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Marketing in the Internet - as seen from Italy

by Giancarlo Livraghi

No. 6 - July 23, 1997
1. Editorial: speaking Globalese
2. Price, service and trust
3. Online catalogs
4. Netiquette
5. Bits of news
6. An Irish story
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1. Editorial: speaking Globalese
Some European countries are "nationalistic" about language (especially France). Italy is not; many English words are used commonly in Italian - such as "computer". But there is a dramatically low number of people in our country that speak English, compared to many European (and non-European) countries. That is a serious problem, on the Net and generally. In Italian schools, English is treated as one of several "foreign languages" - like French, German or Spanish. The children of the more affluent and educated families learn English, if necessary by private tuition or travel; the other often don't, and that creates an unfair social barrier.

We should learn from what happened to Latin. Until not-so-long-ago it was possible to get around in all sorts of places by knowing a few words of Latin; even now, sometimes, we can find it understood where least we would expect. The two languages that became international two thousand years ago, Greek and Latin, leave traces in many tongues today - even Japanese. But the Latin that survived through the Middle Ages into modern times was not the language of Cicero or Tacitus: it was a simplified international jargon, used by priests, monks and practically anyone who could read or write - in Europe and elsewhere.

Now, whether we like it or not, there is a new international language - and it's global. It's not the English of Oxford professors. It's a blend of American, Australian etcetera... including the national language of India (we seem to forget too easily that more people in India speak English than in the UK or the US). I don't think perfect pronunciation or spelling is important. What matters it to understand and be understood - in Russia or Kenya, in Kuala Lumpur or Bangalore.

We can agree with the Bonn Declaration that global networks should promote linguistic diversity (including a broader online alphabet); but that cannot replace a widespread knowledge of Globalese. Even people who were lucky enough to be born in English-speaking communities may need a bit of learning to adjust to today's international jargon.

It's not just a matter of language. There are differences of culture, style, behavior. Not only countries, but also communities (professional, educational or in any way human) can be very different. We need more than vocabulary to establish a common ground of understanding. We all need to know how to listen: we should not try to impose our manners and habits on other people, but learn their way of thinking. This is not just useful, for commerce or any dialogue; it's also educational and can be fun. Diversity (as biologists teach) is a resource. The more we learn to understand it, the richer we shall be - as human beings, and maybe even financially. Learning the ways and manners of Globalese is not just a necessity. It can be quite intriguing and amusing.

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2. Price, service and trust
In his interesting article in the July-August issue of Information Strategy, Jonathan Moules discusses the widespread concern that «electronic commerce will force businesses to compete only on price»; but, he says, «life does not have to be this way for companies who get their online selling strategy right.» Here are a few quotations:

Few involved in the selling of electronic commerce like to admit just how much of the debate about doing business online assumes that consumers are always after the cheapest deal. The evidence that cheap sells, or at least that vendors believe it does, is displayed clearly from a brief surf through the online shopping malls.

Many of the virtual shop windows highlight massive discounts in colored flashes, apparently in the belief that cut-price offers are a key factor in successful selling .....

Massive discounting is certainly viable online ..... And since only a small proportion of Internet surfers currently use the medium to shop, low prices appear to be a good strategy for drumming up business.

But the assumption that electronic commerce requires less marketing spending, or is only viable through pile-it-high-sell-it-cheap strategies, is to misunderstand the new medium. One of the most important characteristics of electronic commerce is that it re-writes the rules of selling, but not necessarily in the way you expect.

Werner Knetsch, managing director of the German arm of the consultancy Arthur D. Little, argues that many assumptions about selling online have proved wrong. «The real challenge is creating a clear value proposition for customers. In marketing, being first and attracting customer "hits" on the web site have not proved as important as being well prepared for your new market. Remember, only 6% of visitors will buy something.»

The greatest barrier to sales is not with high prices but with trust, he adds. Building trust demands a variety of actions, including speed of delivery, brand identity and reliability of service. In terms of service, Knetsch claims that companies must avoid the temptation to use the Internet as a broadcast medium like television.

