1. ELC 310
DAY 7
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2. Agenda Questions? Assignment 2 Due
Alignment 3 (last) will be posted next week
Rest of Grade is from Marketing Plan, exams, Case study analysis and Case study creation
Exam 1 on Sept 30
Chaps 1-5 of Strauss Text
10 Short Essays (2 per chapter)
You will have 70 minutes to complete exam
Open book, open notes
You should be working on your eMarketing Plans
Due Oct 28, Presentations on Oct 28
Discussion on Consumer Behavior
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3. E-Marketing 4/E Judy Strauss, Adel I. El-Ansary, and Raymond Frost
Chapter 7: Consumer Behavior
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4. Consumers are empowered in a way that’s almost frightening.
Time is the only commodity worth anything anymore. Consumers will pay you to save them time. The Internet saves people time.
-Scott Reamer, S.G. Cowen
Consumers are empowered in a way that’s almost frightening.
-Peter Weedfald
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5. Chapter 7 Objectives After reading Chapter 7 you will be able to:
Discuss general statistics about the Internet population.
Describe the Internet exchange process and the technological, social/cultural and legal context in which consumers participate in this process.
Outline the broad individual characteristics and consumer resources that consumers bring to the online exchange.
Highlight the four main categories of outcomes that consumers seek from online exchanges.
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6. The Hanover Story
Hanover Direct’s 4 million customers buy through 12 different catalogs and Web sites.
99% of telephone customers complete an order; only 2% of all online visitors buy during a visit.
Consumer research revealed several reasons for shopping cart abandonment:
Technical difficulties.
Consumer indecision at final check-out page.
By monitoring online behavior, Hanover has achieved 33% improvement.
Have you ever abandoned an online shopping cart? Why or why not?
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7. Consumers in the 21st Century
The Internet has grown faster than any other medium in history.
In 2004, 958 million people had access, representing 16% of the global population.
Internet usage in developed nations has reached a critical mass, leading marketers to ask more questions about consumer behavior on the Internet.
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8. Where Are the Other 5.5 Billion People?
Not online!
In survey of non-Internet users:40% said they have no need for the Internet.
E-marketers’ are digging deeper for a more thorough understanding of consumer preferences online and offline.
Main reasons why consumers do not use the Internet: Social, cultural, technological, legal, and political issues.
Without major shifts some countries may not achieve high levels of Internet adoption among individual consumers for many years.
In these countries the B2B market will lead consumers to the Net where a fast-growing consumer market enticed businesses online.
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9. Content not of interest / relevance 2
Reason %
No need for it 40
Content not of interest / relevance 2
Don’t have a computer 33
Not my choice/decision at work
Not interested in it 25
Content not in my language 1
Don’t know how to use it 16
Cost for ISP/access cost
Cost (general) 12
Cost for local telephone and toll service charges
Not enough time to use it 8
Don’t know how to get it 3
Other 4
Current PC can’t access Web
Unsure
Biggest Reasons for Not Using the Internet Source: Pastore (2001) citing Ipsos-Reid study
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10. Consumers in the 21st Century
Internet usage is still growing.
Marketers have turned their attention to practical questions such as:
Whether a firm’s target market is online,
What these customers do online,
What determines whether they’ll buy from a site,
How much of the marketing effort should be devoted to online channels.
Understanding online consumer behavior helps marketers design marketing mixes that provide value and thus attract and retain customers.
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11. Inside the Internet Exchange Process
What explains consumer buying behavior?
Stimuli = marketing communication messages and cultural, political, economic, and technological factors.
Individual buyer characteristics = income level, personality, psychological, social, and personal aspects.
Consumers move through a variety of decision processes based on situational and product attributes.
To create effective marketing strategies, e-marketers need to understand what motivates people to buy goods and services, both in the short and long term.
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12. Inside the Internet Exchange Process
The e-marketing: “...creating exchanges that satisfy individual consumer and organizational customers’ objectives.”
