Class Discussion Notes MKT September 5, 2001

Internet User Characteristics and Behavior Diffusion of innovation – The process by which new products are spread to members of the target market over time. Innovators The first 2.5% of consumers to purchase a product Risk takers Techies High education and income Self-reliant Early adopters The next 13.5% to purchase the product Communicate more with others than innovators Opinion leaders

Internet User Characteristics and Behavior Diffusion of innovation – contd Early majority The next 34% to purchase the product Information collectors Trial by others important Late majority The next 34% to purchase the product Skeptics Conformity is their motivator Rely on word of mouth Laggards The final 16% Lower socioeconomic status Frequently one or more product generations behind

Internet User Characteristics and Behavior Product Life Cycle Introduction Growth Maturity Decline PLC is useful to marketers Promotion, pricing and distribution strategies differ by PLC stage Type of competition differs by PLC stage Cycle time is critical to marketing expenditures

Internet User Characteristics and Behavior

Market segmentation bases Demographic Geographic location Psychographic Behavior

Internet User Characteristics and Behavior Segmentation coverage strategies Mass marketing Offering one mix for entire market Multisegment marketing Selecting multiple segments and designing marketing mixes for each Niche marketing Selecting one segment and designing a mix to meet that segments needs Micromarketing Tailoring a marketing mix to a very small group of people

Internet User Characteristics and Behavior Geographic segments 56 of 200 countries have people who access the Internet How do marketers tap into the countries with the greatest potential? Global digital marketing index criteria –Economic growth –Power –Stability –Trading level (GDP and trade balance) –Political environment –Freedom of expression –Bureaucratic efficiency –Telecommunications infrastructure –Digital capabilities (PC ownership) –Online resources (hosts)

Internet User Characteristics and Behavior Barriers to adoption Economic Sociological and Cultural Touchy/feely Marketplace socializing Security/privacy concerns Method of payment Lack of education Language barriers Technological PC penetration Communications infrastructure Reliable delivery service

Internet User Characteristics and Behavior Barriers to adoption – contd Legal Government censorship and regulation Tariffs Price escalation due to distribution Currency flux Political

Internet User Characteristics and Behavior Demographic segments The Internets early years were characterized by typical innovators New, attractive demographic niches Women Seniors Teens and children Ethnic Gays and lesbians

Internet User Characteristics and Behavior Psychographic segments Personality Values Lifestyle Activities Interests Opinions The difference between attitude and behavior Attitude – Internal evaluation Behavior – Physical action

Internet User Characteristics and Behavior Attitudes toward technology SRI model CAT (Consumer Acceptance of Technology) –Identifies specific individual benefits –Analyzes the impact of technology on group members –Examines reactions of society to new technology

Internet User Characteristics and Behavior Attitudes toward technology – contd Forrester model Optimist or pessimist? User income level Primary online motivation –10 consumer technographic segments Fast Forwards – biggest users of business software New Age Nurturers – ignored technology consumers Mouse Potatoes – love interactive entertainment Techno-strivers – low income with high PC ownership Digital Hopefuls – strong potential PC market Gadget Grabbers – buy low cost, high tech toys

Internet User Characteristics and Behavior –10 consumer technographic segments – contd Handshakers – low tech in business dealings Traditionalists – use very little technology Media Junkies – love TV Sidelined Citizens – technology laggards

Internet User Characteristics and Behavior Behavior segments Benefit segmentation What do people do online? – –Search for information Community members –Chat rooms and newsgroups Streamies –Listen to online audio Shoppers –E-shoppers –Wired but Wary –Unwired

Internet User Characteristics and Behavior Behavior segments – contd User segmentation Home and work access ISP Wireless access Usage rate Consumer navigation behavior Attention Privacy User control of message –Clickstream –Non-linearity