University:
Kentucky State University
Course:
ECO 301 | Microeconomics
Academic year:

2023
Views:

251

Pages:

53
Author:

amilicaslcw

Chapter 6 E-commerce Marketing: Social, Mobile, Local Netﬂix: The Next Blockbuster? 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?  What is Netﬂix’s “recommender system”?  How does Netﬂix use data mining?  Has Netﬂix’s changes in business model damaged its brand permanently?  Slide 6-3 Consumers Online: The Internet Audience and Consumer Behavior Around 73% (86 million) U.S. households have Internet access in 2011  Growth rate has slowed  Intensity and scope of use both increasing  Some demographic groups have much higher percentages of online usage than others   Gender, age, ethnicity, community type, income, education Slide 6-4 The Internet Audience and Consumer Behavior (cont.) Broadband vs. dial-up audiences, new mobile audience  Internet purchasing 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 ht Te lev ir sni o n viewing n Slide 6-5  has increased with Internet usage Consumer Behavior Models  Study of consumer behavior  Attempts to explain what consumers purchase and where, when, how much and why they buy  Consumer behavior models  Predict wide range of consumer decisions  Based on background demographic factors and other intervening, more immediate variables Slide 6-6 A General Model of Consumer Behavior Figure 6.1, Page 3 3 Slide 6-7 Background Demographic Factors Culture: Affects entire nations  Subculture   Subsets formed around major social differences (ethnicity, age, lifestyle, geography)  Social networks and communities  Direct reference groups (Family, profession and school).  Indirect reference groups (Social class, life-cycle stage).  Opinion leaders  Lifestyle groups g t P n ti h Slide 6-8 The Online Purchasing Decision  Psychographic research  Combines demographic and psychological data  Divides market into various groups based on social class, lifestyle, and/or personality characteristics  Stages in consumer decision process:  Awareness of need  Search for more information  Evaluation of alternatives  Actual purchase decision  Post-purchase contact with ﬁrm Slide 6-9 The Consumer Decision Process and Supporting Communications Figure 6.2, Page 397 Slide 6-10 A Model of Online Consumer Behavior  Decision process similar for online and oﬄine behavior  General online behavior model  Consumer skills  Product characteristics  Attitudes toward online purchasing  Perceptions about control over Web environment  Web site features: latency, usability, security  Clickstream behavior Slide 6-11 A Model of Online Consumer Behavior Figure 6.3, Page 398 Slide 6-12 A Model of Online Consumer Behavior  Clickstream (cont.) factors include:  Number of days since last visit  Speed of clickstream behavior  Number of products viewed during last visit  Number of pages viewed  Supplying personal information  Number of days since last purchase  Number of past purchases  Clickstream  Developed marketing dynamically as customers use Internet Slide 6-13 Shoppers: Browsers and Buyers  Shoppers: 87% of Internet users  73% buyers  15% browsers (purchase oﬄine) One-third of oﬄine retail purchases inﬂuenced by online activities  Online traﬃc also inﬂuenced by oﬄine brands and shopping  E-commerce and traditional commerce are coupled: Part of a continuum of consuming behavior  Slide 6-14 Online Shoppers and Buyers Figure 6.4, Page 401 SOURCE: Based on data from eMarketer, Inc., 2011d. Slide 6-15 What Consumers Shop for and Buy Online  Big ticket items  Travel, computer hardware, electronics  Consumers now more conﬁdent in purchasing costlier items  Small ticket items ($100 or less)  Apparel (clothes), books, oﬃce supplies, software, etc.  Sold by ﬁrst movers on Web  Physically small items  High margin items Slide 6-16 What Consumers Buy Online Figure 6.5, Page 403 Slide 6-17 How Consumers Shop  How shoppers ﬁnd online vendors  Search engines—59%  Marketplaces (Amazon, eBay)—28%  Direct to retail sites—10%  Other methods—3%  Online shoppers are highly intentional  Look for speciﬁc products, companies, services  StumbleUpon op Slide 6-18 Table 6.7, Page 407 Slide 6-19 Trust, Utility, and Opportunism in Online Markets  Two most important factors shaping decision to purchase online:  Utility:  Better prices, convenience, speed  Trust:  Asymmetry of information can lead to opportunistic behavior by sellers  Sellers can develop trust by building strong reputations for honesty, fairness, delivery Slide 6-20 Basic Marketing Concepts  Marketing  Strategies and actions to establish relationship with consumer and encourage purchases  Addresses competitive situation of industries and ﬁrms  Seeks to create unique, highly differentiated products or services that are produced or supplied by one trusted ﬁrm  Unmatchable feature set  Avoidance of becoming commodity Slide 6-21 Feature Sets  Three levels  Core product  e.g.,  Actual of product or service cell phone product  Characteristics that deliver core beneﬁts  e.g., wide screen that connects to Internet  Augmented product  Additional beneﬁts  Basis for building the product’s brand  e.g., product warranty Slide 6-22 Feature Set Figure 6.6, Page 406 Slide 6-23 Products, Brands, and the Branding Process  Brand:  Expectations consumers have when consuming, or thinking about consuming, a speciﬁc product  Most important expectations: Quality, reliability, consistency, trust, affection, loyalty, reputation  Branding: Process of brand creation  Closed loop marketing  Brand strategy  Brand equity Slide 6-24 Slide 6-25 Marketing Activities: from Products to Brands Figure 6.7, Page 407 Slide 6-26 Segmenting, Targeting, and Positioning  Major ways used to segment, target customers        Behavioral Demographic Psychographic Technical Contextual Search Within segment, product is positioned and branded as a unique, high-value product, especially suited to needs of segment customers Slide 6-27 Are Brands Rational?  