Exploring the implications of the internet for consumer marketing

Past commentaries on the potential impact of the Internet on consumer marketing have typically failed to acknowledge that consumer markets are heterogeneous and complex and that the Internet is but one possible distribution, transaction, and communication channel in a world dominated by conventional retailing channels. This failure has led to excessively broad predictions regarding the effect of the Internet on the structure and performance of product and service markets. The objective of this article is to provide a framework for understanding possible impacts of the Internet on marketing to consumers. This is done by analyzing channel intermediary functions that can be performed on the Internet, suggesting classification schemes that clarify the potential impact of the Internet across different products and services, positioning the Internet against conventional retailing channels, and identifying similarities and differences that exist between them. The article concludes with a series of questions designed to stimulate the development of theory and strategy in the context of Internet-based marketing. Robert A. Peterson holds the John T. Stuart III Centennial Chair in Business Administration and is the Charles E. Hurwitz fellow at the University of Texas at Austin. A former editor of theJournal of the Academy of Marketing Science andJournal of Marketing Research, he currently chairs the board of governors of the Academy of Marketing Science. His research interests include the competitive and cooperative interface between electronic and traditional retail channels, customer equity modeling, and the application of options theory in marketing. His research interests are psychological models of economic behavior, consumer choice and choice protocols, and advertising. His work has been published in theJournal of Marketing Research, Marketing Science, Journal of Retailing and Consumer Service, andR&D Management.