Stefan Lagrosen Va xjo University, Va xjo , Sweden Abstract Purpose The purpose is to gain an understanding of how traditional service companies use the internet in their marketing communication and what effect the internet has had on their use of other marketing communication channels. Design/methodology/approach Multiple case studies have been carried out at 19 Swedish service companies. Findings The ndings show that three different communications strategies are used depending on the scope of internet use and the extent to which the companies utilise relationship marketing. Small or decentralised companies use the personalised relationship communication strategy. Large companies have the option of using either the mass relationship communication strategy or the mass transaction communication strategy. The characteristics of the strategies and their respective effects on the other marketing communications tools are described. Research limitations/implications The conceptualisation of the communications strategies provides a framework that gives added understanding and is useful for further studies. Practical implications The presentation of the strategies and their implications should be useful for managers of service companies when planning their communication activities. The managers will benet from making a conscious choice between the strategies and considering their features and implications. Originality/value The conceptualisation of the internet communications strategies provides a novel view of the communications options for service rms. This framework is useful for further research and for managers of service rms. Keywords Internet, Marketing communications, Services, Relationship marketing, Sweden Paper type Research paper An executive summary for managers and executive readers can be found at the end of this article. Introduction and purpose During the so-called internet bubble all investments that concerned the internet were strongly praised. So much so that companies that based all or most of their activity on the web were seen as visionaries. Developments during the last few years have led to wide spread pessimism regarding all online ventures. However, internet use is constantly increasing. Notably, for young and well-educated people world-wide, it has become the natural way of nding information. The adoption of the internet is faster than it has been for any media. Whereas it took 38 years for the radio and 13 years for the TV to reach 50 million users, the internet achieved this level in only ve years (Ellsworth and Ellsworth, 1997). This development has to inuence the way marketing communication is and/or should be conducted. Also, although the media focus has been to a very high degree centred on companies that act solely on the web, the internet might substantially effect companies that sell their goods or services through traditional channels. It should be interesting to see how these companies choose to use the internet. Further, it should be valuable to nd out how the advent of the internet has inuenced the use of the more traditional marketing channels. Have the investments in internet activities led to reductions in the use of traditional marketing communication and have they changed the way that traditional marketing communication is used? Many authors emphasise the value of integrating different marketing communication efforts (Burnett and Moriarty, 1998). Thus, it should be of value to study if and how internet communication is integrated in the traditional communication mix. In this study we have chosen to concentrate on service companies since much of the previous focus has been on goods. Since services are high in information content the internet should be particularly suitable to promote and deliver services (Zinkhan, 2002). Services do not involve transfer of ownership and they usually involve at least some level of consumer participation in the production process (Lovelock, 2000). For this reason the interactive possibilities that the internet offers should have interesting implications. The research question has been: how does the internet inuence the marketing communication of traditional service companies? The purpose has been to gain a preliminary understanding of how traditional service companies use the internet in their marketing communication and what effect the internet has had on their use of other marketing communication channels. Some delimitations have been chosen. We decided to focus solely on private service companies serving consumers and thus excluding business- to-business companies and the service providing organisations of the public sector. Further, we also chose to exclude companies in the retailing and wholesaling industries since these companies often also sell goods via the web and we The Emerald Research Register for this journal is available at www.emeraldinsight.com/researchregister The current issue and full text archive of this journal is available at www.emeraldinsight.com/0887-6045.htm Journal of Services Marketing 19/2 (2005) 6369 q Emerald Group Publishing Limited [ISSN 0887-6045] [DOI 10.1108/08876040510591376] 63 wanted to concentrate on online marketing communication and avoid the intricacies of e-commerce in this study. Internet marketing strategies With the advent of the internet, many marketing communication researchers realised that this new medium would