Exchange = act of obtaining a desired object from someone by offering something in return.
Individuals bring their own characteristics + personal resources (within a social, cultural, and technological context) to the process as they seek specific outcomes from an exchange.
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13. The Internet Exchange Process
Exchange refers to the act of obtaining a desired object by offering something in return.
Exchange occurs within a technological, social/cultural, and legal context.
Technological, Social/Cultural and Legal Context
Individual
Characteristics
Resources
Internet
Exchange
Outcomes
Connect
Enjoy
Learn
Trade
Marketing Stimuli
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14. Technological Context
35% of online Americans connect to the Internet with a broadband connection.
Broadband has increased by 20% in the past 2 years.
The U.S. is only the 10th largest broadband market.
Broadband users exhibit different online behavior than those using mobile handheld devices or dial up.
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15. Top Broadband Country Markets
New Data:
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16. Social and Cultural Contexts
Social/cultural trends have a huge effect on online exchanges.
Information overload overwhelms consumers.
Time poverty creates multitasking and contributes to a stressful environment.
Home and work boundaries are dissolving.
Consumers seek convenience and have high expectations regarding customer service.
“free, perfect, now!”
Consumers cannot do without Internet access: “online oxygen.”
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17. Social and Cultural Contexts, cont.
Self-service is required.
Sophisticated consumers know they are in control and have choices.
Privacy and data security are paramount.
Online crime worries consumers.
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18. Legal Context Legal factors were discussed in Chapter 5.
Despite piracy laws, illegally used software abounds.
In spite of the new Can-Spam law, the number of unsolicited s has increased.
However, when the recording industry sued thousands of illegal music file downloaders, consumer behavior changed.
In 2002, 37% of online consumers shared music files.
Only 23% shared files in 2004.
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19. Individual Characteristics & Resources
Individual characteristics affect Internet use.
Age, income, education, ethnicity, and gender
Attitudes toward technology
Online skill and experience
Goal orientation
Convenience or price orientation
Family life cycle
Consumer resources for exchange
Money, time, energy and psychic costs
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20. Monetary Cost
The Internet exchange doesn’t use cash or paper checks for online transactions.
Many forms of digital money:
Credit and debit cards.
Electronic checks through a third-party such as PayPal.
Smart cards or Splash Plastic.
Other innovative forms are appearing in other countries.
RFID’s
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21. Time Cost Online attention is a desirable and scarce commodity.
Worldwide, the average user goes online 29 times/month, 49 minutes each time.
Some researchers believe that consumers pay more focused attention online than with other media.
Hoffman and Novak applied the concept of flow to online behavior.
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22. Flow The state occurring during during network navigation which is:
Characterized by a seamless sequence of responses facilitated by machine interactivity
Intrinsically enjoyable
Accompanied by a loss of self-consciousness
Self-reinforcing
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23. Global Usage: 2002 to 2004
Metric
Quantity
April 2002
June 2004
August 2007
August 2008
Number of sessions/visits for the month 18 29 34
Number of domains visited 48 57 69
Web Pages per Person per Month
n.a.
1,001
1518
1522
Page views for each session 43 44
PC time spent per month
24 hours
31:25 hours
32:59 Hours
Time spent online for the month
10 hours
23 hours
31 hours
33.5 Hours
Time spent per session
32 minutes
49 minutes
56 minutes
minutes
Duration of page viewed
44 seconds
46 seconds
45 seconds
48 seconds
New Data:
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24. Energy and Psychic Costs
It takes effort to log on and check , especially for dial-up users.
Consumers apply psychic resources to understand information or when facing technical problems.
Shopping cart abandonment and failed online purchases have numerous causes.
Technical reasons.
The consumer may be “window shopping,” comparing several carts at once.
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25. Exchange Outcomes There are 4 basic things that people do online:
Connect
Enjoy
Learn
Trade
Each is ripe with marketing opportunity.
Data Sites
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