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					Users & Behaviour

 Users & Behaviour

”……know who your end
customers and prospects are
and then to learn as much
about them as possible”

         (seybold 1998)

                     Users & Behaviour
”Although it is the customer who ultimately
decides what to buy, digital technology can aid in
the decision process” (Urban 2004)

• Online product reviews / purchasing guides
• Discussion / Chat forums (e.g. Amazon book review)
• Price comparisons (e.g. Pricewatch / Hyvä Valinta)
• Search engines etc.
• Selection procedures (e.g. Dell online, Online
                        Banking etc.)
• Email Alert Systems / Targetted Offers (e.g. Amazon, Interflora)
• Spam Filters
• Online Shopping Baskets
• etc.
                 Users & Behaviour


    Be careful when you are given figures or research relating
    to internet usage and behaviour. Research via the internet
    is often of questionable quality due to:

•   Poor response rates

•   Poor sampling methods (people are already internet users,
    choice of sample population is not random)

•   Research intentions may be biassed

•   etc.

                  Users & Behaviour

American Airlines’ internet research revealed the
  following trends and values: (source: strauss & Frost 2001)
B-to-B & B-to-C

•   Value
•   Price (important for some, not for all)
•   Customization adds value
•   Speed is everything
•   Convenience is critical for busy people
•   Easy does it
•   Personalization makes users feel important
•   One-stop shopping and integrated solutions saves
    time & makes life easier
•   Self-service saves time
•   E-mail communication to firms deserves answers
          B2B E-Commerce MARKETING

B2B = Half of all E-Commerce

What do businesses use it for (straus & Frost 2001) ?:

•   Selling products using electronic networks

•   Providing customer relationship management (CRM)
    functions online

•   Coordinating activities in the distribution channel using
    electronic data interchange (EDI) and just-in-time inventory

•   Supply chain management (SCM)

•   Combining with other firms to buy or sell co-operatively

•   Simply communicating using e-mail, intranets and extranets
     B2B E-Commerce MARKETING

   Companies can force their partners and
 suppliers to do business with them on the net,
         even on the buyer’s own terms

eg. British Airways requests many suppliers to
 supply through its online procurement system

                 B2E E-Commerce MARKETING
mCRM's Future Lies in B2E

By Michael Pastore

 The immediate future for mobile CRM (mCRM) applications lies not in connecting business with consumers,
but in connecting employees and their employers, in particular in developing and enhancing business-to-
employee (B2E) sales applications, according to research by Datamonitor.

The pervasiveness of mobile devices such as phones and PDAs, and the increasing bandwidth available to these
devices (2.5G and 3G networks) means that the mobile/wireless channel is one that businesses, and
consequently CRM vendors cannot afford to ignore. According to Datamonitor, global investment in mCRM in
the B2E space will grow from a mere $70 million in 2000 to $1.3 billion in 2005.

In 2001, the global mCRM market (B2E sales applications, B2E services application and B2C applications), will
be worth $118 million, compared to just $75 million in 2000. By 2005, its value will have increased to a
staggering $1.7 billion. Despite many predictions of Western Europe and Asia-Pacific becoming the hotbeds of
global m-commerce, North America will, by the end of 2001, account for 57 percent of global mCRM revenues,
Datamonitor found. Britain will account for 16 percent, Germany 10 percent, France 7 percent, Italy 3 percent,
Spain 2 percent and Belenelux and Scandinavia 3 percent each.

Sales applications are currently the most popular investment, and will continue to be over the next five years,
because they offer the greatest return in investment, and sales departments have significant political force in
companies because they generate revenues. B2E sales applications currently account for 52 percent of total
global mCRM investment and this will continue to rise to 56 percent in 2005. Wireless connections provided by
mCRM applications enable companies to automate business processes that involve employees who spend much
of their time out of the office. By extending field sales solutions to mobile channels, the sales representative
can update customer data at anytime, from anywhere.

