Chapter 2
Literature Review范文

2.1 Introduction

In chapter two, a list of literatures which concerned with aim will be researched. The section will be divided into 5 parts.

First part- Describe the definition of marketing communication then make an explanation that it is Internet and relevant e-platform to support Internet marketing communication carry on successfully.
Second part- Summarized several key characteristics of Internet while Internet been used in marketing communication for the purpose of draw a clarified picture to gain a good comprehension.
Third part- Introduce some tools which based on Internet technology and investigate the advantages and disadvantages of those tools that impact marketing communication while using Internet.
Fourth part- Research the impact of Internet on marketing communication in SMEs & figure out the current position of SMEs in market
Fifth part- State the development of Internet in China & Chinese SMEs with Internet marketing communication.

2.2. Marketing Communication & Internet

As a part of marketing, marketing communication present an important aspect of marketing. However, in the modernization of business, marketing played as a key point role (Pelsmacker, Geuens, Bergh, 2007). In Fill (2002) words that marketing communication can be described as several messages and related media been used to communicate with a market. Ranchhod & Gurau (2007) also agree this point of view their opinion is that marketing communication created a suitable channel to deliver information from enterprise to several customers.

In the age of ‘internet bubble’, various kinds of investment which related to the internet had been increased dramatically (Lagrosen, 2005). However, the ‘bubble’ also brings a great change to marketing communication, especially in follow area: communication, information exchange, potential customers and new market (Fill, 2002; Adcock, 2001). Meanwhile, the ‘bubble’ increased the power of influence of marketing communication (Lagrosen, 2005). There is no clarified definition of Internet marketing communication, however, some expertise point out that It beyond a simple technology which is just sending a message (Smith et la 1999). Marketing communication is an initiation mode of differentiations. The competition of it is try to persuade customers, stakeholders and employees that the market they offered is the best which is available and unvarying(Smith et la 1999).

Marketing communication keep customer in close touch and provide various kind of helpful plan when customers purchasing. Reinforce the organizations image, build up a good communication platform should be practiced in the same time. All of these steps can consolidate the loyalty of the customers which mean that the organisation can be protected from the severe competition. (Smith & Taylor 2002)

In Blythe (2000) words, that marketing communication is not an action of “press the right button”. The reason why is ever customer has his own character they cannot be treat as they were the same. The customer idea or opinion should be transmitted directly through marketing communication. In addition, marketing communication play the important role in customers purchasing that is locating brand properly.#p#分頁標題#e#

As the ‘bubble’ become bigger, traditional marketing communication forced to be transformed into Internet marketing communication. The consequence leads Internet continually been praised as a main component of a enterprise while using Internet as a channel to communicate with customers (Fill, 2002). Hence, for the purpose of clarifying what Internet marketing communication is, the characteristics of it will be figured out.

2.3. Characteristic

With the Internet involved in the marketing communication, it assist marketing communication present more interactivity and individualization meanwhile it also integrate marketing communication more and improve the oversea communication (Fletcher, Bell, McNaughton, 2004; Timmers, 1994). Except the characteristics mentioned above, as the accessible of Internet, it can gather several times useful information then traditional method do, furthermore, Internet have enough effective to impact industrial structure (Smith & Chaffy, 2005). To summarize these characteristics, it can be list as followed: interactivity, information, individualization, integration, industry restructuring (McDonald & Wilson, 1999).

Interactivity:
Information on the Internet can be easily interchanged while this kind of characteristic provides a two-way communication in Internet marketing communication, a real-time interactive between enterprise and customers (Gurau & Ranchhod, 2007). While traditional marketing communication only sends single information, such as advertising, to its customers via mass media which is called one-way communication can not offered the real-time interactive (Mayer et al, 2003; Kleindl, 2003). This interactive assists increasing the communication between enterprise and customers also receive their feedback quickly (Chaffey, 2004). The more communication enterprise done with customers, the more information, such as their demand, interest, attitudes, etc. that relate to the customers might be gathered easily (Harris & Cohen, 2003). As a result, the relationship between enterprise and customer will be a partner-ship while using Internet in marketing communication, otherwise, customers is only an object to send advertising (Mayer et al, 2003)

