E-Commerce Internet Consumers, E-services and Market Research E-Business Level 2 2013-2014 Try to be the Best Instructor: Safaa S.Y. Dalloul
Jan 21, 2016
E-CommerceInternet Consumers, E-services
and Market Research
E-Business Level 2
2013-2014
Try to be the Best
Instr
ucto
r: S
afa
a S
.Y.
Dallou
l
Customer Behavior Online
Personal Characteristics and Demographics
of Internet Surfers
Consumer Purchasing Decision Making
Matching Products with Customers
(Personalization)
Elements of Lecture
Delivering Customer Service in Cyberspace
and CRM
Market Research for Electronic Commerce
Intelligent Agents in Customer-Related
Applications
Elements of Lecture
Customer Behavior Online
• A Company which changes its web site from passive
to interactive get the advantage of customers care.
• It will hear directly from its customers, even though
it uses intermediaries for its sales.
• The new interactive website allows company to
learn more about its customers, while educating
customers at the same time.
Customer Behavior Online
• Because companies work under increasing business environment pressure, they increase their competition efforts.
• The major pressures are labeled in the 3C's: Competition, Customers, and Change. So, finding and retaining customers is a major critical success factor for most businesses.
• The 3C's are needed to be controlled for
success of companies' work.
Customer Behavior Online
• We will discuss the new relationships that companies such as Ritchey Design are attempting to build with their customers. The key to build such relations is understanding customer's behavior.
• Consumer behavior is summarized in the
electronic commerce model of Consumer Behavior.
Model of EC Consumer Behavior
According to this model, the purchasing decision process is triggered by a customer's reaction to stimuli.
• The process is then influenced by the buyer characteristics, the environment, the technology, the EC logistics and other factors.
• Before we explore the details of the EC model, we need to describe who EC customers are, what they buy online and what the differences are between customers’ relations in direct sales versus intermediary-based markets.
Model of EC Consumer Behavior
Consumer Types
Individual consumers, who get much of the media attention
Organizational buyers who do most of the actual shopping in cyberspace, include governments, private corporations, resellers and public organizations. And their purchases are not intended for personal consumption.
Why is the consumer
shopping? And
what are the
benefits of
shopping online?
Purchases Types and Experiences
Consumers can also be classified into three
other categories
Impulsive buyers who purchase products quickly
Patient buyers who purchase products after
making some comparisons
Analytical buyers who do substantial research
before making the decision to purchase products
or services.
Personal Characteristics and Demographics of Internet Surfers
• The variables that influence the decision
making process include:
• Environmental variables,
• Personal characteristics variables, and
vendor-controlled variables.
Environmental variables
Social Variables: people are influenced by family members, friends, coworkers, and what is in fashion this year. Of special importance of ecommerce are discussion groups and internet communications, which communicate via chat rooms and bulletin boards and newsgroups.
Psychological Variables.
Environmental variables Continued
Cultural Variables: which make big difference if
a consumer lives near Silicon Valley in California
or in the mountains of Nepal, EC enhances the
cultural impact on IT adoption.
• Others: include the available information,
government regulations, legal constraints and
situational factors.
Personal Characteristics and Personal Differences
Several variables are unique to individual
customers. These include consumer resources,
age, knowledge, gender, educational level,
attitudes, motivation, marital status, personality,
values, lifestyles, and more.
Several consumer demographics provide
information on customer buying habits.
Personal Characteristics and Personal Differences Continued
The major demographics presented here include
gender, age, marital status, educational level,
occupation, and household income.
Therefore, most of the data presented here are
related to Internet surfers (potential buyers) and
are not about actual buyers.
• It’s interesting to note that the more experience
people have with the internet, the more likely
they are to spend money online.
• The two most cited reasons for not making
purchases on the web are security and difficulty in
judging the quality of the product. So users don’t
make purchases because they have heard that
buying on the web is not reliable or secure.Personal Characteristics and Personal Differences Continued
Consumer Purchasing Decision Making
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 purchasing 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.
