Date post: | 28-Dec-2015 |
Category: |
Documents |
Upload: | edwin-howard-ball |
View: | 215 times |
Download: | 0 times |
Prentice Hall, 20022
Learning Objectives
Describe the essentials of consumer behaviorDescribe the characteristics of Internet surfers and EC purchasersUnderstand the decision-making process of consumer purchasingDescribe the way companies are building relationships with customers
Prentice Hall, 20023
Explain the implementation of customer service and its relationship with CRMDescribe consumer market research in ECUnderstand the role of intelligent agents in consumer applicationsDescribe the organizational buyer behavior model
Learning Objectives (cont.)
Prentice Hall, 20024
Opening Vignette: Building Customer Relationships: Ritchey Design, Inc.
Ritchey Design, Inc.Small business designing and manufacturing mountain bike components1995 Web site was a status symbol rather than a business toolThe site did not:
Offer enough customer informationEnable the company to gain insight into their customers’ needs and wants
Prentice Hall, 20025
Building Customer Relationships: Ritchey Design, Inc. (cont.)
The static Web site becomes an interactive marketing tool
The company cut a deal with SBT software for Web Trader
A software package that allows companies to sell products over the InternetIt also collects information from customers
Ritchey’s Design Inc. obtained a low price for the software by:
Testing the package for SBTPutting the SBT logo on their site
Prentice Hall, 20026
Building Customer Relationships: Ritchey Design, Inc. (cont.)
Customer surveys introduced the siteInduced customers to complete surveys by offering opportunity to win Ritchey products
Web Trader automatically saves and organizes answers in the databaseInformation used to make marketing decisions
Created an electronic product catalogConsumers find detailed descriptions and pictures of productsDealers can obtain information and order over the Web
Prentice Hall, 20027
Advantages
Company saves cost on product development <-know customer react earlier (before it is in the stores)Retailers/Consumers can learn products quicklyCompany earns benefits from changing its Web site from passive to interactiveCompany needs to control 3C to succeed or survive
Competition : the intensity of competitionsCustomer : the strength of customersChange : Magnitude of the changes
By a strategy
Prentice Hall, 20029
Consumer Behavior Online (cont.)
Consumer types for online can be :1. Individual consumers : buy for consumption
Commands most of the media’s attention
2. Organizational buyers : buy to create products/services
Governments and public organizationsPrivate corporationsResellers
Consumer behavior can be viewed in terms of:Why is the consumer shopping?How does the consumer benefit from shopping online?
Prentice Hall, 200210
Consumer Behavior Online (cont.)
Purchasing types and experiences2-dimension of shopping experiences
Utilitarian—to achieve a goalHedonic—because it’s fun
3-category of consumersImpulsive buyers—purchase quicklyPatient buyers—make some comparisons firstAnalytical buyers—do substantial research before buying
Prentice Hall, 200211
Consumer Behavior Online (cont.)
Direct sales, intermediation, and customer relations
Companies that sell only through intermediaries still need good relations with the end-usersExample: Ford Motor Company
Do not sell directly to consumersRecognize that drivers of Ford vehicles think of themselves as having a relationship with the company
Prentice Hall, 200212
Personal Characteristics and Demographics of Internet Surfers
Environmental variablesSocial variables : people are influenced by family, friends coworker and fashionCultural variables : Make different thinkingPsychological variables : Other environmental variables : information, government regulations, legal constraint and situation factors
Prentice Hall, 200213
Personal Characteristicsof Internet Surfers
Personal characteristics and differences : these variables are unique to individual customers
Consumer resources and lifestyleAge and genderKnowledge and educational levelAttitudes and valuesMotivationPersonality
Prentice Hall, 200214
Demographics of Internet Surfers
Major demographics presented include
GenderAgeMarital statusEducational levelEthnicityOccupationHousehold income
Prentice Hall, 200215
Demographics of Internet Surfers (cont.)
The more experience people have on the Web, the more likely they are to buy onlineTwo major reasons people do not buy online
Security (30%)Difficulty judging the quality of the product (20%)Believed that buying on Web is not reliable (9.3%)Process complicated(4.5%)Have an unfavorable experience (1.9%)
Prentice Hall, 200217
Consumer Purchasing Decision Making
Roles people play in decision-makingInitiator—first suggests/thinks of buying a particular product or service
Influencer—advice/views carry weight in making a final buying decision
Decider--makes a buying decision or any part of it e.g. whether, what, how or where to buy
Buyer—makes the actual purchase
User—consumes or uses a product or service
If more than one individual plays these roles, how to make marketing and advertising strategies?
Prentice Hall, 200218
Consumer PurchasingDecision Making (cont.)
Purchasing decision-making model : 5 major phases of a general model
Need identification—actual and desired states of needInformation searchAlternatives evaluation—research reduces number of alternatives, may lead to negotiationPurchase and delivery—arrange payment, delivery, warranties, etc.After-purchase evaluation—customer service
*** process may not in this order
Prentice Hall, 200219
Purchase Decision Making Process & Support System
CDSS : Consumer Dicission Support SystemSource: O’Keefe and McEachern, 1998.
