Transcript Mobile and Embedded Devices: New Markets, New Opportunities

E-Commerce
BBA (Hons)
Internet Consumer & Market
Research
Lectures 10,11,12
Course Lecturer: Farhan Mir
© Farhan Mir
2014
IMS
Learning Objectives
Describe the essentials of consumer behavior
Describe the characteristics of Internet surfers and EC
purchasers
Understand the process of consumer purchasing decision
making
Describe the way companies are building relationships
with customers
Explain the implementation of customer service
Describe the consumer market research in EC
Experience the role of intelligent agents in consumer
applications
Describe the organizational buyer behavior model
© Farhan Mir
2014
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The Importance of Customers
The major pressures are labeled the 3Cs
Competition
“fighting” on customers
to succeed : control the 3Cs
Customers
customers becomes a King/Queen
to succeed : finding and retaining customers
Change
EC is a new distribution channel
to succeed : convince customers to go online and then to
choose your company over the online competitors
The idea is to understand the needs and requirements of the
customer and the changes in his behavior
© Farhan Mir
2014
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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
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Ritchey Design Learns
about Customers (cont.)
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
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Ritchey Design Learns
about Customers (cont.)
The Solution
In late 1995, Ritchey reworked the Web site so
that the company could hear from its customers
directly
set up customer surveys on the site
offered visitors who answer the surveys a
chance to win free Ritchey products
vsitors enter their names and addresses
and then answer questions about the
company’s products
© Farhan Mir
2014
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Ritchey Design Learns
about Customers (cont.)
Web Trader software automatically organizes
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 per
year
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2014
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Ritchey Design Learns
about Customers (cont.)
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
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Ritchey Design Learns
about Customers (cont.)
The Results
ritcheylogic.com sells only team items such as
t-shirts, 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
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2014
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Ritchey Design Learns
about Customers (cont.)
The site is basically used in B2C EC only for
the basic activities in Internet marketing:
communicating with customers
conducting market research
delivering advertising
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Ritchey Design Learns
about Customers (cont.)
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
© Farhan Mir
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Understanding Consumer
Behavior
Understand the dynamics of online
consumers
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2014
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A Model of EC Consumer
Behavior
Purchasing
decision
begins with
customer’s
reaction to
stimuli
Individual
Characteristics
Age, gender, ethnicity,
education, lift style,
psychological, knowledge,
values, personality
Environment
Characteristics
Social, family,
communities
Buyers’ Decisions
Stimuli
Marketing
Others
Price
Economical
Promotion Technology
Product
Political
Quality
Cultural
Buy or not
What to buy
Where (vendor)
When
How much to spend
Repeat purchases
Decision
Making
Process
Vendors’ controlled System
Logistic
Technical
Customer
service
Support
Payments,
Delivery
Support
Web design,
Intelligentagents
FAQ,
e-mail,
Call centers,
One-to-one
© Farhan Mir
2014
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Consumer Behavior Online
(cont.)
Customer types—
Individual consumers who commands most of the
media’s attention
Organizational buyers
Governments and public organizations
Private corporations
Resellers
Consumer behavior viewed in terms of:
Why is the consumer shopping?
How does the consumer benefit from shopping
online?
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2014
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A Model of EC Consumer Behavior
(cont.)
Purchasing Types
Impulsive buyers: purchase products quickly
Patient buyers: purchase products after making
some comparisons
Analytical buyers: do substantial research before
making the decision to purchase products or services
Purchasing Experiences
Utilitarian: shopping “to achieve a goal” or “complete a
task”
Hedonic: shopping because “it is fun and I love it”
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Variables Influencing
Decision Making Process
Environmental Variables
Social variables
people influenced by family members,
friends, co-workers, “what’s in fashion this
year”, Internet communities and discussion
groups
Cultural variables
Other environmental variables
available information, government
regulations, legal constraints, and situational
© Farhan Mir
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Looking at a online
Consumer (Average)
The statistics are US based
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Variables Influencing Decision
Making Process (cont.)
Consumer Demographics (2006)
Age (mostly 20-30 year-old)
Marital status (41% married & 39% single)
Educational level (82% with at least some
college education & 50% obtained at least
baccalaureate degree)
Ethnicity (87% white in America)
Occupation (26% educational-related field,
22% computers & 22% other professionals)© Farhan Mir
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Consumer Demographics
Gender (61% male user & 39% female user)
Purchases Category
Computer Software
Books
Music
Magazines
Flowers
Women’s Clothing
Computer Hardware
Games
Videos
Crafts & Craft Supplier
Toys
Home Furnishings
Children’s Clothing
Men’s Clothing
Art
Jewelry
Furniture
TOTAL
% of Total Category % of Total Respondents
Buying (166)
Purchases (299)
15%
14%
11%
11%
11%
7%
5%
5%
4%
4%
3%
2%
2%
2%
2%
1%
1%
100%
39%
35%
28%
28%
28%
19%
12%
11%
10%
10%
9%
6%
4%
4%
4%
3%
2%
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Variables Influencing Decision
Making Process (cont.)
