Analyzing Consumer Markets and Buyer Behavior

Individuals Online

Topics

The Dell triangleOnline marketingOnline behavior and interactivityWeb users

The Dell Triangle: Figure 4.1

Online Marketing

• Direct interaction creates customer value and sets the stage for relationship building

• This creates opportunities for– personalization– community building– real-time marketing

Figure 4.2

Customers use sites more as

companies add more interactive

content

Communication Drives Usage

Custom

er Contacts

I nteractivity

Interactivity

• Menghasilkan pendapatan Web Business Models• Mengurangi biaya layanan pelanggan Customer Support and Online

Quality• Menyediakan informasi untuk

personalisasi Personalization• Mengembangkan produk baru New Product Development and the

Net

Interactivity (Cont.)

• Meningkatkan pembangunan merek Traffic and Brand Building• Membangun komunitas Online Community• Menawarkan promosi khusus Pricing in an Online World• Mengambil bagian dalam perdagangan

elektronik E-Commerce

Kontak pelanggan adalah satu dari sumber yang paling berharga bagi pemasar online

Online Behavior & Interactivity

Interactivity depends onDirect communication Individual choiceFriendly technology

Let’s take a look at each of these

Next

Direct CommunicationFrom Broadcast to Dialogue

• Dialogue is possible when there’s direct communication between marketer and customer– Intermediaries can filter or block feedback

Figure 4.3

One-to-Many Broadcast(same message to all)

Direct Targeting (one direction, different messages)

One-to-One Interactive (unique messages to individuals)

Comparing Communication Methods

Hoffman & Novak (1996): Compared traditional and online communication methods

They looked at Communication model: one-to-many one-to one Media symmetry: is the information flow symmetric? Media content: use of text, images, audio, video Diversity of information: the number of information sources

available through the medium (billboards vs. cable TV or the Web)

Communication timing: synchronous vs. asynchronous Personal interactivity: person-to-person vs. machine-mediated

interaction

Comparing Communication Methods

Figure 4.4

The Web is a flexible technology

It’s evolving into a personal and dynamic communication medium

Back

Individual ChoiceSelection + Suggestion = Value

The modern economy presents a staggering amount of variety Typical supermarkets contain 25,000 different items Variety expands even further without the physical

constraints of inventory and shelf space

Choice is confusing without a way to compare, evaluate & select among the huge number of possibilities New technologies combine selection and suggestion Enable consumers to make more effective choices

Impact on Consumer Choice

Selection Suggestion

Shopping on demand

Greater value consciousness

Power shift to consumers

Personalization

Customization

Automation of consumption

"Friction- Free Capitalism" "Captive Consumers"

Back

Friendly Technology

Televisions, radios, telephones, and VCRs have market penetrations > 85%

The Web must become even easier & friendlier to reach the 98% household penetration of TV

As Web access devices becomes more appliance-like, increasing numbers of consumers will be online

Internet marketers must understand consumer behavior online

Technology is technology only if it was invented after you were born

Web Stage and User Challenges

The easiest type of online consumer activity is when loyal and experienced users perform simple tasks

More complicated tasks require marketers to develop better user interfaces

More risky transactions require marketers to establish trust and pay attention to customer needs

Figure 4.6

Back

Online Consumer Behavior

Users relate to virtual information in many of the basic social ways they interact with people in their everyday lives

Users treat machines and software like people

Byron Reeves & Cliff Nass

The Media Equation

Media = Real Life

Online Consumer Behavior

The human brain isn’t well adapted to 20th century media

New media is engaging old brains

Why Are There Social Responses to Information Technology?

Online Consumer Behavior

Manners are critical in online & computer messages

Good Manners = positive responses

Behavior that is considered rude in real life is considered rude onscreen

Simple Technological Features Can Elicit Strong Social Responses

Online Consumer BehaviorSocial Cues E-mail lacks the social cues that a phone

conversation or a face-to-face meeting provide Misunderstandings develop more easily because

people it’s harder to judge confusion People don’t get the signals that make them stop and

explain themselves in face-to-face discussion

People tend to use stronger language and express themselves more frankly

And they tend to circulate their thoughts to a much wider audience

Online Consumer BehaviorSocial Cues

Unhappy customers may resort to flamingE-mail makes it easy to escalate negative

word of mouthFlaming can lead to bad press

Customer service reps have to be careful not to respond similarlyRequires deliberate policy and training

Online Consumer BehaviorCognitive Difficulty

One of the challenges of providing online information is making it accessible to users

Providing effective search functionality is key

Site developers must understand how their users are likely to search and browse

Who’s Online?

High incomeAbove average educationHeaviest users: 30-49 years old

students & kids also onlineseniors & older middle-aged less likely

Gap between male & female is closingUS dominates

wealthiest European & Asian countries coming online quickly

14,8 16,427,9 28,5 26,7 31,6

4515 16,3

19,6 19,1 20,120,5

19,5

27,2 26,6

26,7 26,4 26,627,8

22,7

19,5 17,7

12,6 12,6 13,510,6

7,416,8 17,1

10,1 11 9,9 7,5 4,36,7 5,9 3,2 2,5 3,2 2,1 1

TV Radio Newspaper Magazine Tabloid Cinema Intenet

E

D

C2

C1

B

A

49,1

17

8

6

4,9

7,6

2,9

2,2

2,2

0 10 20 30 40 50 60

Jabotabek

Surabaya

Bandung

Medan

Semarang

Yogyakarta

Makasar

Denpasar

Palembang

Internet Users by Cities

Internet is an upper class domain

Sumber : AC Nielsen, dikutip dari Marketing, Agustus 2005

45,9

37

28,9

22,4

22,5

21,7

20,7

17,1

15,7

13,1

10,6

5,3

49

21,2

25,7

26

23

16,9

17,7

15

13

13

12,9

3,5

Electronic Mail

Play Games

General Surving

Chating

Listen to Music

Access Local News

Product Info

Access Int'News

Read electro Npp

Read electro Mag

Job Hunting

Clasify Ads

Male

Female

E-mail is the most common feature used

Sumber : AC Nielsen, dikutip dari Marketing, Agustus 2005

GENDER

AGE

EDUCATION

40,4

59,6

Male

Female

6,5

16,2

16,3

27,7

23,3

10 40 + yr

30-39 yr

25-29 yr

20-24 yr

15-19 yr

10-14 yr

1,219,3

10,9

40,3

17,2

8,9

2,1

Post Graduate

University

Academy

SLA

SLP

SD

SD not finished

Sumber : AC Nielsen, dikutip dari Marketing, Agustus 2005

Back

As Time Passes

More people onlineMore people connecting at higher speedsMore people using the Web to shop and

transact business>40% of those with 4+ years experience on

the Web regularly shop and conduct Web commerce

as opposed to only 12% of people who have been online for <1 year