Transcript dl.wecouncil.com

TOPIC 4: New Business Opportunities,
Web Advertising Methods and Strategies
4-1
4.1 Learning about consumer behavior online.
Consumer decision-making process.
4.2 Building one-to-one relationships with customers.
Loyalty and trust in E-Commerce.
4.3 Market research in E-Commerce.
4.4 Internet marketing in B2B.
4.5 Web advertising and its characteristics.
4.6 Major advertising methods used on the Web.
4.7 Online advertising strategies and promotions.
4.8 Permission marketing, advertisement management,
localisation, and other advertising-related issues.
4.9 Intelligent agents in marketing and advertising.
Module: Competing in the Network Economy
4-2
Case Study: Ritchey Design Learns about Customers
• The Problem
– Ritchey Design, Inc. is a
relatively small designer
and manufacturer of
mountain bike
components
– Sells its products to
distributors and/or
retailers, who then sell
them to individual
consumers
– Its 1995 Web site was
more a status symbol
than a business tool
• The Problem (cont’d)
– Visitors could get
information on Team
Ritchey or find out where
Ritchey products were
sold
– It did not give customers
all the information they
wanted
– It did not enable the
company to gain insight
into its customers’ wants
and needs
Module: Competing in the Network Economy
4-3
Case Study: Ritchey Design Learns about Customers
• The Solution
– Ritchey reworked the
Web site to hear from its
customers directly
– Online customer surveys
– Offered visitors who
answer the surveys a
chance to win free
Ritchey products
– Visitors enter their names
and addresses and then
answer questions about
the company’s products
• The Solution (cont’d)
– Web Trader software
automatically organises
and saves the answers in a
database and is used to
help make marketing and
advertising decisions
– Questions are changed to
learn customers’ opinions
about any new products
Ritchey develops
– Saves $100,000 on
product development p.a.
Module: Competing in the Network Economy
4-4
Case Study: Ritchey Design Learns about Customers
• The Solution (cont’d)
– An online catalog
educates retailers and
consumers about the
technological advantages
of Ritchey’s high-end
components over
competitors’ parts
– Visitors browse the
product catalog that
includes detailed
descriptions and graphics
of Ritchey’s products
Module: Competing in the Network Economy
4-5
Case Study: Ritchey Design Learns about Customers
• The Results
– ritcheylogic.com sells
only team items such as tshirts, bags, water bottles,
and other gear directly to
individuals online
– The company does not
sell bike parts to
individuals directly online
because it wants to
maintain its existing
distribution system
– Dealers can place orders
on the site
• The Results (cont’d)
– The site is basically used
in B2C EC only for the
basic activities in Internet
marketing:
• communicating with
customers
• conducting market
research
• delivering advertising
Module: Competing in the Network Economy
4-6
Case Study: Ritchey Design Learns about Customers
• What we can learn …
– Illustrates the benefits a company can derive
from changing its Web site from a passive one to
one with interactivity
– Interactive Web site allows the company to:
• Learn more about its customers
• Educate customers
• Use the site for customer service
Module: Competing in the Network Economy
4-7
4.1: Learning About Consumer Behavior Online
• Model of Consumer Behavior Online (see next slide)
– Independent (or uncontrollable) variables
• Personal characteristics
• Environmental variables (e.g., social, cultural/community,etc)
– Intervening (vendor-controlled ) variables
• Market stimuli
• EC systems
– Decision-making process
• Influenced by the Independent and Intervening variables
– Dependent variables (the buying decisions)
• Types of decisions made by buyers
Module: Competing in the Network Economy
4-8
Module: Competing in the Network Economy
4-9
4.1: Consumer Decision Making Process
• Roles people play in the decision-making process:
– Initiator
• The person who first suggests buying a product or service
– Influencer
• A person whose advice/view carries some weight in making the
final purchasing decision
– Decider
• The person who ultimately makes a buying decision or any part
of it
– Buyer
• The person who makes an actual purchase
– User
• The person who consumes or uses a product or service
Module: Competing in the Network Economy
4-10
4.1: Consumer Decision Making Process
Generic Purchase Decision Model:
• It has 5 stages:
1. Need identification
2. Information search
3. Evaluation of alternatives
4. Purchase and delivery
5. After-purchase evaluation
Module: Competing in the Network Economy
4-11
4.1: Consumer Decision Making Process
A Customer Decision Model in Web Purchasing
• It is used to show that each of the 5 stages in the generic
purchase-decision model can be supported through the Internet or
the Consumer decision Support System (CDSS). See Exhibit 4.2.
Online Buyer Decision Support Model
• This model is divided into three parts (see Exhibit 4.4):
– The first part examines the three stages of buyer behavior: identify
and mange buying criteria; search for products and merchants; and
compare alternatives.
– The second part examines price, shipping, and finance.
– The third part examines personalisation, preferences and customer
help.
Module: Competing in the Network Economy
4-12
Module: Competing in the Network Economy
4-13
Module: Competing in the Network Economy