Consumers and the Internet Describing consumers Understanding online consumption Recognizing marketing opportunities Coupey

Perspectives in Perspective: A Consumer Focus Need to understand how consumers obtain resources in the Internet environment Who uses the Internet to get resources? What do they get? How do they get it? Need to leverage this knowledge to create and implement marketing strategy Coupey

Why Are We Doing This??? This is not “traditional” consumer behavior New ways to consume online New things to consume online New types of consumers? (Accountability, addressability) Transaction-related activities are important Psychology is relevant, but it’s not everything Need to focus on exchanges Can’t just condense a CB text and expect it to make sense... Coupey

Who Are The Online Consumers? Two types of research provide insights Descriptive research (who, what, where, when) Crown American data Inferential research (why???) Demographics and psychographics Who they are... A profile of the typical user Some characteristics of online consumers VALS What they do…behavioral measures Efluentials (10% of online population) Coupey

Defining Online Segments What is a segment? Identifiability Sufficiency Addressibility Key Demographic Segments Online Older Americans Younger Americans Newer Americans Coupey

Selling to Seniors Coupey

Seniors, Again Behavioral Data Demographic Data Psychographic data 22% online (22 million) by 12/02 76% online daily Demographic Data Pretty old (limited mobility) Have money (control 77% of US assets) Psychographic data Surf with purpose (healthcare, leisure) Concerned about security issues http://www.suddenly senior.com Coupey

Younger Americans Behavioral Data Demographic Data Psychographic Data 91% of teens have Internet access Average 12 hrs/wk online Not much shopping, though, so why do marketers care? Demographic Data Big spenders, in the future ($483M in 2000, est. $10.6B in 2005 – US and Europe) Use pre-paid cards http://www.visabuxx.com Psychographic Data Provides insight for developing brand awareness and loyalty http://www.gurl.com Coupey

Spending Time… Coupey

Spending Money Coupey

Newer Americans: Hispanics Behavioral Data 55% access content in Spanish uniquely accessible group Enables targeted marketing http://www.yupimsn.com Demographic Data Fastest growing minority group online (in 2002, growth in general online pop +3%, Hispanic +13%) Psychographic Data Like technology, esp. home media devices Emphasis on quality-of-life issues Coupey

Why Segmentation Matters Coupey

A Psychographic Approach: All Segments Coupey

Understanding Behavior with Inferential Research Some caveats… For every resource, there is a theory The environment wreaks havoc on theories The role of resources Look at nature of each resource Understand what motivates people’s behaviors with it Understand how Internet fits in Identify/develop marketing opportunities Coupey

Back to Resource Exchange: Money What is it? The meaning of money Does it change on the Internet? Change of form (e.g., cash and poker chips) Loss of tangibility effects Do consumers’ money behaviors change? Different types of money for different goals E.g., cash (tangible) for gifts, cybercash for bad things Patterns of discounting: intertemporal choice Coupey

Playing with Money Facilitating effects of the Internet New ways to get it Surf for cash Email chain letters (network patterns) New ways to transfer it http://www.paytrust.com New ways to use it (online gambling, auctions) Inhibiting effects of the Internet Show me the money Security fears Coupey

The Internet and Information What is it? Earliest benefit of the Internet From data communications To information repository Information as information E.g., News, communication Information as product E.g., Entertainment Information as service E.g., tax, medical information Coupey

Information For It’s Own Sake Coupey

More Information… Using information as a resource E.g., Decision making: search, evaluation, choice Facilitating and inhibiting effects of the Internet Search: lots of information/too much information How much to get? (Economics of information) What is the quality of the information? Evaluation: how to structure the information Effort/accuracy (cost/benefit) approaches Heuristics Choice: confidence and satisfaction http://www.orbitz.com Coupey

More Resources, More Theories Goods (aka “products,” in marketing) Type and quality assessment Search, Experience, Credence Form Physical v. digital Internet effects Coupey

Still more resources Services, status, and emotion Services Less well understood Less often leveraged More highly personalized Services Characteristics Intangibility, inseparability, heterogeneity, perishability Internet effects (e.g., aggregators) Coupey

The Last Two Resources Status Love Impression management http://www.ecopod.co.uk/cgi-bin/vote.pl?name=vote1&action=view Scarcity theory (exclusivity) Internet effects Love Characteristics (“Putting a price on love – it’s a great deal.Contact 1000 potential soul mates for less than the price of a couple of theater tickets!”) Internet effects http://www.terwillegar.com/cyber__wedding_.html Coupey

Looking Ahead Marketers and the Internet Environment Constraints and opportunities Need to understand what consumers are doing To develop “products” that meet needs To leverage their interactions (even with third parties) to meet marketing objectives Focus on changes to company structure and function, given the Internet Implications for marketing action Coupey