bring new opportunities for the marketing communication process (Heinen, 1996). Some scholars even predict the death of the traditional marketing function (Holbrook and Hulbert, 2002). New strategies for internet marketing have been predicted to include new ways of targeting, focusing on benets; product strategy emphasising authenticity and promotion based on well-managed websites (Aldridge et al., 1997). Since the internet is a global medium, companies using it are always potentially addressing international audiences. This might lead to increased international competition (Wymbs, 2000). There are also international differences in how the internet is used for marketing. For instance a comparative study between the UK, Australia and New Zealand showed that companies in all three countries generally use the internet for marketing communication whereas the use for transactions was much lower in Australia and New Zealand (Adam et al., 2002). In order that marketing communications efforts reach their full potential they need to be integrated into a co-ordinated framework (Burnett and Moriarty, 1998). Thus, internet communication activities need to be integrated in the overall marketing communications mix. They need also to be co- ordinated with the operations of the company (Lovelock, 2000). In e-business, the very distinctions between marketing communications and business operations also become more diffuse especially at a strategic level (Rowley, 2001). Recently, many marketing scholars have highlighted the value of relations in marketing, stressing that traditional transactional marketing needs to be replaced or complemented with new frameworks that focus on the value of relations and interaction (Gummesson, 1999). Due to the relational nature of services, relations are particularly important for service companies (Gro nroos, 2000). In the building and management of relations, the interactivity of the internet makes it a particularly useful tool. Among the relations that Gummesson (1999) points to, the electronic relation is that which can be created when companies and customers interact via the internet. Several stages of e-marketing can be dened ranging from the contact stage focusing only on promotion and information to the relate stage when a two way relationship is established and the internet is integrated into business operations (Rowley, 2001). A fruitful relation, lock-on, can be created when customers choose a company as their primary choice on a long term basis, which many customers tend to do if they feel that the communication and delivery is satisfactory (Vandermerwe, 1999). In order to relate to customers via the web, companies need to shift their focus from web presence and low price to delivering electronic service quality (Zeithaml, 2002). For this purpose it is crucial that the services are customised and personalised (Teo and Tan, 2002). Often, supplementary services, which are more relational, have a stronger bearing on customer satisfaction than the core services (van Riel et al., 2001). Using the new technology, companies need to continuously create new supplementary value for the customers in order to build active relations (Vandermerwe, 1999). For relation-building the internet presents completely new modes of interaction. One example is e-communities or virtual communities in which people with a common interest carry out their social discourse and activities using the internet (Barnatt, 1998; Sands, 2003). By participating in such communities companies can go beyond one-to-one and develop many-to- many communications (Maclaran and Catterall, 2002). Another example is the moderated group chat in which groups of customers interact in real time co-ordinated by a company representative with a commercial motive (van Dolen and de Ruyter, 2002). By using e-bulletins, newsletters delivered via e-mail, the companies can keep the audience informed about new features on their website (Sands, 2003). Although the potential for relationship building based on the internet exists, earlier studies indicate that relatively few companies take advantage of these possibilities and that most companies use the internet solely for informational purposes (Arnott and Bridgewater, 2002). Many companies tend to transfer direct marketing techniques to their online communications effort neglecting the vital difference that the internet is an interactive medium where the consumers may adopt a far more dynamic role (Peters, 1998). Methodology Since the study is of an explorative nature, qualitative methods were chosen for data collection. Due to the intangible, variable and volatile nature of services, qualitative methods are particularly valuable in this context since they are better suited to handle ambiguous data (Gilmore and Carson, 1996). We decided to use multiple case studies on a number of service companies. This method does not allow traditional statistical generalisation but analytical generalisation may be possible when multiple cases support the same theory (Yin, 1989). The sample was not decided in advance. Instead we worked towards theoretical saturation (Glaser, 1992; Glaser and Strauss, 1967). We wanted to include a wide spectrum of private service companies but in accordance with the delimitation above we excluded business- to-business services and companies in the retailing and wholesaling industries. By the time that we