Information
Depends on the two-way communication in Internet marketing communication, huge amounts of real-time customer’s information can be gathered quickly and easily. The useful information gathered from e-mail and online questionnaire which included various kinds of raw data such as responses to promotions (Smith & Chaffey, 2005). Moreover, Roberts (2003) said that quite a lot customers’ information can be figured out from the click rate on the web site, the more click rate the more evidence showed the certain item attracted the customer deeply. As a tool of marketing communication, Internet assist the enterprise to catch what customers want and make continuously improvement, this is the previously said attract and keep (Timmers, 1999). An enterprise can make full use of its advantage through collecting information quickly with a two-way communication model, even more, new market can be possible (Lagrosen).#p#分頁標題#e#

Individualization
Through the specific two-way communication, Internet marketing communication can offer communication from enterprise to one customer which means to send personalized information to the certain customer, to be compared, traditional marketing communication provide communication from enterprise to many customers that is to send same information to every customers (Kleindl,2003). Internet can be useful to individualization in four aspects through gather information from data base of enterprise which included every customer’s personalized information.
•Enterprises can send every customer a individualized e-mail
•Internet can individualized several promotions according to customer’s favorite
•The content of the web sites can meet your favorite after customer’s information had been submitted
•Internet can optimize customer service via satisfying various kinds of customers’ requirements
(Chaffey, 2004; Kleindl, 2003; Adams & Clark, 2001; Timmers, 1999)
These four points can be used to increase sales, create loyalty and keep customer’s attention (Pelsmacker, Geuens, Bergh, 2007)

Integration
Integration provide marketing communication new kinds of channel to cooperate with customers which includes technology, personalized and customize (Fill, 2002). With the intervention of Internet these three aspects will be optimized deeply.

Technology- Internet will assist to integrate media which is based on Internet technology to meet customer’s demand and increase the sales. Such methods are message, audio and video
Personalization- Internet will assist to integrate customers’ data with markets data in order to gather further detail to reach customers requirement and optimized personalization and customer service.
Customization- Internet will assist to integrate offline communication to create a efficient promotion and attract potential customers through mentioned web site and ensure more access on the web.
(Terry & Rayner, 2000; Adams & Clark, 2001; Chaffey, 2004; Owens, 2000; Mayer et al, 2003)

Industry restructuring
Using Internet as a tool in marketing communication, an enterprise can face to their customer directly which partly transformed the industry restructure (Chaffey, 2004). The result of transform had to two main aspects, direct marketing and new kind of agent (Smith & Chaffey, 2005). In direct marketing, it will eliminate all kinds of middle link between customer and enterprise, such as retailer. The new kind of agent does between the customer and enterprise, however, it just play a role to introduce both sides and receive payment from each side (Smith & Chaffey, 2005).

When internet intervene the direct marketing, it not only removed middle link but also provides a magnificent potential in personalize the goods, service and information. Using database and internet interaction ensure a company be absorbed in face-to-face communication. Direct marketing can benefit from self-potential to apply the data in order to create relative communication and concern with customers (Mayer et al 2003). While new kinds of agent might assist enterprise to develop business online and increase value of its product or service (Smith & Chaffey, 2005). These kinds of agent are full of e-business skill and experience that can meet various kinds of requirement.#p#分頁標題#e#

Compared from traditional model, Internet stimulated the industry to transform the original structure, meanwhile enterprise can gain a specific advantage to beat their competitor.

Except the five characteristics, there is also a unique characteristic but not as unique as those five. Based on the five characteristics, Internet also allows a local enterprise to be a international enterprise and enter in the global market easily (Timmers, 1999). Compared with traditional marketing communication, Internet marketing communication has the advantage as: relatively low cost, quickly deal the problem with customers, directly face to customer oversea (Roberts, 2003). Hence, to summarize these characteristics optimized the whole enterprise communication even restructured the industry. As the Internet becomes a core for the business, some tools which based on Internet used in marketing communication will be researched.

2.4. Internet Technology

As Internet marketing communication need to communicate with customer on the Internet, such tools as website, email and search engine that based on Internet technology had been created in order to provide a certain platform (Mayer et al, 2003). These tools, which optimized the majority flows of marketing communication, are not only used by customers but also implemented by enterprises (Fill, 2002)

Website
In the Internet marketing communication, website is the most powerful tools been implemented (Fill, 2002). Website can be looked on as a platform that search engine, e-mail, advertising, customer service can be operated on it, meanwhile the cost of maintenance is relatively low (Teo & Tan, 2002) . To compare with tool that implemented in traditional marketing communication, the advantage can be described as follow:
Creating & maintenance- Enterprise can set up a website easily in a short time without a specific maintenance but common skill is enough. Meanwhile any newest information can be uploaded to the website in no time

Integrated & Variety information- A website can provide mass of information involving new products, service, vary kinds of files. Some special offer will be highlight in order to attract customer and increase sales. Meanwhile customers can be attracted via pretty images, video clip, which might contain hyperlink to download as favorite.

