E-Commerce 03

Chapter 3Chapter 3

Internet Consumers, andInternet Consumers, and

Market ResearchMarket Research

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Learning ObjectivesLearning Objectives

Describe the essentials of Describe the essentials of consumer behaviorconsumer behaviorDescribe the characteristics of Describe the characteristics of Internet surfers and EC purchasersInternet surfers and EC purchasersUnderstand the decision-making Understand the decision-making process of consumer purchasingprocess of consumer purchasingDescribe the way companies are Describe the way companies are building relationships with building relationships with customerscustomers

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Learning Objectives Learning Objectives (cont.)(cont.)

Explain the implementation of Explain the implementation of customer service and its relationship customer service and its relationship with CRMwith CRM

Describe consumer market research Describe consumer market research in ECin EC

Understand the role of intelligent Understand the role of intelligent agents in consumer applicationsagents in consumer applications

Describe the organizational buyer Describe the organizational buyer behavior modelbehavior model

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Building Customer Building Customer Relationships: Ritchey’s bikes Relationships: Ritchey’s bikes

onlineonlineThe ProblemThe Problem

Ritchey Design, Inc. is a relatively Ritchey Design, Inc. is a relatively small designer and manufacturer of small designer and manufacturer of mountain bike components mountain bike components Sells its products to distributors Sells its products to distributors and/or retailers, who then sell them and/or retailers, who then sell them to individual consumers to individual consumers Its 1995 Web site was more a status Its 1995 Web site was more a status symbol than a business tool symbol than a business tool

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onlineonlineVisitors could get information on Visitors could get information on Team Ritchey or find out where Team Ritchey or find out where Ritchey products were sold Ritchey products were sold

It did not give customers all the It did not give customers all the information they wantedinformation they wanted

It did not enable the company to It did not enable the company to gain insight into its customers’ gain insight into its customers’ wants and needswants and needs

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onlineonlineThe SolutionThe Solution

In late 1995, Ritchey reworked the In late 1995, Ritchey reworked the Web site so that the company could Web site so that the company could hear from its customers directly hear from its customers directly

set up customer surveys on the site set up customer surveys on the site offered visitors who answer the surveys offered visitors who answer the surveys a chance to win free Ritchey productsa chance to win free Ritchey productsvisitors enter their names and visitors enter their names and addresses and then answer questions addresses and then answer questions about the company’s products about the company’s products

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onlineonlineWeb Trader software automatically Web Trader software automatically organizes and saves the answers in organizes and saves the answers in a database and is used to help make a database and is used to help make marketing and advertising decisionsmarketing and advertising decisions

Questions are changed to learn Questions are changed to learn customers’ opinions about any new customers’ opinions about any new products Ritchey developsproducts Ritchey develops

Saves $100,000 on product Saves $100,000 on product development per yeardevelopment per year

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onlineonlineAn online catalog educates retailers An online catalog educates retailers and consumers about the and consumers about the technological advantages of technological advantages of Ritchey’s high-end components over Ritchey’s high-end components over competitors’ parts competitors’ parts

Visitors browse the product catalog Visitors browse the product catalog that includes detailed descriptions that includes detailed descriptions and graphics of Ritchey’s products and graphics of Ritchey’s products

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onlineonlineThe ResultsThe Results

ritcheylogic.comritcheylogic.com sells only team sells only team items such as t-shirts, bags, water items such as t-shirts, bags, water bottles, and other gear directly to bottles, and other gear directly to individuals onlineindividuals onlineThe company does not sell bike The company does not sell bike parts to individuals directly online parts to individuals directly online because it wants to maintain its because it wants to maintain its existing distribution system existing distribution system Dealers can place orders on the site Dealers can place orders on the site

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onlineonlineThe site is basically used in B2C EC The site is basically used in B2C EC only for the basic activities in only for the basic activities in Internet marketing:Internet marketing:

communicating with customerscommunicating with customers

conducting market researchconducting market research

delivering advertisingdelivering advertising

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onlineonlineWhat we can learn …What we can learn …

Illustrates the benefits a company can derive from changing its Web site from a passive one to one with interactivityInteractive Web site allows the company to:

learn more about its customerseducate customersuse the site for customer service

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Consumer Behavior Consumer Behavior OnlineOnline

Model of consumer behavior Model of consumer behavior onlineonline

independent (or uncontrollable) variablesintervening or moderating variablesdecision-making processdependent variables

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Figure 3.1Figure 3.1EC Consumer Behavior EC Consumer Behavior

ModelModel

Source: Zinezone, c/o GMCI Co.

