day 11 elc 310. copyright 2005 prentice hallch 1 -2 agenda questions? assignment 2 posted. – elc...

Day 11

ELC 310

Copyright 2005 Prentice Hall Ch 1 -2

Agenda

• Questions? • Assignment 2 posted .

– ELC 310 assignment Two.docx– Internal Data J.R. Bjerklie, Associate Director for Institutional

Research • http://www.umfk.edu/ie/stabstract/default.cfm?ref=6#

– Due Oct 18

• No Class Oct 15 Fall break• No class on Nov. 1 and 8 I will be traveling, alternative

arrangements will be made. • Connected consumers online• CrowdSourcing

http://www.umfk.edu/ie/stabstract/default.cfm?ref=6

E-Marketing/7EChapter 7

Connected Consumers Online

©2014 Pearson Education, Inc. publishing as Prentice Hall

Chapter 7 Objectives• After reading Chapter 7, you will be able to:

–Discuss general statistics about the internet population.–Describe the internet exchange process and the technological, social/cultural and legal context in which consumers participate in this process.–Outline the broad individual characteristics, psychology, and consumer resources that consumers bring to the online exchange.–Highlight the five main categories of outcomes that consumers seek from online exchanges.

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The Customer’s Story• A typical one-hour adventure in the life of a 25-

year-old professional, Justin:– Tunes his iPod to the latest Diggnation podcast

while his TV is tuned to a soccer game and his smartphone and iPad tablet are within reach.

– Picks up iPad to find a blog mentioned during the podcast, sees a video on the blog, tunes it on his TV set and texts a friend about the video.

– Justin searches for the video title on Google and finds a job posting on Vimeo, an online video-posting site.

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http://revision3.com/diggnation/

https://vimeo.com/


The Customer’s Story, cont.

– He posts a link to the video and Vimeo site to his Twitter stream.

• Justin is the new consumer: a multitasker attending to different electronic media simultaneously.

• How can a marketer capture dollars from advertising online, selling music downloads, charging fees for social media subscriptions?

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https://twitter.com/


• 85% of U.S. consumers used the internet in 2012.

• Less connected groups tend to be:– Older– Less educated– Hispanic– Lower income or disability– http://pewinternet.org/Trend-Data-%28Adult

s%29/Whos-Online.aspx

Consumers in the 21st Century

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http://pewinternet.org/Trend-Data-(Adults)/Whos-Online.aspx

http://pewinternet.org/Trend-Data-(Adults)/Whos-Online.aspx


Consumers in the 21st Century, cont.

• Approximately 1.8 billion people have access to the internet, 32.7% of the global population.

• Top ten countries account for 60% of all users and adoption rates range from 10-84%.

• internet usage in developed nations has reached a critical mass, leading marketers to ask more questions about consumer behavior on the internet.

• http://www.internetworldstats.com/stats.htm

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http://www.internetworldstats.com/stats.htm

http://www.internetworldstats.com/stats.htm


Internet Reaches Maturity: 1995-2012

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Consumer Behavior Online

• Many consumer behavior principles that describe offline buyer behavior also apply to online behavior.

• Exhibit 7.2 explains some consumer behavior theories for online buyer behavior.– Scarcity– Popularity– Affinity– Authority– Consistency– Reciprocity

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Social Psychology of Social Shopping

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• Exchange is a basic marketing concept.– It refers to the act of obtaining a valued

object by offering something in return.• Exchange occurs within the following contexts:– Technological – Social/cultural – Legal

The Internet Exchange Process

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The Online Exchange Process

Technological, Social/Cultural, Legal Contexts

Marketing Stimuli

IndividualCharacteristicsResources

Internet Exchange

Outcomes1. Connect 2. Create3. Enjoy4. Learn5. Trade6. Give

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Technological Context• 66-77% of online Americans connect to the

internet at home with broadband.• Broadband users enjoy more multimedia games,

music, and entertainment because they download quickly.

• The typical U.S. home has 26 different electronic devices for media and communication.

• Web 2.0 technologies are driving marketing strategies and tactics.

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2012 U.S. Daily Media Use (Minutes/day)

TV/Video*279

Traditional TV****100

Internet**167

Radio**94

Newspapers**26

Magazines**18

Facebook***14

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Error on page 178 of textbook, on bottom of left hand column


16


Social and Cultural Contexts

• Three cornerstones for attracting customers online:– Reputation: Brand image and reputation are based

on the market’s perception.– Relevance: Consumers don’t like being interrupted

with irrelevant communication.– Engagement: Marketers must provide relevant

content or entertainment.