Experience has shown that businesses can best use the interactive feature of the Internet to enter a one-to-one relationship with customers. These theories have been proved true by the world's most successful online businesses.

I have little to add. The "price temptation" can be strong. There are several categories, with high distribution costs in "traditional" marketing, that offer wide margins. But it remains to be seen how much of this margin should be returned to customers as a discount - and how much in quality, value, trust and service.

These observations confirm that electronic marketing is not as simple and easy as some pretend; and the first move is not to open a website, but to define strategy, process and content. Above all, to study the net and learn to know it well - if only to keep an eye on competitors (and learn from their mistakes as well as their successes).

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3. Online catalogs
There are precise criteria, based on many decades of experience, on how to produce an effective brochure or catalog in print. Most of them apply to online catalogs. But here are a few important differences.


A paper catalog, once printed, can't be changed. An online catalog can be changed at any time.

We can add, whenever we choose, a new product. We can remove, even temporarily, whatever is out of stock. We can change, at any time, a price - or any other element of our offer. We can change the way we present and explain our products, as we learn from experience.

It's useful to change often, or at least offer frequently some new information, to keep readers interested. The more visitors find news and changes, the more often they will come back.


A printed catalog has a rigid size. We can't add products or information without increasing its size (and cost). Many experts in mail-order selling have different editions of the same catalog: a light one for wide distribution, a more complete (and thus more expensive) edition for established customers - or for the most promising prospects.

It's much simpler online. We don't have to decide if we want to mail a two-page leaflet or a two-hundred-page volume. Our online catalog can have a practically infinite size: the reader will choose what to explore and how.


A printed catalog must be mailed or delivered to each customer or prospect. A printed catalog has no physical place: it can be read by anyone, anywhere in the world (as long as that person is interested and knows how to find it). It can be linked to other catalogs, that can be anywhere.


A reader can order immediately, online. No need to find a pen or pencil, make a phone call or mail an order form.

This not only makes it easier to send and receive orders, but allows us to keep a constant check. We can know instantly, at any time, how many people visit out site, which pages they read and what they buy.

We can test ad infinitum, check response in "real time"; with equal speed we can correct errors and improve service, depending on the behavior, comments and advice of our customers.

Another obvious advantage is cost: an online catalog doesn't need any paper, printing or mailing.

We could also develop some maybe complex, but interesting interactions. An online catalog can be combined with a cd-rom or even a paper catalog; each of those can be combined with the online catalog, where we can provide greater depth and, of course, updates.

So there are many opportunities for online catalogs. But also a few problems.

The first is that we can't send it to specific addresses. Customers must come to us. Therefore we must use the tools, which we have already discussed, to make our site known. As selectively as possible. We don't need lots of bored "surfers" clogging up our bandwidth. We need to attract people that are interested in what we have to offer.

If it's generally true that "word of mouth" is the most important tool, this is even more relevant for catalogs. Satisfied customers are the most valuable source of new business.

It's important to have a precise identity. A printed catalog may be competing with another three or five. On the net, we are competing with thousands of online offerings. Already now there are more sellers than buyers in "electronic commerce", and this is likely to get worse - at least until "natural selection" begins to weed out the weaker contenders.

We need to change our assortment frequently, or widen it, or put in the shop window what we had hidden on a shelf - and vice versa (as any good shopkeeper does). So we shall have more frequent visitors, and more loyal customers.

A few hints for pictures

In a printed catalog, pictures are expensive. Online they are not; but they take up bandwidth and can make our site slow. But pictures in a catalog can be very important... there are several ways to reduce their "weight".

  • We can set up our site so that the reader can choose which pictures to see.
  • We can include small pictures and let readers choose if they want them larger. In that case they will be less impatient about slowness.
  • Good HTML practitioners know how to make picture files smaller without losing quality.
  • In any case it's better to check, by looking at our own site from the circumstances of the less favored readers: remote connections, less sophisticated browsers, etc.

