all marketing efforts conducted on it.
International markets can be opened up at low costs. Advertising and promotion costs in other
countries can be significantly reduced, if not eliminated. With the use of the Internet there can
be continuous customer support. Services can be made available through interactive e-mail
systems on the net. This saves time and money. In addition, feedback from the marketplace
can be likewise collected on an on-going basis, and in many cases, in the form of "real-time"
data. New products and services can be tested through interactive questionnaires on the

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Internet. This feedback forms the basis of market identification and segmentation that enables
marketers to better position their products.

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1.2 Objective of the study

Primary Objective
o Comparative study of traditional marketing and online marketing in terms of
growth in Indian scenario.
o Potential and penetration of online marketing over traditional marketing.

Secondary Objectives
o To find the effectiveness of online advertising vs. traditional advertising (reach
and creation of awareness)
o To find the reliability of online marketing vs. traditional marketing (recall and
remembrance)

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 CHAPTER 2

2.0 Literature Review

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By the end of this year, one in every 10 Indians will be an Internet user, making the country
the third-largest Internet market in the world after China and the United States. At the end of
November, 121 million Indians are accessing the Internet at least once a week to check
emails, chat or log on to a social network, a survey has found. India is adding Internet users at
the rate of almost 5-7 million a month, and at the current pace it will surpass the US, which
has about 245 million users, in less than two years.

According to the survey by IMRB and the Internet &Mobile Association of India, the
country's Internet population was about 112 million by September. When this year ends,
about 9 million more will be added, making India one of the world's top markets for Net-
based businesses. The profile of users is evolving rapidly, showing that the medium has made
deep inroads into small town India and among the less affluent. There are more Internet users
in towns with a population of less than 5 lakh than in the top eight metros put together.
Schoolchildren make up more than a fifth of the users and more than one in 10 belong to the
lowest socio-economic groupings. The Internet explosion is also rapidly opening up markets
for online businesses, consumers and retailers.

As per "India Goes Digital", a report by Avendus Capital, a leading Indian Investment Bank
specializing in digital media and technology sector, the Indian e-commerce market is
estimated at Rs 28,500 Crore ($6.3 billion) for the year 2011. Online travel constitutes a
sizable portion (87%) of this market today. Online travel market in India is expected to grow
at a rate of 22% over the next 4 years and reach Rs 54,800 Crore ($12.2 billion) in size by
2015. Indian e-tailing industry is estimated at Rs 3,600 crore (US$800 mn) in 2011 and
estimated to grow to Rs 53,000 Crore ($11.8 billion) in 2015.

Internet is growing at an unprecedented pace in India. Businesses are experimenting with new
models, creating a snowballing effect.

Already, firms such as Google, eBay, Yahoo and Facebook have a large presence in India and
are delighted by the prospects before them. India crossing the 100 million Internet users mark

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represents an incredible market opportunity for other companies. It will particularly foster the
growth of e-commerce in India.

Even though the user base is vast, the total number of Internet connections is just 14.7
million, of which 11.87 million are broadband links. This indicates that most people share
Internet access in offices or cyber cafes. An average unlimited broadband plan costing about
Rs 750 per month is still too expensive in a country where the monthly per capita income is
Rs 2,810.

Of all the broadband connections, only 12% access the Internet at 1 Mbps or higher speeds.
About 54% of users access Internet at speeds of 256 Kbps or lower, and for 34% the speeds
are between 256 Kbps and 1 Mbps.

The survey found that more than 75% of Internet usage is among school- and college-going
students and those who have recently graduated. However, there is a stark contrast in the
usage patterns between urban and rural users. An urban youth accesses the Internet for
emails, social networking and research about education, in that order of priority.

A rural youth uses the Internet to listen to music, watch videos, download photos and email.
India is now of one of the top markets for Yahoo. Yahoo is now focused on localising content
for rural masses.

Mumbai has the highest number of Internet users (6.2 million) followed by Delhi/NCR (5
million), Kolkata (2.4 million) and Chennai (2.2 million). While common access points such
as cyber cafes continue to be important, there has been a dramatic fall in access from cyber
cafes.

Access from home, at 37%, has grown at the cost of cyber cafes and access from offices. The
survey found that of the active users, 48% used the Internet at least six times a week and 28%
used it daily.

Marketing Mix of Online Marketing vs Traditional Marketing in the Indian Scenario

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Product

We now examine some of the ways in which marketers can, and some already have, enhanced
and extended the traditional elements of marketing by using the Internet as a marketing tool,
particularly in the Indian scenario. Adding product value through information. A product is
more than just the physical entity. Relevant information about related topics also add to the
product's value, and make it easy for the customer to make brand and product choices. A
marketer can use the website to provide information about the product, and topics related to
the product group in which it competes. For example, car manufacturers could give
information about travel destinations, diaper companies about childcare, pharmaceutical
companies about health care and various disease states, and so on. Such techniques of
providing useful, related information are used in building brand equity by forging
relationships, whereby existing and potential customers begin to identify the brand with that
particular product category or certain activities. Brand and site loyalty are developed by
providing current and continually evolving information, as this gives visitors an incentive to
revisit the website. The concept here is that the website is similar to a magazine which people
read and marketers use to communicate product and no product information -- it is a living
document which needs to be updated, in synchronization with the overall marketing strategy
of the company. Many companies actually allow potential customers to design their own
products through interactive websites, within certain specification limits. These orders are
then automatically registered and routed to the logistics department. Product choice and
convenience of ordering can give customized products (Tarafdar 1998). As far as Indian
companies are concerned, exporters and manufacturers of physical products -- from
commodities to handicrafts, from leather to tea, from seafood to tobacco -- can use the market
space to contact customers, but not to deliver their wares. So, the net need not define their
product strategy. However, marketers of products that can be digitized and distributed directly
over the net can cash in on the cyberspace by designing appropriate offerings. Pure
information relating to the Indian markets, the economy and the stock markets are hot among
the users of such data, who routinely use the net as their primary shopping spot. The Internet
can be the delivery vehicle for providing business information. Information products like
newspapers and magazines from the country are already on the web. Although most of them
are free at the moment, the trend is being set by on line publications from the US and UK that
charge users a fee to access their news articles and data banks. There are many takers all over

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the world for Indian news and this market is growing day by day; hence, these services would
help develop an information-market that the Indian companies can exploit. Information
sellers like the Mumbai (an Indian city formerly known as Bombay) based Center for
Monitoring Indian Economy (CMIE) are running websites which surfers can access for data
on the Indian economy. Indian advertising agencies also have web-sites that open up their
detailed information bases and full range of services to paid subscribers are pointing to the
future. Among the other ideal products for the cyberspace is software. Since software, like
information, can be downloaded directly over the net, the acts of marketing, sampling and
selling are fused together seamlessly in the cyberspace. Indian software companies targeting
global buyers can use the Web effectively to advertise and vend their products. Some
companies like the Infosys and the National Institute of Information Technology (NIIT) are
already doing this. Educational courses are Web compatible, too. Aptech is planning to
conduct online examinations for students, and for delivering online coursed through
multimedia. The NIIT is starting the Netvarsity with its just-in-time training modules. The
Indian government set up a web site on August 9th, 1998, giving consumers over the world a
chance to access information about the different tourist places in the country, about Indian
history, etc.

