Economic Perspectives on Digital Marketing

The rapid proliferation of business-to-consumer electronic commerce makes it an imperative to investigate marketing strategies for online shopping and to reexamine existing knowledge and assumptions regarding traditional marketing channels in the context of Internet technologies and characteristics. Microeconomics provides a rich foundation for analyzing issues pertaining to location, selling format (including the provision of product information by sellers, renting versus selling, and market mechanisms), product pricing, information asymmetry and the role of electronic intermediaries, and the nature of competition between the Internet and physical channels. Analyses of the above online marketing issues based on microeconomic theories tend to suggest different, if not opposite, implications than those obtained from a purely technological perspective.