Chapter 6 - E-commerce marketing concepts. In this chapter, you will learn to: Consumers online: the internet audience and consumer behavior, consumer behavior models, the online purchasing decision, a model of online consumer behavior,...
Ecommerce business. technology. society seventh edition Kenneth C Laudon Carol Guercio Traver Copyright © 2011 Pearson Education, Inc Copyright © 2011 Pearson Education, Inc Chapter 6 E-commerce Marketing Concepts Copyright © 2011 Pearson Education, Inc Copyright © 2011 Pearson Education, Inc Copyright © 2010 Pearson Education, Inc Slide 62 Netflix Strengthens and Defends Its Brand Class Discussion What was Netflix’s first business model? Why did this model not work and what new model did it develop? Why is Netflix attractive to customers? How does Netflix distribute its videos? What is Netflix’s “recommender system?” How does Netflix use data mining? Is video on demand a threat to Netflix? Copyright © 2011 Pearson Education, Inc Slide 63 Consumers Online: The Internet Audience and Consumer Behavior Around 70% (82 million) U.S households have Internet access in 2010 Growth rate has slowed Intensity and scope of use both increasing Some demographic groups have much higher percentages of online usage than others Copyright © 2011 Gender, age, ethnicity, community type, income, education Pearson Education, Inc Slide 64 The Internet Audience and Consumer Behavior (cont’d) Broadband audience vs dial-up audience Purchasing behavior affected by neighborhood Lifestyle and sociological impacts Use of Internet by children, teens Use of Internet as substitute for other social activities Media choices Traditional media competes with Internet for attention Copyright © 2011 Pearson Education, Inc Slide 65 Consumer Behavior Models Study of consumer behavior Social science Attempts to explain what consumers purchase and where, when, how much and why they buy Consumer Predict Based behavior models wide range of consumer decisions on background demographic factors and other intervening, more immediate Copyright © 2011 variables Pearson Education, Inc Slide 66 A General Model of Consumer Behavior Copyright © 2011 Figure 6.1, Page 352 Pearson Education, Inc SOURCE: Adapted from Kotler and Armstrong, 2009 Slide 67 Background Demographic Factors Culture: Broadest impact Subculture (ethnicity, age, lifestyle, geography) Social Reference groups Direct reference groups Indirect reference groups Opinion leaders (viral influencers) Lifestyle groups Psychological Copyright © 2011 Psychological profiles Pearson Education, Inc Slide 68 The Online Purchasing Decision Psychographic Combines research demographic and psychological data Divides market into groups based on social class, lifestyle, and/or personality characteristics Five stages in the consumer decision process: Awareness of need Search for more information Evaluation of alternatives Actual purchase decision Copyright © 2011 Pearson Education, Inc Post-purchase contact with firm Slide 69 The Consumer Decision Process and Supporting Communications Copyright © 2011 Figure 6.3, Page 356 Pearson Education, Inc Slide 610 Customer Relationship Management (CRM) Systems Record all contact that customer has with firm Generates customer profile available to everyone in firm with need to “know the customer” Customer profiles can contain: Map of the customer’s relationship with the firm Product and usage summary data Demographic and psychographic data Profitability measures Contact history Copyright © 2011 Marketing and sales information Pearson Education, Inc Slide 638 A Customer Relationship Management System Copyright © 2011 Figure 6.14, Page 388 Pearson Education, Inc SOURCE: Compaq, 1998 Slide 639 Market Entry Strategies Copyright © 2011 Figure 6.15, Page 390 Pearson Education, Inc Slide 640 Establishing the Customer Relationship Advertising Banner Networks advertisements Ad server selects appropriate banner ad based on cookies, Web bugs, backend user profile databases Permission Affiliate marketing marketing Copyright © 2011 Pearson Education, Inc Slide 641 How an Advertising Network such as DoubleClick Works Copyright © 2011 Figure 6.16, Page 393 Pearson Education, Inc Slide 642 Establishing the Customer Relationship (cont’d) Viral marketing Getting customers to pass along company’s marketing message to friends, family, and colleagues Blog marketing Using blogs to market goods through commentary and advertising Social network marketing, social shopping Mobile marketing Copyright © 2011 Pearson Education, Inc Slide 643 Insight on Business Social Network Marketing: Let’s Buy Together Class Discussion Why social networks represent such a promising opportunity for marketers? What are some of the new types of marketing that social networks have spawned? What are some of the risks of social network marketing? What makes it dangerous? Have you ever responded to marketing messages on Facebook or another network? Copyright © 2011 Pearson Education, Inc Slide 644 Establishing the Customer Relationship (cont’d) Wisdom of crowds (Surowiecki, 2004) Large aggregates produce better estimates and judgments Examples: Prediction markets Folksonomies Social tagging Brand leveraging Copyright © 2011 Pearson Education, Inc Slide 645 Customer Retention: Strengthening the Customer Relationship Mass marketing Direct marketing Micromarketing Personalized, one-to-one marketing Segmenting market on precise and timely understanding of individual’s needs Targeting specific marketing messages to these individuals Positioning product vis-à-vis competitors to be truly unique Personalization Can increase consumers sense of control, freedom Can also result in unwanted offers or reduced anonymity Copyright © 2011 Pearson Education, Inc Slide 646 The Mass MarketPersonalization Continuum Copyright © 2011 Figure 6.17, Page 404 Pearson Education, Inc Slide 647 Other Customer Retention Marketing Techniques Customization Customer co-production Transactive content: Combine traditional content with dynamic information tailored to each user’s profile Customer service FAQs Real-time customer service chat systems Automated response systems Copyright © 2011 Pearson Education, Inc Slide 648 Net Pricing Strategies Pricing Integral part of marketing strategy Traditionally Fixed based on: cost Variable costs Demand curve Price discrimination Selling products to different people and groups based on willingness to pay Copyright © 2011 Pearson Education, Inc Slide 649 Net Pricing Strategies (cont’d) Free and freemium Can be used to build market awareness Versioning Creating multiple versions of product and selling essentially same product to different market segments at different prices Bundling Offers consumers two or more goods for one price Dynamic pricing: Auctions Yield management Copyright © 2011 Pearson Education, Inc Slide 650 Channel Management Strategies Channels: Different and sold Channel methods by which goods can be distributed conflict: When new venue for selling products or services threatens or destroys existing sales venues E.g online airline/travel services and traditional offline travel agencies Some manufacturers are using partnership model to avoid channel Copyright © 2011 conflict Pearson Education, Inc Slide 651 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 Copyright © 2011 Pearson Education, Inc. Publishing as Prentice Hall Copyright © 2011 Pearson Education, Inc ... Slide 6 16 What Consumers Buy Online Copyright © 2011 Figure 6. 6, Page 361 SOURCES: Based on data from eMarketer, Inc., 2010b; Internet Retailer, 2010 Pearson Education, Inc Slide 6 17 Intentional Acts: How Shoppers Find ... Pearson Education, Inc Post-purchase contact with firm Slide 6 9 The Consumer Decision Process and Supporting Communications Copyright © 2011 Figure 6. 3, Page 3 56 Pearson Education, Inc Slide 6 10 A Model of Online Consumer Behavior.. .Chapter 6 E-commerce Marketing Concepts Copyright © 2011 Pearson Education, Inc Copyright © 2011 Pearson Education, Inc Copyright © 2010 Pearson Education, Inc Slide 6 2 Netflix