Online Consumer

The online consumerJohn Brissenden

16.02.10

Reading

Fill (2009), chapter 26

Learning outcomes

To understand the scale and nature of online purchasing

To consider the challenges of marketing online

To identify various forms of digital marketing communications

Source: warc.com

Percentage change in ad spend by medium, 1999-

2009

UK rate of adoption of different digital mediaSource: MORI Technology Tracker, September 2006. See www.mori.com/technology/techtracker.shtml for details

Chaffey et al (2006)

Development of experience in internet usage

Chaffey et al (2006)

A summary of how the internet can impact on the buying process for a new purchaser

Chaffey et al (2009)

Cognitive modelsConsumer choice is a problem-solving and

decision-making sequence

Customers do not have perfect knowledge of all products – the total set

They are only aware of a proportion – the awareness set

They reduce these to a more manageable set – the evoked set

Decision-making

Kotler (2000)

Total set choice setconsideration setawareness set

decision

IBMAppleDellHP

ToshibaCompaq

NEC Tandy

?IBM

AppleDell

IBMAppleDell

Toshiba

IBMAppleDellHP

ToshibaCompaq

Consumer buying process

Cognitive models generally contain 5 phases

Problem recognition

Information search

Evaluation of alternatives

Purchase

Post-purchase evaluation

Dibb & Simkin (2001)

What is your problem?

“I’ve just been dumped.”

“I have a long commute every day.”

“I’ve been left £20,000 in a will.”

Routine problem solving

Regular

Habitual

Impulse

Limited problem solving

Less frequent

More deliberate decision-making

Moderate expense

Extended problem solving

Much higher risk

More investment of time, money and effort

Extremely infrequent

Long-term commitment

Difficulties to overcome

Different products are bought in different ways

Length of the buying decision process varies

For some products, not all stages are required

Perceived riskConcerns the UNCERTAINTY of the proposed purchase and the outcomes of the purchase decision

Risk is perceived because:

The consumer has little or no experience of the performance of the product, or the decision process associated with it

The consumer may lack the ability to make the “right” decision

Resources such as time and money are limited, and so may force the consumer to buy one product instead of another

Risk is related to brand-based decisions and product categories

Reflects:

Attitude to risk

Involvement

Trust

Risk in context

Situation varies according to:

Perceptions of the shopping experience

Time the purchase is made in the context of other activities

Image of different stores

Risk associated with products in each store

Individual’s attitude to risk varies with age, education, culture, personality

Product may convey risk because of price, experience or emotional attributes

SearchSearch CredenceCredenceExperienceExperience

Differentiation

Most goods

Most services

Clo

thin

g

Hair

cu

ts

Jew

ellery

Fu

rnit

ure

TV

rep

air

Resta

ura

nt

meals

Ch

ild

care

Cars

Hou

ses

Holid

ays

Car

rep

air

Den

tal care

Leg

al serv

ices

Med

ical d

iag

nosisEasy

toEvaluate

Difficultto

Evaluate

Zedithami in Donnelly & George (1981), reproduced in Kotler

(2000)

Dog

s

Slide 2.

Chaffey, Ellis-Chadwick, Mayer and Johnston, Internet Marketing, 4th Edition, © Pearson Education Limited 2009

Figure 2.10 Percentage (by category) who bought online after researching onlineSource: EIAA (2008)

Shopping from home Source: BMRB/Ipsos Mori/Mintel, March 09

Auction sites

Source: BMRB/Ipsos Mori/Mintel, March 09

All online shopping

Age Socio-Economic Group

Source: BMRB/Ipsos Mori/Mintel, March 09

Online advertisingOffline advertising tends to create brand image

Online ads tend to involve a call-to-action

Banner ads have fallen from favour

Pop-up ads (interstitial/superstitial)

Click throughs to microsites are much higher than through banners

Interactive sales promotionCan be used with mobile devices as well as the full web

Tend to involve sampling, free gifts, e-coupons, price deals and competitions

Engage consumers and enable data capture

Normal SP motivation is to prompt immediate purchase - but this does not apply online

Growth of SMS, email and web-based promotions

Online PR

Online PR does not work separately from offline PR

Some market segments are much more active online

Tension between traditional need for control and the openness of networked communications

Important to identify the hubs in any network