Education
`
`‘T'rav --ou‘is-— ~
`
`2nd Edition
`
`Gary Inkpen
`
`PEARSON
`flu.
`
`Starbucks Corp. Exhibit 1034
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`Starbucks Corp. Exhibit 1034
`
`

`

`iiI'
`
`
`
`'
`Ed
`“canon
`
`this book is digitally
`primed on demand
`
`
`
`H,l
`' Wmmnm-
`
`Starbucks Corp. Exhibit 1034
`
`
`
`Starbucks Corp. Exhibit 1034
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`

`

`l
`
`Information
`Technology
`for
`Travel and
`Tourism
`
`SECOND EDITION
`
`Gary lnkpen
`
`ail ala ...
`
`Longman
`
`An imprint of Pearson Education
`Harlow, England . London . New York · Reading, Massachusetts . San Francisco · Toronto · Don Mills, Ontario · Sydney
`Tokyo . Singapore . Hong Kong . Seoul . Taipei . Cape Town . Madrid . Mexico City . Amsterdam · Munich . Paris · Milan
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`tnformatJon on the products and services pre&anled in tllis book has bsen suppJ1Bd by ll\e compantes oon~rned. and tile author
`has made avery a ort to ensll"e that th · ~ matena IS ac<:urate and u; presented correc-tly ~~t o1 the companies concl:!llled ht~Y-e
`fe\llewed !he l:e:d: and have had an opportum{y to modLfy thB mat.elial ~Jiirltten about them. I [11U5_t also be .stressed lila !he book
`does not rep esen any kind of st~rvey of a~ IWrlilable produ:cl.s on the market. The itEm
`l:ha have been 11'\C.ILJded are Slmpl~
`ex.amp1es ol sy~.IS ;nallable to travel ~sents b'i l11e UK at ·~ne time of writing.
`It is fonhese reasons that the a~U\0( and publlshe c:anno be "E!kl re.spoo
`s fa Ci1Y errors or mlsrepre entatioos concei1Wl!l
`the desc: ptiollS of producl:$ and servlc~ mentiol'l d ·
`is boo , Products de-scribed here may have cflaflged s11~e · ey were
`originally docume:nted: ror UP""tfrdate lnforrna 'on and pricri11g details tile- re.a.d.er i.s advised o contact arry company In which they
`am illiBresrerl dlreclly.
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`and Associated Companies throughout the world
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`© Gary lnkpen 1994, 1998
`
`The right of Gary lnkpen to be identified as author of this work has
`been asserted by him in accordance with the Copyright, Designs
`and Patents Act 1988
`
`All rights reserved; no part of this publication may be reproduced,
`stored in any retrieval system, or transmitted in any form or by any
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`90 Tottenham Court Road, London WlT 4LP.
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`First published by Pitman Publishing 1994
`Second edition published by Addison Wesley Longman 1998
`
`British Library Cataloguing in Publication Data
`A catalogue entry for this title is available from the British Library
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`ISBN 0-582-31002-4
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`Set by 35 in Sabon 10/12 and News Gothic
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`Transferred to digital print on demand, 2002
`Printed and bound by Antony Rowe Ltd, Eastbourne
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`