                 B2E E-Commerce MARKETING

mCRM's Future Lies in B2E - Continued

B2E service applications, solutions for the service representatives (such as the employees of utilities
companies) account for 41 percent of mCRM revenues globally. In 2005, Datamonitor estimates this will be
reduced to just 23 percent. Despite the obvious advantages of B2E service applications, particularly with the
integration of location-based services, their future is not as bright as sales applications.

Recent announcements by Siebel, SAP and Onyx, among others, prove that the major CRM players are all
investing in the mobile channel. However, recent worries over the viability of m-commerce, the cost of third
generation (3G) mobile licenses and the general state of telecoms and technology stocks have led a number of
observers to speculate as to which areas of m-business will really justify the investments that have been, and
are being, made in the mobile space.

Although B2E applications will still dominate the market, the B2C space will be the fastest growing over the
next five years. New technologies such as location-based services and personal area networks (PANs - e.g.
Bluetooth) will enable companies to market to and service their customers in a more personalized way, helping
them to move ever closer to the holy grail of "one-to-one"customer relationships.

"M-commerce and mCRM are still very much in their infancy," said Robin Goad, technology analyst with
Datamonitor. "The real promise of m-commerce still lies in the future when 3G networks become more
widespread and mobile devices become more intelligent. As m-commerce becomes more of a reality, the
market for business-to-customer applications will really begin to take off."

July 18, 2001

     Consumer Users & Behaviour

 Current Main Marketing Commerce Channels:

 Telephone, mail, in person, over the internet


   The WEB is only one digital channel for
communicating with customers – there are many
                   others !

        Can you think of some more ?

              Consumer Users & Behaviour
Diagram adapted from Bishop (1998)

   People With Access           Digital Tools For E-Communication
   Everyone                Mobile Telephone (GSM)
                           Voice mail on mobile / Text Messaging
                           Cards with bar code (eg entry cards etc.)
                           Smart cards (e.g., credit cards, phone cards)
   Most People             Personal Computer
                           Net Access
   Fewer People            WAP /GPRS / 3G / In-Car Communication
                           Palm Pilot (hand help PC or Communicator) / Laptop
                           Interactive / Digital TV
                           Virtual reality on PC
                           Video mail / Video Communication
                           Real audio
                           Other multi-media on PC
      Consumer Users & Behaviour

      Diffusion of Innovation (Rogers, 1962)

5 categories of Adopters (based on 500 product diffusions)

                  Innovators (2.5% ?)

                Early Adopters (13.5% ?)

               The Early Majority (34% ?)

                The Late Majority (34% ?)

                   Laggards (16% ?)

        Also, there are of course NON-Adopters
          Consumer Users & Behaviour

          Diffusion of Innovation (Rogers, 1962)

  5 categories of Adopters (based on 500 product diffusions) –
                    Massive generalizations

   risk takers, try things out – especially high tech, self reliant, well
                         educated, good income

                            Early Adopters:
community minded, opinion leaders, eager to buy new products, willing
                         to try things out

          Consumer Users & Behaviour

          Diffusion of Innovation (Rogers, 1962)

  5 categories of Adopters (based on 500 product diffusions) –
                    Massive generalizations

                         The Early Majority
do not rush, information collectors, consider thoughtfully, maybe follow
 opinion leaders and watch other’s experiences. Less thought for low
                         involvement products

                          The Late Majority
           sceptical, follow group norms and word of mouth

traditional, lower socioeconomic status, often adopt the product when
     the product is no longer even the latest product / technology
          Consumer Users & Behaviour

         Diffusion of Innovation (Rogers, 1962)

But: surely these categories depend on the nature of the offering.

Research has found, for example that Bank, Insurance, Telecoms
 and Energy adopters are not necessarily similar (UK EA, 1997)

Consumer Users & Behaviour

Diffusion of Innovation (Rogers, 1962)

  Fits in with the Product Life Cycle:

Introduction (Early Adopters)

Growth (Early Adopters, Early Majority, Late Majority)

Maturity (Late Majority, Laggards)


     Consumer Users & Behaviour

Marketing Should Adapt to Diffusion of Innovation
    group needs & Product Life Cycle stages

            How could that be done ?

