E-Commerce Marketing Concepts:

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18 Νοε 2013 (πριν από 3 χρόνια και 6 μήνες)

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Chapter 6

E
-
Commerce Marketing Concepts:
Social, Mobile, Local

Learning Objectives


Identify the key features of the Internet audience


Discuss the basic concepts of consumer behavior and
purchasing decisions


Understand how consumers behave online


Identify and describe the main technologies that support
online marketing


Identify and describe basic e
-
commerce marketing and
branding strategies

The Internet Audience


Before firms can sell their products online, they first must
understand what kinds of people they will find online and
how those people behave in the online
marketplace


Questions:


Who has access to the Internet?


What do people do online?


Why do people buy online?


Why do people not buy online?


The Internet Audience


In
2011,
around
232 million people of all ages and over 86
million U.S. households (about
73%)
had access to the
Internet


By comparison, 98% of all U.S. households currently have
televisions and 94% have telephones


Internet growth has slowed to about 2
-
3% a year and it is
unlikely that Internet access will reach the same levels as
televisions or telephones in the near future


Why
may these numbers never reach the penetration rate for
TV and telephones?

Intensity and Scope of Usage


The slowing growth rate in the US Internet population is
compensated for in part by an increasing intensity and scope
of use


Overall, users are going online more frequently, with 77% of
adult users in the US (145 million people) logging on in a
typical day


People are also going online to engage in a wider range of
activities than in the past (see Table 6.2)


Some of the most common online activities include e
-
mail,
search engines, news, or using an online social networking
site

Demographics and Access


The demographic profile of the Internet has changed greatly
since 1995


Up until 2000, single, white, young, college
-
educated males
with high incomes dominated the Internet


This inequality in access and usage led to concerns about a
possible “digital divide”


Demographic similarities and differences can be assessed by
looking at:


Gender, age, ethnicity, community type, income level, and
education


Demographics and Access (cont.)


Gender


Fairly equal percentage of men and women users (78%)


Age


Teens (12
-
17) and young adults (18
-
29) form the age groups
with the highest percentage of Internet use (95%)


The percentage of very young children going online is also
growing dramatically in part due to increased access to
computers and the Internet both at school and at home


Another fast
-
growing group online is the 65 and over segment
which is still fairly low at 42%, but more than double the level
of 2002

Demographics and Access
(cont.)


Ethnicity


Variation across ethnic groups is not as wide as across age
groups


In 2002, there were significant differences among ethnic
groups, but this has receded


Community
type


Historically, Internet access rates have been
significantly lower
in rural areas than other kinds of communities


In 2011, only about 72% of rural households have an Internet
connection, with wide variations from state to state

Demographics and Access
(cont.)


Income level


About 96%
of households with income levels above $75,000
have Internet access, compared with only
63%
of households
earning less than $30,000


Education


Of those individuals with a high school education or less,
42%
were online in
2011,
compared to
94%
of individuals with a
college degree or more


In summary, the “digital divide” has indeed moderated, but it
still persists along the income, education, age,
regional, and
ethnic
dimensions (Table 6.3 provides a summary)

Other Internet Access Issues


In 2011, around 83 million US households had broadband service
in their homes while 3.2 million had slower dial
-
up access


Over 90 million Americans access the Internet from mobile
devices


“Neighborhood effects” , either face
-
to
-
face or through social
networks, influences purchasing decisions


Internet use may cause a decline in traditional social activities, but
in other instances may strengthen and complement traditional
face
-
to
-
face relationships


Marketing to young people who are texting and multitasking
online requires messages that are appropriate created and shaped


Time on the Internet takes time away from traditional media

Consumer Behavior


Once firms have an understanding of who is online, they
need to focus on how consumers behave online


The study of consumer behavior is a social science discipline
that attempts to model and understand the behavior of
humans in a marketplace


Models of consumer behavior attempt to identify the factors
that influence behavior and purchase decision making


The following slides describe a general model of consumer
behavior and a more detailed model of online consumer
behavior

A General Model of Consumer
Behavior
(Figure 6.1)

A Model of Online Consumer
Behavior (Figure 6.3)