`

`5
`The Internet
`
`Introduction
`
`This chapter deals with the Internet - possibly
`one of the most exciting developments in travel
`and tourism since the industry was invented. The
`omission of the Internet from the previous edition
`of this book illustrates how quickly it has become
`a major factor in travel. Only two or three years
`ago it was a fledgling technology used by a few
`scientists and some USA students for very special(cid:173)
`ized applications. Now, not only is it widely used
`within the travel and tourism fields to reach con(cid:173)
`sumers, but more importantly it is perceived as
`one of the major influences affecting the travel
`industry of the future. Recent studies, for example,
`predict that 20 per cent of total bookings will
`be via the Internet within five years (source: Jose
`T azon, Amadeus - at the Association of Cor(cid:173)
`porate Travel Executives conference in Madrid).
`From a more general perspective, the US Govern(cid:173)
`ment estimates that 20 per cent of all consump(cid:173)
`tion will be transacted on the Internet within 20
`years. There are currently over 50 million Internet
`users world-wide, over half of which are in the
`USA. The statistics for Europe are shown in Table
`5.1.
`I'm afraid that I do not include here any de(cid:173)
`scription of the Internet or the technologies that
`make it work. This would be an entire subject in
`itself and one that I could not possibly hope to
`even skim in this book. I therefore assume that
`you, the reader, understand the basic terminology
`and that you already know what an Intranet is,
`what a hyper-text mark-up language (HTML) is,
`what browsers are and basically how Internet tele(cid:173)
`communications work. My analysis of the Internet
`
`Table 5.1 Internet registrations in Europe (millions)
`
`European Country Actua/1996 Forecast 2000
`
`Britain
`Germany
`France
`Italy
`Netherlands
`Sweden
`Denmark
`Norway
`Finland
`Belgium
`
`2.40
`2.00
`0.30
`0.20
`0.20
`0.16
`0.08
`0.10
`0.14
`0.30
`
`(Source: IHBRP, lnteco Corp, 1997)
`
`10.00
`6.90
`1.20
`1.00
`1.10
`1.10
`0.80
`0.40
`0.40
`0.40
`
`in this chapter is very much viewed from the per(cid:173)
`spective of how it is used within the field of travel
`and tourism. I therefore do not explore the more
`esoteric technological aspects in any detail at all.
`After all, it's how the Internet is used that I think
`is most germane to this book's audience.
`The chapter starts off with an analysis of the
`marketing aspects of the Internet. Then goes on
`to discuss one of the biggest single issues facing
`the industry at present - disintermediation. Fol(cid:173)
`lowing this, I analyse the various ways that some
`companies are using the Internet at present. In(cid:173)
`cluded here are descriptions of several leading
`Internet sites that have already established them(cid:173)
`selves in the global travel and tourism industries.
`Finally, I have included several examples of some
`particularly interesting Internet pages within each
`section. But please note that these pages are in
`
`THE INTERNET 177
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`fact 'screen shots' and that they do not show a
`complete Internet page. Most Internet pages are
`in fact too large to fit on a single screen and rely
`on vertical scrolling functions supported by most
`browser software. Nevertheless, I hope they give
`you a flavour of what functions and information
`are available on travel and tourism via the World
`Wide Web.
`
`Marketing on the Internet
`
`In my view, the Internet is an almost pure mani(cid:173)
`festation of marketing principles and practices.
`It is a marketing person's dream because: (a) it
`levels the playing fields, (b) it enables companies
`of different sizes to compete on more equal terms,
`and (c) it allows a company to open up a direct
`channel of communication with its customers.
`What's more, the success of an Internet site is not
`always directly proportional to the amount of
`money spent on designing it. We are all no doubt
`aware that the success of an advertising or pro(cid:173)
`motional campaign depends very much on the
`amount of money spent on media advertising. This
`is because the company must broadcast its mess(cid:173)
`age to everyone, or at least a very large propor(cid:173)
`tion of the population, in order to reach its desired
`target market. The amounts spent by large com(cid:173)
`panies on television advertising, bill boards and
`the press are enormous. By contrast, smaller com(cid:173)
`panies cannot afford such massive exposure and
`consequently their products do not become so well
`known.
`However, with the Internet this is not neces(cid:173)
`sarily the case. Companies of all sizes are much
`more equal in their competition for the consumer's
`attention. The main reason for this is that the pages
`that comprise one company's Internet site can be
`available to the same population of consumers as
`another company's site, yet without any signific(cid:173)
`ant additional amounts of expenditure. It is not
`quite so easy for a large company to throw money
`at their Internet site and as a result, expect it to be
`visited by vastly increased numbers of consumers.
`What is happening in the new electronic market(cid:173)
`ing world of the Internet is much more subtle.
`A whole new approach to sales and marketing is
`
`178
`
`INFORMATION TECHNOLOGY FOR TRAVEL AND TOURISM
`
`evolving. It remains to be seen precise!
`this will crystallize into a tried and prove: ho\\>
`odology, because the technology is so you llleth,
`consumer reactions have yet to be measuredng and
`ately. So, everyone is learning the hard way ~~Ur,
`of experimentation mixed with liberal amou Ots
`trial and error.
`nts of
`But first of all, let's get the relative size
`importance of this new channel into perspect~nd
`Because the Internet is the focus of my marke:~e.
`analysis, let's first of all consider what types tn1
`people use it and what its potential is. The cu~­
`rent profile of a typical Internet user is remark(cid:173)
`ably consistent with that of a profitable potential
`travel customer. They tend to have a high level of
`disposable income and are in the 25-35 age group.
`Research shows that many Internet users are afflu(cid:173)
`ent and experienced travellers and this sounds just
`like the target market of many travel agents and
`suppliers. At the moment, over three million Euro(cid:173)
`pean homes have Internet access or subscriptions
`to on-line services, e.g. Compuserve and America
`On-Line (AOL). This figure is estimated to double
`over the next two years. Forrester Research believes
`that Web generated global sales will rise from
`US$2 billion in 1996 to US$61 billion in the year
`2000. Forrester also predicts that the top three
`sectors for on-line shopping will be: (i) computer
`products, (ii) travel, and (iii) entertainment. (Forrester
`Research is a major research and consultancy organ(cid:173)
`ization that has carried out extensive Internet
`analyses).
`Clearly, therefore, the Internet represents a
`significant new opportunity for a company to dis(cid:173)
`tribute its products and services direct to consum(cid:173)
`ers. But in order to do this well, a good marketing
`campaign will be needed. The question is: 'How
`should a company's products and services be mar(cid:173)
`keted to consumers via the Internet?' The prob(cid:173)
`lem is, there appears to be a lack of any established
`methodologies for successful Internet marketing.
`But despite this, it does seem that a set of critical
`success factors are beginning to be distilled. They
`are probably best described in terms of an evolu(cid:173)
`tionary approach that several companies have
`taken towards the development of their market(cid:173)
`ing strategy for the Internet. The first of these,
`not surprisingly, is to establish a corporate pres(cid:173)
`ence on the World Wide Web.
`
`Starbucks Corp. Exhibit 1034
`
`