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Consumer Behavior Online Consumer Behavior Online (cont.)(cont.)

Consumer typesConsumer typesIndividual consumersIndividual consumers

Commands most of the media’s attentionCommands most of the media’s attention

Organizational buyersOrganizational buyersGovernments and public organizationsGovernments and public organizations

Private corporationsPrivate corporations

Resellers Resellers

Consumer behavior viewed in terms of:Consumer behavior viewed in terms of:Why is the consumer shopping?Why is the consumer shopping?

How does the consumer benefit from shopping How does the consumer benefit from shopping online?online?

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Purchasing types and experiencesPurchasing types and experiences2 dimensions of shopping experiences2 dimensions of shopping experiences

Utilitarian—to achieve a goalUtilitarian—to achieve a goalHedonic—because it’s funHedonic—because it’s fun

3 categories of consumers3 categories of consumersImpulsive buyers—purchase quicklyImpulsive buyers—purchase quicklyPatient buyers—make some Patient buyers—make some comparisons firstcomparisons firstAnalytical buyers—do substantial Analytical buyers—do substantial research before buyingresearch before buying

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Direct sales, intermediation, and Direct sales, intermediation, and customer relationscustomer relations

Companies that sell only through Companies that sell only through intermediaries still need good relations with intermediaries still need good relations with the end-usersthe end-users

Example: Ford Motor Company Example: Ford Motor Company Do not sell directly to consumersDo not sell directly to consumers

Recognize that drivers of Ford vehicles think Recognize that drivers of Ford vehicles think of themselves as having a relationship with of themselves as having a relationship with the companythe company

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Personal Characteristics and Personal Characteristics and Demographics of Internet SurfersDemographics of Internet Surfers

Environmental variablesEnvironmental variablesSocial variablesSocial variablesCultural variablesCultural variablesPsychological variablesPsychological variablesOther environmental variablesOther environmental variables

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Personal CharacteristicsPersonal Characteristicsof Internet Surfersof Internet Surfers

Personal characteristics and Personal characteristics and differencesdifferences

Consumer resources and lifestyleConsumer resources and lifestyle

Age and genderAge and gender

Knowledge and educational levelKnowledge and educational level

Attitudes and valuesAttitudes and values

MotivationMotivation

Personality Personality

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Demographics of Internet Demographics of Internet SurfersSurfers

Major demographics presented Major demographics presented includeinclude

GenderGenderAgeAgeMarital statusMarital statusEducational levelEducational levelEthnicityEthnicityOccupationOccupationHousehold incomeHousehold income

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Demographics of Internet Demographics of Internet Surfers Surfers (cont.)(cont.)

The more experience people have on the Web, The more experience people have on the Web, the more likely they are to buy onlinethe more likely they are to buy online

Two major reasons people do not buy onlineTwo major reasons people do not buy onlineSecuritySecurity

Difficulty judging the quality of the productDifficulty judging the quality of the product

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Figure 3.2Figure 3.2Amount of Money Spent on the Amount of Money Spent on the

WebWeb

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Consumer Purchasing Decision Consumer Purchasing Decision MakingMaking

Roles people play in decision-makingRoles people play in decision-makingInitiator—Initiator—suggests/thinkssuggests/thinks of buying a of buying a particular product or serviceparticular product or service

Influencer—Influencer—advice/views carry weight in advice/views carry weight in making a final buying decisionmaking a final buying decision

Decider--makesDecider--makes a buying decision or any a buying decision or any part of it part of it

Buyer—Buyer—makes the actual purchasemakes the actual purchase

User—User—consumesconsumes or uses a product or or uses a product or serviceservice

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Consumer PurchasingConsumer PurchasingDecision Making Decision Making (cont.)(cont.)

