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e-com chapter 04

VIEWS: 130 PAGES: 44

									Consumer Behavior, Internet
 Marketing, and Advertising
1. Describe the factors that influence consumer
   behavior online.
2. Understand the decision-making process of consumer
   purchasing online.
3. Describe segmentation and how companies are
   building one-to-one relationships with customers.
4. Explain how consumer behavior can be analyzed for
   creating personalized services.
5. Discuss the issues of e-loyalty and e-trust in electronic
   commerce (EC).
6. Describe consumer market research in EC.
                    Copyright © 2010 Pearson Education, Inc.
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7. Describe the objectives of Web advertising and its
    characteristics.
8. Describe the major advertising methods used on the
    Web.
9. Describe various online advertising strategies and
    types of promotions.
10. Describe permission marketing, ad management,
    localization, and other advertising-related issues.
11. Relate Web 2.0 and social networks to Internet
    market research and advertising.
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• A GENERIC PURCHASING-DECISION MODEL
  – Five major phases:
     • Need identification
     • Information search
        – product brokering
          Deciding what product to buy
        – merchant brokering
          Deciding from whom (from what merchant) to buy a product
     • Alternative evaluation
     • Purchase and delivery
     • Postpurchase behavior

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• CUSTOMER DECISION SUPPORT IN WEB
  PURCHASING
• PLAYERS IN THE CONSUMER DECISION
  PROCESS
  – Initiator
  – Influencer
  – Decider
  – Buyer
  – User

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• FROM MASS MARKETING TO ONE-TO-ONE
  MARKETING
  – Mass Marketing and Advertising
  – market segmentation
    The process of dividing a consumer market into
    logical groups for conducting marketing research
    and analyzing personal information
  – one-to-one marketing (relationship marketing)
    Marketing that treats each customer in a unique
    way
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• personalization
  The matching of services, products, and advertising
  content with individual consumers and their
  preferences
• user profile
  The requirements, preferences, behaviors, and
  demographic traits of a particular customer
• cookie
  A data file that is placed on a user’s hard drive by a
  remote Web server, frequently without disclosure or
  the user’s consent, which collects information about
  the user’s activities at a site
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• behavioral targeting
  Targeting that uses information collected
  about an individual’s Web-browsing behavior,
  such as the pages they have visited or the
  searches they have made, to select an
  advertisement to display to that individual



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• collaborative filtering
  A market research and 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

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• CUSTOMER LOYALTY
  – e-loyalty
    Customer loyalty to an e-tailer or loyalty programs
    delivered online or supported electronically
     • Business Intelligence and Analytical Software
• SATISFACTION IN EC
  – Satisfaction is one of the most important success measures
    in the B2C online environment
• TRUST IN EC
  – trust
    The psychological status of willingness to depend on
    another person or organization

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• OBJECTIVES AND CONCEPTS OF MARKET
  RESEARCH ONLINE
  – What Are Marketers Looking For in EC Market
    Research?
• REPRESENTATIVE MARKET RESEARCH
  APPROACHES
  –   Market Segmentation Research
  –   Online Sampling Methods
  –   Online Surveys
  –   Hearing Directly from Customers
  –   Data Collection in the Web 2.0 Environment

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– Observing Customers’ Movements Online
  • 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 in e-mail messages and in
    Web sites that transmit information about users and
    their movements to a Web server


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• spyware
  Software that gathers user information over an Internet
  connection without the user’s knowledge
• clickstream data
  Data that occur inside the Web environment; they
  provide a trail of the user’s activities (the user’s
  clickstream behavior) in the Web site
• Web mining
  Data mining techniques for discovering and extracting
  information from Web documents; explores both Web
  content and Web usage
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• LIMITATIONS OF ONLINE MARKET RESEARCH
  – Accuracy of responses
  – Loss of respondents because of equipment
    problems
  – The ethics and legality of Web tracking
  – The difficulty in obtaining truly representative
    samples
  – The lack of understanding of the online
    communication process and how online
    respondents think and interact in cyberspace
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• HOW TO OVERCOME THESE LIMITATIONS
  – Identify the intended target audience or demographic
    so that the right kind of sampling can be performed
  – Anonymity for target respondents may encourage
    them to be more truthful in their opinions
  – Concerns about the security of the information
    transmitted should be minimized
  – Companies may outsource their market research to
    large and experienced companies that have
    specialized market research departments and
    expertise
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• BIOMETRIC MARKETING
  • biometrics
    An individual’s unique physical or behavioral
    characteristics that can be used to identify an
    individual precisely (e.g., fingerprints)
  – By applying the technology to computer users, we
    can improve security and learn about the user’s
    profile precisely


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• Advertising is an attempt to disseminate
  information in order to affect buyer–seller
  transactions
   – In traditional marketing, advertising was impersonal,
     one-way mass communication that was paid for by
     sponsors
   • interactive marketing
     Online marketing, facilitated by the Internet, by which
     marketers and advertisers can interact directly with
     customers, and consumers can interact with
     advertisers/vendors
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• The Advertising Cycle
   – ad views
     The number of times users call up a page that has a banner
     on it during a specific period; known as impressions or
     page views
   – button
     A small banner that is linked to a Web site; may contain
     downloadable software
   – page
     An HTML (Hypertext Markup Language) document that
     may contain text, images, and other online elements, such
     as Java applets and multimedia files; may be generated
     statically or dynamically

