e-commerce internet consumers, e-services and market research e-business level 2 2013-2014 try to be...

E-CommerceInternet Consumers, E-services

and Market Research

E-Business Level 2

2013-2014

Try to be the Best

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Customer Behavior Online

Personal Characteristics and Demographics

of Internet Surfers

Consumer Purchasing Decision Making

Matching Products with Customers

(Personalization)

Elements of Lecture

Delivering Customer Service in Cyberspace

and CRM

Market Research for Electronic Commerce

Intelligent Agents in Customer-Related

Applications

Elements of Lecture


• A Company which changes its web site from passive

to interactive get the advantage of customers care.

• It will hear directly from its customers, even though

it uses intermediaries for its sales.

• The new interactive website allows company to

learn more about its customers, while educating

customers at the same time.


• Because companies work under increasing business environment pressure, they increase their competition efforts.

• The major pressures are labeled in the 3C's: Competition, Customers, and Change. So, finding and retaining customers is a major critical success factor for most businesses.

• The 3C's are needed to be controlled for

success of companies' work.


• We will discuss the new relationships that companies such as Ritchey Design are attempting to build with their customers. The key to build such relations is understanding customer's behavior.

• Consumer behavior is summarized in the

electronic commerce model of Consumer Behavior.

Model of EC Consumer Behavior

According to this model, the purchasing decision process is triggered by a customer's reaction to stimuli.

• The process is then influenced by the buyer characteristics, the environment, the technology, the EC logistics and other factors.

• Before we explore the details of the EC model, we need to describe who EC customers are, what they buy online and what the differences are between customers’ relations in direct sales versus intermediary-based markets.

Model of EC Consumer Behavior

Consumer Types

Individual consumers, who get much of the media attention

Organizational buyers who do most of the actual shopping in cyberspace, include governments, private corporations, resellers and public organizations. And their purchases are not intended for personal consumption.

Why is the consumer

shopping? And

what are the

benefits of

shopping online?

Purchases Types and Experiences

Consumers can also be classified into three

other categories

Impulsive buyers who purchase products quickly

Patient buyers who purchase products after

making some comparisons

Analytical buyers who do substantial research

before making the decision to purchase products

or services.

Personal Characteristics and Demographics of Internet Surfers

• The variables that influence the decision

making process include:

• Environmental variables,

• Personal characteristics variables, and

vendor-controlled variables.

Environmental variables

Social Variables: people are influenced by family members, friends, coworkers, and what is in fashion this year. Of special importance of ecommerce are discussion groups and internet communications, which communicate via chat rooms and bulletin boards and newsgroups.

Psychological Variables.

Environmental variables Continued

Cultural Variables: which make big difference if

a consumer lives near Silicon Valley in California

or in the mountains of Nepal, EC enhances the

cultural impact on IT adoption.

• Others: include the available information,

government regulations, legal constraints and

situational factors.

Personal Characteristics and Personal Differences

Several variables are unique to individual

customers. These include consumer resources,

age, knowledge, gender, educational level,

attitudes, motivation, marital status, personality,

values, lifestyles, and more.

Several consumer demographics provide

information on customer buying habits.

Personal Characteristics and Personal Differences Continued

The major demographics presented here include

gender, age, marital status, educational level,

occupation, and household income.

Therefore, most of the data presented here are

related to Internet surfers (potential buyers) and

are not about actual buyers.

• It’s interesting to note that the more experience

people have with the internet, the more likely

they are to spend money online.

• The two most cited reasons for not making

purchases on the web are security and difficulty in

judging the quality of the product. So users don’t

make purchases because they have heard that

buying on the web is not reliable or secure.Personal Characteristics and Personal Differences Continued

Consumer Purchasing Decision Making

Initiator: The person who first suggests or thinks of the idea of buying a particular product or service.

Influencer: A person whose advice or views carry some weight in making a final purchasing decision.

Decider: The person who ultimately makes a buying decision or any part of it, whether to buy, what to buy, how to buy, or where to buy.

Buyer: The person who makes an actual purchase.

User: The person who consumes or uses a product or service.

Five Roles in Purchasing Decision Making

Consumer Purchasing Decision Making Continued

• When more than one individual play these roles, advertising and marketing strategies become very difficult.

• Several models have been developed in an effort

to describe the details of the purchase decision making process.

• These models provide a framework of learning about the process in an attempt to predict, improve, or influence consumer decisions.

The Purchasing Decision-Making Model

• It consists of five major phases, in each phase we can distinguish several activities and in some of them one or more decisions.

• The five phases are :•

• Need identification.• Information Search.• Alternatives evaluation.• Purchase and delivery• After-purchase evaluation.

• The first phase, need identification, occurs when

consumer is faced with an imbalance between

actual and desired states of a need.