Price

The economics of manufacturing products for the cyberspace is unique, primarily because a
product has to be created only once and stored digitally. The cost of the product tends to be
comparatively low because an on-line marketer avoids the expense of maintaining a store and
the accompanying costs of rent, insurance, and utilities. Digital catalogues can be produced at
price much less than the cost of printing and mailing paper catalogues. As in any other
competitive new market, demand and supply, rather than the cost-plus formula will determine
the price. The real innovation, however, will be the fact that sales will typically be in small
units rather than complete packages -- one item of information instead of the entire database;
a small application instead of the entire program; individual songs rather than the entire
album; one training module instead of the entire course. That is why NIIT's Netvarsity is able
to sell its training modules at prices as low as USD$2 each (Shankar 1998). In addition, the
reduction in cost expenditures normally incurred in marketing a product globally (e.g.,
advertising and sales-teams in multiple markets -- nations), can be reduced, if not eliminated,

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by via the reallocation of these activities on the net; and thus, result in a lower cost, and thus,
price, or a higher unit profit contribution.

Promotion

For promotion, the Internet's big technical advantage over conventional forms of media is
that the cost of reaching out to each additional person keeps crashing as the web widens.
Signals are carried by phone lines at a speed which keeps bills low. The web acts as a
cyberspace version of yellow pages. It transcends borders letting a PC user in America access
an information docket from a website in India. Marketers should consider the world's net
surfing community as a market in its own right. The findings of a Nielson survey says that
surfers, as a consumer group, are richer and younger than most people, they are likely to be
early adopters of new products and services (Prabhakaran 1996). Indian marketers are
therefore now realizing the use of the net to reach global audiences. Many agencies in India
are putting in a lot of money to make their popular sites. Specific industries that they are
attracting for this purpose are tourism, real estate, publishing, financial institutions and air-
freight services -- all in the business of exports. The Paper Products Ltd., a packaging
company has a home page on India Log, a site offered by Progressive Science Information
Pvt. Ltd. (PSIP) whose server is located in the U.S. The most common kind of an ad is a
'banner'. This small patch of text-visual space can be placed is a side column along with other
information, or made to creep on to the PC user's screen whenever he initiates a 'search'. This
website has already attracted advertisers such as the Malhotra Group and the Ion Exchange
Ltd. (Tarafdar 1998).

Advertising on the net has been given the name 'webvertising'. Since webvertising is
interactive, it can be used to send purchase order forms back and forth, so an advertiser can
correlate his ad spend with the sales achieved. The Malhotra Group has reported orders worth
a daily average of Rs10,000 (approximately UDS$ 250) for its Lazer blades through the
Internet. Yet, the web might take years to become a big force in Indian advertising, mainly
due to the very few telephone lines available for it by Videsh Sanchar Nigam Ltd. (VSNL) --
thus, limiting the surfer's style. There are only 80 lines supporting Bombay, which has 56 per
cent of the total surfers in India. But some of the space sellers in India have bypassed the
Indian telecommunication tangle by setting sites in places outside India which have high
speed links. This obstacle, however, should and is being diminished as more businesses are

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realizing the potential for growth in this market. For example, Indian advertisers, have
realized that for corporate advertising outside the country, the website is the best option -- in
terms of cost versus benefit (i.e., reach). It is like a permanent face of the company to the
world. There is no limit to the on the amount of information one can give. So, to woo foreign
institutional investors who need information about banking and finance in India, having a
web site is ideal -- thus, the pressure to expand this availability of this technology is
increasing. Customer service and product support has become a strategic lever for
competitive advantage. The Internet makes it possible for companies to run 24-hour service
centres for their customers across the globe. Customers can log into predetermined websites
and request for maintenance and service, giving details of their problems. Complaints get
logged into the company's database and request can be served on-line, especially if the
product is software or any consultancy service.

Place

In regard to 'place' variable of the Marketing Mix, the most powerful boost to international
marketing comes from the fact that the Net makes the physical distance between the buyer
and the seller immaterial for digitized products (e.g., software, information, etc.). As for the
distribution of tangible -- not digitized products -- the net can serve as a coordination tool to
achieve higher efficiencies. No longer do Indian companies targeting global customers need
to set up expensive distribution channels -- usually the highest entry-barrier in open markets
-- in different countries. One website, located in any computer in the world, can service
consumers all over the world. Previously, distribution and payment were not integrated on the
net and payments had to be made in the real world either through cash or credit cards. Now
even that has been simplified with secure on-line payment systems, emerging in the form of
credit cards and electronic cash.

Another obvious 'place' use of the Internet is that products can be sold anywhere in the world,
24 hours a day, through interactive selling. It takes less time and capital to set up a virtual
shop, complete with advertising and merchandising. Small companies can have as much as a
presence as the larger ones, their effectiveness being limited only by the creativity of the site
design and the convenience which can be provided to the customer.

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The Internet represents an efficient and effective vehicle in which businesses especially
those of small and medium size -- in India, as well as other lessor developed countries, can
overcome many of the common barriers to entry into the global market place (e.g., capital
investment and access). It is evident that the use of the Internet in India is not as advanced as
in many other countries, but there has been a phenomenal amount growth in the use of this
technology as a marketing tool, and even more promise as an opportunity to promote to the
world. Likewise, Indian consumers also have the opportunity to seek out goods and services
beyond their local, regional and national boundaries. This universal access may also have a
positive impact on the quality of life of some population segments -- if this concept can be
defined at least in part by the value (quality price ratio) and variety (new and better quality)
of products; via an increase in competition and the likely result of lower or more competitive
prices due to the very nature of the economic principle of supply and demand. How and by
whom this technology is exploited for competing in the global marketplace will determine in
large part the future of commerce in India, and the world.

