Generally speaking, Internet marketing efforts have traditionally followed a pattern of development similar to other media. The purpose of this lab is to examine these patterns as part of our Internet marketing efforts.

Though every Internet communication effort is different, a pattern in the evolution of Internet communication has become evident that helps us plan and create such efforts. The use of the Internet by companies and other organizations generally involves a hierarchy of six stages of development. These six stages are discussed next.

Level I-Advertisement. This entry level is the use of the World Wide Web (WWW) to display a home page and a few associated or linked pages. Most companies putting up an initial Web page have overly enthusiastic dreams of being overwhelmed by new business inquiries. The truth is that having a home page on the WWW is like putting a billboard in your basement. The home page may have emotional value for the company owners, but users don't know about or gain any value from this type of effort. The typical home page is usually linked to information like pictures of the company building and a message from the president complete with his or her picture. Useful information for a targeted audience is not included. Often a phone number is listed for contact with the company.

Level II-Promotion. The relative ease of developing static Web pages has led to extensive conversion of existing brochures and promotional materials from desktop publishing applications (electronic format) to WWW electronic pages. This caused an explosion in the number of pages on a Web site without increasing the relative value of the communication effort for the user. Often called brochureware, this expansion of the i number of pages in the company site added to the personal pleasure of owners and managers but, like the first level, did nothing to generate I additional business inquiries, supply useful information exchange, or increase relationships. Though they may provide a minimal amount of direct communication via e-mail links, these sites don't respond to this communication quickly. While promoting the company was the intent of this phase, it can more aptly be called the time-wasting phase for end users who dig around a Web site searching for needed information and end up frustrated and feeling like they should have just called or gone to the retail shop instead. These types of communication efforts may cause more harm than good.

Level III-Interaction. This phase of Internet use is the first that provides value for a prospect or customer by offering meaningful information exchange. Visitors to the Web site can receive information about something that is of concern to them and not information about the company. Once prospects or customers have located your Web site, they can learn about your products, capture information about a solution, and even determine how to purchase a specific solution to their problem. A customer can access the company site to download appropriate information that was previously available only from customer service. Using database-enabled presentations, this interactive level allows prospects or customers to provide information to the Web site and gain desired information when they want it with no delay or hassle. The interactive level satisfies customer wants, needs, and desires and lowers costs by reducing demands on customer service. One example, the Federal Express Web site, allows a customer to determine the status of an overnight delivery. Customers, using their air bill number, can access the location of the package, delivery status, and even the name of the person who signed the delivery receipt. In essence, the overnight delivery company has hired its customers to perform their own customer service.

Level IV-Transaction. At this level the prospect or customer can initiate action and complete transactions beyond information exchange over the Internet. The prospect can respond to and accept an offer made by the company in another media. For example, a space ad may carry a Web site address for response. That Web site address is specifically targeted to that offer and captures customer contact information to complete the transaction on-line. The customer can order a product or request a technical support visit from your company at this level of interaction. Customers or prospects may be able to order on-line using some form of credit, or customers may have a pre-established relationship and receive a bill for their purchase. At the transaction level the company can significantly reduce selling costs for acquiring new customers and improve customer service for current customers. Interactions in traditional media, including mail, phone, and personal, are moved onto the Internet. L.L. Bean still mails catalogs, answers the phone when customers call, and operates retail stores. But in this example, the availability of the Internet communication channel has moved customer transactions into a less expensive model and increased customer service in the process. The effect on return on investment (ROI) can be substantial, with decreased costs and increased revenue.

Level V-Transformation. At this level the relationship between the company and its markets has moved from traditional to electronic. In addition, the use of this communication has affected the internal operations of the company or organization. The Internet is not used occasionally but has become the accepted and preferred form of communication between the company and its customers. Because it does not operate in any other model, amazon.com has transformed a certain audience of media buyers into customer relationships. In the early days of Internet communication you might have had to call someone to tell them you had sent them an e-mail. Most of us have now transformed far enough that we no longer call to make e-mail notification. We send the e-mail in lieu of calling or any other form of contact.

Transformation can have a disruptive effect. It can cause the realignment or restructuring of the relationship between a distribution channel and its markets. For example, a manufacturer can eliminate one or more channel levels, opting to use the Internet to sell directly to an end user. When a manufacturer like Dell Computer Inc. sells PCs directly over the Internet, then the chain stores like Comp USA sell less. We don't yet know the impact of amazon.com on local or national chain booksellers.

Level VI-Community. At this highest level of Internet progression a group of people with common interests are bound together by emotional involvement. The emotional connection can range from personal commitment to a subject, like a health issue, to a professional group supporting each other through information transfer. The community is a group of people with common interests in a topic or issue who may not otherwise come together. Generally speaking, communities encourage audience members to communicate with each other as well as with the organizing body. Communities can be based on Web site presentations and then use mailing lists (e-mail subscription), collaboration forums, bulletin boards, chat rooms, IRC (Internet relay chat), or any combination of these to communicate among members. Many affinity groups have successful communities over the Internet. Clubs, organizations, religious groups, political organizations, and hobbyists with every variety of interest have established international communities over the Internet. A company or organization can set up a community, but expecting it to flourish may be problematic. The energy of the community comes from the participants. It can be fostered or supported by a sponsoring company, but it will only be successful if it is of emotional value to the members. Many commercial Web sites have some type of forum or bulletin board; most are unused. Software user groups supported by the development company are a good example of a commercial community. The America Online audience that communicates internally is also a very large community. The efforts by amazon .corn to solicit and publish individual reviews is an effort in this direction, as are companies that build e-mail lists of active customers and use them to foster communication.

As we mentioned earlier, many companies evolve in their use of the Internet and seem to follow the progression just described. Evaluating expansion on the Internet within your company or organization is another part of the planning process. Consider where you are today and where you would like to go in the future, utilizing the flexibility and communication opportunities the Internet can provide.