Consumer Demographics
Household income (46% at least $50,000/year)
Internet usage profile (Internet access option, length and
frequency of web use & access cost)
Internet access option (63% primarily form home &
58% primarily from work or school)
Length and frequency of use (88% access daily &
33% access 10-20 hours a week)
Access cost (67% pay for their own Internet access &
31% paid for by their employers)
© Farhan Mir
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Some figures from 2007
comScore Networks has announced the
results of the first complete review of
consumer e-commerce for the year 2007,
reporting that sales at domestic online
retailers surged to $153 billion for the year.
Excluding online Travel, comScore reports
sales totaled $73.7 billion, reflecting a
growth rate of approximately 30% vs. the
year 2006.
© Farhan Mir
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© Farhan Mir
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Source: http://www.sellitontheweb.com/ezine/news0556.shtml
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Shop.org Statistics
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Consumer DecisionMaking Essentials
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Consumer Purchasing Decision-Making: Roles
Roles that people play in the decision making
process
Initiator : the person who first suggests or thinks of the
idea of buying a particular product or service
Influencer : a person whose advice or views carry some
weight in making a final buying decision
Decider : the person who ultimately makes a buying
decision or any part of it - whether to buy, what to buy, how
to buy, or where to buy
Buyer : the person who makes an actual purchase
User : the person who consumes or uses a product or
service
© Farhan Mir
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Consumer Purchasing DecisionMaking (cont.)
The Purchasing Decision-Making Model
Need identification
(Recognition)
Information search
(What? From whom?)
Alternative evaluation,
negotiation and selection
Purchase and delivery
After purchase service
and evaluation
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Customer
Satisfaction &
Loyalty
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2014
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Model of Internet Consumer Satisfaction
3rd Party
Seal of Approval
Logistics Support
Vendor
Reputation
Trust in
Web-shopping
Customer Service
Pricing Attractiveness
Web-site Store Front
Customer
Satisfaction
Repeat Web Purchase
(Brand Loyalty)
Security
Privacy
Transaction
Safety
System
Reliability
Speed of
Operation
Ease of
Use
Content,
Quality
Format
Timeliness
Authentication
Integrity
Reliability
Completeness
© Farhan Mir
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Organization want loyal
customers (Satisfied
Customers) but how?
Answer: Relationship Marketing
(One-to-One Marketing)
© Farhan Mir
2014
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One-to-One Marketing
Relationship marketing
“Overt attempt of exchange partners to build a
long term association, characterized by
purposeful cooperation and mutual dependence
on the development of social, as well as
structural, bonds”
“Treat different customers differently”
Able to change the manner its products are
configured or its service is delivered, based on
the individual needs of individual customers
© Farhan Mir
2014
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How One-to-One
Relationships Are Practiced
Doing business over the Internet enables
companies to:
Communicate better with customers
Understand customers’ needs and buying habits
better
Improve and customize their future marketing
efforts
© Farhan Mir
2014
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One-to-One Marketing (cont.)
Customer loyalty
Effects Purchase behavior
One of the most significant contributors to
profitability
Increase profits; strengthen market position;
become less sensitive to price competition;
increase cross-selling success; save cost, etc.
Real world examples
1-800-FLOWERS
Amazon.com
Federal Express (FedEx)
© Farhan Mir
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Customer Loyalty & E-Loyalty
Customer loyalty—degree to which
customer stays with vendor or brand
Important element in consumer purchasing
behavior
One of the most significant contributors to
profitability
E-loyalty—customer’s loyalty to an e-tailer
Learn about customers’ needs
Interact with customers
Provide customer service
© Farhan Mir
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One-to-One Marketing (cont.)
Building and maintaining customer loyalty
Maintain continuous interactions between
consumers and business
Make a commitment to provide all aspects of
the business online
Build different sites for different levels of
customers
Willing to invest capital, both human and
financial, in the information systems, to insure
continuous improvement in the supporting
technology as it becomes available
© Farhan Mir
2014
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One-to-One Marketing (cont.)
Customer Service : One of the essence of
Customer Satisfaction
Information can be directed to the customer efficiently
Creation of a database which records purchases, problems
and requests is facilitated
Information can now be traced and analyzed for immediate
response
If customer service options and solutions do not maintain the
same level of excitement and interaction as the advertising
and sales presentations, the level of intensity declines and
the vendor runs the risk of losing customers
© Farhan Mir
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Implementing Customer Service
in Cyberspace (cont.)
Types of Customer Service Functions
Answering customer inquires
Providing technical and other information
Letting customers track accounts or
order status
Allowing customers to customize and
order online
© Prentice Hall, 2000
21
© Farhan Mir
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Tools of Customer Service
Personalized Web Pages
used to record purchases and preference
direct customized information to customers efficiently
Chat Room
discuss issues with company experts; with other
customers
E-mail
used to disseminate information, send product
information and conduct correspondence regarding
any topic, but mostly inquiries from customers
FAQs
not customized, no personalized feeling and
contribution to relationship marketing
© Farhan Mir
2014
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Tools of Customer Service (cont.)