For consumers, a qualiﬁed yes:  Brands introduce market eﬃciency by reducing search and decision-making costs  For business ﬁrms, a deﬁnite yes:  A major source of revenue  Lower customer acquisition cost  Increased customer retention  Successful brand constitutes a long-lasting (though not necessarily permanent) unfair competitive advantage Slide 6-28 Can Brands Survive the Internet? Brands and Price Dispersion Early postulation: “Law of One Price”—end of brands  Instead:   Consumers still pay premium prices for differentiated products  E-commerce ﬁrms rely heavily on brands to attract customers and charge premium prices  Substantial price dispersion  Large differences in price sensitivity for same product  “Library effect” Slide 6-29 The Revolution in Internet Marketing Technologies  Three broad impacts:  Scope of marketing communications broadened  Richness of marketing communications increased  Information intensity of marketplace expanded  Internet marketing technologies:  Web transaction logs  Tracking ﬁles  Databases, data warehouses, data mining  Advertising networks  Customer relationship management systems Slide 6-30 Web Transaction Logs Built into Web server software  Record user activity at Web site  Webtrends: Leading log analysis tool  Provides much marketing data, especially combined with:   Registration forms  Shopping cart database  Answers questions such as:  What are major patterns of interest and purchase?  After home page, where do users go ﬁrst? Second? Slide 6-31 Tracking Files  Allow users browsing activities to be tracked as they move from site to site  Four types of tracking ﬁles  Cookies  Small text ﬁle placed by Web site  Allows Web marketers to gather data  Flash cookies  Beacons (“bugs”)  Apps Slide 6-32 Insight on Society: Class Discussion Every Move You Make, Every Click You Make, We’llinnocuous? Be Tracking  Are beacons Or You are they an invasion of personal privacy?  Do you think your Web browsing should be known to marketers?  What are the Privacy Foundation guidelines for Web beacons?  Should online shopping be allowed to be a private activity? Slide 6-33 Databases   Database: Stores records and attributes Database management system (DBMS):  Software used to create, maintain, and access databases  SQL (Structured Query Language):  Industry-standard database query and manipulation language used in a relational database  Relational database:  Represents data as two-dimensional tables with records organized in rows and attributes in columns; data within different tables can be ﬂexibly related as long as the tables share a common data element py g Slide 6-34 A Relational Database View of E-commerce Customers Figure 6.9, Page 421 Slide 6-35 Data Warehouses and Data Mining  Data warehouse:  Collects ﬁrm’s transactional and customer data in single location for oﬄine analysis by marketers and site managers  Data mining:  Analytical techniques to ﬁnd patterns in data, model behavior of customers, develop customer proﬁles     Query-driven data mining Model-driven data mining Rule-based data mining Collaborative ﬁltering Slide 6-36 Insight on Technology: Class Discussion The Long Tail: Big Hits and Big Misses What are “recommender systems”? Give an example you have used.  What is the “Long Tail” and how do recommender systems support sales of items in the Long Tail?  How can human editors, including consumers, make recommender systems more helpful?  Slide 6-37 Customer Relationship Management (CRM) Systems Record all contact that customer has with ﬁrm  Generate 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 Marketing and sales information Slide 6-38 A Customer Relationship Management System Figure 6.10, Page 427 Slide 6-39 Generic Market Entry Strategies Figure 6.11, Page 429 Slide 6-40 Establishing the Customer Relationship  Advertising networks  Ad server selects appropriate ad based on cookies, Web bugs, backend user proﬁle databases  Advertising exchanges  Auction ad slots over many advertising networks  Permission marketing  Aﬃliate marketing Slide 6-41 How an Advertising Network Such as DoubleClick Works Figure 6.12, Page 432 Slide 6-42 Establishing the Customer Relationship  Viral marketing  Blog marketing  Social network marketing  Driven by social e-commerce  Social sign-on  Collaborative shopping  Network notiﬁcation  Social search (recommendation)  Mobile marketing Slide 6-43 Slide 6-44 Insight on Business: Class Discussion Social Network Marketing: Let’s Buy Together  Why do 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? Slide 6-45 Establishing the Customer Relationship  Social marketing and wisdom of crowds  Large aggregates produce better estimates and judgments, e.g.,  “Like” button  Folksonomies  Social tagging  Mobile platform marketing  Local marketing  Brand leveraging Slide 6-46 Slide 6-47 Customer Retention 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 Slide 6-48 The Mass Market-Personalization Continuum Figure 6.13, Page 445 Slide 6-49 Other Customer Retention Marketing Techniques  Customization  Customizing product  Customer  Customer to user preferences co-production interactively involved in product creation  Customer service  FAQs  Real-time customer service chat systems  Automated response systems Slide 6-50 Net Pricing Strategies  Pricing  Integral part of marketing strategy  Traditionally based on:  Fixed cost  Variable costs  Demand curve  Price discrimination  Selling products to different people and groups based on willingness to pay py g Slide 6-51 Net Pricing Strategies (cont.)  Free and freemium   Versioning   Creating multiple versions of product and selling essentially same product to different market segments at different prices Bundling   Can be used to build market awareness Offers consumers two or more goods for one price Dynamic pricing:    Auctions Yield management Flash marketing Slide 6-52 Channel Management Strategies  Channels:  Different and sold  methods by which goods can be distributed Channel 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 conﬂict Slide 6-53 Chapter 7 E-commerce Advertising

Chapter 6 E-commerce Marketing Social, Mobile, Local

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