Unit 3 Internet Consumers

Learning outcomes Describe and understand the characteristics of Internet surfers and electronic commerce purchasers. Understand the process of consumer purchasing decision making. Id the consumer’s shopping procedure on the Internet Understand the types of comparison-shopping aids

Definition of web activities Information accumulation Communication Surfing Shopping

Consumer behaviour online

Consumer characteristics Age Income Gender Demographics Family & occupation Education

Consumer characteristics Demographics: Age Younger users They engage in more exploratory behaviour They have low income levels They use the Internet for communication activities They have time on their hands Clip 1

Consumer characteristics Demographics: Age Older users They use the internet for communication purposes They are prime Internet shoppers Their usage of the Internet depends on their personality characteristics

Consumer characteristics Demographics: Gender Female users They are more likely to engage in exploratory behaviour They spend less time online They buy less online They are cautious online, especially in terms of privacy and security issues

Consumer characteristics Demographics: Gender Male users They spend more time online They buy more online They are more liberal with their private information They are more likely to take action when they feel their privacy have been violated

Consumer characteristics Demographics: Education Internet users have been characterised as having a higher education level than non-users Higher levels of education reduce technology and computer anxiety and create a more positive technology schema

Consumer characteristics Demographics: Income Internet users have been found to have higher-than-average-income Higher incomes are associated with higher levels of education Income levels provide an indication of whether basic Internet access can be afforded And indicates access to credit facilities

Consumer characteristics Demographics: Family composition and occupational status The presence or absence and the age of the youngest child influence the users’ use of the Internet as a shopping tool

The Digital Native Alphabet _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ Name: ________________________ _________

Consumer characteristics Technology readiness innovativeness Personal characteristics Gregarious ness

Consumer characteristics Personal characteristics: Consumer innovativeness Defined: It is the degree to which an individual is receptive to new ideas and makes innovative decisions independently from others

Consumer characteristics Personal characteristics: Consumer innovativeness General innovativeness whether a consumer will try new things Domain specific innovativeness Focuses on the consumer’s affinity towards one domain or one category

Consumer characteristics Personal characteristics: Technology readiness Defined: It is the extent to which an individual is open and receptive to new technologies People with this trait usually exhibit a willingness and desire to be at the foreground of technological change

Consumer characteristics Personal characteristics: Technology Schema Related to technology readiness is technology schema Technology schema defined: It is an organised and arranged set of expectations and beliefs that one holds about technology

Consumer characteristics Personal characteristics: Gregariousness

Consumer characteristics Personal characteristics: Gregariousness People who are unable to have proper social relations offline are able to spend time communicating with others online by using: chat rooms, discussion forums & listservs There is a belief that the Internet acts as a surrogate social network

Personal characteristics: Gregariousness An example of a forum

Consumer characteristics Consumer lifestyles Defined: It is the activities, interests and opinions of consumers – in sum, their “pattern of living”

Consumer characteristics Consumer lifestyles Four important factors influence consumer lifestyles: Attitudes towards technology Time pressure Occupational demands Stage in the family life cycle

Consumer decision-making

Levels of decision-making Consumer decision-making can be viewed in terms of three levels: Routine decision-making Limited decision-making Extensive decision-making

Levels of decision-making Routine decision-making Mundane purchasing by the consumer that requires very little thought process

Levels of decision-making Limited decision-making Limited decision-making – It involves a greater number of thought processes

Levels of decision-making Extensive decision-making Extensive decision-making – It involves a great deal of search, a large consideration set and a far-reaching evaluation of alternatives

Role players in consumer purchasing decision making Initiator-suggests/thinks of buying a particular brand or service. Influencer-advice/views carry weight in making a final buying decision. Decider-makes a buying decision or any part of it. Buyer-makes the actual purchase. User-consumes or uses a product or service.

Environmental/social characteristics Language/culture Store, product and service characteristics Environmental/social characteristics Access

Environmental/social characteristics Store, product and service characteristics Type of goods The type of product, service or information will influence consumer behaviour Products have different characteristics

Environmental/social characteristics 3 criteria that determine consumer behaviour : Experiential = need to experience product first, e.g. food, books, CD. – only info goods are easy to sell on net. Search = need to find info first e.g. insurance – easy to sell on net. Credence = need repeated use before effects felt, e.g gym

Environmental/social characteristics Store, product and service characteristics Brand Brands provide assurance of quality and recourse to established companies Brands are information processing short cuts The brand represents a safe choice Brands are important when dealing with experience and credence goods Brands are used as time-saving devices

Environmental/social characteristics Guess the Brand

Environmental/social characteristics Store, product and service characteristics Offline presence A store’s offline presence is important to many consumers It provides assurance that the consumer is dealing with an established dealer

Environmental/social characteristics Store, product and service characteristics Variety The variety of goods offered online is an important consideration for Internet adaptation in any country

Environmental/social characteristics Language/culture The presence of information in consumers’ own language and about their own culture and country on the Internet has a large impact on whether or not they use the Internet

Environmental/social characteristics Access Where the consumer accesses the Internet influences their behaviour Most South Africans access the Internet from work Access to credit facilities also play an important role

Purchase detractors: perceived risks The greatest barriers to Internet use are security and privacy Cybercrime defined includes Spam and outright fraud

Purchase detractors: perceived risks Due to the large number of possible cybercrimes, consumers are concerned with: Security and confidentiality of transactions Supplier authenticity Trust in suppliers The ability of suppliers to deliver the product or service promised The legal enforceability of contracts Clip 2

Purchase detractors: perceived risks Other barriers to consumer adoption of the Internet are: Conservative shopping habits Limitations in bandwidth technology Long download times Lack of e-tailer profitability Distribution problems

Online communities The Internet differs in that it is a One-to-one medium (e-mail) Many-to-many medium (chat-rooms) Technology has facilitated the creation of new communities, where people discuss issues with each other without being bound by geography

Online communities Both online and offline communities can be viewed as groups linked by social relationships and a sense of belonging or by common bonds and a sense of shared identity

Online communities Not all members of Internet communities are influenced equally Lurkers – They follow the discussion online, but never interact with fellow members (others might not even know the person exists)

Online communities Posters – They participate in the discussions by posting messages to listserv, chat rooms, bulletin boards or discussion forums Posters are more influenced by the opinions of others, develop relationship with other members and see themselves as members of the community