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Engaging Customers With Relevant Content

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• In spite of the Can-Spam act the number of unsolicited emails was 71.9% in June 2012.

• When the recording industry sued illegal music file downloaders, consumer behavior was affected.– In 2002, 37% of online consumers shared music

files, but the percentage has dropped.– The Recording Industry Association of America

still claims $12.5B in annual losses from music piracy.

Legal Context

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• Individual characteristics affect internet use.– Demographics such as age, income,

education, ethnicity, and gender. – Attitudes toward technology.–Online skill and experience.– Goal orientation.

Individual Characteristics & Resources

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Consumer Resources

• Consumers perceive value as benefits minus costs. V=B-C

• These costs constitute a consumer’s resources for exchange:–Money– Time – Energy –Psychic costs

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U.S. Combined Home/Work Internet Usage

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Exchange Outcomes

• There are 6 basic things that people do online:

1. Connect

2. Create

3. Enjoy

4. Learn

5. Trade

6. Give• Each is ripe with marketing opportunity.

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Connecting Online in the U.S.(connect)

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Creating & Uploading Content in the U.S.(create)

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Entertainment Online in the U.S.(Enjoy)

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Top 10 Search Terms for 2011(learn)

Google Yahoo! Bing

Rank Term Rank Term Rank Term

1 Rebecca Black 1 iPhone 1 Fauja Singh

2 Google+ 2 Casey Anthony 2 Katy Perry

3 Ryan Dunn 3 Kim Kardashian 3 The cardinals

4 Casey Anthony 4 Katy Perry 4 Harry Potter

5 Battlefield 3 5 Jennifer Lopez 5 Adele

6 iPhone 5 6 Lindsay Lohan 6 Rory Mcllroy

7 Adele 7 American Idol 7 Japan Earthquake

8 Tepco 8 Jennifer Aniston 8 Job crisis

9 Steve Jobs 9 Japan Earthquake 9 Foreclosures

10 iPad2 10 Osama Bin Laden 10 Weather disasters

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Learning and Getting Information

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Trading Online in the U.S.(Trade)

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Giving Online

• Trendwatcher.com mentions “Generation Generosity” as one of the top global consumer trends.

• 25% of Americans made an online donation to charity in 2011.

• Kickstarter.com offers a Web platform for individuals seeking funding for creative projects.

• http://mashable.com/2011/03/14/social-good-fundraising-tools/

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http://mashable.com/2011/03/14/social-good-fundraising-tools/



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 © 2014 Pearson Education, Inc. Publishing as Prentice Hall

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Crowdsourcing

terms

• Amateur A person without formal training or professional credentials in a specific field.• Brief A document giving essential information concerning the problem that needs

solving.• Creative A term used in the advertising industry to describe people who produce

creative products. For example designers or copywriters.• Collaboration An online community working together on a single project.• Collective intelligence A shared intelligence from the collaboration of many individuals.• Community A social network of individuals who interact through a specific medium.• Crowd A large undefined group of people made up of many online individuals.• Crowdsourcing Taking a job traditionally performed by a professional and distributing it

to an undefined, generally large group of people in the form of an open call.• Folksonomy A form of crowdsourcing also known as collaborative tagging, social

classification, social indexing or social tagging. The practice and method of collaboratively creating and managing tags to interpret and categorize content.

terms• Ideation A process during which new ideas are created.• Intellectual property (IP) Legal property rights over intangible creations of the mind, both

artistic and commercial.• New agency model The incorporation and use of crowdsourcing platforms to source marketing

and communications solutions.• Open Call When a request is made for anyone to submit solutions to a problem.• Open Source In the context of Crowdsourcing this is when a cooperative activity is initiated and

voluntarily undertaken by members of the public, not by a client or crowdsourcer.• Outsourcing Work is conducted outside of an organisation by a specific defined individual or

group of people.• Spec work Fully executed creative work requested by crowdsourcing platforms that is not paid

for upfront, and is only paid for when the work is chosen or accepted. Work that is not selected is not paid for.

• User-generated Various kinds of media content, publically available, that are produced by endusers.