Five Roles in Purchasing Decision Making
Consumer Purchasing Decision Making Continued
• When more than one individual play these roles, advertising and marketing strategies become very difficult.
• Several models have been developed in an effort
to describe the details of the purchase decision making process.
• These models provide a framework of learning about the process in an attempt to predict, improve, or influence consumer decisions.
The Purchasing Decision-Making Model
• It consists of five major phases, in each phase we can distinguish several activities and in some of them one or more decisions.
• The five phases are :•
• Need identification.• Information Search.• Alternatives evaluation.• Purchase and delivery• After-purchase evaluation.
• The first phase, need identification, occurs when
consumer is faced with an imbalance between
actual and desired states of a need.
• Here, a marketer’s goal is to get the consumer to
recognize such imbalance and then convince this
consumer that the product or service the seller
offers will certainly fill in the gap between the two
statesThe Purchasing Decision-Making Model
• In the phase two, Searches for information, on the
various alternatives available to satisfy the need.
Here we differentiate between a decision of what
products to buy -- product brokering, and from
whom to buy it--merchant brokering.
• This stage is basically an information search,
which can occur internally, externally or both.
The Purchasing Decision-Making Model
• The internal information search is the process of
recalling information stored in the memory.
• The external information search: seeks
information in the outside environment, typically
in internet databases. One example is searching
in google.com search engine.
The Purchasing Decision-Making Model
• The third phase, Alternatives, come after the
consumer will have a result of searched
information generate a set of alternatives to him.
• In the third phase, consumer will use the
information stored in the memory and obtained
from outside sources to develop a set of criteria.
The Purchasing Decision-Making Model
The phase four of making a purchasing decision
starts now.
Finally the post purchasing stage of customer
service i.e. maintenance and evaluation of the
usefulness of the product. This process can also
be seen as life cycle in which at the end the
product is disposed of.
The Purchasing Decision-Making Model
• The above model used and developed to build a
framework, called the consumer decision support
system CDSS.
• This framework can help companies in using
internet technologies to improve, influence, and
control the decision process.
The Purchasing Decision-Making Model
Matching Products with Customers
• It’s type of the Relationship Marketing. Which is the 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?
• To be genuine one-to-one marketer, a company must
change its behavior toward an individual customer based
on what they know about the customer. So one-to-one
market treats different customers differently.
One-to-One Marketing : An Overview
• One of the benefits of doing business over the
Internet is that it enables companies to better
communicate with customers and better
understand customers’ needs and buying habits,
amazon.com emails customers announcements of
new books published in a customer’s area of
interest.
Matching Products with Customers
One-to-One Marketing : An Overview
• The actual detailed mechanics of building a one-
to-one relationship depend on understanding the
various ways customers are different and how
these differences should affect the firm’s behavior
toward particular, individual customers.
Matching Products with Customers
One-to-One Marketing : An Overview
• A company increases loyalty in its own customers, by establishing a learning relationship with each customer, starting with the most valuable customers.
• The learning relationship is a relationship that
gets better with every new interaction.
Matching Products with Customers
One-to-One Marketing : An Overview
Matching Products with Customers
• Customer Loyalty: it’s the degree to which a customer will stay with a specific vendor or brand. It’s an important element in customer purchasing behavior.
• Customer loyalty is one of the most significant
contributors to profitability.
• By keeping customers loyal a company can increase its profits because customers will buy more and over time sales will grow.
Issues in EC-Based One-to-One Marketing
• Cognitive Needs: gaining information about current and potential customers’ needs and converting those needs into demand is more feasible in EC than in any other marketing channel.
• E-Loyalty: it’s simply a customer loyalty to an e-tailer.
• Trust: The psychological status of involved parties
who are willing to pursue further interaction to achieve a planned goal.
Matching Products with Customers
Issues in EC-Based One-to-One Marketing
• Personalization: it refers to the process of matching
content, services, or products to individuals. The
matching process is based on what a company
knows about the individual user, this information is
usually referred to as a user profile which defines
customer preferences, behaviors and
demographics.