           Consumer Users & Behaviour
Adoption Barriers (straus & frost 2001):

• Sociological & Cultural issues
   • Habbit of touching merchandise before buying

   • Direct marketing culture – eg: how common is direct mail

   • Appeal and trust of Technology

   • Role of the physical marketplace within society

   • Credit card infrastructure / role of cash

   • Likelihood of fraud

   • Internet education

   • Language (need to develop automatic translation technology)
   • New business start-up assistance
                    Consumer Users & Behaviour
The m-payment circus rolls into town
Duncan Brown, Consulting Director (
On Wednesday 26 February (2003), Orange, Telefonica Moviles, T-Mobile, and Vodafone formed a new
association to drive interoperable mobile payments.

Exactly one month before, I ranted at the plethora of m-payment standards initiatives in despair. “The best way
to kill off a standards initiative is to create a competing one,” I wrote. There are at least six initiatives, creating a
standards circus that is stalling growth of m-commerce.

So it was with a heavy heart that I spoke with Tim Jones, the CEO of the new Mobile Payment Services

MPSA aims to be the “Visa/MasterCard” for mobile operators. That is, it is a membership organisation that
facilitates payment transactions by providing branding, settlement and other support services. Membership is
restricted to mobile operators (plus MVNOs and other SIM issuers).

The founding members are joined by 3, debitel, KPN Mobile group, O2 and TMN in supporting the venture. MPSA
hopes that other operators will join up.

MPSA is clearly an attempt by operators to push forward the m-payments agenda. Operators stand most to lose
by procrastination, as required ARPU increases are expected to come from data services (that is, m-commerce),
not voice. M-commerce is enabled by payment, and every mobile operator has implemented a payment solution
or will do so within 18 months. M-payment is a not an optional service.

The creation of MPSA illustrates the frustration of operators at other standards initiatives, such as the GSM
Association, the OMA and the Mobile Payments Forum. Tim Jones states that he hopes the groups can work
together and is keen to share specifications.

MPSA will develop (or borrow) technical specifications in order to define the interfaces between parties. But
development of the solution will be outsourced, presumably to one of the leading players (such as iPin, Trivnet,
Encorus or Altamedius). Smoothing the selection of a technology provider with the four founding members will
be challenging, as each has a different payment platform today. Indeed, Jones believes that getting players to
agree on technology will be a battle.
                   Consumer Users & Behaviour

The m-payment circus rolls into town - Continued

Will MPSA improve the m-payment standards circus?
With at least six overlapping standards acts vying for attention, the m-payment industry is a joke. Is MPSA
about to restore order to the ring, or is it wearing a false nose and over-size shoes?

There are two key parties that want to ensure the success of m-payments:

Operators, who need to increase ARPU by offering value-added data services
Content providers, who want to sells their wares to consumers

Both parties are served by MPSA. Operators are offered a standard way of providing m-payment, plus an
acceptance brand that will ease recruitment of merchants. Content providers can set up a single merchant
acquirer (payment service provider) relationship, thus reducing their transaction and management costs.

This last point could be the key to increased take-up of m-commerce. If big content providers, such as Disney,
EMI and Bertelsmann, decide to offer content directly to consumers, they’ll want a single relationship with a
payment provider. Operators will then break down their current walled garden approaches to offer this generic
content to demanding subscribers.

If MPSA is successful in offering this service we won’t need any other m-payment standards. The show will be

All of this takes time, however. MPSA will not launch its service until 2004. Until then, the circus will trundle on.

              Consumer Users & Behaviour
UK Bank Takes Wireless FastPay Platform (20 August 2002:

Magex announced that NatWest will use Magex's Managed Payments Platform as the
technology platform for FastPay, its new mobile phone and email P2P service.