Purchasing decision-making modelPurchasing decision-making model5 major phases of a general model5 major phases of a general model

Need identification—actual and desired Need identification—actual and desired states of needstates of needInformation searchInformation searchAlternatives evaluation—research Alternatives evaluation—research reduces number of alternatives, may reduces number of alternatives, may lead to negotiationlead to negotiationPurchase and delivery—arrange Purchase and delivery—arrange payment, delivery, warranties, etc.payment, delivery, warranties, etc.After-purchase evaluation—customer After-purchase evaluation—customer serviceservice

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Consumer Decision Consumer Decision Making Process Making Process (cont.)(cont.)

Product brokering:Product brokering: Deciding what product Deciding what product to buyto buy

Merchant brokering:Merchant brokering: Deciding from whom Deciding from whom (from what merchant) to buy a product (from what merchant) to buy a product

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Table 3.1Table 3.1Purchase Decision Making Process & Purchase Decision Making Process &

Support SystemSupport System

Source: O’Keefe and McEachern, 1998.

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Figure 3.3 Figure 3.3 Model of Internet Consumer Model of Internet Consumer

SatisfactionSatisfaction

Source: Lee (2001)

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Matching Products with Matching Products with Customers: PersonalizationCustomers: Personalization

One-to-one marketingOne-to-one marketingRelationship marketing Relationship marketing

““Overt attempt of exchange partners to Overt attempt of exchange partners to build a long term association, build a long term association, characterized by purposeful cooperation characterized by purposeful cooperation and mutual dependence on the and mutual dependence on the development of social, as well as development of social, as well as structural, bonds”structural, bonds”

““Treat different customers differently”Treat different customers differently”No two customers are alikeNo two customers are alike

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Figure 3.4Figure 3.4The New Marketing ModelThe New Marketing Model

Source: GartnerGroup

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Matching Products with Matching Products with Customers: Personalization Customers: Personalization (cont.)(cont.)

Issues in EC-based one-to-one Issues in EC-based one-to-one marketingmarketing

Customer loyalty—degree to which Customer loyalty—degree to which customer stays with vendor or brandcustomer stays with vendor or brand

Important element in consumer Important element in consumer purchasing behaviorpurchasing behaviorOne of the most significant contributors One of the most significant contributors to profitabilityto profitability

Increase profitsIncrease profitsStrengthen market positionStrengthen market positionBecome less sensitive to price competitionBecome less sensitive to price competitionIncrease cross-selling successIncrease cross-selling successSave costs, etc.Save costs, etc.

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Matching Products with Matching Products with Customers: Personalization Customers: Personalization

(cont.)(cont.)Issues in EC-based one-to-one marketingIssues in EC-based one-to-one marketing

Meeting customers cognitive needs—organize Meeting customers cognitive needs—organize customer service to meet needs of each skill customer service to meet needs of each skill setset

NoviceNovice

IntermediateIntermediate

Expert Expert

E-loyalty—customer’s loyalty to an e-tailerE-loyalty—customer’s loyalty to an e-tailerLearn about customers’ needsLearn about customers’ needs

Interact with customersInteract with customers

Provide customer serviceProvide customer service

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(cont.)(cont.)Issues in EC-based one-to-one Issues in EC-based one-to-one marketingmarketing

Trust in ECTrust in ECDeterrence-based trust—threat of Deterrence-based trust—threat of punishmentpunishmentKnowledge-based trust—grounded in Knowledge-based trust—grounded in knowledge about trading partnersknowledge about trading partnersIdentification-based trust—empathy and Identification-based trust—empathy and common values between partnerscommon values between partners

Value of EC referralsValue of EC referralsWord-of-mouthWord-of-mouthDelivery of good or service sparks other Delivery of good or service sparks other usersusers

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Figure 3.5Figure 3.5The EC Trust ModelThe EC Trust Model

Source: Lee and Turban (2001)

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(cont.)(cont.)PersonalizationPersonalization

Process of matching content, services, or Process of matching content, services, or products to individuals’ preferencesproducts to individuals’ preferencesAlternative methodsAlternative methods

Solicit information from usersSolicit information from usersUse cookies to observe online behaviorUse cookies to observe online behaviorUse data or Web miningUse data or Web mining

Personalization applied throughPersonalization applied throughRule-based filteringRule-based filteringContent-based filteringContent-based filteringConstraint-based filteringConstraint-based filteringLearning-agent technologyLearning-agent technology

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(cont.)(cont.)Personalization Personalization (cont.)(cont.)

