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2. E-commerce Marketing Concepts
CHAPTER 7
E-commerce Marketing Concepts
Created by, David Zolzer, Northwestern State University—Louisiana
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3. Learning Objectives Identify the key features of the Internet audience
Discuss the basic concepts of consumer behavior and purchasing decisions
Understand how consumers behave online
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4. Learning Objectives
Describe the basic marketing concepts needed to understand Internet marketing
Identify and describe the main technologies that support online marketing
Identify and describe basic e-commerce marketing and branding strategies
Explain how online market research is conducted
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5. Key Features of the Internet Audience
Number of users online in the United States
around 170 million in mid 2001
expected 215 million in 2005
rate of growth has begun to slow
Intensity and scope of use
Both increasing
56% of adult users logging on in a typical day
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6. Key Features of the Internet Audience
Demographics and access
some demographic groups have much high percentage of Internet users
different patterns of usage exist across groups
Ethnicity
Variation across ethnic groups not as wide as age groups
57% white
47% Hispanic
43% African American
Hispanics and African Americans going online at higher rates
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7. Key Features of the Internet Audience
Education
82% of individuals with a college degree online
39% with high school education of less online
Gender
Men accounted for the majority of Internet users at first
Women now outnumber men online
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8. Key Features of the Internet Audience
Lifestyle impact
Intense Internet usage may cause a decline in traditional social activities
Social development of children using Internet intensively instead of engaging in face-to-face interactions or undirected play out of doors may also be negatively impacted
Media choices
More time using the Internet
Less time spent using traditional media
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9. Frequency of Daily Use of Various Internet Features
Page 336, Table 7.1
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10. A Growing Range of Online Activity
Page 377, Table 7.2
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11. Changing Demographic Differences
Page 338, Table 7.3
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12. Consumer Behavior Models
Consumer behavior is a social science discipline that attempts to model and understand the behavior of humans
Culture is the broadest factor to consumer behavior
Culture shapes basic human values, wants, perceptions, and behaviors
Subcultures are subsets of cultures that form around major social differences
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13. A General Model of Consumer Behavior
Page 341, Figure 7.1
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14. Consumer Behavior Models
Direct reference groups include one’s family, profession or occupation, religion, neighborhood, and schools
Indirect reference groups include one’s life-cycle stage, social class, and lifestyle group
Opinion leaders (virtual influencers) influence the behavior of others through their personality, skills, or other factors
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15. Consumer Behavior Models
Lifestyle group can be defined as an integrated pattern of activities (hobbies, sports, shopping likes and dislikes, social events typically attend), interests (food, fashion, family, recreation), and opinion (social issues, business, government)
Psychological profile is a set of needs, drives, motivations, perceptions, and learned behaviors
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16. Psychographic Profiles
Combines both demographic and psychological data and divides a market into different groups based on social class, lifestyle, and/or personality characteristics
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17. Factors that Predict Online Buying Behavior
Page 344, Figure 7.2
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18. The Purchasing Decision
Five stages in the consumer decision process:
awareness of need
search for more information
evaluation of alternatives
the actual purchase decision
post-purchase contact with the firm
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19. The Consumer Decision Process
Page 345, Figure 7.3
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20. Online Consumer Decision Process
Adds two new factors:
Web site capabilities -- the content, design, and functionality of a site
Consumer clickstream behavior -- the transaction log that consumers establish as they move about the Web and through specific sites
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21. A Model of Online Consumer Behavior
Page 346, Figure 7.4
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22. Seven Types of Online Sessions
Page 347, Table 7.4
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23. How Consumers Behave Online: Clickstream Analysis
about 40% of online users purchase something entirely online
another 40% of online users research products on the Web, but purchase them offline
Most online purchases involve small ticket items, with the top categories being books, music, apparel and accessories, software, and toys
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24. How Consumers Behave Online: Clickstream Analysis
More that 85% of shoppers go directly to vendors sites by typing a product into a search engine, going straight to the merchant’s site, or entering a store or brand name in a search engine
More that 80% of shoppers are shopping on the Web for specific products or items
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25. Increasing Online Purchases
There are a number of actions e-commerce could take to increase the likelihood that shoppers and non-shoppers would purchase online more frequently.
better prices
easier comparison shopping
easier returns
better security
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26. Online Shoppers Page 349, Figure 7.5
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27. Impact of Online Product Research on Offline Purchase Decisions
Page 349, Figure 7.6
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28. What Consumers Buy on the Web
Page 350, Figure 7.7
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29. How Shoppers Find Vendors and Stores Online
Page 351, Figure 7.8
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30. Intended Purchases on the Web
Page 352, Figure 7.9
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31. Factors that Would Encourage More Online Purchasing
Page 353, Table 7.5
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32. Basic Marketing Concepts
Marketing -- the strategies and actions firms take to establish a relationship with a consumer and encourage purchases of its products or services
Internet Marketing is using the Web -- as well as traditional channels -- to develop a positive, long-term relationship with customers, thereby creating a competitive advantage for the firm by allowing the firm to charge a higher price for products or services than it competitors can charge
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33. Basic Marketing Concepts
Firms within an industry compete with one another on four dimensions:
differentiation
cost
focus
scope
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34. Basic Marketing Concepts
Feature set is the bundle of capabilities and services offered by the product or service
Commodity is a good or service for which there are many dealers supplying the same product and all products in the segment are essentially identical
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35. Feature Sets
Core product is the core benefit the customer receives from the product
Actual product is the set characteristics designed to deliver the product’s core benefits
Augmented product is a product with additional benefits to customers beyond the core benefits embodied in the actual product
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36. Feature Set Page 355, Figure 7.10
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37. Products, Brands, and the Branding Process
Brand is a set of expectations that consumers have when consuming, or thinking about consuming, a product or service from a specific company
Branding is the process of brand creation
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38. Marketing Activities: From Products to Brands
Page 356, Figure 7.11
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39. Products, Brands, and the Branding Process
Closed loop marketing refers to when marketers are able to directly influence the design of the core product based on market research and feedback from the market
Brand strategy is a set of plans differentiating a product from it competitors, and communicating these differences effectively to the marketplace
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40. Products, Brands, and the Branding Process
Brand equity is the estimated value of the premium customers are willing to pay for using a branded product when compared to unbranded competitors
Brands are alive and well on the Web
Consumers are still willing to pay price premiums for products and service they perceive and differentiate
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41. Products, Brands, and the Branding Process
Customer acquisition costs refer to the overall costs of converting a prospect into a consumer, and include all marketing and advertising costs
Consumer retention costs are those costs incurred in convincing an existing customer to purchase again
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42. Products, Brands, and the Branding Process
“Law of One Price” -- With complete price transparency in a perfect information marketplace, there will be one world price for every product
Price dispersion refers to the difference between the highest and lowest prices in a market
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43. Please open file ch07b.ppt to continue viewing chapter 7.
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