CPIS380 CH04 Consumer Behaviour and Advertising
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Transcript of CPIS380 CH04 Consumer Behaviour and Advertising
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Chapter 4
Consumer Behavior, MarketResearch and Web Advertisement
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The purpose of a CUSTOMER BEHAVIOUR model is: to help vendors understand how a customer make a purchasing decision.
to show factors that effects consumer behaviour
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Electronic Commerce Prentice Hall 2006 3
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Consumer DSS supports specificdecisions
product brokeringDeciding what product to buymerchant brokering
Deciding from whom (from what merchant)to buy a product
Provide EC mechanisms, communicationand collaborations
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3 basic approaches used in Marketing and Advertising:1. Mass
Targeted to everyone2. market segmentation
The process of dividing a consumer market into logical groups for conductingmarketing research and analyzing personal information
3. one-to-one marketing (relationship marketing)Marketing that treats each customer in a unique way
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Electronic Commerce Prentice Hall 2006 5
The one-to-one New Marketing Model
Start at (1). Then customer decides to buy or not (2). When sales is made (3) customerinformation is collected (4) and place in database (5). Then, customer profile is developed(6) and the four P are generated on one-to-one basis (7). Based on this individualisedprofile, appropriate advertisement prepared (8) that will hopefully lead to another purchase.Then the cycle repeats. All of this can be done in Web environment.
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Personalization in EC
Personalization
The matching of services, products, and advertisingcontent with individual consumers and theirpreferences.
Based on what on a company knows about individual user and
called user profileUser profile
Defines the requirements, preferences, behaviors,and demographic traits of a particular customer.
Behavioral Targeting is the method to compile userprofile, that uses information collected about anindividuals Web-browsing behavior, such as the pagesthey have visited or the searches they have made, to
select an advertisement to display to that individual
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Method of Behavioral targeting
Collaborative filtering
Method that uses customer data to predict, based on formulasderived from behavioral sciences, what other products or servicesa customer may enjoy; predictions can be extended to othercustomers with similar profiles. E.g those who bought theseitems also bought the following items ..
Rule-based filtering Based on a series of yes/no or MCQs Range from personal to
specific information custoer is looking on a speficis Web. E.g. ifcustomer age is greater than 35, income is above $35000.00, soads Car A, else show Car B
Content-based filtering Identify customer preferences by attributes of products they intend
to buy. E.g. recommend a electronic commerce book to customerwho have shown interest in EC.
Activity-based filtering By watching the user activities on the Web
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CUSTOMER LOYALTY
Customer Loyalty refres to adeep commitment tp rebuy aprefrred product or services continually in future. Customer acquisition and retention. e-loyalty
Customer loyalty to an e-tailer or loyalty programs
delivered online or supported electronically Business Intelligence and Analytical Software Merchant rating, customer reviews.
SATISFACTION IN EC Satisfaction is one of the most important success
measures in the B2C online environment TRUST IN EC
trustThe psychological status of willingness to depend onanother person or organization
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Satisfaction in EC
A repeat web purchase is mainly due tocustomer satisfaction
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Trust in EC
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Online Market Research Methods
A critical success factor to B2C is to find out what the
customer want, so that the merchants can make thecustomer happy
Cheaper, faster, geographically diverse audience (largesample)
Representative Market Research Approaches1. Market Segmentation Research2. Online Sampling Methods through email,
questionnaire placed on Web, Voting Polls,3. Online Surveys Web-based, online focus group,
4. Hearing Directly from Customers5. Data Collection in the Web 2.0 Environment
polling, blogging, chatting, Tagging, Multimedia
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Online Market Research Methods
6. Observing Customer Movements online
Keep track of consumers movement (what people are doing) on theWeb by observing customer behaviour rather that by asking themquestions
Sometimes customer are not aware; illegal and unethical Uses:
Transaction log (log file)is a record of user activities at a companys
Web site clickstream behavior , customer movements on the Internet clickstream data, data that occur inside the Web environment. they provide a
trail of the users activities (the users clickstream behavior) in the Web site
Cookies,A data file that is placed on a users hard drive by a remote Webserver, frequently without disclosure or the users consent, that collectsinformation about the users activities at a site. It allow a Web site to storedata on the users PC, when customer return to the site, the cookies can beused to find what the customer did in the past
Web bugs, tiny graphics files embedded on e-mail messages and in Websites that transmit information about the users and their movements to aWeb server
Spyware is software that gathers user information over an Internetconnection without the users knowledge. Then send you e-mails or pop upsbased on what they learn about customer.
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Web Advertising
Advertising is an attempt to disseminate information inorder to affect buyer-seller transaction.
Interactive advertising Online marketing, enabled by the Internet, in which advertisers can
interact directly with customers and consumers can interact withadvertisers/vendors.
A customer can click an ad on the Web to obtain more information orsend an e-mail to ask a question.
Two major business models for advertising online:
Using the Web as a channel to advertise a firms own productsand services
Making a firms site a public portal site and using captive
audiences to advertise products offered by other firms
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Web Advertising - Terminology
ad views
The number of times users call up a page that has a banner on itduring a specific period; known as impressions or page views.