Collaborative filtering examplesCollaborative filtering examplesBackfilp.com—recommends restaurantsBackfilp.com—recommends restaurants

C5solutions.com—personalized messages C5solutions.com—personalized messages via cell phonesvia cell phones

Mysimon.com—assists in purchase Mysimon.com—assists in purchase decision-making process based on user decision-making process based on user informationinformation

Legal and ethical issuesLegal and ethical issuesPrivacy issuesPrivacy issues

Permission-based personalization toolsPermission-based personalization tools

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Delivering Customer ServiceDelivering Customer Servicein Cyberspacein Cyberspace

Customer serviceCustomer serviceTraditional: do the work for the customerTraditional: do the work for the customerEC delivered: gives tools to the customer EC delivered: gives tools to the customer to do the work for him/herself (log: to do the work for him/herself (log: tracking, troubleshooting, FAQ) withtracking, troubleshooting, FAQ) with

Improved communicationImproved communicationAutomated processAutomated processSpeedier resolution of problemsSpeedier resolution of problems

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Delivering Customer ServiceDelivering Customer Servicein Cyberspace in Cyberspace (cont.)(cont.)

Product life cycle and customer Product life cycle and customer serviceservice

Phases of product life cyclePhases of product life cycleRequirementsRequirements: assisting the customer to : assisting the customer to determine needsdetermine needsAcquisitionAcquisition: helping the customer to : helping the customer to acquire a product or serviceacquire a product or serviceOwnershipOwnership: supporting the customer on an : supporting the customer on an ongoing basisongoing basisRetirementRetirement: helping the client to dispose : helping the client to dispose of a service or productof a service or productService must be provided in all of themService must be provided in all of them

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E-service—online help for online E-service—online help for online transactionstransactions

Foundation of service—responsible and Foundation of service—responsible and effective order fulfillmenteffective order fulfillment

Customer-centered services—order tracing, Customer-centered services—order tracing, configuration, customization, security/trustconfiguration, customization, security/trust

Value-added services--dynamic brokering, Value-added services--dynamic brokering, online auctions, online training and online auctions, online training and educationeducation

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Customer relationship management (CRM)Customer relationship management (CRM)CRM in action—customer-focused ECCRM in action—customer-focused EC

Make it easy for customers to do business onlineMake it easy for customers to do business online

Business processes redesigned from customer’s Business processes redesigned from customer’s point of viewpoint of view

Design a comprehensive, evolving EC architectureDesign a comprehensive, evolving EC architecture

Foster customer loyalty by:Foster customer loyalty by:Personalized servicePersonalized service

Streamline business processesStreamline business processes

Own customer’s total experienceOwn customer’s total experience

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Customer Relationship Customer Relationship Management (CRM)Management (CRM)

Customer service functionsCustomer service functionsProvide search and comparison capabilitiesProvide search and comparison capabilities

Provide free products and servicesProvide free products and services

Provide specialized information and servicesProvide specialized information and services

Allow customers to order customized Allow customers to order customized products and servicesproducts and services

Enable customers to track accounts or order Enable customers to track accounts or order statusstatus

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Customer Relationship Customer Relationship Management (CRM) Management (CRM) (cont.)(cont.)

Customer service toolsCustomer service toolsPersonalized Web pagesPersonalized Web pages

Used to record purchases and preferenceUsed to record purchases and preference

Direct customized information to customers Direct customized information to customers efficientlyefficiently

FAQsFAQsCustomers find answers quicklyCustomers find answers quickly

Not customized, no personalized feeling and Not customized, no personalized feeling and no contribution to relationship marketingno contribution to relationship marketing

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Tracking toolsTracking toolsCustomers track their orders saving time Customers track their orders saving time and money for alland money for allExample: FedEx’s package trackingExample: FedEx’s package tracking

Customer service tools Customer service tools (cont.)(cont.)Chat rooms—Chat rooms—discuss issues with discuss issues with company experts and with other company experts and with other customerscustomers E-mail and automated responseE-mail and automated response

Disseminate general informationDisseminate general informationSend specific product informationSend specific product informationConduct correspondence regarding any Conduct correspondence regarding any topic (mostly inquiries from customers)topic (mostly inquiries from customers)