In the research paper of The Complementary Roles of Traditional and Social Media in
Driving Marketing Performance by Andrew T. Stephen And Jeff Galak, the authors have
discussed thoroughly on how the Social Media and traditional marketing are complementing
each other in a way that both together can emerge to be the next big thing. In the abstract
authors summarise the paper as

The media landscape has dramatically changed over the past decade, with traditional media
(e.g., newspapers, television) now supplemented by social media (e.g., blogs, discussion
forums). This new media landscape is not well understood with respect to (i) the joint impacts
of traditional and social media on marketing performance (e.g., sales), (ii) how these media
types influence each other, and (iii) the mechanisms through which they affect marketing
outcomes. These issues are examined with 14 months of daily performance data and media
activity for a microfinance website. The authors find that both traditional and social media
have strong effects on marketing performance, though a single unit of social media has a
much smaller effect than a single unit of traditional media. However, because social media is
created in larger volumes than traditional media, it has a sizeable effect on performance (i.e.,
social media is high-volume, low-margin, whereas traditional media is low-volume, high-

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margin). Further, social media acts as a broker of information flow in an informal network
comprising traditional and social media outlets.

Through this we can get to know how important both traditional as well as the eMarketing is
for todays marketing scenario especially in Indian background which is one of the fastest
developing geographic area in the world with one fo the largest market which is still
unexplored.

E-Commerce has shown a very exciting growth trend among the travel and retail sites, which
have gained considerable acceptance within the Indian population. Few relevant statistics
mentioned below highlights this exciting growth trend:

IRCTC (Indian Railways), MakeMyTrip and Yatra are amongst the most visited travel
sites in India.

Flipkart leads the way among the online retailers in India with 7.4 million unique
visitors a month, growing at 431% annually. Snapdeal has been close second with 6.9
million unique visitors.

Apparel has been the fastest growing subcategory in retail and reaches 13.4% online
users in India.

Retail growth in e-Commerce in India has been primarily fueled due to the following factors:

Several startup ventures getting the required funding from Venture Capital funds or
Private Equity funds

Aggressive marketing by the players going online

Consumer need and convenience to buy these products online

Today Indian e-Commerce market has been buzzing due to significant progress achieved in
all the four pillars of e-Commerce: technology, logistics, payment and marketing.

Technology Platforms/ products have been developed in various robust and scalable
technologies such as Enterprise Java, Microsoft Technologies as well as open source
technologies (primarily Magento framework).

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 Logistics The level of connectivity between Supply chain management and last mile
logistics and end customers have greatly improved over the past few years. The
increasing presence of international logistics player in India such as FedEx (acquired
AFL) and DHL (acquired Blue dart) etc. has compelled the Indian players to upgrade
their logistics services offerings.

Payment Other than usage of Cards and Net Banking payment modes, the newer
models like Cash on Delivery (COD) and other consumer centric payment options
such as EMI for purchases has boosted the growth of online commerce. Usage of
Debit cards for shopping as well as credit card penetration in the country is also
increasing year-on-year.

Marketing On the digital marketing side, people have partnered with Google, who
provide analytics to retailers, and demonstrated that usage of AdWords can drive
traffic.

Online retail has seen a heavy overlap with social networking and search due to aggressive
marketing and strong inclination towards social commerce. India is positioning itself as one
of the fastest growing social networked user base.

To conclude, e-Commerce has seen tremendous growth in the last 12 months. Yet, these are
still early days, as the e-Commerce industry in India is set to boom further, perhaps reaching
$260 billion, by 2025, according to a report by First Data Corporation and ICICI Merchant
Services.

Google India Study reports numbers about online shopping in India; Electronics Top Search
but Apparels most bought

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 CHAPTER 3

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3.0 Method of study

The methodology used in this project is Descriptive and Exploratory research. The
descriptive research method refers to the method used to describe data and characteristics
used to describe the population. The purpose of using the descriptive research method is to
acquire accurate, factual, systematic data that can provide you with an actual picture of the
data set that you are reviewing. It is advice that the descriptive research method should not be
used to create a causal relationship, where one variable affects the other. Exploratory research
of research conducted for a problem that has not been clearly defined. Exploratory research
helps determine the best research design, data collection method and selection of subjects. It
should draw definitive conclusions only with extreme caution. Given its fundamental nature,
exploratory research often concludes that a perceived problem does not actually exist.

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3.1 Research Statement

The research statement of this project is the comparative study of traditional and online
marketing in Indian scenario which is prevailing now and how internet marketing is
overshadowing the traditional marketing.

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3.2 Tools for data collection

Secondary data are information that already exists, collected by others. These could be in
form of books, journal articles, online data sources such as web pages of companies, etc. The
data collected in this project are mainly secondary data. The main source for these secondary
data were:

Newspaper Articles

Journals

Articles

Magazines

Web sources

Reports

The information gathered from these source of data have been analysed and then used in this
project according to the need and topic discussed in this project. This is a very crucial stage
where the data is collected is put up in a way that the research statement is justified and the
solution for it can be found out. Since there was no need of primary data and all the
information was dependent on the secondary data only the project has its own limitation as
well as advantage.

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3.3 Statistics

The research and secondary data which was gathered in the time period depicted following
results:

In research done by Nielson, Internet advertising has been outgrowing traditional forms like
television, radio, magazines, and newspaper. It is projected to take up a quarter of the
advertising share by 2015. Penetration level of traditional and online marketing:

2011 2012 2013 2014 2015

Newspaper 20.3% 18.9% 17.8% 16.8% 15.9%
Magazines 9.4% 8.8% 8.3% 7.8% 7.3%
Television 39.9% 40.2% 40.1% 40.1% 40%
Radio 7.1% 7.0% 6.9% 6.7% 6.6%
Cinema 0.5% 0.6% 0.5% 0.6% 0.6%
Outdoor 6.7% 6.6% 6.5% 6.4% 6.3%
Internet 16.1% 18.0% 19.8% 21.6% 23.4%
Source - Infographic: Internet Marketing Statistics You Cant Ignore

Mode of operation in India among the retailers (in percentage):

Business operation mode Operations in percentage

Offline operation 48%
Online operation 9%
Offline operation with E-commerce branch 27%
Online operation with offline branch 16%

Online Marketing Investments:

Activities Percentage
Banner/PPC/Search marketing 36%
E Mail Marketing 39%
SMS Marketing 32%
Social media promotions 75%
other 4%

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Social media growth from 2006 to 2012:

