intro2e_ch04.ppt

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Chapter 4

Online Consumer Behavior,

Market Research, and Advertisement

Chapter 4

Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 1

Learning Objectives

1. Understand the decision-making process ofconsumer purchasing online.

2. Describe how companies are building one-to-one relationships with customers.

3. Explain how personalization is accomplishedonline.

4. Discuss the issues of e-loyalty and e-trust inEC.

5. Describe consumer market research in EC.


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Learning Objectives

6. Describe Internet marketing in B2B, includingorganizational buyer behavior.

7. Describe the objectives of Web advertisingand its characteristics.

8. Describe the major advertising methods usedon the Web.

9. Describe various online advertisingstrategies and types of promotions.

10.Describe permission marketing, admanagement, localization, and otheradvertising-related issues.

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Learning about Consumer Behavior

and Purchasing Decisions Online

THE CONSUMER PURCHASEDECISION-MAKING PROCESSA Generic Purchasing-Decision Modelproduct brokering

Deciding what product to buy.merchant brokering

Deciding from whom (from what merchant) tobuy a product.

A Customer Decision Model in WebPurchasing


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Learning about Consumer Behaviorand Purchasing Decisions Online

MASS MARKETING, MARKETSEGMENTATION, AND ONE-TO-ONE

MARKETING

one-to-one marketingMarketing that treats each customer in a

unique way.

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Personalization, Loyalty,

Satisfaction, and Trust in EC

personalizationThe matching of services, products, and

advertising content with individual

consumers and their preferences.

user profileThe requirements, preferences,

behaviors, and demographic traits of a

particular customer.


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Personalization, Loyalty,Satisfaction, and Trust in EC

Major strategies used to compile userprofiles:

Solicit information directly from the userObserve what people are doing onlinecookieA data file that is placed on a users hard driveby a remote Web server, frequently withoutdisclosure or the users consent, that collects

information about the users activities at a site.

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Build from previous purchase patternsPerform marketing researchMake inferences

behavioral targetingThe use of information collected on an individuals

Internet-browsing behavior to select which advertisementsto display to that individual.

Personalized servicesIndividual servicesUniversal services


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CUSTOMER LOYALTYe-loyalty

Customer loyalty to an e-tailer or loyaltyprograms delivered online or supportedelectronically.

TRUST IN ECtrust

The psychological status of willingness todepend on another person or organization.

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Market Research for EC

METHODS FOR CONDUCTINGMARKET RESEARCH ONLINE

WHAT ARE MARKETERS LOOKINGFOR IN EC MARKET RESEARCH?

Market Segmentation Research


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MARKET RESEARCH FOR ONE-TO-ONE

Direct Solicitation of InformationImplementing web-based surveysOnline focus groups

Hearing directly from customers

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Observing Customerstransaction log

A record of user activities at a companys Web site.

clickstream behaviorCustomer movements on the Internet.

Web bugsTiny graphics files embedded in e-mail messages and in

Web sites that transmit information about users and their

movements to a Web server.

spywareSoftware that gathers user information over an Internet

connection without the users knowledge.


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clickstream dataData that occur inside the Webenvironment; they provide a trail of theusers activities (the users clickstreambehavior) in the Web site.

Web miningWeb mining explores both Web content datamining techniques for discovering andextracting information from Web documentsand Web usage.

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collaborative filteringA market research and personalization method thatuses 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 customerswith similar profiles.

Rule-based filteringContent-based filteringActivity-based filtering


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LIMITATIONS OF ONLINE MARKETRESEARCH AND HOW TO

OVERCOME THEM

BIOMETRIC MARKETINGbiometricsAn individuals unique physical or behavioral

characteristics that can be used to identify

an individual precisely (e.g., fingerprints).

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Internet Marketing in B2B

ORGANIZATIONAL BUYERBEHAVIOR

A Behavioral Model of OrganizationalBuyers

THE MARKETING AND ADVERTISINGPROCESSES IN B2B


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Internet Marketing in B2B

METHODS FOR B2B ONLINEMARKETING

Targeting CustomersElectronic WholesalersOther B2B Marketing Services

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Web Advertising

OVERVIEW OF WEB ADVERTISINGinteractive marketing

Online marketing, facilitated by the Internet,

by which marketers and advertisers can

interact directly with customers andconsumers can interact with advertisers/

vendors.


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Web Advertising

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Web Advertising

SOME INTERNET ADVERTISING TERMINOLOGY ad views

The number of times users call up a page that has a banneron it during a specific period; known as impressions or pageviews.

buttonA button is a small banner that is linked to a Web site. It cancontain downloadable software.

pageA page is an HTML (Hypertext Markup Language) documentthat may contain text, images, and other online elements,such as Java applets and multimedia files. It can begenerated statically or dynamically.


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Web Advertising

click (click-through or ad click)A count made each time a visitor clicks onan advertising banner to access theadvertisers Web site.

CPM (cost per thousand impressions)The fee an advertiser pays for each 1,000

times a page with a banner ad is shown.conversion rate

The percentage of clickers who actuallymake a purchase.