judged that saturation had been achieved, 19 companies had been included. The companies are briey presented in Table I. In the data collection we wanted to get access to data giving a deep understanding of the companies activities. The method that is normally considered to be most suitable for this purpose is in-depth interviews (Patton, 1990). The author trained students to carry out in-depth interviews. Depending on the size of the company, the access and the richness of the data from each interview, they carried out between one and four interviews at each company. The total number of interviews was 33. In order not to force the data, the respondents were asked to speak freely about their use of the internet and their view of the value of it. The data from the interviews was analysed by the author with methods inspired by the grounded theory approach (Glaser, 1992; Glaser and Strauss, 1967; Strauss and Corbin, 1990). Findings When the empirical data was analysed with the help of the constant comparative method (Glaser, 1992; Glaser and Strauss, 1967; Strauss and Corbin, 1990) six categories emerged: (1) The value of online marketing communication. (2) The extent of online marketing communication. Effects of the internet on marketing communication Stefan Lagrosen Journal of Services Marketing Volume 19 Number 2 2005 6369 64 (3) Centralisation vs decentralisation. (4) Collaboration with external organisations. (5) Measurements. (6) The effect of internet activities on the use of other communication tools. The value of online marketing communication Most companies argued that the greatest benet of the internet compared to other communication tools is that it gives a possibility for two-way communication. In this way communication can become interactive and thus more engaging for the customers as well as better suited to the individual customers needs and wants. Some of the companies encourage active communication by listing the e-mail addresses of their staff in order that the customers may contact them directly. Many of the companies also claim that the internet has a value for their brand. For instance SEB, which is the bank that uses online communication to the largest extent, claims that this has given their brand a more modern touch. Another of the advantages that several of the companies highlight is that the internet is a very fast medium, which allows great exibility in marketing communications. Referring the values that the respondents pointed out to the steps of the buying process in the most traditional of the hierarchy of effects models, the AIDA model, (Fill, 2002) we nd that: . Attention: generally the respondents saw this as a somewhat weak aspect of internet communication. It is not really probable that prospective customers will come across the website while surng aimlessly in the way that people without purpose may come across traditional advertising. This problem can be overcome through banner advertising at popular websites and through information and links from portals or other relevant sites. Only very few of the interviewed companies use banner advertising and then to a limited extent. On the other hand, the hotels and travel agencies particularly regard links from portals and tourism sites as an important aspect of their communication. Often the companies rely on traditional advertising to direct prospective customers to their websites. This highlights the value of integration of different communication tools. . Interest: this is one of the stronger aspects of the internet sites. Once the prospective customers are there, the companies can entice them with plenty of information and inspiration in an interactive way. The content of the sites can be renewed frequently so as to encourage repeat visits. . Desire: the ample possibilities for publishing elaborate material and interactive options on the internet give companies plenty of opportunities to raise the desire of prospective customers. . Action: also in this phase there are several possibilities for the websites. Selective promotional offers can be posted on the website or sent by e-mail. Through integration with a customer card system, like that of SAS, these offers can even be completely customised to match the interests of the individual customers. Further, it is usually possible to actually take action and book a journey or a hotel room or use the services of insurance companies and banks on the net. The extent of online marketing communication All the studied companies utilise the internet for marketing communication but the emphasis that is put on it varies. Among the banks, SEB has a clearly stated ambition to become the internet leader whereas Svenska Handelsbanken puts considerably less emphasis on its online activities. This is in line with both banks general communication practice, which for SEB involves substantial marketing communication in traditional channels while Svenska Handelsbanken relies more on personal communication controlled by the separate branch ofces. Centralisation vs decentralisation The issue of centralisation varies for the different companies. Even the practices within the same industry vary considerably. For instance, among the banks, the online communication of SEB is completely centralised. Local campaigns are allowed Table I The companies included in the study Name Type Comment SAS Airline The leading Scandinavian airline