Year Facebook Twitter LinkedIn Wordpress Tumblr Google+ Pintrest

2006 12,000,000 1,000 8,000,000 600,000 0 0 0
2007 50,000,000 750,000 15,000,000 2,000,000 170,000 0 0
2008 100,000,000 5,000,000 33,000,000 4,300,000 1,000,000 0 0
2009 350,000,000 75,000,000 50,000,000 8,000,000 2,000,000 0 0
2010 600,000,000 145,000,000 75,000,000 11,100,000 7,000,000 0 10,000
2011 800,000,000 300,000,000 135,000,000 50,000,000 38,000,00 90,000,000 11,700,000
2012 1,000,000,000 500,250,000 200,000,000 60,000,000 86,000,000 400,000,000 25,000,000
GAGR 109.00 507.47 71.00 120.43 248.03 344.44 4,900.00
Source - Infographic: Internet Marketing Statistics You Cant Ignore

Where Advertising agencies are planning to spend their Money

Social Media Ad Platform Percentage

Facebook 89%
Twitter 39%
You Tube 36%
LinkedIn 21%
Google+ 18%

2011 2012 2013 2014 2015

Online Ad spending(in billions) 80.2 94.2 106.1 119.8 132.1
Total ad spending(in billions) 496.9 529.5 552.5 579.8 603.1
Online ad spending in Growth 17.2% 17.5% 12.7% 12.9% 10.2%
percentage

Ad revenue growth (in percentage) by industry category

Industry category 2010 2011

Retail 20% 23%
Telecom 14% 14%
Financial services 11% 13%
Auto 12% 11%
Computing products 10% 10%
Consumer packaged goods 8% 6%
Leisure travel 7% 8%
Pharmaceuticals 5% 4%
Media 4% 4%

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Entertainment 4% 4%
Others 5% 3%

Online advertising market share

Internet Properties Market Share

Google 44.1%
Microsoft + Yahoo 12.3%
Facebook 3.1%
AOL 1.5%
Others 39%

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 Chapter 4

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4.0 Results and discussions

4.1 Results

The results which came out of this project and secondary data depicts how the new entry i.e.
online marketing is overshadowing the traditional marketing but still online marketing is far
behind the traditional marketing in real world. Both online and traditional marketing when
used together works wonders in terms to be a successful mantra for winning the market.
There are many products which consumers still have no faith in buying online instead they
want to see, touch and confirm it on themselves like furniture, apparels etc., but the there are
benefits of online marketing as well on the traditional marketing.

Online Marketing

Let us know some of them which was found out through this project:

Reach

The nature of the internet means businesses now have a truly global reach. While traditional
media costs limit this kind of reach to huge multinationals, eMarketing opens up new avenues
for smaller businesses, on a much smaller budget, to access potential consumers from all over
the world.

Scope

Internet marketing allows the marketer to reach consumers in a wide range of ways and
enables them to offer a wide range of products and services. E60Marketing includes, among
other things, information management, public relations, customer service and sales. With the
range of new technologies becoming available all the time, this scope can only grow.

Interactivity

Whereas traditional marketing is largely about getting a brands message out there,
eMarketing facilitates conversations between companies and consumers. With a two way
communication channel, companies can feed off of the responses of their consumers, making
them more dynamic and adaptive.

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 Immediacy

Internet marketing is able to, in ways never before imagined, provide an immediate impact.
Imagine youre reading your favourite magazine. You see a double-page advert for some new
product or service, maybe BMWs latest luxury sedan or Apples latest iPod offering. With
this kind of traditional media, its not that easy for you, the consumer, to take the step from
hearing about a product to actual acquisition. With eMarketing, its easy to make that step as
simple as possible, meaning that within a few short clicks you could have booked a test drive
or ordered the iPod. And all of this can happen regardless of normal office hours. Effectively,
Internet marketing makes business hours 24 hours per day, 7 days per week for every week of
the year. By closing the gap between providing information and eliciting a consumer reaction,
the consumers buying cycle is speeded up and advertising spend can go much further in
creating immediate leads.

Demographics and targeting

Generally speaking, the demographics of the Internet are a marketers dream. Internet users,
considered as a group, have greater buying power and could perhaps be considered as a
population group skewed towards the middle-classes. Buying power is not all though. The
nature of the Internet is such that its users will tend to organise themselves into far more
focussed groupings. Savvy marketers who know where to look can quite easily find access to
the niche markets they wish to target.Marketing messages are most effective when they are
presented directly to theaudience most likely to be interested. The Internet creates the perfect
environment for niche marketing to targeted groups.

Adaptively and closed loop marketing

Closed Loop Marketing requires the constant measurement and analysis of the results of
marketing initiatives. By continuously tracking the response and effectiveness of a campaign,
the marketer can be far more dynamic in adapting to consumers wants and needs. With
eMarketing, responses can be analysed in real-time and campaigns can be tweaked
continuously. Combined with the immediacy of the Internet as a medium, this means that
theres minimal advertising spend wasted on less than effective campaigns. Maximum

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marketing efficiency from eMarketing creates new opportunities to seize strategic
competitive advantages. The combination of all these factors results in an improved ROI and
ultimately, more customers, happier customers and an improved bottom line.

Traditional Marketing

While newer marketing methods do work and can increase a company's client base,
completely replacing traditional marketing with the latest marketing techniques can prove
dangerous. Traditional methods have a high success rate and are proven. Internet methods are
subject to clients or customers having access to an online medium and being Internet savvy.
With traditional marketing, anyone with a newspaper, mail service, television or radio can
learn of your business or service. Rather than customers going online to find your business or
service, you bring your business or service to potential customers with print advertisements
and other traditional methods.

Now let us find us some key points where traditional marketing is winning over online
marketing:

Stock

A fundamental of retailing. Retailers clearly have plenty of stock and great channels and
relationships to get more of it. By comparison, their online retailers either have to invest in it
or spend considerable time creating relationships with suppliers to acquire it.

Storage

In addition to their stores, many retailers have other space to store their product. Online
retailers have to find, create and pay for this space which is a given for their traditional
retailers.

Staff

Again a standard operational fundamental of retailing and an asset online retailers need to
resource. Or put another way, properly resourced, existing staff can be re-purposed towards
online operations.

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 Systems

Retailing has been around for centuries and over that time have developed systems for
everything from sourcing product to conducting stocktaking. Onliners need to establish these
from scratch.

Customers

Probably the most important asset of all. Traditional retailers in most cases have been looking
after customers for years. If they could be counted, they would probably number several
thousand. By comparison, online retailers need to invest heavily to attract those kinds of
numbers.