General Service- Generally, official websites support several languages, such as English, French, Russian, German and Chinese in order to meet oversea customers need. Humanization service had also been installed in the website, especially search engine and e-mail box.

Globalization & 24 hours- Ashttp://www.ttc-switch.com/Thesis_Tips/ the internet is worldwide, Website can assist SMEs enter in the global market. Furthermore, there is no need for website to have a rest as it can be browsed in 24 hours

Customer interaction- Website provides a great channel between customers and enterprise. Customer can receive information from enterprise and feedback their opinion of the product or the service. From angle of enterprise, quick improvement can be carried out which aim at certain service or product. Meanwhile research on-line is also usually implemented in the website, such as questionnaire can provide enterprise raw data to have a research.#p#分頁標題#e#
(Geissler, 2001; Fill, 2002, Ranchhod & Gurau, 2007; Chaffey, 2004; Gronroos, 2000)

Despite the advantage mentioned above, like the two sides of the coin, website also has some disadvantages. The slow speed of accessing the certain website and failed design are two main aspects which will present a poorly impress on customers that might cause losing some potential customers (Fill, 2002; Chaffey, 2004). Some information that delivered on the website by enterprise may not be true, the only purpose is trying it to attract customers (Gronroos, 2000). Meanwhile, website must create its own address. Suppose that customers do not know the address, communication between enterprises and customers will never be occurred online (Fletcher et al, 2004).

Usually some traditional method can be implemented to assist website to avoid losing potential customers (Gronroos, 2000). Enterprises can print and deliver newspaper or journal about itself which must contain the address of website in a remarkable place, meanwhile, highlight the address while advertising through TVs even radio (Fill, 2002). These will enhance customers’ impression of the website in order to increase the click rate (Fill, 2002). Through advertising online, a hyperlink which has a band picture and further detail will be provided (Fill, 2002). A hyperlink can be inserted into many others website which can attract potential customers and increase the amount of browsing (Smith & Chaffey, 2005)

E-mail
E-mail is the most popular tool that been implemented in Internet marketing communication (Gronroos, 2002). While customers register on the website of an enterprise, a free e-mail box might be given. Meanwhile customers will be required to hand in their personal information when register, through information, enterprise can gather further customers detail in order to analyze market more close to the customer (Fletcher et al, 2004). To compare with the traditional communication tools, e-mail has these relevant advantages as followed:
•The operation of e-mail can be describe as convenient, inexpensive and immediately which ensure the information can be accurately send.
•E-mail can be customized through the database of the enterprise which contain certain information of customer
•E-mail ensure the response of customers be quicker than ever which especial present in communication and advertising
•E-mail can offer a friendly channel to create and keep the partner-ship in order to reach loyalty
(Mayer et al, 2003; Fletcher et al, 2004; Kleindl, 2003; Adam, 2002)
However, junk mail had annoyed many customers recently (Chaffey, 2004). It is a really good idea to send information to potential customers, nevertheless, junk mail directly impress customers poorly and lose not only potential customers but also loyalty customers. Even more, customers have no willing to glace at the brand (Chaffey, 2004).

Search engine
Another tool which been widely use by both customers and enterprise is search engine (Fill, 2002). Customers and enterprises can input some key word of the information in order to research further details (Fill, 2002). Nevertheless the goal of using search engine between is quite different. From customers angle, more than 90 percentage customers claimed that they used search engine to get more detail, such as search a address of the website and find out the relative information which match customers opinion through access the link address (Smith & Chaffey, 2005; Kleindl, 2003). However, enterprises use search engine to investigate the market movement that link to enterprise position (Fill, 2002). Meanwhile, through customers use search engine to find out the address, enterprises regard search engine as their brand awareness creative (Kleindl, 2003). Like the website have some weakness, search engine can not 100 percent to provide further links through the key words which might also lose attraction of customers (Kleindl, 2003).#p#分頁標題#e#

Through the advantages of these tools which based on Internet technology, a local enterprise can quickly and conveniently transfer into an international known enterprise also join the global market. Meanwhile it assists enterprise to create a partner-ship with customers and brand awareness. While it provide a powerful platform in order to allow SMEs have opportunity to be a winner when fight with large enterprise (Fill, 2002).