Fo reningssparbanken Bank The largest bank in Sweden Ikanobanken Bank A fairly new and small bank that is part of the IKEA group SEB Bank Swedens oldest privately owned bank and one of the largest, especially in corporate nance Svenska Handelsbanken Bank A large bank which is the most protable bank in Sweden Ljuders vandrarhem Boarding-house A small boarding house with focus on older people Toftastrand pensionat Boarding-house A company operating two large boarding-houses First Hotel Cardinal Hotel A large modern hotel Grand Hotell Hotel A large traditional hotel that is more than 100 years old Petri Pumpa Hotell Hotel A small personal hotel that is a spin-off of a popular restaurant Scandic Star Hotel Hotel A large modern hotel Folksam Insurance company One of the largest insurance companies in Sweden with strong ties to the major trade union La nsfo rsa kringar Insurance company The only insurance company in Sweden that is mutual and locally based Apollo Travel agency An agency that originally focused only on tours to Greece but has recently expanded to other markets Fritidsresor Travel agency A large well-established travel agency Kilroy travels group Travel agency A travel agency with links to the students unions Resia Travel agency A travel agency acting as an agent for other travel agencies Tournee Travel agency A travel agency with its roots in motoring associations Vingresor Travel agency A large well-established travel agency with a focus on family travel Effects of the internet on marketing communication Stefan Lagrosen Journal of Services Marketing Volume 19 Number 2 2005 6369 65 but they need to be approved by the group management in each instance. In Svenska Handelsbanken, on the other hand, much of the online communication is handled locally and each of the individual branch ofces have their own local website. In Fo reningssparbanken the policy is that all activities that inuence the brand should be handled centrally whereas the local branch ofces may handle their practical activities separately. Collaboration with external organisations The hotels and boarding houses usually collaborate with other organisations in order to enhance the possibility of reaching the customers via their homepages. Particularly, it is usual to get information on and links from different tourism and travel websites and to be listed on hotel portals. For the smaller hotels the costs of being listed on portals is, however, sometimes a deterrent. Some of the hotels (First Hotel Cardinal and Scandic Star Hotel) are owned by larger hotel chains. Thus, they are to a certain extent dependent on those larger organisations for their internet communication. Measurements The extent to which the effects of the internet communication efforts are being measured varies. Those companies that emphasise their online communication most, such as SEB, are also most anxious to measure the effects of this investment even if most of them realise the difculties of measuring such results. Many of the other companies that have a more limited internet activity, such as Svenska Handelsbanken, make no organised efforts to measure the effects of the activities they have. The effect on the use of other communication tools Most companies believe that in the long run online communication will increase its share of the total communications budget. However, no company assumes that it will completely substitute any of the traditional communication channels. Presently, the majority of the companies claim that the resources spent on the internet have led to a negligible reduction on the amounts spent on other communication tools. However, SEB has reduced its advertising in daily newspapers signicantly as a result of their massive investment in online activities. Some of the travel agencies have managed to reduce the size of the catalogues that traditionally are their main communication channel due to the possibility of having more detailed information on the web. An important issue is the integration of the internet with the other communication channels. For instance, normally the companies refer to their websites in all advertising. SAS has integrated the use of internet communication with the Eurobonus customer card system allowing the company to offer customised offers to their customers via the web. A communication strategy model Analysing the ndings we found that a fairly coherent picture emerged regardless of the industry. One dividing line between the companies was the scope of the internet operations. In the large and centralised companies such as SEB and SAS, the internet operations are of completely different magnitude to that of the small independent hotels. This is in line with earlier research that has shown that small companies use marketing differently from larger companies due to their limitations on resources (Gilmore et al., 2001). In the large but decentralised companies such as Svenska Handelsbanken and Lansfo rsakringar the scope is in many aspects comparable to that of the small companies. The other major dividing line was between those companies that focused heavily on relations and those that concentrated less intensely on this issue. Although no company said that it was not interested in relations, systematised procedures for handling them was fairly absent in some of the companies. This is apparently related to their general marketing strategy. In the