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The major pressures are labeled the 3Cs

Competition
fighting on customers
to succeed : control the 3Cs

Customers
customers becomes a King/Queen
to succeed : finding and retaining customers

Change
EC is a new distribution channel
to succeed : convince customers to go online

and then to choose your company over the


online competitors

Purchasin
g decision
begins
with
customer
s reaction
to stimuli

Individual
Characteristics
Age, gender, ethnicity,
education, lift style,
psychological, knowledge,
values, personality

Environment
Characteristics
Social, family,
communities

Buyers Decisions

Stimuli
Marketing
Others
Price
Economical
Promotion Technology
Product
Political
Quality
Cultural

Buy or not
What to buy
Where (vendor)
When
How much to spend
Repeat purchases

Decision
Making
Process

Vendors controlled System


Logistic

Technical

Customer
service

Support
Payments,
Delivery

Support
Web design,
Intelligentagents

FAQ,
e-mail,
Call centers,
One-to-one

Consumer Types
Individual consumers: get much of the media attention
Organizational buyers: do most of the shopping in cyberspace

Purchasing Types

Impulsive buyers: purchase products quickly


Patient buyers: purchase products after making some comparison
Analytical buyers: do substantial research before making the

decision to purchase products or services

Purchasing Experiences
Utilitarian: shopping to achieve a goal or complete a task
Hedonic: shopping because it is fun and I love it

Environmental Variables
Social variables
people influenced by family members, friends, coworkers, whats in fashion this year, Internet
communities and discussion groups

Cultural variables
Psychology variables
Other environmental variables
available information, government regulations,
legal constraints, and situational factors
6

Consumer Demographics (1998)


Age (mostly 21-30 year-old)
Marital status (41% married & 39% single)
Educational level (81% with at least some college
education & 50% obtained at least baccalaureate
degree)
Ethnicity (87% white in America)
Occupation (26% educational-related field, 22%
computers & 22% other professionals)
Prentice Hall, 2000

Consumer Demographics
Household income (46% at least $50,000/year
Internet access option (63% primarily form home &
58% primarily from work or school)
Length and frequency of use (88% access daily &
33% access 10-20 hours a week)
Access cost (67% pay for their own Internet access
& 31% paid for by their employers)

Prentice Hall, 2000

Roles that people play in the decision


making process
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 buying 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

The Purchasing Decision-Making Model


Need identification
(Recognition)
Information search
(What? From whom?)
Alternative evaluation,
negotiation and selection
Purchase and delivery
After purchase service
and evaluation

Relationship marketing

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

Treat different customers differently

Able to change the manner its products are


configured or its service is delivered, based on
the individual needs of individual customers

Customer loyalty
Purchase behavior
One of the most significant contributors to profitability
Increase profits; strengthen market position; become
less sensitive to price competition; increase crossselling success; save cost, etc.
Real world examples
1-800-FLOWERS
Amazon.com
Federal Express (FedEx)

Building and maintaining customer loyalty


Maintain continuous interactions between
consumers and business
Make a commitment to provide all aspects of the
business online
Build different sites for different levels of
customers
Willing to invest capital, both human and
financial, in the information systems, to insure
continuous improvement in the supporting
technology as it becomes available

ISFLAVIA:
ISFLAVIA:

Customer Service
Information can be directed to the customer efficiently
Creation of a database which records purchases,
problems and requests is facilitated
Information can now be traced and analyzed for
immediate response
If customer service options and solutions do not
maintain the same level of excitement and interaction
as the advertising and sales presentations, the level of
intensity declines and the vendor runs the risk of losing
customers

Product Life Cycle

Phase 1. Requirements : assisting the customer


to determine needs
Phase 2. Acquisition :
helping the customer to
acquire a product or
service
Phase 3. Ownership :
supporting the customer on
an ongoing basis
Phase 4. Retirement :
helping the client to
dispose of a service or
product
Prentice Hall, 2000

20

Types of Customer Service Functions

Answering customer inquires


Providing technical and other information
Letting customers track accounts or order
status
Allowing customers to customize and
order online

Prentice Hall, 2000

21

Addressing Individual Customer Needs


Companies
understand their
customers needs
and buying habits
better
Companies
customize their
future marketing
efforts

Doing
business
via Web
Prentice Hall, 2000

22

Personalized Web Pages

used to record purchases and preference


direct customized information to customers efficiently

Chat Room
discuss issues with company experts; with other
customers

E-mail
used to disseminate information, send product
information and conduct correspondence regarding any
topic, but mostly inquiries from customers

FAQs
not customized, no personalized feeling and contribution
to relationship marketing

Aims
Finding relationship between consumers, products,
marketing methods, and marketers through
information in order to discover marketing
opportunities and issues, to establish marketing
plans, to better understand the purchasing process,
and to evaluate marketing performance

Problem definition
and
Research
objectives

Research
methodology,
Data collection
plan

Data
collection,
Data analysis

Results,
Recommendations,
Implementation

Market Segmentation
Market segmentation is the process of
dividing a consumer market into
meaningful groups for decision-making.
In the past, most marketing approaches
have focused on group-based targeted
markets, not on a personal way to
identify individual consumers who
actually purchased and used the
products.