`

`WEB SITE PRESENCE
`
`fhe first and most basic commitment that a
`company can make to the Internet is the estab(cid:173)
`lishment of its own Web site. Although many com(cid:173)
`panies have taken this first step, it can be more
`complex than it seems at first glance. To start
`with, there are some fundamental issues to be
`resolved, such as: should the site be created and
`maintained in-house using the company's own
`computer or should it be outsourced to a local
`computer service bureau? Companies sometimes
`start by establishing a Web presence on a bureau
`basis and then, depending upon its success, move
`the Web site operation in-house. Having said this,
`there are a lot of companies that are perfectly
`happy with an outsourced solution to their Web
`presence. After all, unless the company has a cost
`effective in-house IT department, the expense
`of creating a Web site and coping with ever(cid:173)
`changing Internet technology can be significant.
`Another important decision is the establish(cid:173)
`ment of a memorable name for the site. Site names
`are important because they need to be memorized
`easily by the consumer and they obviously need
`to represent a natural link to the name of the
`supplier company. Once established, they cannot
`be easily copied, or for that matter changed. Hav(cid:173)
`ing established a site name or unique reference
`locator (URL), the next step is to design a home
`page. Again, this is no simple task. A home page
`needs to be attractive and must provide links to
`other parts of the site and to other related sites.
`Incidentally, it is quite possible that advertising
`fee income can be generated if a company's Web
`site incorporates links to other sites. It usually
`incorporates some form of main menu, but not in
`the sense of the old classical computer applica(cid:173)
`tion. An Internet main menu is much more intui(cid:173)
`tive and user-friendly. It often involves graphics,
`sound and animation, as well as text. The prob(cid:173)
`lem is: 'How should a home page be designed so
`that it supports today's site visits, yet allows
`the remainder of the site and its other pages to
`grow and develop over time?' Well, the answer is
`that of course the remainder of the site must be
`designed at least in concept before the home page
`can be completed. However, this is easier said
`than done, especially when the site is expected to
`
`evolve and therefore change over the short term
`as more content and new sections are added.
`Design is a critical aspect of any Web site; and
`design is not just about information content and
`layout. It is very much about the visual effect of
`Web site pages as they appear on computer screens.
`The Internet Web site design process is certainly
`not confined to computer programmers. It is a new
`skill that is best undertaken by graphic designers
`and creative artists who work in the advertising,
`publishing, marketing and corporate communica(cid:173)
`tions businesses. After all, if the pages are to be
`effective and have impact they need to be pro(cid:173)
`duced by the kind of people who design brochures,
`magazines, logos and advertisements. This is a
`specialist field and is not one in which either travel
`companies, tourism organizations or IT depart(cid:173)
`ments are known to excel. To get the best Web
`site design, an outside agency is probably the best
`approach. There are now many companies that
`provide these services, including the Internet pro(cid:173)
`viders themselves, and the only issue is how to
`decide the best and most appropriate one.
`An important feature of the home page is the
`site owner's e-mail address. This is vital in order
`to begin the development of a rapport with the
`consumers that comprise the company's target
`market. It is here that the company will need to
`make its second major commitment to the Internet.
`If it is to publish its e-mail address then it must
`expect to answer incoming e-mail from site vis(cid:173)
`itors. Again, this is easier said than done. As the
`Internet is a global medium, e-mail can be ex(cid:173)
`pected from virtually anywhere in the world; and
`they will come from a very wide range of people
`too. Students, casual browsers and serious cus(cid:173)
`tomers are all potential sources of e-mail. The
`challenge is to weed out the serious customers yet
`maintain a reputation for all round good customer
`service. So, to develop a site successfully, it is very
`important that all e-mail is filtered and answered
`within a certain period of time. This is often im(cid:173)
`plemented via a quality control measure that com(cid:173)
`panies with successful Web sites embed within
`their employee work practices. This brings us
`to one of the golden rules of Internet marketing;
`develop a good communications channel that
`establishes a dialogue between your company and
`its consumers. The next steps are: (a) increase the
`
`THE INTERNET 179
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`