• Here, a marketer’s goal is to get the consumer to

recognize such imbalance and then convince this

consumer that the product or service the seller

offers will certainly fill in the gap between the two

statesThe Purchasing Decision-Making Model

• In the phase two, Searches for information, on the

various alternatives available to satisfy the need.

Here we differentiate between a decision of what

products to buy -- product brokering, and from

whom to buy it--merchant brokering.

• This stage is basically an information search,

which can occur internally, externally or both.


• The internal information search is the process of

recalling information stored in the memory.

• The external information search: seeks

information in the outside environment, typically

in internet databases. One example is searching

in google.com search engine.


• The third phase, Alternatives, come after the

consumer will have a result of searched

information generate a set of alternatives to him.

• In the third phase, consumer will use the

information stored in the memory and obtained

from outside sources to develop a set of criteria.


The phase four of making a purchasing decision

starts now.

Finally the post purchasing stage of customer

service i.e. maintenance and evaluation of the

usefulness of the product. This process can also

be seen as life cycle in which at the end the

product is disposed of.


• The above model used and developed to build a

framework, called the consumer decision support

system CDSS.

• This framework can help companies in using

internet technologies to improve, influence, and

control the decision process.



• It’s type of the Relationship Marketing. Which is the overt

attempt of exchange partners to build a long-term

association, characterized by purposeful cooperation and

mutual dependence on the development of social as well

as structural bonds?

• To be genuine one-to-one marketer, a company must

change its behavior toward an individual customer based

on what they know about the customer. So one-to-one

market treats different customers differently.

One-to-One Marketing : An Overview

• One of the benefits of doing business over the

Internet is that it enables companies to better

communicate with customers and better

understand customers’ needs and buying habits,

amazon.com emails customers announcements of

new books published in a customer’s area of

interest.



• The actual detailed mechanics of building a one-

to-one relationship depend on understanding the

various ways customers are different and how

these differences should affect the firm’s behavior

toward particular, individual customers.



• A company increases loyalty in its own customers, by establishing a learning relationship with each customer, starting with the most valuable customers.

• The learning relationship is a relationship that

gets better with every new interaction.




• Customer Loyalty: it’s the degree to which a customer will stay with a specific vendor or brand. It’s an important element in customer purchasing behavior.

• Customer loyalty is one of the most significant

contributors to profitability.

• By keeping customers loyal a company can increase its profits because customers will buy more and over time sales will grow.

Issues in EC-Based One-to-One Marketing

• Cognitive Needs: gaining information about current and potential customers’ needs and converting those needs into demand is more feasible in EC than in any other marketing channel.

• E-Loyalty: it’s simply a customer loyalty to an e-tailer.

• Trust: The psychological status of involved parties

who are willing to pursue further interaction to achieve a planned goal.



• Personalization: it refers to the process of matching

content, services, or products to individuals. The

matching process is based on what a company

knows about the individual user, this information is

usually referred to as a user profile which defines

customer preferences, behaviors and

demographics.


Matching Products with Customers (Personalization)

• Personalization forms:• Rule-based filtering: a company asks the

consumer a series of yes/no multiple choice questions, the question may range from personal information to the specific information the customer is looking for on the web site.

• Content-Based Filtering: with this technique, vendors ask users to specify certain favorite products. Based on these user preferences, the vendor’s system will recommend additional products to the user.



• Personalization forms: • Constraint-based filtering: similar to content-

based, but requires users to provide information about the preferred products. However, instead of asking many questions regarding specifications of products, takes as input a sequence of demographic and other constraints to represent a user’s preferences.

• Learning-agent technology: here, users don’t answer any questions because their preferences are collected by cookies or other technologies while they surf the web.



• Personalization forms:•

• Collaborating Filtering: A personalization

method that uses customer data to predict, based

on formulas derived from behavioral sciences,

what other products or services a customer may

enjoy; predictions can be extended to other

customers with similar profiles.



Delivering Customer Service in Cyberspace and CRM

• Customer Service is a series of activities designed

to enhance customer satisfaction, that is, the

feeling that a product or service has met the

customer's expectation.

• Customer service is responsible for resolving

problems customers encounter in any phase of

the purchase decision-making process.

• When customer services are supplied over the internet, sometimes automatically, it's referred to as e-service.

• E-service often provides online help for online transactions. In addition, even if a product is purchased off-line, customer service may be provided online.


E-Services


• There are three levels of service:•

• Foundation of Service: this includes the minimum

necessary services such as site responsibilities, site

effectiveness and order fulfillment.

• Customer-Centered services: these are services

that make the difference; they include order tracing,

configuration and customization, and security/trust.

• Value added services: these are extra services such

as dynamic brokering, online auctions or online

training and education.

E-Services


• There are four phases for a product life cycle, they are presented as follows:

• Requirements: Assisting the customer to determine

his or her needs, for example by photographs of a product, video presentations, textual description articles, etc.

• Acquisition: Helping the customer to acquire a specific product or service, e.g., online order entry, negotiations, closing of sale, downloadable software.