NatWest, part of The Royal Bank of Scotland, is currently trialling FastPay to UK
consumers. The service enables anyone with an email address or a mobile phone
number to send and receive payments.

One of the key features of FastPay is that it is open to all UK residents regardless of
what bank is their primary bank account. New consumers simply visit to register for their account. Once the registration process has
been completed, users are free to send and receive money to anyone with an email
address or mobile phone number.

Users can also pay money into / take money out of their FastPay accounts using any
UK debit card or bank account.

"We are delighted that NatWest has chosen Magex as its technology partner for this
important trial", said Josh Groves, CEO of Magex. "Over the last 12 months, we have
been working extremely hard to develop pioneering P2P and P2M payment services
and solutions for financial institutions and mobile operators. The recent launch of the
trial of FastPay proves Magex to be a major player in the growing P2P payments 21
industry in the UK and Europe."
         Consumer Users & Behaviour

Adoption Barriers:

• Technology Issues
  • Lack of PC ownership (eg: China)

  • Communication Infrastructure, Speed & Reliability, Wireless &
  Satelite Availability etc. (eg: 49 telephones per 000 in Arab countries
  compared to 133 worldwide, but Sweden aims to have 80%
  wideband access soon)

  • Usage costs: Phone calls, ISP access
  (eg. local calls are free in the USA)

  • Postal Service Reliability: requirement for eg. Amazon

          Consumer Users & Behaviour

Adoption Barriers:

• Legal & Political Issues
   • Government Censorship & Regulation: eg: prevention of foreign
     investment in internet ventures

   • Taxation rules: eg: US firms have weaker taxation on foreign sales

   • Usually only hurts companies in the same country

Adoption Barriers: Adoption of Mobile Multi-Media Services
(Source: Lewis 2003)

               The advent of a new
              generation of mobile
           multimedia services will
            enable our customers to
             live more of their lives
          through their mobile device

          Gavin Darby – Vodafone (April 2002)

Adoption Barriers: Adoption of Mobile Multi-Media Services
(Source: Lewis 2003)

             Most customers feel it is
                enough to use their
               phones for talking &
              messaging, do not want
             to pay more and will not
             believe any more WAPing

Adoption Barriers: Adoption of Mobile Multi-Media Services
(Source: Lewis 2003)

    GSM Users Tend To Be Pessimistic
  Are satisfied with what they have
  Use their phones for talking & messaging
  Do not feel they need phones for other purposes
  Do not want to pay more, would like to pay less
  Will Not Believe Any More WAPing lies & promises
  Know little about the benefits, advantages & logistics of switching to 3G.
  Would be happy to adopt 3G only if it does not cost any more & if
  switching is effortless
  Would not try-out 3G-based services without knowing they exist
  Would not try-out many 3G services without knowing enough about
  what they are, how to use them & the benefits from them (trial costs
  Respond to independent & expert recommendations when considering
  services to use
  Would give-up trying 3G services following several disappointing
  experiences (as with WAP & Internet) – greater guidence needed
  May adopt 3G phones & services & pay a premium only if convinced of
  the benefits of 3G services (ie. desire & need created)             26
Adoption Barriers: Adoption of Mobile Multi-Media Services
(Source: Lewis 2003)

               Therefore Potential Service
                Providers Are Pessimistic

                  Therefore 3G Services
                   Will Remain Absent

                  Therefore Consumers
            Will Not See Need For 3G Phones

              .........So The Spiral Continues

         Need to Avoid Self Fulfilling Prophecy
Adoption Barriers: Adoption of Mobile Multi-Media Services
(Source: Lewis 2003)

                   Customers need
                answers before they
                 take action…………..

Adoption Barriers: Adoption of Mobile Multi-Media Services
(Source: Lewis 2003)

                 2                     3
Knowledge &           Tell me more          Where can I
                                                                    of benefits
                      about those            find those
Understanding                                services?