`

`number of site visitors, and (b) turn site visitors
`into buyers of the company's products and ser(cid:173)
`vices; in other words, increase sales.
`An essential way of increasing Web site vis(cid:173)
`itors is to advertise the site. This can of course be
`accomplished by means of standard paper-based
`advertising and promotion, e.g. specialist Internet
`magazines and 'Whats On' publications. But there
`is an alternative electronic way to achieve the same
`thing. This is by establishing hyper-links from other
`Web sites to your own. Again, its all pure mar(cid:173)
`keting. The company needs to research other com(cid:173)
`panies that have a Web site and select those with
`whom a strategic relationship exists. In fact, no
`such relationship might exist at present because
`the other company is in an entirely different field
`of business. However, new relationships can be
`established by finding new
`inter-relationships
`between a company's products and those offered
`by other companies. Establishing hyper-links from
`other successful sites to your own is absolutely
`essential if your site visits are to be maximized.
`Another way to increase site visitors and attract
`new customers is to make use of the Internet
`Newsgroup functions. There are many prime
`examples of individuals and companies who have
`used the Newsgroup facility to create new busi(cid:173)
`nesses. They establish a Newsgroup on a particu(cid:173)
`lar subject. Then they post open letters into the
`Newsgroup that describe a particular business
`opportunity, a new product or an innovative ser(cid:173)
`vice. Internet users can log onto the Newsgroup
`index and if they are interested, pick the com(cid:173)
`pany's Newsgroup item. From here they can post
`open-electronic-news items of their own within
`the Newsgroup that other participants can also
`see. Using this kind of open communications
`channel, a company can build up a pretty good
`base of interested potential customers. All the
`company has to do is ensure that somehow or
`another it captures the Newsgroup user's e-mail
`address. The company can venture into the world
`of direct e-mailing. This whole area is a subject in
`itself and there are many books that specifically
`address the topic. All I have attempted to do here
`is make the reader aware that these electronic
`marketing opportunities exist.
`Another approach to turning a Web site pres(cid:173)
`ence into actual sales is by providing site visitors
`
`180
`
`INFORMATION TECHNOLOGY FOR TRAVEL AND TOURISM
`
`.
`with access to a booking engine. This can b
`a supplier's own booking engine interface e ~la
`corporate computer or by linking from th to lts
`plier's site to another site that provides a b~ k~P­
`service. Let's examine this in a little more do 1~&
`etatl.
`
`BOOKING ENGINE
`
`Once a. com pan~ ha.s established a ~ eb site, the
`next thmg that It will need to consider is sell'
`1?&
`its product directly to consumers. This is a
`Sig(cid:173)
`nificant step for any company and one that .
`obviously not taken lightly. To sell products an~
`services direct to consumers via the Internet, com.
`panies really need some form of computerized
`inventory system. Most companies will already
`have such a system that they use to control stock
`positions and support the sales process. Airlines
`have their CRSs, hotels have their room inventory
`systems, tour companies have their booking sys(cid:173)
`tems and so on. At present many of these com(cid:173)
`panies use their booking systems as platforms from
`which to distribute their products via existing
`channels such as the GDSs and videotex. To dis(cid:173)
`tribute products via the Internet, a new interface
`is required. This interface will allow the company
`to make an Internet booking engine available to
`its site visitors.
`Even with an in-house computerized inventory
`control system, developing an Internet booking
`engine is a non-trivial task. However, it need not
`be a major obstacle for a company. This is because
`there are specialist IT service companies that have
`already sprung up to support just this type of
`Internet application. In fact I have given an ex(cid:173)
`ample of one such company in the section below
`entitled 'Interfacing supplier systems to the Internet'.
`These companies have developed the technical
`infrastructure that enables an existing booking
`system to be interfaced to the Internet. This infra(cid:173)
`structure makes the interfacing task relatively
`simple and straightforward. It allows all kinds
`of systems to be adapted for the Internet. Even
`old legacy main-frame computer systems can be
`presented to consumers as dynamic new Web sites
`using this approach.
`Companies that have established their own Web
`sites and have complemented these with book(cid:173)
`ing engines are in powerful positions to generate
`
`Starbucks Corp. Exhibit 1034
`
`