light of the recent writings on relationship marketing many companies have come to adopt this framework to a very high degree and others have not. Departing from these two distinctions we can dene four possible core communication strategies that service companies use or could use (see Table II). Since services are created in interaction between the customer and the service provider, they are relational in their nature and service companies should have a great tendency to embrace relationship marketing (Gro nroos, 2000). However, some of the large companies in this study such as Fo reningssparbanken and Folksam showed relatively limited focus on relations and their communication was predominantly on the contact stage (Rowley, 2001). Thus their communication strategy resembles mainly the mass transaction communication strategy. Other large companies such as SEB and SAS have a more explicit focus on relations and their communications bear a resemblance to the relate stage (ibid.). Their strategy can thus be characterised as a mass relationship communication strategy. None of the small or decentralised companies in this study has adopted a strategy that can be characterised as transaction oriented. Probably, it is difcult to conceive of a small service company doing so. It should be possible for small goods producing companies. However, for service companies that need to be constantly in contact with a limited number of customers this option is hardly viable. Thus the strategy that the small or decentralised companies in this study have adopted is the personalised relationship communication strategy. It is interesting to note that the role of the customer will be substantially different in the three strategies. In the mass transaction communication strategy, the customers have the traditional, rather passive role and the role of the communication is to lead them through a sequential process from awareness to purchase such as in the AIDA model. In the mass relationship communication strategy the objective is to create relations with large numbers of customers. In order to make the customers loyal, different membership schemes such as the SAS customer card system are particularly useful. Following such schemes in which their only interest is commercial the customers become pseudo- members as opposed to the genuine membership that people obtain when engaging in associations for idealistic or personal development reasons (Gummesson, 1999). Still such pseudo-membership is reasonable as long as it brings commercial or other benets to both parties. For smaller companies the network of the managers are particularly important for market success (Gilmore et al., 2001). Sometimes social networks may be equally important as traditional business contacts (Gummesson, 1999). Thus, in the personalised relationship communication strategy the customers take the role of partners in the network. The characteristics of the three strategies that are used are listed in Table III. Effects of the internet on marketing communication Stefan Lagrosen Journal of Services Marketing Volume 19 Number 2 2005 6369 66 Managerial implications For managers of service companies it should be valuable to make a conscious choice regarding the strategies presented above. Service companies that are small or decentralised do not, however, have any real option in our opinion. They should develop the personalised relationship communication strategy utilising the features presented above. For large centralised companies two options are possible. The proponents of relationship marketing would argue that the mass relationship communication strategy should be the natural option. In this case use of an advanced, elaborated website with effective interactive opportunities should be very valuable. Also the other tools mentioned in Table III should be considered. However, some large companies may possibly gain from choosing the mass transaction communication strategy. In that case, this should probably be coupled with cost leadership. In this option it will be particularly important that the internet activities are co- ordinated with and supported by traditional advertising and sales promotion. Conclusions, limitations and suggestions for future research The study has shown that the internet communication strategies of Swedish service companies can be characterised according to three different options. The mass transaction communications strategy is used by some large companies. Other large companies have opted more for the use of relationship marketing in their marketing communication and in consequence they follow the mass relationship communication strategy. For the small companies it has been found that they all follow the personalised relationship communication strategy. It is argued that this is the only reasonable choice for them since small service companies probably need to focus on relations. Some of the large companies have adopted a greatly decentralised organisational structure. The communication strategy that their sub-units utilise has been found to resemble that of the small service companies. There are a number of limitations to the ndings of the study. One is that only Swedish companies have been studied. The possibilities of generalising the ndings to other countries Table II Core communications strategies Transaction-oriented marketing strategy Relations-oriented