      1      How Can I
            live more of           What’s the                Are any
                my life             point of                services
              through a            getting &              worth using?
           phone? – give             paying                which Ones
               me real              more for              are the best?
              examples              3G etc ?

                6      Where can I
                        find all the        Where can I       5
                        info in one          find honest             Desire/Need
   Trust                 place & in         independent
                       plain simple            advice?
                        language?                                         29
         Consumer Users & Behaviour

Segments & Segmentation

Demographics of net users is becoming more like
the mainstream population but is still…….

•   Average income is higher
•   More men than women
•   More educated
•   etc.

Therefore: more stable niches are appearing

       Consumer Users & Behaviour

Segments & Segmentation


Still internet usage varies greatly by country

        Consumer Users & Behaviour

Segments & Segmentation

Demographics & Lifestage             Singles

                      Teens                 Gays
Women     Seniors                Ethnic
                    & Children            & Lesbians

   Students    Mothers               Families
                         & Dinkies

            Consumer Users & Behaviour

Segments & Segmentation

Demographics & Lifestage

             Women         eg.,

    • Rapidly increasing proportion on the net. Possibly the majority in the USA now
• Key issues include: health, finance, food, fashion, house & home, discussion, children,
                                  travel, books & all else.
        • Middle age women (grown kids, independent, wealthy = good segment

                          Mothers          eg.
                     • Traditional shopping is not always so easy
 • Need to find people in similar situations eg. discussion forums for pregnant women
                             • Flexible timing is important

                        Ethnic      eg.
   • eg. in the USA, African Americans buy more music on the net than other groups

            Consumer Users & Behaviour

Segments & Segmentation

Demographics & Lifestage

              Seniors        eg.,
                              • Potentially massive segment
                                    • Time and money
    •Senior net users are more likely to shop on the net, eg. books, medicine, health,
      insurance, travel, information, investments, presents for grand children etc.

      Teens & Children eg.       
                          • Generation I (”the net generation”)
•eg. entertainment (music, fun and games, cartoons, videos), chat, music tickets, fashion
                               • Driven by school internet
                      • Payment is a problem – needs to be solved
                    • Often prefer the net to television or telephone

              Consumer Users & Behaviour

Segments & Segmentation

Demographics & Lifestage

                Families       eg.,
                • People with families often have limited time, evening is best
                 • Banking, Insurance, Travel, etc are often best on the net.
                  • Have need for ideas: eg. and family fun: eg:

                                    Explore the Disneyland® Park
five imaginary lands to enjoy! ….Wouldn't you love to visit an enchanted realm... the Disneyland® Park!
   Discover a place so magical that the whole family will remember it... A place where there's always
                 something new to do and see, a place where your dreams come true...


                  Students: WHAT DO YOU THINK ?
         Consumer Users & Behaviour

Segments & Segmentation

Demographics & Lifestage

                Gays & Lesbians      
  • Use the internet more frequently and stay online longer than any other group
                             (”investors flock…” 2000)

      Consumer Users & Behaviour
Segments & Segmentation

Psychographic Segments

  Personality   – hard to harness separately in segmentation

           Values     – eg.

         Lifestyle    – eg.

            Activities    – eg.

                Interests   –

          Opinions      – see for eg: greenpeace
       Consumer Users & Behaviour
Segments & Segmentation

Mixing Segments: Psychographic Segments with
Demographic Segments & Lifestage Segments

• Are There Any Examples ?

• Can You think of any new Ideas ?

          Consumer Users & Behaviour
Segments & Segmentation - Mixing Segments:

Youth and Upscale Consumers Want an M-Lifestyle
By Robyn Greenspan

The fate of the wireless Internet revolution may rest on the shoulders
of consumers under age 25, and upscale users who will drive demand
for 3G, according to findings by Taylor Nelson Sofres (TNS).

The research firm predicts that marketers who concentrate on the
youth and affluent population segments will have the greatest chance
of capturing the wireless Internet market.