2.5. SME & Internet Impact

In worldwide economy, SMEs contribute more than large enterprises, though it lack of funds, facilities and human resource cause SMEs have a huge quantity ( Brown et al, 2005; Kleindl, 2003). While Internet impact several aspects on marketing of SMEs which provide SMEs a competitive strength

Position
SMEs provide main work force in world wide market also support a large number to global economic. In Brown, Lockett and Schubert’s (2005) report, who are expertise in economic field, the data in Europe and United states showed that more then 90% work force are from local SMEs. From the GDP angle, SMEs create nearly half of the amount in those two areas. Obviously SMEs hold a important position whatever in a country or global economic. While Internet stimulates the SMEs, the same stimulation will bring to worldwide (Brown et al, 2005)

Internet impact on marketing communication in SMEs
With the technology developed dramatically internet had been widely used in many sections of our society. For marketing communication in SMEs, internet is an essential tool and impact deeply. It both has opportunity side and threat side.

Chaffy, Mayer, Johnston and Chadwick (2000) conclude these two points.
Opportunity- It is both for customers and for organizations. Customers can choose various kinds of goods, service and the value from suppliers. This means that customers can make their own choice and shopping rapidly. The chance for organizations is to expand their original market to a new area. Produce new kinds of product and be able to outstand in itself market.

Threat- It is most for the organisation. The new born companies like E-bay, Amazon, have their own market as they setup which shocked the existing organisation.

The most important five elements of marketing communication in SMEs are advertising, sales promotion, personal selling, public relations, direct market (Fill, 2002) that internet impact most.

Advertisement
The task of advertising is to design and send the relevant information to the expected customers (Fill, 2002). Through internet the staff of a company has two ways to deliver the message. The first one is just build up a website for communicate with customers by transfer main idea, photo, key information. The second plan is to use the banner advertisement. It is easy for customers to recognize the brand and reinforce the band into customers also link to the website when clicked. The opportunities that the banners offered are interaction and further information. (Chaffy, Mayer, Johnston, Chadwick, 2000)#p#分頁標題#e#

Sales promotion
Encourage those expected customers to buy a item is the main target for sales promotion. This can accomplish short-term up switch in sales (Fill, 2002). Internet provides a first-class platform that can communicate sales promotion. Customers are allowed to gather certain level of financial reward when they interact through internet with a company by sales promotions. The result can be the loyalty never wavered. It is very easy to include a simple gift like a model, a lighter or even a t-shirt integrates into a website. These showed that the internet can be powerful platform for sales promotion. (Chaffy, Mayer, Johnston, Chadwick, 2000)

Personal selling
In our mind, person selling is a kind of work that someone deliver massive information, which is strong enough, about the product to a customers who is confusing and unwilling. The situation now had changed cause of the professional personal selling had been accept by most customers and the internet provide a elite platform (H.Ellsworth.J, V.Ellsworth.M 2000). Personal selling is a distinct form in marketing communication that is two-way communication, sending and feedback. With the internet intervene, the communication between the customers and the salesman can be more easy and more efficiency. Even more the salesman can sale the same product to different people in the same time. In addition, salesmen can analysis the feedback information without delay. (Fill, 2002)

Public Relations
Public relations (PR) target is to form the attitudes and ideas that hold by those stakeholders (Fill, 2002). Currently, most organizations thought the internet can be helpful to the original way and expand the market of PR. Through Internet, a company can send their news report by e-mail or them creative a link on the website. With this new technology, PR can immediately communicate the market though the co-operate website. Another new appearance is fresh information appear by hours even minutes instead the original time like weekly or monthly. This benefit the organisation in the reaction of the changing marketing environment (H.Ellsworth.J, V.Ellsworth.M 2000).