Credibility

Like many of these factors, traditional retailers have built in credibility that onliners have to
work hard to attain. Simply by having a street address that can be passed, seen and even
dropped into provides a massive advantage over their online competitors who battle
considerable suspicion and caution before buyers will hand over their credit card details to
them. This advantage cannot be underestimated in a increasingly cautious online market.

Relationships

Having usually worked in the game for some time, traditional retailers have that asset that
often cannot be bought relationships with the gamut of retail stakeholders stock suppliers,
other suppliers, other retailers and as discussed, customers. Many online retailers have to
build these relationships from scratch and may never be able to match those of the
traditionalists.

Retailing experience

A massive advantage that should never be underestimated. The experience of the retailer is
something that most onliners simply dont have. Yet it is as valid to the online world as it is to

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their traditional modus operandi. The trick is simply understanding how to translate that
experience to an online setting something that with the right guidance, isnt as difficult as
many would make it out to be.

Identifying and understanding your target audience is still the key to marketing success.
Many traditional marketing techniques remain appropriate. Audience segmentation is one
example. Marketers can identify ways to provide a relevant and meaningful customer
experience by creating segments for a number of components like:

audience composition

buying behaviour

geography

events

Do you have a current and precise overview of your target audience so that you can create a
persona? The first step is to know your customer so that you can tailor relevant messages,
offers and content to them, taking into consideration the media preference of your audience
throughout an entire lifecycle.

With defined audience segmentation and on target offers, traditional marketing is still very
effective when acquiring some customer segments. Traditional marketing strategies offer an
effective way to deliver content to current and prospective customers, and can become a
catalyst to drive your web site along other traffic marketing assets. This traditional marketing
approach is often referred to as push marketing.

Promotions and offers are still important pieces in the marketing mix, but in 2013, content is
a new form of currency. Instead of relying solely on coupons and price discounts, marketers
can offer valuable information that consumers will find relevant and engaging.

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Delivering the right message through the proper channel is more important than ever.
Traditional marketing strategies still work as they expand to incorporate more options.Heres
how Strategic Marketing Solutions can help with your traditional marketing strategies:

Identify your target audience.

Creating relevant content that will optimized the customer experience.

Select channels for delivery including Email and/or Direct Mail.

Develop a variety of marketing materials for the selected channels

Test messages and then measure results.

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4.2 Discussions

Marketing Goals:

Customer Acquisition came out to be the primary marketing goal for retailers during this
project research based on the secondary data. Customer retention and brand awareness follow
respectively according to the both online (e-Commerce) and offline (brick &mortar stores)
retailers.

Physical or Virtual:

Most of the retailers seems to be convinced of going online for capturing the bigger market
even while having their physical stores. Few retailer even seem to have been convinced with
the idea of trying something new with their store in order to reach out to more customers.

Going Online:

Companies are looking to increase their online e-Commerce activities while about some are
planning to start an online retail presence soon.

Use of Technology:

Not a lot of companies are into use of internet as a source of marketing but most of them
seems to be keen to enter into this new segment of internet in order to reach the youth target
who are actively participating in the social media and online buying. So the scope is very
good in this criteria to explore.

Email vs. Mobile:

A lot of brick and mortar (offline) retailers was found to be using Mobile as a marketing
channel while very less of the e-Commerce companies are doing the same. E Mail marketing
is still not have penetrated and going well with brick and mortar companies while online
companies rely mostly on Email marketing.

Use of Analytics:

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Demographics (age, gender, location etc.) and average basket value is the top two metrics
used by Indian retailers to understand their customer base as seen in through the secondary
data found out on the websites.

Customer Engagement:

Understandably, when it comes to customer engagement, brick & mortar stores and online
retailers think differently. While most of the offline retailers feel sales & special offers get
them maximum engagement very few of online retailers feel the same way. Most of the
e-Commerce companies, Email marketing is the more preferred platform for customer
engagement.

Online Marketing Investments:

When it comes to offline retailers, most of them go with social media for marketing
investments while very few seem to go with email marketing. At the same time, when
looking at online companies, they rely mostly on both the social media as well as email
marketing equally.

The Indian retail industry has experienced growth of 10.6% between 2010 and 2012 and is
expected to increase to USD 750-850 billion by 2015. Food and Grocery is the largest
category within the retail sector with 60 per cent share followed by Apparel and Mobile
segment.Within the organized retail sector, Apparel is the largest segment. Food and
Grocery and Mobile and telecom are the other major contributors to this segment. The e-
commerce market in India is smaller than in other markets, but it is growing the fastest.
Retailers have a sizeable opportunity as the online population starts to spend more and buy
more frequently online.Similar to retailers in most emerging e-Commerce markets, retailers
in India are doing whatever is necessary to drive consumers to shop online. Online shoppers
expect to see good deals online accompanied by free or very low-cost shipping.To be
successful online in India, e-Business professionals must understand local e-Commerce
trends. Two key areas that companies must focus on in all markets -- localized payment and
fulfilment options -- are particularly essential in India.

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An increasing number of global companies are eyeing the rapidly growing e-Commerce
market in India as improvements in infrastructure are made and Indias economy grows. As
the worlds

11th-largest economy (and fourth-largest emerging economy after BRIC peers China, Brazil,
andRussia), India is starting to appear on e-Business organizations lists of key international
markets. While Internet penetration is low at just 10% of the overall population, the
government is building infrastructure to improve and enable connectivity in metropolitan and
rural areas and with the 2001 census showing an estimated English-speaking population of
125 million, India currently appeals to global companies looking to sell online using their
English-language websites. Currently, shoppers in metropolitan India are driving e-
Commerce: These consumers are primarily buying travel, consumer electronics, and books
online.4 And although spending per online buyer remains low, some 59% of online
consumers in metropolitan India already make purchases online at least monthly.5 Consumers
in nonmetropolitan areas will also help fuel growth; unlike online consumers in cities, they
are more likely to shop online for goods that are unavailable at local stores.

Online Consumers in India Have Specific Demands

As the eCommerce market in India develops, so will its consumers. Retailers should be aware
that:

Consumers expect the returns process to be seamless and convenient. Traditionally,

the shopping culture in India is not returns-friendly. However, online shoppers have
come to expect the option to return items purchased online, and retailers have made
doing this convenient at their own cost. One of the top online retailers in India, for
example, has gone so far as to offer an at-home pickup service for returned goods.
The cost is high, but the retailer considers this option necessary to develop consumer
trust and confidence in the retailer. While such at-home pickup for returns is typical in
other emerging markets, markets tend to shift from this labour-intensive, often
inconvenient process to prepaid return labels as the eCommerce ecosystem develops.

