Online Marketing Gay, Charlesworth & Esen Chapter Five

Buyer Behaviour “Effective strategic marketing requires business planners to be almost obsessive about understanding the needs of their customers.” Brennan et al (2003) “The unique characteristics of the Internet offer new ways for consumers to interact with one another, organizations and the wider e- marketplace.” Cotte et al (2006)

Understanding Buyer Behaviour Marketing Stimuli Product / Price / Place / Promotion / etc Other Stimuli Societal / Technological / Economic / Political / Legal Buyer’s Black Box Buyer characteristics Buyer decision process Buyer’s Response Product / brand choice Dealer / web site choice Purchase timing Frequency Amount

Consumer buying decision process Information search Problem recognition Evaluation of alternatives Post-purchase behaviour Purchase decision

Online Buyer Behaviour Although all steps in the consumer buying process might be affected by the Internet, “… it’s biggest impact is in the decision making process at the research stage.” (Yahoo! Inc. and OMD 2006) The study cites three key determinants in the online information search as: 1.Trusted sites 2.Choice of brands to compare 3.Competitive prices

The Purchase Behaviour Matrix In the Internet age, information about products is available from a myriad of off- and online sources. Furthermore, the purchase is not necessarily made from the vendor who provides the most significant information. Purchase behaviour variables for the web enabled customer include: researchpurchasefulfillmentpurchased from online home delivery same vendor that provided the original information online customer collects different vendor to that which provided the original information Offline literature onlinehome delivery same vendor that provided the original information onlineofflinecustomer collects different vendor to that which provided the original information

Online Customer Expectations The Internet gives impetus to the marketer’s objectives shifting from ‘helping the seller to sell’, to ‘helping the buyer to buy’. Customers now expect to be facilitated in their research for the product that most suitably meets their wants and needs. The web is a ‘pull’ media, meaning that the user, those to whom any marketing message is directed, requests the information rather than having it forced – or ‘pushed’ – for the marketer this means the customer chooses which marketing messages they see.

Online B2C Buyer Behaviour Two key aspects can be monitored to help assess that customer’s online behaviour: 1.Explicit behaviour based on: –Data provided by the user; eg. a profile for registration to a site. –Any recorded actions on the site; eg. signing up for an e-newsletter or placing an order. 2.Implied behaviour based on data derived from the observation of a user’s actions as they interact with the site.

Online B2B Buyer Behaviour Electronic communications not new – Internet preceded by electronic data interchange (EDI). New technology accelerated adoption of: –Electronic exchange mechanisms –E-supply chain management Web presence must appeal to all members of decision making unit. Web now considered to be an essential ‘tool of the trade’ in purchasing process.

Web Site Analytics The online marketer must be aware of how the use of technology can help collect data that facilitates the analysis of online behaviour. E-metrics vary depending on site objectives: Site objectivePotential e-metrics Increase salesSales value per visitor Average order size Conversion rate (sales / visitors) Provide after-sales service Visits to FAQ page Page downloads (eg instruction manuals) Generate sales leadsConversion rate (leads / visitors) Discount vouchers download Develop brandNumber of visits/visitors Depth of visit (how many pages accessed)

Behavioural & Contextual Targeting Industry split on definitions,current status: Contextual targetingBehavioural targeting Less complex – no user date required. On-site ads in context with content of page. Behaviour – prior or post – of the user of no significance to ads posted. More complex – user data required. Based on offline behavioural segmentation; eg benefits sought, purchase occasion, usage frequency etc. User data collection strategic activity.

Database Marketing “A list of customers’ and prospects’ records that enables strategic analysis, and individual selections for communication and customer service support. The data is organized around the customer.” (Tapp 2005) Kotler (2003) suggests four examples of when database marketing is unlikely to be worthwhile: 1.Where the product is a once in a lifetime purchase. 2.Where customers show little loyalty to a brand. 3.Where the unit sale is very small. 4.Where the cost of gathering information is too high.

Database Composition B2CB2B Age Income Birthday Family unit Location Interests Hobbies Purchasing habits Volume of previous purchases Frequency of previous purchases Profitability of customer Credit / debit history Customer’s share of organization’s business Buying practices and patterns