The Impact Of Internet Marketing On Profitability

Abstract

With the internet user increased, the internet marketing becomes a hot and new marketing channel to sell and buy through internet meanwhile changes buyer behavior. This study examine whether internet marketing become a popular marketing channel or a key marketing channel for the company in future.  This paper reports the results of an empirical study of the marketing channel choices (internet and catalog) have different marketing costs to cause different performances on firm profitability. Data on financial statements from internet and catalog retail of COMPUSTAT database that were in existence in 2002 were examined and statistically analyzed the profitability. Comparisons are made, through a series of T-tests, to determine the profitability of their different retail marketing channel choices. The results indicated statistically significant differences in ROE, ROA, and ROS between internet and catalog retail, therefore, the adoption and implementation of different retail marketing channel choices such as internet and catalog did have a different profitability. The results concluded that internet retail or on-line retail may be an additional marketing channel for the company but it can not be a key retail marketing channel due to the negative means of t-test results on internet profitability.