Issues in EC-Based One-to-One Marketing
Matching Products with Customers (Personalization)
• Personalization forms:• Rule-based filtering: a company asks the
consumer a series of yes/no multiple choice questions, the question may range from personal information to the specific information the customer is looking for on the web site.
• Content-Based Filtering: with this technique, vendors ask users to specify certain favorite products. Based on these user preferences, the vendor’s system will recommend additional products to the user.
Issues in EC-Based One-to-One Marketing
Matching Products with Customers (Personalization)
• Personalization forms: • Constraint-based filtering: similar to content-
based, but requires users to provide information about the preferred products. However, instead of asking many questions regarding specifications of products, takes as input a sequence of demographic and other constraints to represent a user’s preferences.
• Learning-agent technology: here, users don’t answer any questions because their preferences are collected by cookies or other technologies while they surf the web.
Issues in EC-Based One-to-One Marketing
Matching Products with Customers (Personalization)
• Personalization forms:•
• Collaborating Filtering: A personalization
method that uses customer data to predict, based
on formulas derived from behavioral sciences,
what other products or services a customer may
enjoy; predictions can be extended to other
customers with similar profiles.
Matching Products with Customers (Personalization)
Issues in EC-Based One-to-One Marketing
Delivering Customer Service in Cyberspace and CRM
• Customer Service is a series of activities designed
to enhance customer satisfaction, that is, the
feeling that a product or service has met the
customer's expectation.
• Customer service is responsible for resolving
problems customers encounter in any phase of
the purchase decision-making process.
• When customer services are supplied over the internet, sometimes automatically, it's referred to as e-service.
• E-service often provides online help for online transactions. In addition, even if a product is purchased off-line, customer service may be provided online.
Delivering Customer Service in Cyberspace and CRM
E-Services
Delivering Customer Service in Cyberspace and CRM
• There are three levels of service:•
• Foundation of Service: this includes the minimum
necessary services such as site responsibilities, site
effectiveness and order fulfillment.
• Customer-Centered services: these are services
that make the difference; they include order tracing,
configuration and customization, and security/trust.
• Value added services: these are extra services such
as dynamic brokering, online auctions or online
training and education.
E-Services
Delivering Customer Service in Cyberspace and CRM
• There are four phases for a product life cycle, they are presented as follows:
• Requirements: Assisting the customer to determine
his or her needs, for example by photographs of a product, video presentations, textual description articles, etc.
• Acquisition: Helping the customer to acquire a specific product or service, e.g., online order entry, negotiations, closing of sale, downloadable software.
Product Life Cycle
Delivering Customer Service in Cyberspace and CRM
• There are four phases for a product life cycle, they are presented as follows:
• Ownership: supporting the customer on an ongoing basis, e.g. interactive online user groups, online technical support, frequently asked questions and answers, resource libraries, newsletters and online renewal of subscriptions.
• Retirement: Helping the client to dispose of a service or product when the product is no longer of use to the customer, e.g. online resale, classified ads.
Product Life Cycle
• CRM: an approach that recognizes that customers are the
core of the business and that a company's success depends
on effectively managed their relationship with them.
• Customer Service Functions: The form the customers'
service take on the web, such as answering customer
inquiries, providing search and comparison capabilities,
providing technical information to customers, allowing
customers to track order status and allowing customers to
place an online order.
Delivering Customer Service in Cyberspace and CRM
• Customer Service Tools: the followings are
some tools used in serving customers and
satisfying there needs by answering their inquiries
related to some specific products or services.
Delivering Customer Service in Cyberspace and CRM
• Personalized Web Pages:• The tool which gives the ability for customers to
create their own pages. These pages can be used to record customer purchases and preferences.
• FAQs• Frequently Asked Questions, a feature which is
simple and inexpensive that can be used to handle repetitive customer questions. However, FAQs can't answer all customers' questions, nonstandard questions should be sent and responded to via email.
