Understanding What Internet Marketers Do Wrong

By Sherif Ramadan
Very little is actually understood about the nature of business and its scholarly studies by Internet marketers - or what many are calling themselves online these days. The term "Internet marketing" also seems to be associated with a great number of derogatory terms. The common practice of Internet marketers is undoubtedly flawed in that they take numerous twists and turns in order to satisfy their overall objectives.
Trying Too Hard
When I see a web page advertising a product online with words written in 48 pt. bold, underlined, and bright colored fonts I already know, pretty much, what I'm getting without having to scroll down. Anyone who is trying that hard to get your attention clearly has little understanding of what marketing is all about.
Marketing was meant to be subtle and attractive, not evasive and hostile. Think what would happen if household brand names like Nestle or Coca-Cola tried to sell their products with the same ideology as these Internet marketers. You'd be seeing a lot of commercials on T.V that were 90 minutes long and had loud and obnoxious people screaming at you to buy their products right "NOW, NOW, NOW!" before you even understood what it was you were buying.
Forgetting Who Determines Value
Value is really any aspect of goods and services for which consumers are willing to exchange resources (usually money). For example, when you pay for a meal at a classy restaurant the value is high because you are willing to give up more resources in order to satisfy your entire dining experience. When you choose to eat at a fast food restaurant or a hot dog stand the value is fairly less because you aren't willing to pay $200 for a burger or a hot dog that you're eating on the street.
The producer can determine and control the quality of a product, but cannot determine its value. This is because value is in the hands of a consumer. If consumers unanimously decide that crude oil is valueless then producers can do little to change that.
I'm sure a number of people have seen ebooks or software products being marketed online that claim to tell or show you the secrets of making millions over night. The consumer is then dismayed after reading or using the product only to learn that they have spent a good $99 on something that was far less valuable than it first appeared to be. The product may go on to tell you that the secret to making millions over night is to resell this $99 product to more people. Well, what happens when more people continue to purchase the same product and it constantly fails to live up to its image? The product will ultimately become valueless; a principle explained by economics as marginal utility.
Misinterpreting Demand vs. Supply
The nature of economics is fairly complex, but a few simple concepts teach us, fundamentally, what is most commonly used as standard practice for any commercial trade. Almost all Internet marketers seem to defy this very concept.
The laws of demand and supply tell us that if the demand increases for a particular good or service then the price for that good or service will ultimately increase and vice versa. This is built on the principle of limited resources. Because both producer and consumer are given a limited number of resources at any point in time, but have an unlimited number of needs, it's therefore necessary to make some choices -- or sacrifices -- in order to satisfy their most important needs.
For example, the release of the new Sony Playstation III influenced a phenomenal spike in the demand curve of that product. There were more people who wanted to buy the SP3 than there were game consoles in stock. In this case the demand has far exceeded the supply. Yet, notice that Sony did not raise the retail price on the game console itself; at least not as the product was being soled out in stores.
It was the retailers who charged more to the consumers. People were selling the game console on ebay and through other online auction sites at prices two or three times that of conventional retail stores.
Here the limited and declining supply of the product vs. its increasing demand is quite reasonable according to the laws of supply and demand. What is not reasonable, however, are the manipulative tactics many Internet marketers use to gain greater profits from their products.
Transposing Price Margins
When an Internet marketer begins by introducing a new product at an incredibly low price and raises the price frantically as the number of sales go up, this does not comply with the laws of supply and demand. Demand is measured by the number of consumers who are both willing and able to purchase goods and not necessarily consumers who have already purchased the good. Additionally, if the good is digital in nature, such as an ebook or downloadable product, that makes it extremely abundant in supply since the duplication of a digital file is rather cheap and effortless.
What an Internet marketer is ultimately trying to do by pulling off this rapid price change is compensate for the defective nature of their products. Many of these products are informational and become obsolete over time. This means that the producer will be unable to continue selling the product once consumers learn that it no longer satisfies any of their needs. Thus it is the Internet marketers aim to quickly generate enough revenue from the product before the demand falls so that it will still make a profit. This is done by giving consumers more reason to secure their benefits at a lower cost.
Any economist will tell you that there is no benefit from dramatically raising the price on a good or service that is virtually unlimited in supply (or fairly abundant) and draws an increasing demand. In fact this may very well lead to a fall in the demand curve as consumers will realize that the cost of the good exceeds their marginal utility. Marginal utility is a measure in economics to determine how much more satisfaction is gained from the consumption of one more unit of a good or service.
Synopsis
For those of you who spend a great deal of time online trying to find that perfect solution to make a quick buck this might be a bit of a disappointment. What is not disappointing though is that we now understand why it is Internet marketers spend a great deal of time, effort, and money in creating obsolete products with little or no benefit to the consumer. The need for "a quick buck" has created a vast supply of needless products. Internet marketers will continue to supply this need for as long as it exists.
As far as I can tell, economics did not fail to explain the behaviors of these producers and consumers; if anything it brightened the picture. The limited number of resources we have define the choices we are likely to make because we are faced with an unlimited number of needs, but let us not forget that some of our needs are not as important as others. Moreover, it should be noted that the role of marketing involves some ethical behavior on the part of the producer.
If you're starting a small business and wish to learn more about small business startup, visit the Business-Geek.com website to find affordable small business services.
Article Source: http://EzineArticles.com/?expert=Sherif_Ramadan