`

`significant additional revenues from the Internet.
`This is especially true for companies that can: (a)
`sell their products or services to consumers all
`around the world; (b) sell their products or ser(cid:173)
`vices without needing to deliver paper documents,
`e.g. an air ticket; and (c) accept payments from
`consumers via plastic card mechanisms. For these
`reasons, hotels are in a particularly strong posi(cid:173)
`tion to exploit the Internet, and there are many
`instances that illustrate that hotels are in fact
`doing just that. The examples I have given in the
`following section include THISCO's TravelWeb,
`Utell's HotelBook and Marriott's own site. So,
`a Web site linked to a booking engine would
`appear to be the ultimate position for a company
`to strive for in the world of the Internet. But it
`really is just the beginning. It is at this point that
`highly targeted relationship marketing becomes a
`possibility.
`
`TARGETED MARKETING
`
`Companies with established Web sites and book(cid:173)
`ing engines are in a position to undertake some
`highly productive marketing activities that have
`not been practical with older technologies. These
`all revolve around a customer data base and an
`activity known as 'push marketing'. First of all,
`let me explain this terminology. There are two
`types of marketing campaigns which are known
`in the industry as push and pull, respectively:
`
`• Push marketing Push marketing is where a
`company's products are advertised widely to
`many people. The audience that is targeted
`may be very large and it is probably the case
`that only a small percentage of the audience
`will be attracted to buy the company's pro(cid:173)
`ducts or even simply to enquire about them.
`However, without the ability to know each
`one of their prospective customers individually,
`companies are faced with having to push the
`product at them in a kind of shotgun approach.
`The ultimate hope is that sufficient numbers
`will buy the product and thereby justify the high
`cost of the associated advertising campaign.
`Push marketing is what we are all used to and
`it will no doubt continue for many years, if
`not, forever. However, 'pull' marketing can be
`
`more cost effective and highly productive. It
`also happens to be a marketing technique that
`is ideally supported by the Internet.
`• Pull marketing Pull marketing is much more
`consumer specific than push marketing. It relies
`on establishing a relationship with a customer
`or consumer. The best kind of relationship is
`that which flows from a customer's purchase
`of the company's products or services. When
`this happens, the company is in an ideal posi(cid:173)
`tion to learn a great deal about its customer.
`If customer information such as this can be
`categorized, indexed and stored on a data base
`then it can form the platform for highly effect(cid:173)
`ive 'pull' marketing campaigns. A pull market(cid:173)
`ing campaign is one where specific products
`are aimed at precisely those consumers that
`have either made prior purchases or whose
`profiles exactly match the product being pro(cid:173)
`moted. The concept is to pull these specific
`customers towards the company and encour(cid:173)
`age them into purchasing those products or
`services that are of particular interest to them.
`
`Successful 'pull' marketing campaigns are highly
`dependent upon IT for their effectiveness. How(cid:173)
`ever, pull marketing is not a new concept. There
`are many cases, for example, where a single site
`hotel can afford to keep a handwritten card file
`on all their guests. Each guest's card would show
`their personal preferences and the kinds of ser(cid:173)
`vices they have enjoyed on previous visits. Then,
`when the hotel decides to hold a particular event,
`it scans the card file for previous guests whose
`profiles would seem likely to fit that of the planned
`event. Those guests selected would receive per(cid:173)
`sonalized letters from the manager reminding
`them of the previous event and introducing them
`to the planned new one. The problem is that this
`approach is not really feasible on a national scale
`and is totally impractical globally without some
`degree of automation. This is where the new and
`emerging technologies can play a vital part in
`travel-related marketing programmes.
`It is now possible to use a similar approach to
`the old card file system across entire multi-national
`corporations that have customer bases of several
`hundred thousand people. With new IT it is per(cid:173)
`fectly feasible to process millions of electronic 'card
`
`THE INTERNET 181
`
`Starbucks Corp. Exhibit 1034
`
`