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Customer service tools Customer service tools (cont.)(cont.)Help desks and call centersHelp desks and call centers

A comprehensive customer service entityA comprehensive customer service entityEC vendors take care of customer service EC vendors take care of customer service issues communicated through various issues communicated through various contact channelscontact channels

Telewebs combineTelewebs combineWeb channels (automated e-mail reply)Web channels (automated e-mail reply)Web knowledge bases (portal-like self service) Web knowledge bases (portal-like self service) Call center agents or field service personnelCall center agents or field service personnel

Troubleshooting tools—Troubleshooting tools—assist customers in assist customers in solving their own problemssolving their own problems

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Customer Relationship Customer Relationship Management (CRM) Management (CRM) (cont.)(cont.)Justifying customer service and CRM Justifying customer service and CRM programs—2 problemsprograms—2 problems

Most of the benefits are intangibleMost of the benefits are intangible

Substantial benefits reaped only from Substantial benefits reaped only from loyal customers, after several yearsloyal customers, after several years

Metrics—standards to determine Metrics—standards to determine appropriate level of customer supportappropriate level of customer support

Response and download timesResponse and download times

Up-to-date site and availability of relevant Up-to-date site and availability of relevant contentcontent

Others Others

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Customer Relationship Management Customer Relationship Management (CRM)(CRM)

1-800-FLOWERS 1-800-FLOWERS

Buy by telephone, retail Buy by telephone, retail shops, and onlineshops, and online

Online and offline Online and offline promotionspromotions

E-mail order E-mail order confirmationconfirmation

Blackstar (music retailer)Blackstar (music retailer)

Thanks customers by e-Thanks customers by e-mailmail

Provides toll-free Provides toll-free telephone numbertelephone number

Provides tracking systemProvides tracking system

Amazon.comAmazon.com

Convenience, selection, Convenience, selection, value, special servicesvalue, special services

E-mail order confirmationE-mail order confirmation

Personalized servicesPersonalized services

Federal Express (FedEx)Federal Express (FedEx)

Package tracking servicePackage tracking service

Ability to calculate Ability to calculate delivery costs, online delivery costs, online shipping forms, arrange shipping forms, arrange pickup, find local drop pickup, find local drop boxbox

Examples of superb customer service

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Market Research for ECMarket Research for EC

Aim– find Aim– find relationship betweenrelationship between

ConsumersConsumers

ProductsProducts

Marketing methodsMarketing methods

Marketers through Marketers through information information

In order to improve In order to improve customer servicecustomer service

Discover marketing Discover marketing opportunities and opportunities and issuesissues

Establish marketing Establish marketing plansplans

Better understand the Better understand the purchasing processpurchasing process

Evaluate marketing Evaluate marketing performanceperformance

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Figure 3.6Figure 3.6Market Research ProcessMarket Research Process

Market segmentation—divide consumer Market segmentation—divide consumer market into groups to conduct marketing market into groups to conduct marketing research, advertising, salesresearch, advertising, sales

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Market Research for EC Market Research for EC (cont.)(cont.)

Conducting online market research—Conducting online market research—powerful tool for research regarding:powerful tool for research regarding:

Consumer behaviorConsumer behaviorDiscover of new marketsDiscover of new marketsConsumer interest in new productsConsumer interest in new products

Internet-based market researchInternet-based market researchInteractive—allowing personal contactInteractive—allowing personal contactGives better understanding of Gives better understanding of customer, market, and competitioncustomer, market, and competition

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Table 3.2Table 3.2Online Market Research Process Online Market Research Process

& Results& ResultsOnline market research methods—Online market research methods—fast, cheap, data collectionfast, cheap, data collection

Source: Based on Vassos (1996), pp. 66-68.