Like eCommerce retailers in other emerging markets such as Brazil, it is standard for
eCommerce retailers in India to offer free, relatively quick delivery of online orders.

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 HomeShop18, for example, offers free shipping for the majority of its items and
delivers within five days. MyGrahak offers free 48-hour delivery, but it will deliver
within 24 hours for an extra US$0.88. To compete in Indias nascent eCommerce
market, online retailers have little choice but to offer the same convenience and low
cost that their local counterparts are offering, a situation that venture capitalists
haveidentified as unsustainable in the long term. While retailers cite free shipping as
an essential first step to drive customers toshop online and win customer loyalty,
companies investing in the space must consider how longthey can sustain this type of
offering.

In addition to the challenges of offeringfree shipping, retailers also face hurdles in

matching the highly discounted prices that leadingonline retailers have traditionally
offered on their sites. New entrants have struggled to keepup: Upstart Taggle.com
ceased operations in late 2011, for example, citing its unwillingness toengage in a
price war with retailers selling below cost to gain customers.

In India, as in all other markets, payments and fulfilment are two of the areas that
retailers mustmost heavily localize.

E-Commerce norms are still being established in India, where the eCommerce market is
just developing and experienced eBusiness professionals are still hard to find.

In India, no single player today can handle all aspects of the eCommerce business on
behalf of major retailer or brands. Instead, eBusinesses will need to manage every
step of the eBusiness operation from site design to fulfilment solutions to employee
training. Leading eCommerce sites in India today tend to build their capabilities rather
than buy, although that scenario is likely tochange as more global players with
existing vendor partners enter the market. EBusinessesentering the Indian market
must be aware of the need to work with a variety of partners andbe willing to work
through the challenges of integrating multiple solutions.

While the mobile opportunity in India is nascent, it is undeniably going to be a critical

part of how consumers interact online. EBusinesses should take advantage of this
growing trend by including a mobile website as part of their offering ensuring that

35 | P a g e
 it is accessible on bothfeature phones and smartphones, given the relatively low
penetration of smartphones in India today.

The main differences which was found out during this project research between online
marketing and traditional marketing were:

Internet Marketing Traditional Marketing

Internet Marketing is very economical and fast way
to promote product.
Internet Marketing is very useful for promoting
product globally [without any additional cost].
In Internet Marketing, you can also work with less
employs [you can take more work with less
manpower].
In online business you can sell or buy product 24 X
7, round the year without employing any person.
Paying Professional and Experienced Internet
Marketing Company is very economical.
Traditional Marketing is very expensive
and takes more time to promote product.
It is very expensive and time consuming
process for traditional marketing.
In Traditional Marketing, you need more
employment with more man power which
in terms requires spending more money.
That is not possible in traditional
marketing.
Paying renowned Advertising and
Marketing Company is very costly.

Growth prospects which was found out during this research was as follows:

E-commerce in India is still in budding stage but it offers extensive opportunity in developing
countries like India. Highly intensed urban areas with very high literacy rates, an enormous
rural population with fast increasing literacy rate, a rapidly growing internet user base,
technology advancement and adoption and such other factors make India a dream destination
for e-commerce players. Moreover, stumpy cost of personal computers, an emergent installed
base for Internet use and a progressively more competitive Internet Service Provider (ISP)
market has added fuel to the fire in augmenting e-commerce growth in Asias second most
populous nation. Indias eCommerce industry is on the growth curve and experiencing a
surge in growth. The Online Travel Industry is the biggest segment in eCommerce and is
flourishing largely due to the Internet-savvy urban population. The other segments,

36 | P a g e
categorized under online non-travel industry, include e-Tailing (online retail), online
classifieds and Digital Downloads (still in a blossoming stage). The online travel industry has
some private players such as Makemytrip, Cleartrip and Yatra as well as a strong government
presence in terms of IRCTC, which is a successful Indian Railways initiative. The online
classifieds segment is broadly divided into three sectors; Jobs, Matrimonial and Real Estate.
MobileCommerce is also growing rapidly and proving to be a stable and secure supplement
to eCommerce due to the record growth in mobile user base in India, in recent years. Growth
drivers and barriers are present in equal measures for new eCommerce ventures. A
description by the Internet and Mobile Association of India has exposed that Indias e-
commerce market is mounting at an average rate of 70 percent annually and has grown over
500 percent since 2007. The current estimate of US$ 6.79 billion for year 2010 is way ahead
of the market size in the year 2007 at $1.75 billion. The following chart depicts the growth of
E-commerce in India in the last couple of years.Apparently, more online users in India are
willing to make purchases through the Internet. Overall e-commerce industry is poised to
experience a high growth in the next couple of years. The 70 percent year on year growth is
expected to continue and Indias e-commerce market is forecast to reach a whopping $US 10
billion by the end of 2011.The e-commerce market in India was largely dominated by the
online travel industry with 80% market share while electronic retail (E-Tailing) held second
spot with 6.48% market share.E-Tailing and digital downloads are expected to grow at a
faster rate, while online travel will continue to rule the major proportion of market share. Due
to increased e-commerce initiatives and awareness by brands, e-Tailing has experienced
decent growth. According to the Indian Ecommerce Report released by Internet and Mobile
Association of India (IAMAI) and IMRB International, The total online transactions in India
was Rs. 7080 crores (approx $1.75 billion) in the year 2006-2007 and it was grown by 30%
to touch Rs. 9210 crores (approx $2.15 billion) by the year 2007-2008. According to a
McKinsey-Nasscom report the e-commerce transactions in India hasreached $100 billion by
the 2008. Although, as compared to the western countries, India is still in is its initial stage of
development. Home Internet usage in India grew 19% from April 2006 to April 2007. In
April 2007 it became 30.32 million and the e-Marketer accepts that there will be 71 million
total Internet users in India by 2011. India is showing tremendous growth in the e-commerce.
Rival tradeindia.com has 700,000 registered buyers and it has the growth rate of 35% every
year which is doubled in the year 2008. Indiamart.com claims revenues of Rs. 38 crores and
has a growing rate of 50 every year. It receives around 500,000 enquiries per month.
Undoubtedly, with the middle class of 288 million people, online shopping shows unlimited