Clickstream

Behavior


Clickstream

behavior refers to the transaction log that
consumers establish as they move about the Web


They may move from search engine, to a variety of sites, then
to a single site, then to a single page, and then, finally, a
decision to purchase


Understanding individual user
clickstream

behavior may
enable websites to be designed to better support this online
purchase decision process

Why Consumers Choose the Online
Channel (Table 6.4)

Reason

Percentage of Online
Respondents

24
-
hour shopping convenience

35.1

Easier to compare

prices

33.1

Free shipping offers

31.5

Don’t want to fight the crowds

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Better variety online

17.4

Don’t have to pay sales tax

14.9

Want gifts shipped directly to the recipient

13.8

Easier to compare prices

11.4

How Shoppers Find Vendors Online


Given the prevalence of “click here” banner ads, one might
think customers are driven to online vendors by spur
-
of
-
the
-
moment decisions


In fact, only a tiny percentage of shoppers click on banners to
find vendors


Once they are online, 59% of consumers use a search engine
to research or purchase a product


28% go to marketplaces such as Amazon and eBay


10% go direct to retail Web sites


Online shoppers are focused browsers looking for specific
products, companies, and services


Why Internet Users Do Not Buy Online
(Table 6.7)

Reason

Percentage

of Internet Users

Want to see and touch before buying

34

Concerns about personal financial information

31

Delivery costs too high

30

Concerns

that returns will be a hassle

26

Prefer to research

online, then buy in a store

24

No need to buy products online

23

Can’t speak to a sales assistant

in person

14

Internet Marketing Technologies


Online data sources


Web transaction logs


records user activity at a Web site


Registration forms


Shopping carts


Tracking files (cookies, etc.)


Databases, data warehouses, and data mining


Customer relationship management (CRM) systems


Advertising networks


Data Warehouse and Business
Intelligence Applications

Customer Relationship Management
(CRM) Systems


A CRM system is a repository of customer information that
records all of the contacts that a customer has with a firm and
generates a customer profile available to everyone in the firm with
a need to “know the customer”


Data is collected through customer touch points


CRM systems assist firms in categorizing customers (potential
customer, current customer, high
-
value customer, lost customer,
etc.) and enabling them to best serve each individual customer
based on their individual characteristics and needs


The basic idea of CRM is to treat different customers differently,
because their needs differ and the value to the company also may
differ


A Customer Relationship Management
System (Figure 6.10)

How An Advertising Network Such As
DoubleClick

Works (Figure 6.12)

Customer Retention: Strengthening the
Customer Relationship


The Internet offers several extraordinary marketing
techniques for building a strong relationship with customers
and for differentiating products and services


Personalization and one
-
to
-
one marketing


Customization and customer co
-
production


Customer service (FAQs, real
-
time customer service chat
systems, automated response systems)


The Internet also provides opportunities for new pricing
strategies to best serve individual customers and increase
revenues and profits


Net Pricing Strategies


In the early years of e
-
commerce, sellers were pricing their
products far below their marginal costs to attract new
customers and achieve short
-
term success


Later, once the customer was part of a large, committed,
audience then prices could be raised to the point where an
online seller could achieve a profit through some
combination of revenue models


Net pricing is particularly difficult when information
products and services have a marginal cost near zero


Several pricing strategies are used online

Net Pricing Strategies (cont.)


Free and
freemium


Users are offered a basic service for free, but must pay for premium
or add
-
on services


The
freemium

revenue subsidizes the free services


Versioning


Creating multiple versions of information goods and selling
essentially the same product to different market segments at different
prices


Bundling


Offers consumers two or more goods for a reduced price


Dynamic pricing and flash marketing


Different from fixed
-
price strategies


Identifying different prices for different consumers, situations, and
time periods


Channel Strategies: Managing Channel
Conflict


The term channel refers to different methods by which goods
can be distributed and sold


The emergence of e
-
commerce on the Web has created a new
channel and has led to channel conflict


Channel conflict occurs when a new venue for selling
products or services threatens to destroy existing venues for
selling goods


The impact of channel conflict varies by industry, but it is a
consideration when firms are selecting an overall e
-
commerce strategy