Market Segmentation
Improved methods of marketing research based
on information technologies allow marketers to
collect, store, and analyze detailed and personal
information in a cost-efficient way.
Example : Wal-Mart
Lifestyles are typically established by consumers
filling out questionnaires about their activities
such as work and family, interests and opinions,
etc.

Online Market Research


Using online technology to conduct surveys
More efficient, faster, and cheaper data
collection, and a more geographically diverse
audience than those found in off-line surveys
Ability to incorporate radio buttons, data-entry
fields and check boxes in the surveys
Not suitable for every customer or product
it is skewed toward highly educated males
with high disposal income

Online Market Research

Risk of losing people who sign off if they


had difficulty in logging on or
communicating with researchers
Companies such as E-valuations can
conduct the research for your company
VALS 2 (values and lifestyles) is a wellknown segmentation dividing consumers
in the U.S.

Online Market Research Methods

Process of conducting the research

Define the research issue and the target market


Identify newsgroups and Internet communities to study
Identify specific topics for discussion
Search discussion group topics and content lists to find
the target market
Search e-mail discussion groups lists
Subscribe to filtering services that monitor groups
Read FAQs and instructions of your competitor
Enter chat rooms, whenever possible

Online Market Research Method


Content of the research instrument
Post strategic queries to news groups
Offer rewards for participation
Post strategic queries on your Web site
Post relevant content to groups with a pointer to
your Web site survey
Post a detailed survey in special e-mail
questionnaires
Create a chat room and try to build a community
of consumers

Online Market Research Methods


Target Audience of the Study
Compare your audience to the target
population
Determine your editorial focus
Determine what Web services to create for
each type of audience

Consumer Market Research

Methods of conducting a survey: personal


interviews; telephone survey and mail survey
The Internet is providing an efficient channel
for faster, cheaper and more reliable
collection and transmission of marketing
information even in multimedia form

Intelligent Agents
Computer

programs that help the


users to conduct routine tasks, to
search and retrieve information, to
support decision making and to act
as domain experts

Intelligent Agents for Information Search


and Filtering
Help to determine what to buy to satisfy a specific
need by looking for specific products information
and critically evaluate them

Rated of products

Negotiation Agents
Price and other terms of transactions are determined
multiple agents; classified as system where users
create agents for the purpose of selling or buying goods
3 strategies : anxious, cool-headed and frugal
considering a number of different parameters: price,
warranty, delivery time, service contracts, return policy,
loan option and other value added services

Learning Agents
Be capable of learning individuals preferences and
make suggestions
use learning theory by monitoring customers
interactions
learns customers interests, preferences and behavior
and delivers to them customized service accordingly

Consumer Types
Individual customers Vs. Organizational buyers

Characteristic
Demand
Purchase volume
Number of customers
Location of buyers
Distribution structure
Nature of buying
Nature of buying influence
Type of negotiations
Use of reciprocity
Use of leasing
Primary promotional
method

Retail Buyers
Individual
Smaller
Many
Dispersed
More indirect
More personal
Single
Simpler
No
Lesser
Advertising

Organizational Buyers
Organizational
Larger
Fewer
Geographically concentrated
More direct
More professional
Multiple
More complex
Yes
Greater
Personal selling

Individual
Influences
Age; gender; ethnicity;
education, lift style;
psychological; knowledge;
values; personality

Stimuli
Marketing
Others
Price
Promotion
Product
Quality

Economical
Technology
Political
Cultural

Behavioral
Model

Prentice Hall, 2000

Interpersonal
Influences

Organizational
Influences

Authority; status;
persuasiveness

Policies and procedures;


organization structure;
centralized/decentralized;
systems used; contracts

Decision Making
Process (Group
or Individual)

Buyers
Decisions
Buy or not; What to buy;
Where (vendor);
When; Delivery terms
Payments

Vendors Controlled Systems


Logistic
support

Technical
support

Customer
service

Payments,
delivery

Web design,
Intelligentagents

FAQ,E-mail,
Call Centers,
One-to-one

Thank

You