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Web Advertising

click-through rateThe percentage of visitors who are exposed to abanner ad and click on it.

click-through ratioThe ratio between the number of clicks on a bannerad and the number of times it is seen by viewers;

measures the success of a banner in attracting

visitors to click on the ad.

hitA request for data from a Web page or file.


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Web Advertising

visitA series of requests during one navigation of a Website; a pause of a certain length of time ends a visit.

unique visitsA count of the number of visitors entering a site,regardless of how many pages are viewed per visit.

stickinessCharacteristic that influences the average length oftime a visitor stays in a site.

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Web Advertising

advertising networksSpecialized firms that offer customized

Web advertising, such as brokering ads

and targeting ads to select groups of

consumers.


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Online Advertising Methods

bannerOn a Web page, a graphic advertising display

linked to the advertisers Web page.

keyword bannersBanner ads that appear when a predetermined

word is queried from a search engine.random banners

Banner ads that appear at random, not as the

result of the users action.

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banner swappingAn agreement between two companies to

each display the others banner ad on its

Web site.

banner exchangesMarkets in which companies can trade or

exchange placement of banner ads on each

others Web sites.


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POP-UP AND SIMILAR ADSpop-up ad

An ad that appears in a separate window before,after, or during Internet surfing or when reading e-mail.

pop-under adAn ad that appears underneath the current browserwindow, so when the user closes the active windowthe ad is still on the screen.

interstitialAn initial Web page or a portion of it that is used tocapture the users attention for a short time whileother content is loading.

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E-MAIL ADVERTISINGE-Mail Advertising ManagementE-mail hoaxesFraud

E-Mail Advertising Methods andSuccessesNEWSPAPER-LIKE AND CLASSIFIED

ADS

Classified Ads


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SEARCH ENGINE ADVERTISEMENTImproving a Companys Search-Engine

Ranking (Optimization)

Paid Search-Engine InclusionAdvertising in social networks

GoogleThe Online Advertising King

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ADVERTISING IN CHAT ROOMS,BLOGS, AND SOCIAL NETWORKS

Advertise in Videos

OTHER FORMS OF ADVERTISINGadvertorialAn advertisement disguised to look like

editorial content or general information.


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Web 2.0 and AdvertisingAdvertising in NewslettersPosting Press Releases Onlineadvergaming

The practice of using computer games to

advertise a product, an organization, or aviewpoint.

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Advertising Strategies

and Promotions Online

affiliate marketingA marketing arrangement by which anorganization refers consumers to the sellingcompanys Web site.

ADS AS A COMMODITY

viral marketingWord-of-mouth marketing by which customerspromote a product or service by telling othersabout it.Viral Marketing in Social Networks


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Advertising Strategiesand Promotions Online

CUSTOMIZING ADS Webcasting

A free Internet news service that broadcasts personalizednews and information, including seminars, in categoriesselected by the user.

ONLINE EVENTS, PROMOTIONS, ANDATTRACTIONS Live Web Events admediaries

Third-party vendors that conduct promotions, especially large-scale ones.

Selling Space by Pixels: The Case of Million DollarHomepage

Advertising in Second Life and Other Virtual Worlds

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Advertising Strategies

and Promotions Online


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Special Advertising Topics

PERMISSION ADVERTISINGspamming

Using e-mail to send unwanted ads

(sometimes floods of ads).

permission advertising (permissionmarketing)

Advertising (marketing) strategy in which

customers agree to accept advertising and

marketing materials (known as opt-in).

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Special Advertising Topics

ADVERTISEMENT AS A REVENUEMODEL

MEASURING ONLINEADVERTISINGS EFFECTIVENESS

WIRELESS ADVERTISINGAD CONTENTSOFTWARE AGENTS IN MARKETING

AND ADVERTISING APPLICATIONS


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Managerial Issues

1. Do we understand our customers?2. Who will conduct the market research?3. Are customers satisfied with our Web site?4. How can we use social networks for advertising?5. How do we decide where to advertise?6. What is our commitment to Web advertising, and how

will we coordinate Web and traditional advertising?

7. Should we integrate our Internet and non-Internetmarketing campaigns?

8. What ethical issues should we consider?9. Are any metrics available to guide advertisers?10.Which Internet marketing/advertising channel to use?

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Summary

1. The online consumer decision-making process.2. Building one-to-one relationships with customers.3. Online personalization.4. Increasing loyalty and trust.5. EC customer market research.6. B2B Internet marketing methods and organizational

buyers.

7. Objectives and characteristics of Web advertising.8. Major online advertising methods.9. Various advertising strategies and types of promotions.10.Permission marketing, ad management, and

localization.


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All rights reserved. No part of this publication may be reproduced, stored in a

retrieval system, or transmitted, in any form or by any means, electronic,mechanical, photocopying, recording, or otherwise, without the prior written

permission of the publisher. Printed in the United States of America.

intro2e_ch04.ppt

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