1 © Prentice Hall, 2000 Chapter 3 Internet Consumers and Market Research 2 © Prentice Hall, 2000 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 3 © Prentice Hall, 2000 The Importance of Customers ❙ 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 major pressures are labeled the 3Cs 4 © Prentice Hall, 2000 A Model of EC Consumer Behavior ❚ Purchasing decision begins with customer’s reaction to stimuli Vendors’ controlled System Logistic Support Payments, Delivery Technical Support Web design, Intelligent- agents Customer service FAQ, e-mail, Call centers, One-to-one Decision Making Process Stimuli Marketing Price Promotion Product Quality Others Economical Technology Political Cultural Buyers’ Decisions Buy or not What to buy Where (vendor) When How much to spend Repeat purchases Individual Characteristics Age, gender, ethnicity, education, lift style, psychological, knowledge, values, personality Environment Characteristics Social, family, communities 5 © Prentice Hall, 2000 ❚ Consumer Types ❙ Individual consumers: get much of the media attention ❙ Organizational buyers: do most of the shopping in cyberspace ❚ 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” A Model of EC Consumer Behavior (cont.) 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 ❙ Psychology variables ❙ Other environmental variables ❘ available information, government regulations, legal constraints, and situational factors 6 7 © Prentice Hall, 2000 Consumer Demographics ❙ Gender (61% male user & 39% female user) WOMEN’S PURCHASES BY CATEGORY (1998) Purchases Category % of Total Category Purchases (299) % of Total Respondents Buying (166) Computer Software 15% 39% Books 14% 35% Music 11% 28% Magazines 11% 28% Flowers 11% 28% Women’s Clothing 7% 19% Computer Hardware 5% 12% Games 5% 11% Videos 4% 10% Crafts & Craft Supplier 4% 10% Toys 3% 9% Home Furnishings 2% 6% Children’s Clothing 2% 4% Men’s Clothing 2% 4% Art 2% 4% Jewelry 1% 3% Furniture 1% 2% TOTAL 100% ❚ Consumer Demographics (1998) Variables Influencing Decision Making Process (c ont.) ❙ Age (mostly 21-30 year-old) ❙ Marital status (41% married & 39% single) ❙ Educational level (81% 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) © Prentice Hall, 2000 8 Variables Influencing Decision Making Process (c ont.) ❚ 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) © Prentice Hall, 2000 9 10 © Prentice Hall, 2000 Consumer Buying Patterns In last six months of 1998: ❙ 76% filling out a form on the Web ❙ Online purchases are more than paper catalog purchases for Net buyers ❙ 32% spent between $100.00- $500.00 ❙ Spending of less than $50.00 decreases steadily as shoppers gain experience ❙ Women are more likely to purchase more in the under $50.00 level, and less likely to purchase at the above $500.00 level 0 10 20 30 40 50 P e rc e n t less than $50 $50- $100 $100- $500 $500 or more Don't know Amount Spent on Web in Last 6 Months of 1998 < 1 Year 1 - 3 Years > 4 Years Experience: [...]... identification (Recognition) Information search (What? From whom?) Alternative evaluation, negotiation and selection Purchase and delivery After purchase service and evaluation © Prentice Hall, 2000 12 Model of Internet Consumer Satisfaction 3rd Party Seal of Approval Logistics Support Vendor Reputation Trust in Web-shopping Customer Service Pricing Attractiveness Customer Satisfaction Web-site Store Front Security... through various contact channels ƒ 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 ƒ Internet ‚ a medium of instant gratification ‚ demand for both prompt replies and proactive alerts © Prentice Hall, 2000 24 Market Research for EC „ Aims ƒ Finding relationship between consumers, products,... Hall, 2000 30 Market Research for EC (cont.) „ Online Market Research Methods ƒ Process of conducting the research ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ ‚ Define the research issue and the target market Identify newsgroups and Internet communities to study Identify specific topics for discussion Subscribe to pertinent groups, register in communities Search discussion group topics and content lists to find the target market Search... telephone survey and mail survey ƒ Online market research done on the Net, ranges from client-specific moderated focus groups conducted via chat rooms; to interactive surveys placed on Web sites ƒ The Internet is providing an efficient channel for faster, cheaper and more reliable collection and transmission of marketing information even in multimedia form © Prentice Hall, 2000 34 Market Research for... cookies—files attached to a user’s browser © Prentice Hall, 2000 35 Intelligent Agents for Consumers „ Search Engines ƒ 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 ƒ Computer programs that help the users to conduct routine tasks, to search and retrieve information, . 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. 2000 Chapter 3 Internet Consumers and Market Research 2 © Prentice Hall, 2000 Learning Objectives ❚ Describe the essentials of consumer behavior ❚ Describe the characteristics of Internet surfers. variables ❘ people influenced by family members, friends, co- workers, “what’s in fashion this year”, Internet communities and discussion groups ❙ Cultural variables ❙ Psychology variables ❙ Other