marketing strategy Large centralised service company Mass transaction communication strategy Mass relationship communication strategy Small or decentralised service company Limited transaction communications strategy (improbable position) Personalised relationship communication strategy Table III Summary of the implications of the strategies Mass transaction communication strategy Mass relationship communication strategy Personalised relationship communication strategy Main objective Creating the maximum number of transactions Creating a massive amount of protable relations Creating a limited amount of very protable relations Main value of the internet Values as described in the traditional AIDA model. Stimulating purchases through enticing content An interactive mass communications tool. Highly interactive web pages, automatically personalised through the use of cookie les An aid in the personal communication between the personnel of the service provider and the customers. E-mail and local web sites are most useful Additional features and possibilities Banner advertising is an additional option Integrating the websites with customer cards or other membership schemes should be particularly useful. Moderated group chats, e-communities and e-bulletins may be valuable For the small company, presence at portals and other relevant sites is important. The internet becomes a means for handling their networking activities. For the decentralised company, co-ordination between the central head ofce and the local branches is vital. Local e-communities may be of use Role of the customers Traditional role Pseudo members Partners Effects on the companies other communications tools Traditional tools are used to direct customers to the website. It is important that the messages in the traditional advertising are co-ordinated with the offers on the website To a certain extent traditional advertising and sales promotion can be substituted by the website The internet becomes more of a substitute to other personal communications tools such as telephone, fax, etc. Main basis for measurement Amount of sales generated Number of regular users Protability of each individual user Effects of the internet on marketing communication Stefan Lagrosen Journal of Services Marketing Volume 19 Number 2 2005 6369 67 are unknown. Although the context in many western countries is probably fairly similar, generalisations can only be made with substantial caution. Further research in other countries and particularly cross-country comparisons should therefore be valuable. The choice of the empirical eld provides another limitation. Research in the goods sector and in retail services would also be useful for a more complete understanding of this area. Furthermore, while the three strategies have been identied and described, the consequences for economic and market success remain unknown. For instance, can a large service company obtain sustainable protability by choosing the mass transaction communication strategy or is the mass relationship communication strategy superior? This will be an interesting area for future research. References Adam, S., Mulye, R., Deans, K.R. and Palihawadana, D. (2002), E-marketing in perspective: a three-country comparison of business use of the internet, Marketing Intelligence & Planning, Vol. 20 No. 4, pp. 243-51. Aldridge, A., Forcht, K. and Pierson, J. (1997), Get linked or get lost: marketing strategy for the internet, Internet Research: Electronic Networking Applications and Policy, Vol. 7 No. 3, pp. 161-9. Arnott, D.C. and Bridgewater, S. 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(1992), Basics of Grounded Theory Analysis, Sociology Press, Mill Valley, CA. Glaser, B.G. and Strauss, A.L. (1967), The Discovery of Grounded Theory, Strategies for Qualitative Research, Aldine Publishing Company, Chicago, IL. Gro nroos, C. (2000), Service Management and Marketing: A Customer Relationship Management Approach, Wiley, Chichester. Gummesson, E. (1999), Total Relationship Marketing, Butterworth-Heinemann, London. Heinen, J. (1996), Internet marketing practices, Information Management & Computer Security, Vol. 4 No. 5, pp. 7-14. Holbrook, M.B. and Hulbert, J.M. (2002), Elegy on the death of marketing, never send to know why we have come to bury marketing but ask what you can do for your country churchyard, European Journal of Marketing, Vol. 36 Nos. 5/6, pp. 706-32. Lovelock, C. (2000), Service Marketing, People, Technology, Strategy, 4th ed., Prentice-Hall, Upper Saddle River, NJ. Maclaran, P. and Catterall, M. (2002), Researching the social web: marketing information from virtual communities, Marketing Intelligence & Planning, Vol. 20 No. 6, pp. 319-26. Patton, M.Q. (1990), Qualitative Evaluation Methods, Sage Publications, Newbury Park, CA. Peters, L. (1998), The new interactive media: one-to-one, but who to whom?, Marketing Intelligence & Planning, Vol. 16 No. 1, pp. 22-30. Rowley, J. (2001), Remodelling marketing communications in an internet environment, Internet Research: Electronic Networking Applications and Policy, Vol. 11 No. 3, pp. 203-12. Sands, M. (2003), Integrating the web and e-mail into a push-pull strategy, Qualitative Market Research: An International Journal, Vol. 6 No. 1, pp. 27-37. Strauss, A.L. and Corbin, J. (1990), Basics of Qualitative Research, Grounded Theory Procedures and Techniques, Sage, Newbury Park, CA. Teo, T.S.H. and