`

`files' within a matter of seconds. In fact this cap(cid:173)
`ability is a combination of two new technologies:
`(a) the Internet, which provides the communica(cid:173)
`tions channel with the consumer and acts as a
`front-end for data collection; and (b) a good rela(cid:173)
`tional data base management system, which can
`index and organize the information gathered. T oge(cid:173)
`ther, these two technologies enable companies to
`develop highly effective pull marketing campaigns.
`However, to be successful, a company needs to be
`highly disciplined in the way it deploys its IT on a
`global basis. Consider for a moment the key prin(cid:173)
`cipals that a successful Internet-based pull mar(cid:173)
`keting campaign should embody:
`
`•
`
`If a company is to estab(cid:173)
`Internet Web site
`lish an interactive communications channel
`with its customers, it will almost certainly need
`to have a Web site of its own. To be effect(cid:173)
`ive, this needs to be highly interactive and
`responsive. It will probably use e-mail to ex(cid:173)
`change messages with existing or prospective
`customers. Ideally, the site should incorporate
`a booking engine and be capable of receiving
`post-booking feedback from the customer.
`• Customer data base This is the core of any
`marketing effort. But for pull marketing to be
`effective, a customer needs to be identified
`individually. This is not so much a technical
`challenge as it is a logistical one. A method
`must be found that encourages a person to
`identify themself to the Web site whenever they
`visit it. One commonly used approach is to
`request the user to enter their own user name
`and password whenever they visit the com(cid:173)
`pany's site. Once the consumer is registered
`other more detailed profile information, includ(cid:173)
`ing their e-mail address, may be captured and
`stored within the data base.
`• Transaction history While the presence of an
`individual's profile on the customer data base
`is critical, so are the transactions which that
`customer undertakes with the company. It is
`essential that all relevant details of each and
`every transaction is captured and stored so
`that it is linked to the profile recorded in the
`customer data base. The trick is to link what
`appear to be separate transactions, to a single
`individual on the customer data base.
`
`182
`
`INFORMATION TECHNOLOGY FOR TRAVEL AND TOURISM
`
`• Query tools As the data base of profiles
`.
`. b
`and
`transactions grows, so It ecomes ever rn
`important for the company's marketing te~re
`to be able to analyse the data and try to id rn
`tify trends and patterns. This is the first s~~­
`that a company can take towards understan!.
`ing its customers. Only by doing this well ca
`new products, services and special promotio n
`be designed in the knowledge that a mark~~
`exists for them.
`• Selection tools Sometimes called profiling, this
`is a technique for selecting all customers from
`a data base that meet certain pre-defined cri(cid:173)
`teria. For example, a hotel may select all cus(cid:173)
`tomers who stayed in a certain room type as
`part of a weekend break anywhere in Western
`Europe over a particular holiday weekend (and
`who also booked using the Internet). Selection
`tools can be quite sophisticated and can specify
`very detailed parameters indeed.
`• Direct e-mailing As more consumers use the
`Internet, so the number with registered e-mail
`addresses will grow. Because this is almost
`certain to be one of the data elements recorded
`within the customer profile, it can be used to
`communicate with those customers that have
`been selected. This is very similar to classical
`paper-based direct mail but with some import(cid:173)
`ant differences: (i) the degree of targeting is
`extremely high; (ii) the cost of an e-mail is
`virtually zero; and (iii) people are more in(cid:173)
`clined to reply to an e-mail than a letter, chiefly
`because it is hassle-free.
`
`These are all very challenging principals for a com(cid:173)
`pany to implement successfully. More significantly,
`they all involve substantial amounts of expend(cid:173)
`iture in terms of both cash and people's time.
`However, there is clear evidence that most, if not
`all of these pull marketing principals are in fact
`being implemented by many companies right now.
`This, to a large extent, illustrates the faith that
`these companies are placing in today's fledgling
`Internet. So, as the world-wide population of Inter(cid:173)
`net users grows in volume and Internet commerce
`grows with it, I think pull marketing will become
`a critical success factor for many businesses, par(cid:173)
`ticularly those in the field of travel and tourism.
`Companies that have started to experiment with
`
`Starbucks Corp. Exhibit 1034
`
`

