Online Marketing in Sri Lanka

I. Online Marketing in Sri Lanka

1. Introduction

The development of online marketing in Sri Lanka is lagging behind when compared to developed countries. The adoption of online marketing is more than a technical issue. Country specific factors such as differences in culture and business environment are influencing the nature and type of appropriate IT solutions including online marketing. Therefore the marketing strategies must be suitable for the country to reach and communicate with the target audience. Online marketing and selling has enabled business organizations to provide better quality products and services, reduce costs and shorten deliver times.

Kotlar defines online marketing as "marketing conducted through interactive online computer systems, which link consumers with sellers electronically". (Kotlar et al, 1997) A company engaging in online marketing can use methods ranging from hosting an informative web site to taking orders over the internet to having a fully integrated Customer Relationship Management and Order Management system over the internet.

The internet is considered as the engine of bringing phenomenal changes to business and society and failure to adapt to these changes would face extinction. Therefore both the Sri Lankan government and the private sector are conscious about the need to promote IT and online marketing to achieve competitive advantage.

Online marketing is a sub system of e-commerce which is defined by Gartner Group, USA as "a dynamic set of technologies, integrated applications and multi-enterprises business processes that link enterprises and consumers together", which covers the use of messaging, networking and applications to enable communication of business information. E-Commerce could take place between businesses, business to consumers (e.g. Amerzon.com) or between customers facilitated by an intermediate service provider (e.g. e-bay).

Online marketing has its own advantages such as improving productivity and competitiveness as well as challenges and barriers. These, in relation to Sri Lanka, will be discussed in this paper.

2. Current Status

A recent survey by the Department of Census and Statistics has found that only 9.7% of Sri Lankans are computer literate although the overall literacy level is over 90%. The Colombo district has the highest computer literacy of 20%. However the current trend of many youngsters opting for IT education and the government policy of e-enabling Sri Lanka are healthy signs that the computer literacy would take a steep upward trend in the years to come. 10% of urban households report having computers as against a low 3% in rural areas. Only 0.9% and 0.7% of households have access to email and internet respectively. The number of email and internet connections has grown at an encouraging rate since year 2000 as shown in figure1. In addition many cyber cafйs and workplaces also provide, to those who patronage them, access to the internet.

Figure 1: Growth in Internet and Email Subscribers

Source: Data from http://www.trc.gov.lk/

Sri Lanka has a well established and deep rooted private sector which is seemed to be far ahead of the government sector in the use of technology and agility towards conducting business. However, very recently, the public sector is also seen to be making a stride towards developing its IT infrastructure. E-Government was a key area of focus at the recent 2nd International Conference on e-Governance held in Colombo. The theme of this event was "From Policy to Reality" and it looked at how Sri Lanka can effectively move towards e-government especially with leanings from countries such as India and Singapore.

Online marketing in Sri Lanka takes many forms.

o Publishing information - Using ICT to expand access to company information

o Interactive marketing - Broadening customer participation through websites

o Transacting - Making goods and services available online

Many companies use the World Wide Web (WWW) to host a website to publish information and thus improve access to Company information. Having a website has become the "in thing" these days. Although the content is seen to be static over a period of time it is a good stepping stone to the world of online marketing. This method was first used to promote Sri Lanka as a tourist destination. The tourist board website (www.srilankatourism.org) provides a wealth of information for those interested in visiting Sri Lanka. The WWW is now used by most organisations engaged in promoting tourism and many other business to business and retail organizations enabling its customers to view products, services and information and influencing their purchasing decisions. Some stores use mechanisms such as 3-D animation to enable customers to view products in 3 dimensional forms. E.g. Alankara Jewelers (www.alankara.com) provides images in 3-D form.

The next level is to use online marketing as an interactive marketing tool. E-Commerce sites have the option of collecting customer specific data and personalizing the site / targeting advertisements to suit the user. For example the Keells Supermarkets (www.keellssuper.com) site collects user information at the time of registration and uses this information to personalize the site for visitors. The Skywards customer loyalty program web site (www.skywards.com) uses customer information for target marketing as well as providing customized services (such as meals and preferential seating) for airline passengers using the already stored customer information. Dialog GSM (www.dialog.lk) uses chatting for customer support but the facility does not appear to be adequately manned to provide a prompt service.

Use of email newsletters is another economical means of online marketing. Many sites request visitors to voluntarily register to receive email newsletters with information of their choice. For example Comet Cable (www.cometcable.com) uses e-newsletters to send latest updates of planned programs to those who register. However the number of companies using this method is still handful.

Transacting or enabling the customers to buy and sell goods and services online is the next level in online marketing. During the last 2 years we have seen an encouraging growth in this area. All leading banks are web enabled and promote internet based transactions as it helps improve