Tan, J.S. (2002), Senior executives perceptions of business-to-consumer (B2C) online marketing strategies: the case of Singapore, Internet Research: Electronic Networking Applications and Policy, Vol. 12 No. 3, pp. 258-75. van Dolen, W.M. and de Ruyter, K. (2002), Moderated group chat: an empirical assessment of a new e-service encounter, International Journal of Service Industry Management, Vol. 13 No. 5, pp. 496-511. van Riel, A.C.R., Liljander, V. and Jurriens, P. (2001), Exploring consumer evaluations of e-services: a portal site, International Journal of Service Industry Management, Vol. 12 No. 4, pp. 359-77. Vandermerwe, S. (1999), Customer Capitalism, Increasing Returns in New Market Spaces, Nicholas Brealey Publishing, London. Wymbs, C. (2000), How e-commerce is transforming and internationalizing service industries, Journal of Services Marketing, Vol. 14 No. 6, pp. 463-78. Yin, R.K. (1989), Case Study Research, Design and Methods, Sage, Newbury Park, CA. Zeithaml, V.A. (2002), Service excellence in electronic channels, Managing Service Quality, Vol. 12 No. 3, pp. 135-8. Zinkhan, G.M. (2002), Promoting services via the internet: new opportunities and challenges, Journal of Services Marketing, Vol. 16 No. 5, pp. 412-23. Executive summary and implications for managers and executives This summary has been provided to allow managers and executives a rapid appreciation of the content of this article. Those with a particular interest in the topic covered may then read the article in toto to take advantage of the more comprehensive description of the research undertaken and its results to get the full benets of the material present. Lagrosen investigates how 19 traditional Swedish service companies from leading Scandinavian airline SAS to a small boarding house and from Swedens largest bank Foreningssparbanken to a mutually owned and locally based Effects of the internet on marketing communication Stefan Lagrosen Journal of Services Marketing Volume 19 Number 2 2005 6369 68 insurance company use the internet in their marketing communication and what effect the internet has had on their use of other marketing communication channels. The research reveals that three different communication strategies are used depending on the scope of internet use and the extent to which companies use relationship marketing. Mass transaction communication strategy Large companies have the option of using a mass relationship communication strategy or a mass transaction communication strategy. Firms using the latter place relatively little importance on fostering interaction with customers over the internet. Instead, they focus their internet communication on the contact stage and aim to create the maximum number of transactions. The main value of the internet, for these companies, is in stimulating purchases through enticing content, although banner advertising is an additional option. Other, more traditional communication tools are also used to direct customers to the website. The messages in the traditional advertising should, however, be co-ordinated with the offers on the website. Customers have a traditional, rather passive role, and the role of the internet communication is to lead them through a sequential process from awareness to purchase. Success is measured by the amount of sales generated. Mass relationship communication strategy Companies opting for a mass relationship communication strategy, in contrast, have a more explicit focus on creating protable relations with large numbers of customers over the internet. One example is the SAS customer card system, designed to make the airlines customers more loyal. Moderated group chats, e-communities and e-bulletins may also be valuable. For these companies, the main value of the internet is as an interactive mass communications tool, and the main basis for measuring success is the number of regular users. The rms should seek to have highly interactive web pages, automatically personalised through the use of cookie les. To a certain extent, these rms can replace traditional advertising and sales promotion by the website. Personalised relationship communication strategy A personalised relationship communication strategy, whose main objective is creating a limited number of very protable relationships, is more appropriate for small or decentralised rms. Under this strategy, the main value of the internet is as an aid in the personal communication between customers who are often seen as partners and the service providers employees. E-mail and local websites are most useful. For the small company, presence at portals and other relevant sites is important. The internet becomes a means for handling their networking activities. For the decentralised company, co- ordination between head ofce and the local branches is vital. Local e-communities may be of value. For rms using a personalised relationship communication strategy, the internet partially substitutes other personal communications tools such as the telephone or facsimile machine. The protability of each individual user is the main basis for measuring success. (A precis of the article Effects of the internet on the marketing communication of service companies. Supplied by Marketing Consultants for Emerald.) Effects of the internet on marketing communication Stefan Lagrosen Journal of Services Marketing Volume 19 Number 2 2005 6369 69