`

`Jectronic marketing in the early days will be well
`e ositioned and sufficiently experienced to cap(cid:173)
`fralize on these critical business survival skills in
`the future.
`
`INTERNET MARKETING RELATED ISSUES
`
`The Internet is such a new distribution channel
`that there are many issues that both suppliers and
`intermediaries are faced with. In this section I am
`going to focus on some of the major issues that
`influence the way in which companies market their
`products and services on the Internet. Each of
`these issues is explored only briefly because they
`nearly all could consume chapters in themselves.
`However, the following encapsulation of these
`issues should provide fertile ground for further
`debate.
`
`Search engines
`
`When consumers first start surfing the net in search
`for holiday planning and booking sites, they often
`start by using a search engine, e.g. Yahoo. There
`are several popular search engines and they each
`work in similar ways although there are important
`differences in the way in which they catalogue
`and find sites for users of the Internet. Web site
`owners register their sites with the major search
`engines and provide them with a great deal of
`information about the site and its contents. Besides
`providing Web site search functions, the search
`engine companies also award their own prizes
`to what they consider to be the best sites of the
`week or month; and they obtain much of their
`income from advertising other companies' pro(cid:173)
`ducts and services on their Web search page.
`Now, the issue is: 'How is the sequence of a
`search engine's Web Sites Found display deter(cid:173)
`mined?' Let's say the consumer enters search cri(cid:173)
`teria keywords of 'air travel booking'. The search
`engine will identify several Web sites that provide
`air travel bookings, but how will the sequence
`in which they are displayed be determined?
`Often, this is on the basis of the number of site
`hits recorded, but the criteria vary. Isn't this rather
`like the old CRS biased display situation that was
`judged as unfair and discriminatory by various
`regulatory bodies in the USA and the EC a few
`
`years ago? Couldn't the big airlines, for example,
`pay vast sums in advertising revenues to the search
`engines to ensure their sites always came at the
`top of the list? If they did so, would this be judged
`to be unfair competition? It's an interesting issue,
`which to my mind has not yet been sufficiently
`debated within the industry.
`
`The legal issue
`
`This issue relates to the contractual position be(cid:173)
`tween the consumer and the supplier when a travel
`product is booked through an I