Internet Consumer and Market Research

Chapter 3

Building Customer Relationship: Ritchey Design Inc.

Small business.Designer and manufacturer of mountain

bike components.The Problem

Early website was just a status symbol, The site did not:

Offer enough customer informationEnable the company to gain insight into their

customers’ needs and wants

Ritchey Design LearnsAbout Customers (cont.)

The SolutionCustomer surveys introduced on the site

Web Trader automatically saves and organizes answers in the database.

This information is used to make marketing decisions

Created an electronic product catalogVisitors can browse through the product catalog

with detailed descriptions and graphics of products.

Ritchey Design LearnsAbout Customers (cont.)The Results

Ritchey does not yet sell directly to individuals online, because the company wants to maintain its existing distribution system.

Dealers can:Place orders on the siteLearn about new products quicklySite is basically used for market research and

advertising,Now the company can hear from its customers directly,

learn from them and can educate them also.

The Consumer Behavior Model

Business Pressures (3Cs)CompetitionCustomers Change

Finding and retaining a customers is major critical success factor for all business.

Strengths of customers is increased due to information.

Magnitude of the change is very high.Every business need to control 3Cs to succeed,

or even to survive.

The Model of EC Consumer Behavior (Fig. 3.1)Decision making process is dependent to all these :-Personal characteristics

Gender, Age, Occupation, Education, IncomeEnvironmental characteristics

Social , family,Stimuli (motivation)

Marketing (Price , Promotion, Product, Quality) Others (economical, technology,)

Buyers Decisions What, When , where, which, how

Vendor controlled systems Logistics (payment, delivery) Technical support (website design, ) Customer service (FAQ, call center)

Consumer Behavior

Consumer types Individual consumers who commands most of the media’s attention Organizational buyers

Governments and public organizationsPrivate corporationsResellers

Purchasing Types Valuable or valueless Impulse buyer or patient Buyer

Direct sales, Intermediaries and Customer relations It is the end user who supports everyone

Environmental VariablesSocial variables—people are influenced by:

Family members, friends, co-workers, “what’s in fashion this year”

Cultural/community variables—where the consumer lives

Psychological variables –common beliefs Other environmental variables:

Available information, government regulations, legal constraints, situational factors

Personal characteristics and the demographics of internet surfer

Personal Characteristicsand Individual Differences Consumer demographic provide an indicator of buying:-Age and genderMarital statusEducational levelEthnicityOccupationHousehold income Internet Usage Profile

Internet access options Length and frequency of use Access cost

Consumer buying patterns Surfer are purchasers Spending categories Security and quality perception

Consumer Purchasing Decision Making

Initiator Influencer Decider Buyer User

Decision-Making model (Table 3.2)1. Need identification2. Information search3. Evaluation of alternatives 4. Purchase and deliver5. After-purchase evaluation

One to one and Relationship Marketing

Basic Idea No two customer are same: Treat different customer

differently Available to a customer and interact continuously Obvious attempt to build a long term association by

establishing a learning relationship with each customerEC trust* and customer loyaltyBy well defined rulesGood experience with ECRealistic expectationsReferrals (word of mouth) (Page 118)

Delivering customer service in cyber spaceCustomer service is set of activities designed to

enhance the level of customer satisfactionTypes of customer service

Answering customer inquiriesProviding search and comparison capabilitiesProviding technical and other informationOrder statusCustomizationTools Available

Personalize web pagesFAQs, chat rooms, emails, Help Desks and call centers

Market Research for EC

Market research is gathering information about economy, industry, firms, product, pricing, distribution, promotion and consumer behavior

Market research process Problem Definition Research Methodology Data Collection Data Analysis Results Implementations

Online market research: utilizing the internet in research for efficient, faster and cheaper

data analysis Larger the sample size, greater accuracy and predicative

capabilities

Market Research for EC

The goal of market research is to find information and knowledge that describes the relationships among consumers, products, marketing methods, and marketers.QuestionnairesTelephone Surveys Focus Groups

Market Research for EC

Market SegmentationThe process of dividing a consumer market

into logical groups for conducting marketing research, advertising, and sales.

Segmenting optionsGeographyDemographicsPsychographicsBenefits sought

Market Research for EC

Conducting Online Market ResearchWhat are we looking for in EC Market Research?

Analyze personal profiles to explain and predict online buying behavior.

Typical QuestionsWhat are the purchase patterns for individuals and

groups?What factors encourage online purchasing?How can we distinguish real buyers from browsers?How do individuals navigate?What is the optimal web page design?

Market Research for EC

Online Market Research MethodsWeb-based surveysOnline focus groups Hearing directly from customersTracking customer movements

Transaction logsClickstream behaviorCookiesWeb bugsSpyware

Market Research for EC

Limitations of Online Market ResearchHaving too much dataAccuracy of responsesEquipment failureEthics and legality of web trackingTruly representative samples

Data Mining

Data mining—the process of searching a large database to discover previously unknown patterns; automates the process of finding predictive information

New business opportunities generated by conducting:Automated prediction of trends and behaviorsAutomated discovery of previously unknown

patterns and relationships

Intelligent agents

Intelligent agents are computer programs that help the users to conduct routine tasks, search and retrieve information and support decision making. agents sense the environment and act automatically e.g. My Yahoo Intelligent agents for information search and filtering. Intelligent agent for products and vendor finding Intelligent agent for Negotiation Intelligent agent for customer services

Internet Marketing in B2B

Organizational Buyer BehaviorBuy in large quantitiesThe number of organizational buyers is smaller than

individual but the transaction volumes are largerBehavioral Model of Organizational Buyers

Organizational Influences Module

Organizational buyerCharacteristicsDemandPurchase volumeNumber of customerLocation of buyers

Distribution structureNature of buyingNature of buying influenceType of negotiationsUse of reciprocity Use of leasingPrimary promotion method

B-to-BOrganizationalLargerFewerGeographically concentratedMore directMore professionalMultipleMore complexYesGreaterPersonal selling

Retail IndividualSmallerManyDispersed

More indirectMore personalSingleSimplerNo Lesseradvertising