• Wiki A simple website that can be edited in real time by a number of users.• Wisdom of the crowd The collective knowledge, opinion or skills of a group of individuals rather

than a single expert used to solve a problem. Usually used for consumer feedback and new product development.

What is it?

Image credit: Alexander Kesselaar

“Crowdsourcing is the act of taking a task traditionally performed by an employee or contractor and outsourcing it to an undefined, generally large group of people in the form of an open call” (Wikipedia).

Its not a new idea…

The 19th century Oxford English Dictionary was crowdsourced.

In 1714 the Longitude prize was awarded for the simplest solution for determining a ships longitude.

Then came the Internet

Now the crowd:

•Is larger•Is more connected•Offers more levels of skill for contributions

The Internet:

•Provides a global distribution channel•Allows for faster publishing•Means ideas are now regulated by value

Organisations can gain insight into their customers’ needs and desires and build products and services that meet them.

Commercially clients can:

•Pay once-off (one-time) for numerous solutions•Pay only for solutions they use•Not limit themselves to ‘traditional’ solutions

Image Credit: Creative commons, AMagill

Non-commercially the crowd can create a pool of info and ensure it is accurate.

e.g. Wikipedia: http://www.wikipedia.org

http://www.wikipedia.org/

Early adapters of crowdsourcing:

Threadless (www.threadless.com)iStockphoto (www.istockphoto.com)InnoCentive (www.innocentive.com)

http://www.threadless.com/

http://www.istockphoto.com/

http://www.innocentive.com/

The “rise of the amateur”

An idea that took ten minutes to come up with may be as good or better than one that took ten hours to develop.

Crowdsourcing is a serendipity multiplier

Four types of crowdsourcing:

•Invention•Creation•Organisation•Prediction

• Invention – sourcing ideas for new or existing product development.

• e.g. My Starbucks Idea (www.mystarbucksidea.com)

http://www.mystarbucksidea.com/

• Creation – new content created, owned and maintained by a community on an existing platform.

• e.g. Idea Bounty (www.ideabounty.com).

http://www.ideabounty.com/

• Organisation – Create new content by organising already existing content.

• e.g. Digg (www.digg.com)

http://www.digg.com/

• Prediction – predict trends by asking the community to submit ideas and vote.

• e.g. Yahoo! Buzz (www.yahoo.com/buzz)

http://www.yahoo.com/buzz

How does it work in business?

•To develop products•For new business and initiatives•To communicate ideas•Prediction and forecasting

Two approaches to managing a campaign:

1. Centrally located:

A guiding force is used to channel ideas and formalise the process.

Idea Idea Idea

2. Community controlled:

The community controls the process and the outcome.

The Community

•The most important asset in crowdsourcing•Aim to understand why they exist and what motivates people to participate

It is vital to understand and address community needs:

•How should it be managed?•What rewards should be put in place?

Pros of crowdsourcing

•Consumer involvement•Fresh input•Opportunities and connections that did not exist before•Problems can be explored quickly at low cost

•Only pay for what is used•Tap into a range of talent outside internal resources•Gain valuable insight into the desires of their customers

Cons of crowdsourcing

•Lack of agency guidance or strategic direction•Little control over production value•For spec work the risk/reward ratio is high•Ethics and opinions could be questionable, leading to incorrect assumptions of reliability

•IP of work is often disregarded with no written contracts etc.•Added costs may be needed to bring a project to a conclusion•Lack of financial motivation or reward may lead to lower work quality•Difficulties may arise in maintaining a working relationship with the community

The new agency model

Marketing and branding are no longer owned and managed by one agency.

Through crowdsourcing, amateurs can now communicate ideas to global brands.

This generates PR and direct interaction with a consumer base. Image credit:

ming888

But a marketing agency will still be needed for brand strategy development.

Remember...

•Proper planning is essential!•Remunerate communities adequately to avoid a negative PR backlash•Use crowdsourcing to tap into the collective knowledge of more than one billion people

Further Reading?

www.quirk.biz/emarketingtextbook

http://www.quirk.biz/emarketingtextbook

day 11 elc 310. copyright 2005 prentice hallch 1 -2 agenda questions? assignment 2 posted. – elc...

Documents

prentice hall slide

online behavior

online video

pearson education

online exchanges

internet population

prentice hallch

consumer behavior principles