Differing views on the value of the Internet

TWO recent contrasting quotes from the business press encapsulate the current debate about the Internet as a serious business tool. They show clearly that businesses have very different views about what is undoubtedly a new era in communications.

These were:

. "Mr Michael Fuchs, the president of Germany's wholesale and foreign trade association, said companies are losing lucrative niche markets because the Internet made it easier to compare prices and so was increasing competition";

. "By the end of the century, 94 per cent of US business would be on the Internet, but only 12 per cent would know why."

Some enterprises are actively using the Internet to promote their goods and services; some are still wondering what the Internet is; and many are now beginning to take seriously the developmental potential of this new tool for business.

The Internet has suffered more than its share of hype, and there has already been a backlash. A recent survey by Sony showed that business people were disappointed with it and believed it had not lived up to expectations. Many will have nodded wisely when they heard these views - proof, they believed, that the Internet was just another fad that they could now safely forget.

We must remember, however, that we are still in the dark ages of the Internet. It is only now being wrested from the hands of the "techies" and information systems departments. The part of the Internet where business people are seeing potential is the World Wide Web.

The "Web", as it is known, was invented in its current form in 1992. There are now about 100,000 sites containing several million pages of information and it is doubling in size every three months.

But most of the pages at present are of little interest to business for the simple reason that business managers in general, and marketers in particular, are only now getting to grips with its complexities.

Information technology people can take the technology only so far. But the people who will realise the potential for business growth are the imaginative entrepreneurs who incorporate the Web into their strategic marketing thinking.

The thinking is still somewhat unfocused, with mangers still unsure about whether the Web is an advertising medium, or a way to send out information, or an outlet for direct sales.

It can, in fact, be all these and more but only if the business has worked out what it is trying to do.

An examination of those business applications which can now be found on the Web indicates that certain patterns are emerging which show this essential planning element.

Three common commercial uses for Web sites are:

. as a provider of information to supplement other communication channels,

. as a vehicle for online purchasing and selling,

. as a provider of online customer support.

Providing information about company products and services via Web site, integrated with other media, has two benefits. It overcomes one of the standing problems of the Internet - how to ensure that your site is looked at - by publishing the site address in the existing media.

For example, many television advertisements now display this address (to the uninitiated this is the http:// etc, etc, item).

More significant, however, are the additional benefits that the Web site can bring as a potential distributor of information:

. It is probably the cheapest publishing medium ever invented with almost infinite distribution possibilities because there are no geographical limitations.

. It is extremely flexible because it can be kept constantly up to date at a moment's notice.

Using the Internet as a vehicle for online purchasing and selling is closely - related to this information providing function.

All Web sites have an interactive capability - there is a facility for the viewer to respond to the material via email. This response can be to request further information on certain products but it can also be used to order and pay for those products.

Many marketing managers believe that online customer support offers the greatest true marketing potential. In its simplest form this can be using a Web site to provide answers to frequently asked questions, for example, about using a piece of computer software. But again flexibility and interactivity are the real sources of added value, enabling such a site to become the source of all accumulated knowledge from both customers and suppliers.