Delivering Customer Service in Cyberspace and CRM
• Tracking Tools
• Companies can supply customers with tracking tools
so that customers can track their own orders, saving
the company time and money. Customers generally
like tracking tools as it gives them a quick and easy
way to check on the status of their purchased
products.
Delivering Customer Service in Cyberspace and CRM
Delivering Customer Service in Cyberspace and CRM
Customer Relationship Management
• Help desks and call centers
• One of the most important customer service tools,
by which customers can drop in at physical site or
communicate by telephone, fax, or email. Because
the communications was initially conducted by
telephone, the remote help desk is often called the
call center.
• Help desks and call centers
• A help desk or call centre is a place where all
customer contact is directed.
• Staff of the call centre has access to the necessary
information to provide service to customers.
• There are a number of organizations that provide
this service for a variety of companies thereby
keeping the costs down for each organization.
Delivering Customer Service in Cyberspace and CRM
• Real-Time Service Chat• By using products like Live Person from
liveperson.com or Webex Oncall from webex.com, you can deliver personal services either as a text-base chat or audio.
• Many companies have found that a single support representative can work with several customers simultaneously when using a text-based service.
• The benefits of voice/audio are obvious but add significantly to the cost.
Delivering Customer Service in Cyberspace and CRM
• E-Learning as a Service• An even more sophisticated way to deliver product
and service support is by using one of the many video-based, e-learning services.
• These are offered in two ways: • First as an archived or library product; and second,
as real time. • A real-time service that represents one of the new
breeds of offerings is Essential Talk from the Essential Talk Network.
Delivering Customer Service in Cyberspace and CRM
Delivering Customer Service in Cyberspace and CRM
• E-Learning as a Service•
• This service operates like a radio talk show with broadcast quality sound and interactivity using either posted chat or phone-in.
• One way to use this service is to record a session on a
particular topic and then make it available from a library as users require the information.
• These sessions could be comprehensive “how to’s” with
voice, slides, documents, and diagrams made available to the user
• The goal of market research is to find information
and knowledge that describes the relationships
among consumers, products, marketing methods,
and marketers.
• Another goal is to discover marketing opportunities
and issues, to establish marketing plans, to better
understand the purchasing process, and to
evaluate marketing performance.
Market Research for Electronic Commerce
Market Research for Electronic Commerce
• Market Segmentation: The process of dividing a
consumer market into logical groups for conducting
marketing research, advertising, and sales.
• Segmentation is done with the aid of tools such as
data modeling and data warehousing.
• Implementing Web-based Surveys: these types of
surveys aim to collect information about
customers' needs, satisfactions, and suggestions
toward a company specific product or service.
Online Market Research Methods
Online Market Research Methods
• Online focus groups: form of qualitative research in which a group of people is asked about their attitude towards a product, service, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting where participants are free to talk with other group members.
• Hearing Directly from customers: a method of
collecting customer’s information by conducting direct interviews with them.
Tracking Customers Movements
• Transaction log: A record of user activities at a company’s Web site.
• Clickstream behavior: Customer movements on the Internet.
• Web bugs: Tiny graphics files embedded on e-mail
messages and in Web sites that transmit information about the users and their movements to a Web server.
• Spyware Software that gathers user information over
an Internet connection without the user’s knowledge.
Intelligent Agents in Customer-Related Applications
• It’s a practical solution to handle the information overload by using intelligent and software agents to consider the relevant information of the huge number of customers, products and vendors.
• Search engines could be classified as a software agent and the most intelligent types of agents.
Intelligent Agents in Customer-Related Applications
• A search engine is computer software than can automatically contact other network resources on the internet, search for specific information or keyword and report the results.
• For example, people tend to ask for information such as requests for product information or pricing, this type of request is repetitive and answering such requests is costly when done by a human. Search engines deliver answers economically and efficiently by matching questions with FAQ templates, which include standard questions and answers to them.
Any Question