A basic principle

The crucial element, in addition to product quality, is service. Price is a tool, but experience shows that online customers want quality and value. They are used to the speed of electronic communication: they expect quick answers and fast delivery.

Above all, we must establish a bind of trust. People ordering from far away ask themselves: can I trust someone I don't know? Each well-answered request builds the relationship; every small mistake or lack of attention can destroy it.

More than ever, the basic principle of direct marketing (and marketing in general) applies here: what's important is not to make sales, but to gain customers.

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4. Netiquette
I think anyone who wants to be successful with online marketing should study and practice Netiquette.

What does that have to do, someone might ask, with electronic marketing? And isn't that part of the original net culture, being gradually forgotten as global networks become more commercial?

I don't think so.

As I pointed out several times... net marketing is not just a matter of setting up a website with pretty pictures. It's building relationships. And Netiquette is not just a private code of Usenet newsgroups. It's a well developed set of commonsense manners, that can help establish effective communication in any type of online dialogue - commercial or not.

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5. Bits of news
L'Unità is a major newspaper, owned by PDS - the leading party in the coalition now in power. It was one of the first Italian newspapers on the Web. It was online for over two years, from January 25, 1995 to March 2, 1997. For five months now, it has been off-line for "work in progress". No explanation for its absence is provided.

An American non-profit organization, NetAction, is organizing a campaign on September 15 to urge the US Congress to take action against the Microsoft monopoly.

According to a report from Adnkronos on July 26, Dario Dal Zotto, a director of PubliKompass (a major media broker) said: «1998 will be a boom year for Internet advertising also in Italy.» The assumption is based on a forecast of a large increase, next year, of computer sales and of internet connections. As usual, I am skeptical about any prophecies... we shall see. If there will be a real increase of net usage, we may really have the beginning of a trend. A much less "rosy" hypothesis is that the commitment of large brokers, such as Publikompas and others, may generate an increase of advertising on websites (it's so small now that it would be easy to double or triple it in a relatively short time). We know that most companies haven't had the time to study the opportunities and have no strategy for their presence on the net - nor can we imagine that this vacuum can be filled by the improvised know-how of the brokers' salesmen. We could fall once again, quite heavily, into the delusion-disappointment vicious circle.

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6. An Irish story
In the article I quoted above, it's confirmed once again that "Europe lags behind" in online marketing. Some failures are reported, as in the case of the Voss knitwear and sports goods retailer in Norway, that «is to scrap its year-old electronic commerce system selling direct to the customer, and is instead looking at selling through a bigger online vendor

But there are also success stories, such as Office World, an office furniture, stationery and computer retailer focusing on service - or the French Supervox, supplying do-it-yourself products to shops across France, Belgium, Spain, Portugal and the UK with an effective net-supported service system.

It's not surprising to find that an interesting success story comes from Ireland, the brightest upcoming economy in the European Union - and one of the few countries in which there is a fairly widespread understanding of the Net.

House of Ireland, a retailer of fine china and glassware, has a single tourist shop in Dublin's university district. It opened online in June last year, building upon its already successful US mail order business; Internet sales are expected to outstrip "snail" mail orders in the near future. Roger Galligan, the company's chief executive, says that he could never have achieved that result by competing on price. «On the Internet, there is a big issue of trust because customers cannot touch or feel the goods being ordered,» he explains. «One way, we have found, to get around this is to only stock products, such as Waterford crystal, which are strongly branded.» Especially with hand crafted products, one of the big issues is order fulfillment. House of Ireland "has been lucky so far" that most of the online orders come from the US, where the company had already established a distribution network for its mail order business. Galligan notes also that managing a limited product range has its advantages for online selling. «By being sophisticated with the technology, we have been able to register all 300 products with Internet search engines

But, once again - the crucial element for online success is service. House of Ireland has invested in dedicated staff to stay close to its customers. «Moneymaking on the web, for us, is still an insignificant part of our total business - Galligan admits - however in the future we believe we are well placed to take a lead over our competitors still focusing on mail order operations.».

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