Chapter 4 Online Consumer Behavior

Buyer Decision Making Process 4-2

4-3 Learning about Consumer Behavior Online The independent variables Personal characteristics Environmental variables Social variables Cultural/community variables Other environmental variables The dependent variables: the buying decisions

4-4 Learning about Consumer Behavior Online Roles people play in the decision-making process: Initiator Influencer Decider Buyer User

The most important “influencers” 4-5

4-6 The Consumer Decision-Making Process A Generic Purchasing-Decision Model 1.Need identification 2.Information search 3.Evaluation of alternatives 4.Purchase and delivery 5.Post-purchase behavior

4-7 The purpose of a consumer behavior model is to help vendors understand how a consumer makes a purchasing decision, and help them to be able to influence it. Online Buyer Decision Making –influence factors

From Mass Advertising to Interactive Advertising 4-8

4-9 Mass Marketing, Market Segmentation, and One-to-One Marketing one-to-one marketing Marketing that treats each customer in a unique way Mass Marketing Marketing efforts traditionally were targeted to everyone Targeted marketing—marketing and advertising efforts targeted to groups (market segmentation) or to individuals (one-to- one)—is a better approach

4-10 Mass Marketing, Market Segmentation, and One-to-One Marketing market segmentation The process of dividing a consumer market into logical groups for conducting marketing research and analyzing personal information

4-11 Market Research for EC

4-12 Mass Marketing, Market Segmentation, and One-to-One Marketing

Online VS. offline purchase 4-13 Amazingly, 56% of book purchases seem to be offline. That is a surprise!!! (Given the fact that Amazon is dominant and Borders is dead.)

4-14

Different Online Shopper Personality Types There are many different online shopper personality types, or behavioral characteristics of shoppers. Each has certain traits, and skillful marketing professionals stress the importance of learning each type in order to design a shopping services that are attractive to members of each type or customer segment. 4-15

Different Online Shopper Personality Types Recreational Shoppers--- flit from one website to another very quickly, and only stop when a truly significant deal catches their eye. like to click on ‘similar product’ links, and are likely to spend a great deal of time at your online retail store if your present enough engaging content to keep them there. 4-16

Different Online Shopper Personality Types Deal Hunters --- These are customers who might buy an item they don’t actually need if you present them with a good enough deal for it. also often on the lookout for free shipping deals. 4-17

Different Online Shopper Personality Types The Flitter --- One way to keep them shopping is to ensure that the shopping cart on your website remains active for a long time, so that if they are in another window and forget that they are in the middle of a transaction, they can simply return and finish it. 4-18

Different Online Shopper Personality Types The Researcher --- Researchers love to learn everything they can about a product before purchasing it online. Researchers also enjoy reading reviews from other customers, and regularly rely on ratings and reviews when deciding what to purchase online. 4-19

Different Online Shopper Personality Types Impatient Shoppers--- Impatient shoppers will not stick around if your checkout process is lengthy and complicated. To capture this type of online shopper, make sure that your website loads quickly, and that your checkout process is as streamlined as possible. 4-20

Different Online Shopper Personality Types Rewards Shoppers--- Rewards shoppers love the websites that give rewards or points for purchases, and love to take part in deals and promotions. Rewards shoppers enjoy taking part in SMS Text Message Marketing campaigns, where they can receive messages about sales and specials. 4-21

Different Online Shopper Personality Types Hipsters--- These shoppers only purchase high end retail brands.. They will purchase these brands from various sellers, but only buy the very best and premium brand names. They are willing to spend a great deal of money in order to get top of the line items that are hot, fresh, and in style. 4-22

Different Online Shopper Personality Types Day Dreamers --- Some people really love to make wish lists. They enjoy dreaming about their ideal purchases, but needs a push in order to actualize the transaction. 4-23

Different Online Shopper Personality Types Some other types??? 4-24

4-25 Market Research for EC Observing Customers transaction log A record of user activities at a company’s Web site clickstream behavior Customer movements on the Internet Web bugs Tiny graphics files embedded in messages and in Web sites that transmit information about users and their movements to a Web server spyware Software that gathers user information over an Internet connection without the user’s knowledge

4-26 Market Research for EC Click-stream data Data that occur inside the Web environment; they provide a trail of the user’s activities (the user’s click- stream behavior) in the Web site. Some of the information that click-stream data seeks to capture is:

Where was the visitor before she reached my website? If a visitor came in from a search engine, what search term did she use? What pages did the visitor access on my website? In what sequence? How much time did the visitor spend on each page? When and where did the visitor click the "back" button on the web browser? What items did the visitor add to (or remove from) her shopping cart? 4-27 Market Research for EC

What can we do with the data we collect??? If you find that many people are visiting your website from a certain set of websites, you could consider catalyzing the process by advertising on those sites. You could analyze the top exit-pages on your website to figure out whether there is something about those pages that is turning people away. Maybe you are asking for some information that visitors do not want to provide. …… 4-28 Market Research for EC

4-29 Market Research for EC collaborative filtering A market research and personalization method that uses customer data to predict, based on formulas derived from behavioral sciences, what other products or services a customer may enjoy; predictions can be extended to other customers with similar profiles. Growing in importance due to social networks!

4-30 Market Research for EC

4-31 Market Research for EC This image shows an example of predicting of the user's rating using collaborative filtering. At first, people rate different items (like videos, images, games). After that, the system is making predictions about user's rating for an item, which the user hasn't rated yet. These predictions are built upon the existing ratings of other users, who have similar ratings with the active user. For instance, in our case the system has made a prediction, that the active user won't like the video.

4-32 Market Research for EC Behavioral Targeting Use of information collected about individual’s web browsing behavior (pages they have visited, searches they made) In order to select advertisement to display to that individual

4-33 Market Research for EC

4-34 Market Research for EC Cookies A cookie, also known as a web cookie, browser cookie, and HTTP cookie, is a small piece of data sent from a website and stored in a user's web browser while the user is browsing that website. Every time the user loads the website, the browser sends the cookie back to the server to notify the website of the user's previous activity. Want to delete the cookies? You can learn more about it on

4-35 Internet Marketing in B2B