The report hypothesizes that marketers can deliver these branded
offerings by forming strategic alliances with businesses that provide
networks, content, hardware and/or software.

For those marketers whose core competencies are in consumer
insights, new-product development and branding, the potential is
huge and virtually untapped.
             Consumer Users & Behaviour
Segments & Segmentation

Attitudes Towards Technology: Technographics:
According to Forrester Research, USA

•   Fast Forwards: Biggest users of business software
•   New Age Nurturers: Most ignored group of technology consumers
•   Mouse Potatoes: love interactive entertainment on the PC
•   Techno-strivers: Highest proportion of PC ownership of all low income groups
•   Digital Hopefuls: Strong potential market for low-cost PC
•   Gadget Grabbers: Buy low cost, high-tech toys such as Nintendo
•   Handshakers: not into technology for their business dealings
•   Traditionalists: Use VCR but not much more
•   Media Junkies: love TV and are early adopters of satelite television
•   Sidelined Citizens are technology laggards

         Consumer Users & Behaviour
Segments & Segmentation

Behaviour Segments

1. Benefit Segments – nearly all internet users use internet for
   information, most for email, many for shopping, some for chat.

2. User Segments – (P.T.O)

          Consumer Users & Behaviour
Segments & Segmentation

Behaviour Segments

Benefit Segments:
      •   Community Members:
          people join communities to feel connected with people who
          have common interests: hobbies, professions, family
          contacts, support groups, politics, religion etc.
      •   Shoppers: E-Shoppers, Wired but Wary, Unwired
          (Scarborough research, USA)
      •   Streamies: - People who listen to online music, also buy
          much online (eg. books, music, CD’s, travel, etc). Likely to
          increase as bandwidth increases.

              Consumer Users & Behaviour
   Segments & Segmentation

   Behaviour Segments

   User Segments:

   Home                     ISP                                       Time
                       (Internet Service       Wireless
   & Work                  Provider)                                  Online
eg. Home users
often have slower     eg. Partnerships                            When amount of
connection speeds,    with ISP providers    Set to grow           time online does not
therefore want less   and Ventures into     massively. Wireless   matter, depth of
graphics.             ISP may be a way of   customers want        content may become
Home & Work users     reaching customers    ”..customized         more important,
may wish to                                 information, ASAP,    surfing may increase
connections                                 anytime, anywhere”    and brand loyalty
between home &                              – J.Dorfman           may decrease – so
work and perhaps                            (Strategis Group,     loyalty will become
businesses will                             2000)                 more of an issue.
support this move
   Consumer Users & Behaviour

TV, Radio and even direct mail have been
(until now) Linear mediums of
communication..we start at the beginning
and work our way through..the marketer
organizes and controls the way the
information is presented. Internet is not
like that, the customer can move around
the information more freely. The customer
is more in control of the information – but
they also want to avoid information
overload and stress, and they want
guidance and simplicity – how do we
achieve this compromize ?

Services tend to be evaluated to a large
extent using experience or reputation

This linked to absence of physical
differentiation between competing
offerings, can often result in price being
the key variable in purchase decisions in
service markets (Berry & Yadav, 1996) –
eg: energy.


E-commerce providers are at special risk
because of ease of comparing prices and
difficulty in noticing differences between

Therefore, providers have to be more price
competitive or identify new ways to
differentiate (Loewe & Boncher,1999)

In markets with low differentiation ability,
eg. home insurance, consumer banking
and air travel), as price becomes more
dominant within purchase decision
making, many services become
commodity goods. (Chaston,2001)            46

Response Options (Chaston, 2001):

1. Develop economies of scale through
   exploiting technological infrastructures
   (eg. AT&T)

2. Invest in developing internal process
   operations to deliver lower operating
   costs (eg. Charles Schwab)

3. Strategies to avoid price wars: eg.
   customization (eg.Dell) and long-term
   relationship development (UPS)



is de-commoditization Possible ?

eg. Avida