Product Life Cycle


• There are four phases for a product life cycle, they are presented as follows:

• Ownership: supporting the customer on an ongoing basis, e.g. interactive online user groups, online technical support, frequently asked questions and answers, resource libraries, newsletters and online renewal of subscriptions.

• Retirement: Helping the client to dispose of a service or product when the product is no longer of use to the customer, e.g. online resale, classified ads.

Product Life Cycle

• CRM: an approach that recognizes that customers are the

core of the business and that a company's success depends

on effectively managed their relationship with them.

• Customer Service Functions: The form the customers'

service take on the web, such as answering customer

inquiries, providing search and comparison capabilities,

providing technical information to customers, allowing

customers to track order status and allowing customers to

place an online order.


• Customer Service Tools: the followings are

some tools used in serving customers and

satisfying there needs by answering their inquiries

related to some specific products or services.


• Personalized Web Pages:• The tool which gives the ability for customers to

create their own pages. These pages can be used to record customer purchases and preferences.

• FAQs• Frequently Asked Questions, a feature which is

simple and inexpensive that can be used to handle repetitive customer questions. However, FAQs can't answer all customers' questions, nonstandard questions should be sent and responded to via email.


• Tracking Tools

• Companies can supply customers with tracking tools

so that customers can track their own orders, saving

the company time and money. Customers generally

like tracking tools as it gives them a quick and easy

way to check on the status of their purchased

products.



Customer Relationship Management

• Help desks and call centers

• One of the most important customer service tools,

by which customers can drop in at physical site or

communicate by telephone, fax, or email. Because

the communications was initially conducted by

telephone, the remote help desk is often called the

call center.

• Help desks and call centers

• A help desk or call centre is a place where all

customer contact is directed.

• Staff of the call centre has access to the necessary

information to provide service to customers.

• There are a number of organizations that provide

this service for a variety of companies thereby

keeping the costs down for each organization.


• Real-Time Service Chat• By using products like Live Person from

liveperson.com or Webex Oncall from webex.com, you can deliver personal services either as a text-base chat or audio.

• Many companies have found that a single support representative can work with several customers simultaneously when using a text-based service.

• The benefits of voice/audio are obvious but add significantly to the cost.


• E-Learning as a Service• An even more sophisticated way to deliver product

and service support is by using one of the many video-based, e-learning services.

• These are offered in two ways: • First as an archived or library product; and second,

as real time. • A real-time service that represents one of the new

breeds of offerings is Essential Talk from the Essential Talk Network.



• E-Learning as a Service•

• This service operates like a radio talk show with broadcast quality sound and interactivity using either posted chat or phone-in.

• One way to use this service is to record a session on a

particular topic and then make it available from a library as users require the information.

• These sessions could be comprehensive “how to’s” with

voice, slides, documents, and diagrams made available to the user

• The goal of market research is to find information

and knowledge that describes the relationships

among consumers, products, marketing methods,

and marketers.

• Another goal is to discover marketing opportunities

and issues, to establish marketing plans, to better

understand the purchasing process, and to

evaluate marketing performance.



• Market Segmentation: The process of dividing a

consumer market into logical groups for conducting

marketing research, advertising, and sales.

• Segmentation is done with the aid of tools such as

data modeling and data warehousing.

• Implementing Web-based Surveys: these types of

surveys aim to collect information about

customers' needs, satisfactions, and suggestions

toward a company specific product or service.

Online Market Research Methods

Online Market Research Methods

• Online focus groups: form of qualitative research in which a group of people is asked about their attitude towards a product, service, concept, advertisement, idea, or packaging. Questions are asked in an interactive group setting where participants are free to talk with other group members.

• Hearing Directly from customers: a method of

collecting customer’s information by conducting direct interviews with them.

Tracking Customers Movements

• Transaction log: A record of user activities at a company’s Web site.

• Clickstream behavior: Customer movements on the Internet.

• Web bugs: Tiny graphics files embedded on e-mail

messages and in Web sites that transmit information about the users and their movements to a Web server.

• Spyware Software that gathers user information over

an Internet connection without the user’s knowledge.

Intelligent Agents in Customer-Related Applications

• It’s a practical solution to handle the information overload by using intelligent and software agents to consider the relevant information of the huge number of customers, products and vendors.

• Search engines could be classified as a software agent and the most intelligent types of agents.

Intelligent Agents in Customer-Related Applications

• A search engine is computer software than can automatically contact other network resources on the internet, search for specific information or keyword and report the results.

• For example, people tend to ask for information such as requests for product information or pricing, this type of request is repetitive and answering such requests is costly when done by a human. Search engines deliver answers economically and efficiently by matching questions with FAQ templates, which include standard questions and answers to them.

Any Question

e-commerce internet consumers, e-services and market research e-business level 2 2013-2014 try to be...

Documents

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customers relations

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ec model

advantage of customers

consumer shopping

customer behavior onlinewe