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Online market research methods Online market research methods (cont.)(cont.)Conducting Web-based surveysConducting Web-based surveys

Limitations of online researchLimitations of online researchNot suitable for every customer or product Not suitable for every customer or product Skewed toward highly educated males Skewed toward highly educated males with high disposable incomewith high disposable income

May be unreliable, biasedMay be unreliable, biasedMore knowledge is neededMore knowledge is needed

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Online market research methods Online market research methods (cont.)(cont.)Data mining—searching for valuable Data mining—searching for valuable business information in extremely large business information in extremely large databasesdatabasesNew business opportunities generated by New business opportunities generated by conducting:conducting:

Automated prediction of trends and Automated prediction of trends and behaviorsbehaviorsAutomated discovery of previously Automated discovery of previously unknown patterns and relationshipsunknown patterns and relationships

Web mining—Web mining—mining meaningful patterns mining meaningful patterns from Web resourcesfrom Web resources

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Datamining Datamining (cont.)(cont.)Major characteristics and objectives of data Major characteristics and objectives of data mining:mining:

Relevant data difficult to find in huge databasesRelevant data difficult to find in huge databases

Tools help find information buried in corporate Tools help find information buried in corporate files or public recordsfiles or public records

““Miner” uses “data drills” for easy access to Miner” uses “data drills” for easy access to answers, may find valuable, unexpected resultsanswers, may find valuable, unexpected results

Tools combined with spreadsheets for easy Tools combined with spreadsheets for easy analysis of resultsanalysis of results

Yields: associations, sequences, classifications, Yields: associations, sequences, classifications, clusters, forecastingclusters, forecasting

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Market Research for ECMarket Research for EC (cont.)(cont.)

Limitations of online market researchLimitations of online market researchtoo much data may be available—need business intelligence to organize, edit, condense, and summarize itaccuracy of responsesloss of respondents because of equipment problemsethics and legality of Web tracking

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Market Research for ECMarket Research for EC (cont.)(cont.)

Online shoppers tend to be wealthy, employed, and well educatedThe lack of clear understanding of the online communication process and how online respondents think and interact in cyberspace

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Figure 3.7Figure 3.7A Framework for Classifying EC A Framework for Classifying EC

AgentsAgents

The purchasing decision- making process: agent classification

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Intelligent Agents in Intelligent Agents in Customer-related Applications Customer-related Applications

(cont.)(cont.)Need identificationNeed identification——helps determine helps determine what to what to buybuy to satisfy a specific need by looking for specific to satisfy a specific need by looking for specific products information and critically evaluating themproducts information and critically evaluating them

ExamplesExamples::Salesmountain.com—specifically requested items Salesmountain.com—specifically requested items for individual customersfor individual customers

Discogs.com—sample and buy musicDiscogs.com—sample and buy music

Netcactus.com—help choose giftsNetcactus.com—help choose gifts

Querybot.com/shopping—looks for deals and finds Querybot.com/shopping—looks for deals and finds related information on requested itemsrelated information on requested items

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(cont.)(cont.)Product brokeringProduct brokering

Example: Example: FireflyFireflyUsed a Used a collaborative filteringcollaborative filtering process that process that could be described as “word-of-mouth” to build could be described as “word-of-mouth” to build the profilethe profileAsked a consumer to rate a number of productsAsked a consumer to rate a number of productsMatched his ratings with the ratings of other Matched his ratings with the ratings of other consumersconsumersRelied on the ratings of other consumers with Relied on the ratings of other consumers with similar tastes, recommended products that he similar tastes, recommended products that he has not yet ratedhas not yet rated

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(cont.)(cont.)Merchant brokering—Merchant brokering—intelligent agents for intelligent agents for finding vendorsfinding vendors

Bargainfinder from Andersen Consulting Bargainfinder from Andersen Consulting (first product brokering agent—no longer (first product brokering agent—no longer exists)exists)

Queried the price of a specific CD from a number of Queried the price of a specific CD from a number of online vendors and returned a list of prices online vendors and returned a list of prices (unsuccessful)(unsuccessful)

Jango (embedded in excite program)Jango (embedded in excite program)Originates the requests from the user’s site instead Originates the requests from the user’s site instead of from Jango’s of from Jango’s vendors have no way to determine vendors have no way to determine whether the request is from a real customer or from whether the request is from a real customer or from the agentthe agentProvides product reviewsProvides product reviews

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(cont.)(cont.)Merchant brokering Merchant brokering (cont.)(cont.)