Direct Marketing
Using all kinds of medium action to provide information or sending message and respond customers whatever existed or potential is a form that direct marketing used (Fill, 2002). This kind of form in Bird (1989) words is ‘curriculum marketing, dialogue marketing, personal marketing and database marketing’. When internet intervene the direct marketing, it provides a magnificent potential in personalize the goods, service and information. Using database and internet interaction ensure a company be absorbed in face-to-face communication. Direct marketing can benefit from self-potential to apply the data in order to create relative communication and concern with customers (Chaffy, Mayer, Johnston, Chadwick, 2000)

Through internet intervention, marketing communication in SMEs benefit enough and can take advantage to compete with large enterprise, further more, SMEs can hold its position stably. While in Chen’s (2002) words, who is a expertise in China marketing research, SMEs might lose its position and been failed without using Internet as their marketing communication tools. As the great development of China attract world’s eyes, the research of Internet impact on marketing communication in Chinese SMEs is necessary.#p#分頁標題#e#

2.6. Internet, Marketing communication &Chinese SMES

China catches up the dramatic development of Internet meanwhile SMEs take advantage of the chance to reinforce their enterprise (Wang, 2006) though it is a developing country. Hence, Internet in China and the existing condition of Internet impact of China SMEs in marketing communication should be stated.

China & Internet
Compared with western country, China contacted with Internet in the end of 1980s while western country began in the early of 1970s (Chen, 2006). The delay directly influence the development time which is in the end of 1990s (Chen, 2006). In recent year China has invested a huge amount of fund to develop and improve its Internet as China take part in the WTO (World Trade Organization) Internet could be a important tool to assist China to keep a good position in WTO (Wang, 2006). While because the dramatic growing of Internet in the end of 1990s, China government set up a center which called China Internet Network Information Center to account the user of Internet and deliver the report. According to the 2007’s report, there are 210 million registered users and the increase rate is 53.3%. The amount of user is just 50million less than United States meanwhile follows the rate, China might be the largest market in the world.

Existing condition of Internet impact of China SMEs in marketing communication
Chinese small and medium-sized enterprises (SMEs) have a short history of development. According to Chen (2002) the development can be divided into three parts. The first period was from 1978 to 1992, just after the chairman Deng came into power. The new government policy encouraged SME to develop and the rapid speed of expanding stimulate economic and improve the living standards in China. The second was from 1992 to 2002. The government utilize various method to accelerate reform of government owned SMEs in the same time reduce government owned SMEs. But what dramatically grow are the privately owned SMEs because of the socialist market economy. This is core period for Chinese SMEs. The third development is from 2002 to now. The government established a promotion law which means that Chinese SMEs entry in a new world.

Focus on now a day marketing communication in China SMEs the basic theory is learn from western countries. There are three main theories, said Wang (2006) “uniqueness of the product, brand awareness and positioning”. Like western countries China SMEs have similar contents such as Advertising, Public Relations, Personal selling, Sales promotion, Direct Marketing etc.
However, in the beginning age, many China SMEs behave not so well as western SMEs in marketing communication (Wang, 2006). Enterprise know the theory, however, the practice had been done is just as the copy work. Less research had been carry out about the history of China SMEs, the environment that China facing, the financial resource, internal marketing communications and infrastructure while western country consider these key points seriously (Zhang & Tang, 2006). When in 2004, some of the successful SMEs began to implement the internet as the tool in market communication and gain real benefits which more than using traditional way (Yu, 2006). Internet can assist marketing communication in China SMEs continually to decrease their cost, be known as world wide, cooperate more with customer, improve their product finally hold their proper position (Martinsons, 2002).#p#分頁標題#e#

As Riquelme (2002) said that Chinese SMEs is in the baby age of using Internet as their marketing communication tool, so how does Internet impact and the usability of Internet in the current situation will be carried on by the research in questionnaires and interviews.

2.7. Summary

The internet http://www.ttc-switch.com/Thesis_Tips/use in market communication has dramatically increased in the early 1990(Schultz & Kitchen 2002).Using the internet is to develop the market through communication with the potential customers then create new market without agents and provide customers new goods and service (Smith & Chaffey, 2005). It can support every aspect of market communication the direct result is reduce the cost. When facing the customers, the internet shows its instant interactivity. The faster and the more details feedback the more benefit produce. Online promotion can capture new customers such as search engines, banner advertisements, external links, URLs etc. In China SMEs many enterprise defined marketing communication strategy not so clear and never use internet. At the result, they do not get enough benefits from the marketing. When internet intervened, it bring a SME not only benefits and but also a right path to compete not just survive.