37 | P a g e
potential in India. The real estate costs are touching the sky. The travel portals' share in the
online business contributed to 50% of Rs 4800 crore online market in 2007-08. The travel
portal MakeMyTrip.com has attained Rs 1000 crores of turn-over which is around 20% of
total e-commerce market in India. Further an annual growth of 65% has been anticipated
annually in the travel portals alone.According to a McKinsey-Nasscom report, the e-
commerce transactions in India are expected toreach $100 billion by the 2008. Although, as
compared to the western countries, India is still in is its initialstage of development. E-
Marketer forecasts that online sales will more than double by reaching $168.7 billion in 2011.
Market share is moving toward Australia, India and especially China. Chinas share of
regional B2C e-commerce will grow more than threefold from 4.1% in 2006 to 14.3% by
2011. At the low end, South Koreas B2C e-commerce sales will grow by 13.3% over the
same period. Between 2006 and 2011, the aggregate CAGR for the five countries will be
23.3%.Sales of selected countries in Asia Pacific Online travel is the largest e-commerce
sales category in most major countries. For the same group of five countries, plus New
Zealand, online leisure and unmanaged business travel sales totaled about $17.7 billion in
2007 and are forecast to rise to $41.7 billion by 2011. E-Marketer forecasts that from 2006 to
2011 online travel sales will grow at a 24.8% annual rate, higher than the 23.3% rate for B2C
e-commerce. This indicates that travel is one of the key drivers of e-commerce sales in the
APAC region. In China and India, online-travel spending drives B2C e-commerce sales, and
it accounts for a majority of total sales. Consumers are less wary of buying services like train
or airline tickets online, and sellers can avoid the logistics and delivery problems associated
with physical goods. Jeffrey Grau, senior analyst at e-Marketer, said that such preferences
underscore how e-commerce in the region has a vast amount of growth ahead. E-commerce
in these markets will have come of age when consumers start buying more expensive, high-
touch categories such as apparel, home furnishings and jewellery. According to the eBay
Census Guide, 2009 for Indian e-commerce scenario, it has been observed that India has over
2,471 eCommerce Hubs consisting of the cities, towns, villages and smaller towns which
cover the entire length and breadth of the country. Technology or technology related products
dominate Indias domestic e-commerce. Whereas, lifestyle product category dominates in the
global trade. Technology, being Indias favourite traded vertical category contributes 44% of
totals eCommerce transactions according to the latest eBay Census. Lifestyle category at 35%
comes second in popularity for online Indians. For Global Trade, lifestyle is the clear winner
at 64% of all transactions followed by Media & Collectibles at 15% each. Elaborating Indias
domestic online shopping scenario, South India has the most active buyers at 41% of all

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transactions, followed by West India at 27%. However, West India has the most active sellers
at 46%, followed by North India at 28%. Delhi entrepreneurs sold the most technology
gadgets at 46% of all transactions to buyers in India. Lifestyle scored on the Exports front at
67% of all transactions. Delhi sells the most musical instruments percussion, brass,
synthesizers, and guitars - in the country. In addition to this, Delhi buyers bought the most
sunglasses in the country according to the eBay census. Delhi buyers have also bought the
most number of high end digital cameras in the country.India is showing tremendous growth
in the e-commerce. Rival tradeindia.com has 700,000 registered buyers and it has the growth
rate of 35% every year which is likely to double in the year 2010. Indiamart.com claims
revenues of Rs. 38 crores and has a growing rate of 50 every year. It receives around 500,000
enquiries per month. Undoubtedly, with the middle class of 288 millionpeople, online
shopping shows unlimited potential in India. The real estate costs are touching the sky. The
travel portals' share in the online business contributed to 50% of Rs 4800 crores online
market in 2007-08. The travel portal MakeMyTrip.com has attained Rs 1000 crores of
turnovers which are around 20% of total e-commerce market in India. Further an annual
growth of 65% has been anticipated annually in the travel portals alone. To make a successful
e-commerce transaction both the payment and delivery services must be made efficient.
There has been a rise in the number of companies' taking up e-commerce in the recent past.
Major Indian portal sites have also shifted towards e-commerce instead of depending on
advertising revenue. Many sites are now selling a diverse range of products and services from
flowers, greeting cards, and movie tickets to groceries, electronic gadgets, and computers.
With stock exchanges coming online the time for true e-commerce in India has finally
arrived. On the negative side, there are many challenges faced by e-commerce sites in India.
The relatively small credit card population and lack of uniform credit agencies create a
variety of payment challenges unknown in India. Delivery of goods to consumer by couriers
and postal services is not very reliable in smaller cities, towns and rural areas. However,
many Indian Banks have put the Internet banking facilities. The speed post and courier
system has also improved tremendously in recent years. Modern computer technology like
secured socket layer (SSL) helps to protect against payment fraud, and to share information
with suppliers and business partners. With further improvement in payment and delivery
system it is expected that India will soon become a major player in the e-commerce market.
While many companies, organizations, and communities in India are beginning to take
advantage of the potential of e-commerce, critical challenges remain to be overcome before
e-commerce would become an asset for common people. Indias ecommerce industry is on

39 | P a g e
the growth curve and experiencing a spurt in growth. The Online Travel Industry is the
biggest segment in ecommerce and is booming due largely to the Internet-savvy urban
population. The other segments, categorized under online non-travel industry, include e-
Tailing (online retail), online classifieds and Digital Downloads (still in a nascent stage). The
online travel industry has some private players such as Makemytrip, Cleartrip and Yatra as
well as a strong government presence in terms of IRCTC, which is a successful Indian
Railways initiative. The onlineclassifieds segment is broadly divided into three sectors; Jobs,
Matrimonial and Real Estate.

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 CHAPTER -5

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5.0 Limitations and implications

5.1 Limitations

Although the research has been conducted systematically and all the relevant data has been
collected carefully in order to eliminate/ minimize the errors in study, apart from positive
situations the study has some limitations too, as listed below:-

The study is entirely based on secondary data collected from Internet,

magazines, newspapers, journals etc. This exposes it to the threat of being

accurate & authentic only to the extent of authenticity and accuracy being

provided on internet.
The project which has been completed within a limited time frame may also

stand as a limitation.
Since the study is exploratory in nature, there is ample scope for further

research in this field of study.

There was a limitation of financial support, which restricted the scope of my

research work.
The data maybe old and out of date.
The sample used to generate the secondary data maybe small.
The company publishing the data may not be reputable.

5.2 Implications

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Some implications which can be taken out of it and the suggestive measures for future
researchers, policy measures, inclusions of result based suggestions is :

Primary data can be more reliable and so it could be used in this type of research.

More emphasis on data mining can be helpful and fruitful in this research.

All the data must be crossed check with the available data and then should be put in
the research paper.

Time management should be done in order to take out the best output of the research
paper.

More financial support should be taken in order to reach more mass and get the exact
survey and relevant information.