Kasbah from MIT Lab (product & services Kasbah from MIT Lab (product & services comparison agent)—no longer operatingcomparison agent)—no longer operating

Users wanting to sell or to buy a product, assign Users wanting to sell or to buy a product, assign the task to an agent who is then sent out to the task to an agent who is then sent out to proactively seek buyers or sellersproactively seek buyers or sellers

Purchase and delivery—Purchase and delivery—arrange payment arrange payment and delivery of goodsand delivery of goods

After sale service and evaluation—After sale service and evaluation—automatic answering agents respond to automatic answering agents respond to customer queries and remind them of customer queries and remind them of maintenance needsmaintenance needs

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(cont.)(cont.)Negotiation—Negotiation—price and other terms of price and other terms of transactions are determinedtransactions are determined

KasbahKasbahMultiple agents—users create agents for the Multiple agents—users create agents for the purpose of selling or buying goodspurpose of selling or buying goods3 strategies: anxious, cool-headed and frugal3 strategies: anxious, cool-headed and frugal

Tete-@-tete (no longer in operation)Tete-@-tete (no longer in operation)Parameters: price, warranty, delivery time, Parameters: price, warranty, delivery time, service contracts, return policy, loan option and service contracts, return policy, loan option and other value added servicesother value added servicesUse information acquired during the first two Use information acquired during the first two stages of the purchasing decision model to stages of the purchasing decision model to evaluate each single offerevaluate each single offer

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(cont.)(cont.)

Other EC agentsOther EC agentsAuction support agentsAuction support agents

Fraud and detection protection agentsFraud and detection protection agents

Character-based interactive (animated) Character-based interactive (animated) agentsagents

Learning agentLearning agent

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(cont.)(cont.)Organizational Organizational buyer behaviorbuyer behavior

Purchase same Purchase same products as products as individualsindividualsTransaction volumes Transaction volumes much largermuch largerTerms of Terms of negotiations and negotiations and purchasing more purchasing more complexcomplexPurchasing process Purchasing process more important than more important than to an individual to an individual buyerbuyer

Behavioral model Behavioral model of organizational of organizational buyersbuyers

Influencing variables Influencing variables different from those different from those of individual buyersof individual buyersOrganization Organization purchasing purchasing guidelines and guidelines and constraintsconstraintsInterpersonal Interpersonal influences are factors influences are factors (authority)(authority)Group decision Group decision makingmaking

6262

Organizational Buyer Organizational Buyer Behavior Internet Marketing Behavior Internet Marketing

in B2B (cont.)in B2B (cont.)Organizational buyer behaviorOrganizational buyer behavior

number of organizational buyers is much smaller than the number of individual buyerstransaction volumes are far largerterms of negotiations and purchasing are more complex

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Figure 3.8 A Model of Figure 3.8 A Model of Business Buyer BehaviorBusiness Buyer Behavior

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in B2B (in B2B (cont.)cont.)Methods for B2B online marketingMethods for B2B online marketing

Targeting customersTargeting customerscontact all of its targeted customers individually when they are part of a well-defined groupaffiliation serviceadvertising

Electronic wholesalersElectronic wholesalersintermediary sells directly to businesses, but does so exclusively online

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in B2B (in B2B (cont.)cont.)Other B2B marketing servicesOther B2B marketing services

Digital Cementprovides corporate marketing portals that help companies market their products to business customers

National Systemstracks what is going on in an industry

Business Townprovides information and services to small businesses, including start-ups

Vantagenetoffers free tools that help increase traffic to a company’s Web site

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Organizational Buyer Organizational Buyer Behavior Behavior Internet Marketing in Internet Marketing in

B2BB2B (cont.)(cont.)

Affiliate programsAffiliate programsPlacing banners on another vendor’s Placing banners on another vendor’s Web siteWeb siteContent alliance program in which content is exchanged so that all can obtain some free content

InfomediariesOnline data mining services

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Management IssuesManagement Issues

Understanding consumersUnderstanding consumersConsumers and technologyConsumers and technologyResponse timeResponse timeIntelligent agentsIntelligent agentsMarket researchMarket researchCRM and EC integrationCRM and EC integrationMeasuring customers’ Measuring customers’ satisfaction from a Web sitesatisfaction from a Web site

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CRM Applications and Tools CRM Applications and Tools (cont.)(cont.)

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CRM Applications and Tools CRM Applications and Tools (cont.)(cont.)

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