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– click (click-through or ad click)
  A count made each time a visitor clicks on an
  advertising banner to access the advertiser’s Web
  site
– CPM (cost per thousand impressions)
  The fee an advertiser pays for each 1,000 times a
  page with a banner ad is shown
– conversion rate
  The percentage of clickers who actually make a
  purchase
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– click-through rate
  The percentage of visitors who are exposed to a
  banner ad and click on it
– click-through ratio
  The ratio between the number of clicks on a
  banner ad and the number of times it is seen by
  viewers; measures the success of a banner in
  attracting visitors to click on the ad
– hit
  A request for data from a Web page or file
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– visit
  A series of requests during one navigation of a
  Web site; a pause of a certain length of time ends
  a visit
– unique visit
  A count of the number of visitors entering a site,
  regardless of how many pages are viewed per visit
– stickiness
  Characteristic that influences the average length
  of time a visitor stays in a site
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  – Advertising Online and Its Advantages
     •   Cost
     •   Richness of format
     •   Personalization
     •   Timeliness
     •   Location-basis
     •   Linking
     •   Digital branding
• advertising networks
  Specialized firms that offer customized Web
  advertising, such as brokering ads and targeting
  ads to select groups of consumers

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• BANNERS
  – banner
    On a Web page, a graphic advertising display linked to
    the advertiser’s Web page
  – keyword banners
    Banner ads that appear when a predetermined word
    is queried from a search engine
  – random banners
    Banner ads that appear at random, not as the result of
    the user’s action

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– Benefits and Limitations of Banner Ads
   • major benefit is users are transferred directly to an
     advertiser’s site, often the shopping page
   • major disadvantage of banners is their cost
– banner swapping
 An agreement between two companies to each display the
 other’s banner ad on its Web site
– banner exchanges
 Markets in which companies can trade or exchange
 placement of banner ads on each other’s Web sites

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• POP-UP AND SIMILAR ADS
  – pop-up ad
    An ad that appears in a separate window before, after,
    or during Internet surfing or when reading e-mail
  – pop-under ad
    An ad that appears underneath the current browser
    window, so when the user closes the active window
    the ad is still on the screen
• E-MAIL ADVERTISING
• NEWSPAPER-LIKE AND CLASSIFIED ADS
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• SEARCH ENGINE ADVERTISEMENT
  – URL Listing
  – Keyword Advertising
  – search engine optimization (SEO)
    The craft of increasing site rank on search engines;
    the optimizer uses the ranking algorithm of the
    search engine (which may be different for
    different search engines) and best search phrases,
    and tailors the ad accordingly
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• GOOGLE—THE ONLINE ADVERTISING KING
• ADVERTISING IN CHAT ROOMS
• OTHER FORMS OF ADVERTISING
  – Advertising in Online Newsletters
  – Posting Press Releases Online
  – Video Ads
  – advergaming
    The practice of using computer games to advertise
    a product, an organization, or a viewpoint
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• social network advertising
  Online advertising that focuses on social
  networking sites
  – Types of Social Network Advertising
     • Direct advertising that is based on your network of
       friends
     • Direct advertising placed on your social network site
     • Indirect advertising by creating “groups” or “pages”
  – Sponsored Reviews by Bloggers
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• VIDEO ADS ON THE WEB AND IN SOCIAL
  NETWORKING
  – Tracking the Success of an Online Video Campaign
     • Web video analytics
       A way of measuring what viewers do when they watch an
       online video
• viral marketing
  Word-of-mouth marketing by which customers
  promote a product or service by telling others
  about it
  – Viral Marketing in Social Networks

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• OTHER ADVERTISING STRATEGIES
  – affiliate marketing
    A marketing arrangement by which an organization
    refers consumers to the selling company’s Web site
  – Ads as a Commodity (Paying People to Watch Ads)
  – Selling Space by Pixels
  – Personalized Ads
     • Webcasting
       A free Internet news service that broadcasts personalized
       news and information, including seminars, in categories
       selected by the user

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• ONLINE EVENTS, PROMOTIONS, AND
  ATTRACTIONS
  – Live Web Events
• mobile advertising
  Ads sent to and presented on mobile devices
  – Mobile Marketing




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• PERMISSION ADVERTISING
  – spamming
    Using e-mail to send unwanted ads (sometimes
    floods of ads)
  – permission advertising (permission marketing)
    Advertising (marketing) strategy in which
    customers agree to accept advertising and
    marketing materials (known as opt-in)


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• SOME IMPLEMENTATION ISSUES
  – admediaries
    Third-party vendors that conduct promotions,
    especially large-scale ones
  – Ad Exchanges
  – Advertisement as a Revenue Model
  – Measuring Online Advertising’s Effectiveness



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• ad management
  Methodology and software that enable
  organizations to perform a variety of activities
  involved in Web advertising (e.g., tracking
  viewers, rotating ads)
• localization
  The process of converting media products
  developed in one environment (e.g., country) to a
  form culturally and linguistically acceptable in
  countries outside the original target market
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  – Automatic Versus Manual Web Page Translation
  – Using Internet Radio for Localization
    • Internet radio
      A Web site that provides music, talk, and other
      entertainment, both live and stored, from a variety of
      radio stations
• AD CONTENT
• INTELLIGENT AGENTS APPLICATIONS


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1. Do we focus on value-creating customers?
2. Which Internet marketing/advertising channel do we
   use?
3. What metrics do we use to guide advertisers?
4. What is our commitment to Web advertising?
5. Should we integrate our Internet and non-Internet
   marketing campaigns?
6. Who will conduct the market research?
7. Should we use intelligent agents?
8. What ethical issues should we consider in online
   marketing?

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