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Lowering Entry Barriers in a Digital Era

A qualitative Study about the Swedish Fashion Industry's International Expansion with Affiliate Marketing

Written by C. Brunius, I. Lind

Paper category

Bachelor Thesis


Business Administration>Marketing & Sales




Thesis: The Internet The Internet is a network that connects computers and reaches the world. It in turn has created millions of other networks (Berners-Lee, Cailliau, Loutonen, Frystryk Nielsen & Hiller 1994). One service on the Internet is the World Wide Web (Berners-Lee et al., 1994). The Internet is often referred to as the "web" or WWW (ibid.). Simply explained the function of the Internet to connect and obtain data from millions of servers around the world (ibid.). The Internet makes it possible to obtain content in the form of text, audio, photos, and videos (ibid.). Initially, the Internet was created and used as a tool for sharing information, but in the course of its development it became an important channel for individuals, companies, and governments (ibid.). The Internet has not only changed the way companies communicate, but has also affected corporate workflows on multiple levels, because it can become a key part of optimizing any business process (Dentzel 2014). Two examples are supply chain and sales management, they can use the Internet in their daily operations (Dentzel 2014). The better the company's ability to sell or process data through the Internet, the greater the opportunity to improve its business (Dentzel 2014). The Internet has had an impact on societies all over the world, and the number of people using the service is increasing every day (ITU 2015). According to ITU, more than 3.2 billion people had access to the Internet in 2015. Affiliate marketing has existed even before the introduction of e-commerce, but e-commerce provides the impetus for growth and spread of affiliate marketing. It is the basis of Internet-based transactions, so e-commerce as a theoretical concept constitutes a part of the theoretical framework. 2.2 E-commerce has brought a revolution in online transactions due to the development of the Internet (Laudon, KC & Traver, C. 2016). This means that the business environment of companies around the world has changed and has brought many new opportunities (ibid.). Laudon & Traver (2016) pointed out that the three most important factors for e-commerce success are social media, big data, and accessible e-commerce tools. E-commerce stands for e-commerce and is every business activity managed through electronic connections (Wigan 1997). Business is everything that creates value for the company, including internal and external customers (ibid.). With the development of the Internet and e-commerce, many companies focus their online business on becoming a more efficient business (Wigand 1997). 2.3 Affiliate Network Marketing Affiliate network marketing is a marketing method based on a two-part agreement, in which affiliate network marketers represent advertisers to advertise online and receive remuneration for each purchase (Duffy 2005). Affiliates can be private individuals, companies, or associations (ibid.). The affiliated company publishes content on its online media platform with a trackable link to the advertiser's website (ibid.). The link contains a specific ID, which allows advertisers to analyze the performance of each affiliate (Gray 1999). Examples of media platforms can be websites in the form of blogs, online magazines, and social media platforms (such as Instagram or Facebook) (Mariussen, Daniele, and Bowie, 2010). The purpose of using affiliate marketing may vary depending on the marketing strategy or company type (Mariussen, Daniele and Bowie 2010). It can be used to increase sales, increase exposure, or strengthen relationships with customers (Goldschmidt, Junghagen, and Harris, 2003; Mariussen, Daniele, and Bowie, 2010). The payment structure and advertising format may vary depending on the objectives of the affiliate or company (Gray 1999). In most cases, affiliate members receive monthly payments, or when the affiliate member reaches the minimum sales to receive payment (Gray 1999). Duffy (2005) exemplifies the advantages of affiliate marketing. Entity companies advertise through media such as television, radio, print magazines or daily newspapers. This type of marketing requires a large amount of up-front payment without any sales guarantee (ibid.). Advertising costs may be higher than the profits generated by marketing, which is a big risk for the company. Since the company is responsible for the development and cost of advertising, it cannot be sure to recover the investment capital (ibid.). Compared with affiliate marketing, affiliate marketing pays per acquisition, and affiliate members use existing marketing channels to promote products or services (Duffy 2005). Therefore, Duffy (2005) believes that affiliate marketing has become the main strategic consideration for many companies involved in e-commerce. It is important to have social media in the theoretical framework, because in the context of social media, affiliate marketing will become seen in the practice of individuals and businesses. This makes it possible for companies to enter new markets in many cases. 2.4 Social mediaPocol (2012) interprets social media as a global term that defines various activities. Mainly social interaction, where users can share their creations in text, blogs, photos, videos and music (ibid.). Read Less