CHAPTER ONE
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Introduction
This chapter presents the reader with an overview of the study. It includes the background of the study, problem area and purpose of the study as well as justification of the Study. The limitations, delimitation and the organization of the Study are also presented.
1.1 Background to the Study
We live in a global world with an ever changing phase of technology; the role of traditional marketing is being challenged constantly. Local firms are beginning to face competition from foreign firms located both near and very far away in other continents. This trend is expected to continue as long as technology is available to facilitate business between a willing buyer and seller. Traditionally marketing is seen as an organizational function and a set of processes for creating, communicating, and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders according to American Marketing Association (American marketing Association 2004).
Traditional marketing has been transformed by the new technological advances creating new business contexts throughout time. First dramatic implication for marketing occurred with the emergence of public press, telegraph, radio, telephone, television, and fax technology (Ngai, 2003).
Today, the Internet not only offers tremendous opportunities for marketers, it brings about a new way of conducting marketing and approaching consumer markets (Sterne, 1996; Hoffman & Novak, 1997; Peterson et al., 1997; Walsh & Godfrey, 2000; Rahman, 2003; Pitt et al., 1999a, b; Lichtenthal & Eliaz, 2003).
The Internet also melts the borders of national markets increasing and shifting the competition into electronic marketplace, where many companies are competing now on an international basis due to the global nature of e-commerce (Hoffman & Novak, 1996; Malhotra & Peterson, 2001). The coming of the Internet and digitalization of information together with the spread of the use of personal computers created the context of e-commerce, in which the core marketing function has acquired new universal characteristics and directions, inducing the development of Internet Marketing as a concept (Watson et al., 2000; Pitt et al., 2002; Ngai, 2003).
The internet is a very important tool for gaining strategic advantages in business the world over. Several hotels have made attempts to capture some of the growth potential of the internet, by creating their websites and are using the internet for various purposes. It is used mostly as a sales and marketing tool. (Murphy et., 1996; Walle 1996)
Internet marketing has been defined in different ways by different authors. According to Ngai, (2003) internet marketing is “The process of building and maintaining customer relationships through online activities to facilitate the exchange of ideas, products, and services that satisfy the goals of both buyers and sellers”
Buhalis, (1998) state that “Marketing on the Web is multidimensional content marketing that requires the following paradigm shifts: from traditional advertising to interactive marketing; and from developing and managing one-way information flows to computer-mediated empowerment of users, consumers, and entrepreneurs who will be engaged in electronic commerce in the information age” According to Laudon & Traver, (2002) “Internet marketing is to use the Web – as well as traditional channels – to develop a positive, long-term relationship with customers (who may be online or offline) and thereby create a competitive advantage for the firm by allowing it to charge a higher price for products and services than its competitors can charge”
Ghana was amongst the first countries in Africa to achieve connection to the internet. The internet was introduced into Ghana in 1998 by NCS Network Computer Systems. Broadband ADSL services were introduced in 2003. In 2004 alone almost 100 new ISPs were licensed bringing the total at the end of that year to more than 140. The rapid growth in this sector in recent years is set to continue.
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