Button A small banner that linked to a Web site. Can contain down
loaded software.
Page An HTML (Hypertext Markup Language) document that may contain
text, images, and other online elements, such as Java applets andmultimedia files; may be generated statically or dynamically.
Click (click-through or ad click)
A count made each time a visitor clicks on an advertisingbanner to access the advertisers Web site
CPM (cost per thousand impressions) The fee an advertiser pays for each 1,000 times a page with a
banner ad is accessed by viewers.
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Web Advertising - Terminology
Conversion rate
The percentage of visitors who actually make a purchase. Click-through rate
The percentage of visitors that are exposed to a banner adand click on it.
Hit
Any request for data from a Web page or file. visit
A series of requests during one navigation of a Web site; apause of a certain length of time ends a visit
Unique visit
A count of the number of visitors to a site, regardless ofhow 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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Web Advertising - Terminology
ButtonUnique visit
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Web Advertising
advertising networks Specialized firms that offer customized Web advertising,
such as brokering ads and targeting ads to select groupsof consumers.
E.g. DoubleClick (a Google company) E.g. Bannnerserver.com
Advertising Online and Its Advantages Cost Richness of format Personalization
Timeliness Location-basis Linking Digital branding
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Online Advertising MethodsBanner
Banner is a graphic advertising display linked to the advertisers Web
page major benefit is users are transferred directly to an advertisers
site, often the shopping page major disadvantage of banners is their cost
keyword banners
Banner ads that appear when a predetermined word is queried from asearch engine, have target audiences
random banners Banner ads that appear at random, not as the result of the users action
Static banners Always on the Web page
banner swapping An agreement between two companies to each display the others banner
ad on its Web site
banner exchanges Markets in which companies can trade or exchange placement of banner
ads on each others Web sites Swapping is a problem : a match is frequently not possible
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Advertising MethodsBanner
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Advertising MethodsPop-up
pop-up ad An ad that appears in a separate window before,
during, or after Internet surfing or when reading e-mail
It appear in front of the active window, automatically
pop-under ad An ad that appears underneath the current browser
window, so when the user closes the activewindow, he or she sees the ad
interstitial (splash screen) An initial Web page or a portion of it (box) that is
used to capture the users attention for a short timewhile other content is loading.
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Advertising MethodsPop-up
Pop-up ad
Splash screen
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Advertising Methods E-Mail Advertising
Most companies have database of customers to send e-mails or can purchase them, low cost Using email without the consumers permission is called
spamming and have lots of junk mail.
Advertising in chat rooms one-to-one, virtualmeeting ground, more effective than banner,
Advertising in newsletters/papers Advertising in social networks
Online advertising that focuses on socialnetworking 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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Advertising Methods
Search Engine Advertisement URL Listing: Most search engine allows the companies to submit the
internet address, URL, for free so that these URLs can be searchelectronically
Keyword Advertising: Linking an ad with the users keywords.Advertisements appears on the screen along with the search resultswhen the chosen keywords are searched. Advertiser who pay more
will appear higher on the list
Improving companys search engine optimization SEO: To be placed at the top of results. The craft of increasing site rank
on search engines; the optimizer uses the ranking algorithm of thesearch engine (which may be different for different search engines)
and best search phrases, and tailors the ad accordingly. e.g.Google ranks Web sites by linkage their popularity and giveweight to link to major companies, government organisation, sitebuild on .edu domain.
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Advertising Methods
Associated ad display (text links)
An advertising strategy that displays a banner ad related to a termentered in a search engine
E.g amazon.com. When a customer reads about a book, a list ofbooks is displayed under the heading Customer who bought this
book also bought The ads appear only as a reaction to user actions.
Affiliate marketing
A marketing arrangement by which an organization refers consumersto the selling companys Web site
Amazon.com have 500,000 affiliates sites
viral marketing
Word-of-mouth marketing by which customers promote a product orservice by telling others about it
Ad i i S i d P i
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Advertising Strategies and PromotionsOnline
Customizing Ads
Filtering irrelevant information by providing consumerswith customized ads
Based on users profiles. Select from menu, say whenregistration only select sports, news and travel.
Webcasting
A free Internet news service that broadcastspersonalized news and information, including seminars,
in categories selected by the user Comparison ads
comparestoreprices.co.uk/compare-prices/daewood
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Special Advertising Topics
Permission Advertising
Spamming - Using e-mail to send unwanted ads (sometimesfloods of ads)
permission advertising (permission marketing) - Advertising(marketing) strategy in which customers register with advertisersand agree to accept advertising and marketing materials
Localisation
The process of converting media products developed in oneenvironment (e.g., country) to a form culturally and linguisticallyacceptable in countries outside the original target market
E.g. web translation, dates, Internet Radio Ad Content (Business Content)
The content of ads is extremely important, and companies usead agencies to help in content creation for the Web just as theydo for other advertising media
The right content can drive the traffic to a site, remain at thesite, read its content carefully and make a purchase.
Content is especially important to increase stickinessfactorremain at a site read its contents make a purchase