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 CHAPTER 6

6.0 Summary and Conclusions

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6.1 Summary

While the growth of the digital medium over the last decade has surpassed that of any other
media, the year 2013 was especially important in this regard as 86% of top Indian marketers
confirmed their use of this channel as the most vital client engagement platform. The prime
use of e-Marketing channels in 2013 was customer acquisition. For majority of Indian
marketers this platform proved its effectiveness (97%) and a substantial number of marketers
are using this platform for daily communications (34%) with their audiences. Overall the use
of e-Marketing platform in 2010 was focused on sending promotional communications (62%)
and newsletters (52%).

In terms of budget allocation on e-Marketing platform, 36% of Indian marketers have

invested more than 10% of their marketing budgets in 2013. In terms of generating sales
through online medium, it is interesting to know that 46% of marketers are generating more
than 10% of their sales online. It is not surprising that marketers plan on considerably
increasing their budgets towards email and SMS marketing in 2014. 72% of leading
marketers have reported of their plans to increase investments in e-Marketing platform in
2014.

With increase in budget allocation, there is a positive outlook for e-Marketing platform in
2014. Customer acquisitions remain to be the prime goal of Indian marketers (59%).
According to leading marketers of India, the top three online investment channels for 2014
are Social media, Email marketing and Search marketing.

In email marketing, the main challenges faced by marketers in India are Reaching Inbox &
Building Subscriber Lists. As reported by Indian marketers, the top 3 factors impacting
email deliverability were: Frequency, content of mailer and sender reputation. In order to
decrease inbox clutter, marketers are now focusing on Personalization and Targeting of
their mailers. Overall the responsibility of email delivery is fairly distributed between IT team
(22%), Marketing group (22%), partnership between IT group and marketing team (26%) and
ESPs (19%). There is no single group ownership as yet.

According to marketers in India, the integration of email and SMS will result in a significant
increase in the return on campaign investments. About 82% of marketers believe that there is
indeed a synergy in integrated service offering to customers.

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With regard to the presence of flexibility aspect in either Traditional or Internet Marketing,
there happens to be contrast opinions. On one hand it is found that mostConsumers and
Company agrees that traditional marketing is more flexible than internet marketing while on
other hand most of the 3rd party agency agrees that Internet Marketing is more flexible than
Traditional Marketing.While comparing the Traditional and Internet Marketing it was found
that most Consumers have strong opinion that in near future the Internet marketing will fully
takeover traditional marketing. Similarly more than 1/4 thof the total companies in India and
3rd party agency respondents strongly agree to the growing significance of Internet
Marketing and hence have opinion that it may take over the Traditional Marketing. However
about few people also disagree and hence dont want to have any comparison between
Traditional Marketing and Internet Marketing. Most consumers and 3rd party agency strongly
agree that more number of players would enter in the field of Internet Marketing in the next 5
years so as to cater to the growing number and needs of consumers. With the increase in use
of internet and thereby the growth of the Internet Marketing it was found that many
companies would spend more towards the promotion of their products. This seems to be true
as the increase in spending by companies on promotional purpose is reported in U.S
economy. According to Business Standard report dated 14th April 2011 the internet
advertising revenue increased by 15% and thus the total revenue spending accounted to 26
Billon dollars. About 75% to 90% of the respondents Agree that the spending by company in
Internet Marketing for promotion of the products would increase in near future.There are
various schemes i.e. marketing techniques in Internet Marketing. The search engine
marketing scheme was found to be one of most successful marketing technique followed by
schemes like E-mail Marketing, Video Marketing, Blog Marketing and so on.Besides the
above findings there are certain facts which also needs a mention as the facts are related to
the field of Internet Marketing. Today it is found that the Sponsored links in search engines
are maximum and this is followed by Email marketing. It is reported that the viral marketing
advertisements have minimum viewership and hence are least clicked.

The growth of internet marketing is certainly a phenomena experienced by almost all. The
growth of internet marketing is directly related to the increase in the use of internet. Hence
the effect of internet era is experienced in marketing sector. Alike the existence of specific
relationship between company and 3rd party in traditional marketing, there also exists similar
relationship in internet marketing The only variation found between traditional marketing and

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internet marketing is that there is no compulsion of channel network in internet marketing.
Through all these we can see the bright future of online marketing in Indian scenario but at
the same time we should never ignore the importance and pillar of the marketing i.e. the
traditional marketing. Traditional marketing and online marketing when used together can be
a boon and hence should be focused together in order to gain the maximum profit out of it.

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6.2 Conclusion

The bursting of the dotcom bubble has made several companies apprehend that doing
business on the Internet is not as easy as it sounds. Undoubtedly, the power of the Internet to
reach any part of the world holds terrific potential for enhancing international trade and
boosting global economy. However, just as every coin has a flip side; it has been observed
that doing business on the Internet also has risks and legal issues associated with it. The rapid
pace of e-commerce development has generally left the legal system struggling to keep up
and gasping for breath. In much the same way as companies doing ecommerce must invent
new business procedures and rules, the legal system is trying to adapt existing laws to fit new
settings where it is simply unclear how these laws will apply. In the midst of this legal
turmoil, India is one of the few countries across the globe that has enacted an e-commerce
legislation. However, much more is needed to effectively regulate the tangled web. Effective
risk management strategies coupled with adequate legal documentation will go a long way in
protecting e-commerce companies. Although the Internet is a goldmine, without adequate
legal protection, it could become a landmine. Nevertheless, with the rapid expansion of
internet, e-commerce is set to play a very important role in the 21st century, the new
opportunities that will be thrown open, will be accessible to both large corporations and small
companies. The role of government should be to provide a legal framework for e-commerce
so that while domestic and international trade are allowed to expand their horizons, basic
rights such as privacy, intellectual property prevention of fraud, consumer protection etc. are
all taken care of.

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References

Economic Times dated 17 July 2013 (Digital Marketing by Sunil Gupta et al)

Chip magazine (July edition)

Emerging Trend of E-Commerce in India: Some Crucial Issues,Prospects and

Challenges by Sarbapriya Ray

Annual Indiae-Marketing by Benchmark Research onIndia Digital Marketing

www.quirk.biz

Marketing On The Internet The Indian Scenario by UshaKiranRai, Ashish Chandra,

and Sheb L. True

Comparative Study Of Traditional And OnlineMarketing Mix

A Laypersons Guide toInternet Marketing Terms

eMarketing: The essential guide to digital marketing by Rob Stokes

www.wikipedia.com

http://www.smartinsights.com/

http://www.slideshare.net/

Octane Research

http://visual.ly/

http://rajeshthambala.blogspot.in

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