Help Desks and Call Centers
A comprehensive customer service entity
EC vendors take care of customer service issues
communicated through various contact channels
Telewebs
combines Web channels, such as automated e-mail
reply, Web knowledge bases and portal-like self service
with call center agents or field service personnel
Internet
a medium of instant gratification
demand for both prompt replies and proactive alerts
© Farhan Mir
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How to know what the
customer wants online?
Answer: Online Market Research
© Farhan Mir
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Market Research for EC
Aims
Finding relationship between consumers, products,
marketing methods, and marketers through information in
order to discover marketing opportunities and issues, to
establish marketing plans, to better understand the
purchasing process, and to evaluate marketing
performance
Problem definition
and
Research
objectives
Research
methodology,
Data collection
plan
Data
collection,
Data analysis
Results,
Recommendations,
Implementation
© Farhan Mir
2014
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Market Research for EC
Goal–find
information and
knowledge that
describes
relationships among
Consumers
Products
Marketing methods
Marketers
Aim—find relationship
between
Discover marketing
opportunities and issues
Establish marketing
plans
Better understand the
purchasing process
Evaluate marketing
performance
© Farhan Mir
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Market Research for EC (cont.)
Online Market Research
Using online technology to conduct surveys
More efficient, faster, and cheaper data collection,
and a more geographically diverse audience than
those found in off-line surveys
Ability to incorporate radio buttons, data-entry
fields and check boxes in the surveys
Not suitable for every customer or product — it is
skewed toward highly educated males with high
disposal income
© Farhan Mir
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Market Research for EC (cont.)
Procter & Gamble
Example: Internet market research
expedites time-to-market for Procter &
Gamble
In the past developing a major new product,
from concept to market launch, took over 5
years
In September 2000 introduced Whitestrips on
the Internet, offering the product for sale on
P&G’s Web site
© Farhan Mir
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Market Research for EC (cont.)
Procter & Gamble (cont.)
Online research was facilitated by data mining
conducted on P&G’s huge historical data and
the new Internet data
Internet created a product awareness of 35
percent before shipments were made to stores
Revolutionized process of studying the product
concept, segmenting the market, and
expediting product development
© Farhan Mir
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Market Research for EC
(cont.)
Various tools are used to conduct
consumer market research:
Questionnaires
Surveyors
Telephone surveys
Focus groups
Important first to understand how groups of
consumers are classified
© Farhan Mir
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Market Research for EC
Online Market Research
If you don’t know how to do it then
companies such as E-valuations or
Northstar can conduct the research for
your company
© Farhan Mir
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© Farhan Mir
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Limitations of Online
Market Research Methods
Accuracy of responses
Loss of respondents because of
equipment problems
Ethics and legality of Web tracking
Focus group responses can lose
something in the translation from an inperson group to an online group
Eye contact and body language are lost
Anonymity is necessary to elicit an
unguarded response
© Farhan Mir
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IMS
Intelligent Agents for Consumers
Search Engines
Computer programs that can automatically
contact other network resources on the
Internet, searching for specific information or
key words, and reporting the results
Intelligent Agents
Computer programs that help the users to
conduct routine tasks, to search and retrieve
information, to support decision making and to
act as domain experts
Do more than just “search and match”
© Farhan Mir
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Intelligent Agents for Consumers
Intelligent Agents for Information Search and
Filtering
Help to determine what to buy to satisfy a specific need by
looking for specific products’ information and critically
evaluate them
For Organization these intelligent agents are a very useful
source of consumer information and analytical calculation
of this information could really provide closer insight to
consumer buying behavior
© Farhan Mir
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Organizational Buyer’s
Behavior
© Farhan Mir
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Organizational Buyer’s Behavior
Consumer Types
Individual customers Vs. Organizational buyers
Characteristic
Demand
Purchase volume
Number of customers
Location of buyers
Distribution structure
Nature of buying
Nature of buying influence
Type of negotiations
Use of reciprocity
Use of leasing
Primary promotional method
Retail Buyers
Individual
Smaller
Many
Dispersed
More indirect
More personal
Single
Simpler
No
Lesser
Advertising
Organizational Buyers
Organizational
Larger
Fewer
Geographically concentrated
More direct
More professional
Multiple
More complex
Yes
Greater
Personal selling
© Farhan Mir
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Organizational Buyer’s Behavior
(cont.)
Individual
Influences
Interpersonal
Influences
Organizational
Influences
Age; gender; ethnicity;
education, lift style;
psychological; knowledge;
values; personality
Authority; status;
persuasiveness
Policies and procedures;
organization structure;
centralized/decentralized;
systems used; contracts
Stimuli
Marketing
Others
Price
Promotion
Product
Quality
Economical
Technology
Political
Cultural
Behavioral
Model
Decision Making
Process (Group
or Individual)
Buyers’
Decisions
Buy or not; What to buy;
Where (vendor);
When; Delivery terms
Payments
Vendors’ Controlled Systems
Logistic
support
Technical
support
Customer
service
Payments,
delivery
Web design,
Intelligentagents
FAQ,E-mail,
Call Centers,
One-to-one
© Farhan Mir
2014
IMS