Prentice Hall, 200220
Model of Internet Consumer Satisfaction
Source: Lee (2001)
• a repeat Web purchase depends on customer satisfaction
Prentice Hall, 200221
Matching Products with Customers: Personalization
One-to-one marketingRelationship marketing (Mowen and Minors,1998)
“Overt attempt of exchange partners to build a long term association, characterized by purposeful cooperation and mutual dependence on the development of social, as well as structural, bonds”
Simple idea: “Treat different customers differently”
No two customers are alike
Prentice Hall, 200222
Practical way
Using software agent as a toolOne customer at a time by establishing learning relationship with each customer, starting with the most valuable customersLearning means relationship get better in every new interaction Customer tells a company of some needs and the company customizes its productProducts more valuable for customer created high customer loyalty
Prentice Hall, 200224
Matching Products with Customers: Personalization (cont.)
Issues in EC-based one-to-one marketingCustomer loyalty—degree to which customer stays with vendor or brand
Important element in consumer purchasing behaviorOne of the most significant contributors to profitability
Increase profitsStrengthen market positionBecome less sensitive to price competitionIncrease cross-selling successSave costs, etc.
Prentice Hall, 200225
Matching Products with Customers: Personalization (cont.)
Issues in EC-based one-to-one marketingMeeting customers cognitive needs—organize customer service to meet needs of each skill set
NoviceIntermediateExpert
E-loyalty—customer’s loyalty to an e-tailerLearn about customers’ needsInteract with customersProvide customer service
Prentice Hall, 200226
Matching Products with Customers: Personalization (cont.)
Issues in EC-based one-to-one marketingTrust in EC
Deterrence-based trust—threat of punishmentKnowledge-based trust—grounded in knowledge about trading partnersIdentification-based trust—empathy and common values between partners
Value of EC referralsWord-of-mouthDelivery of good or service sparks other users
Prentice Hall, 200228
Matching Products with Customers: Personalization (cont.)
PersonalizationProcess of matching content, services, or products to individuals’ preferencesAlternative methods
Solicit information from usersUse cookies to observe online behaviorUse data or Web mining
Personalization applied throughRule-based filteringContent-based filteringConstraint-based filteringLearning-agent technology
Prentice Hall, 200229
Matching Products with Customers: Personalization (cont.)
Personalization (cont.)Collaborative filtering examples
Backfilp.com—recommends restaurantsC5solutions.com—personalized messages via cell phonesMysimon.com—assists in purchase decision-making process based on user information
Legal and ethical issuesPrivacy issuesPermission-based personalization tools
Prentice Hall, 200230
Delivering Customer Servicein Cyberspace
Customer serviceTraditional: do the work for the customerEC delivered: gives tools to the customer to do the work for him/herself (log: tracking, troubleshooting, FAQ) with
Improved communicationAutomated processSpeedier resolution of problems
Prentice Hall, 200231
Delivering Customer Servicein Cyberspace (cont.)
E-service—online help for online transactions
Foundation of service—responsible and effective order fulfillmentCustomer-centered services—order tracing, configuration, customization, security/trustValue-added services--dynamic brokering, online auctions, online training and education
Prentice Hall, 200232
Delivering Customer Servicein Cyberspace (cont.)
Product life cycle and customer servicePhases of product life cycle
Requirements: assisting the customer to determine needsAcquisition: helping the customer to acquire a product or serviceOwnership: supporting the customer on an ongoing basisRetirement: helping the client to dispose of a service or productService must be provided in all of them
Prentice Hall, 200233
Delivering Customer Servicein Cyberspace (cont.)
Customer relationship management (CRM)CRM in action—customer-focused EC
Make it easy for customers to do business onlineBusiness processes redesigned from customer’s point of viewDesign a comprehensive, evolving EC architectureFoster customer loyalty by:
Personalized serviceStreamline business processesOwn customer’s total experience
Prentice Hall, 200234
Customer Relationship Management (CRM)
Customer service functionsProvide search and comparison capabilitiesProvide free products and servicesProvide specialized information and servicesAllow customers to order customized products and servicesEnable customers to track accounts or order status
Prentice Hall, 200235
Customer Relationship Management (CRM) (cont.)
Customer service toolsPersonalized Web pages
Used to record purchases and preferenceDirect customized information to customers efficiently
FAQsCustomers find answers quicklyNot customized, no personalized feeling and no contribution to relationship marketing
Prentice Hall, 200236
Customer Relationship Management (CRM) (cont.)
Tracking toolsCustomers track their orders saving time and money for allExample: FedEx’s package tracking
Customer service tools (cont.)Chat rooms—discuss issues with company experts and with other customers
E-mail and automated responseDisseminate general informationSend specific product informationConduct correspondence regarding any topic (mostly inquiries from customers)
Prentice Hall, 200237
Customer Relationship Management (CRM) (cont.)
Customer service tools (cont.)Help desks and call centers
A comprehensive customer service entityEC vendors take care of customer service issues communicated through various contact channels
Telewebs combineWeb channels (automated e-mail reply)Web knowledge bases (portal-like self service) Call center agents or field service personnel
Troubleshooting tools—assist customers in solving their own problems
Prentice Hall, 200238
1
3
4
5
2
RealTime
Company
Customer
Customer
Customer
ProductAdvertisingSalesDistribution
2002 +A Real Time Company is able to quickly test and implement new innovations whether the idea comes from the company or the customer.
[No Real Time companies currently exist in today’s market.]
ProductAdvertisingSalesDistribution
CustomerDriven
Company
Customer
Customer
Customer
Needs
1990s-2005A Customer-Driven Company must meet three requirements. First, it hasmodified its channels of communication to also “listen” to customers.Second, it has determined which data to capture among the plethora ofdata. Finally, it has determined how to effectively use customer
information to create and deliver better products and services back to thecustomer.
Dbase MrktingDriven
CompanyProduct
AdvertisingSalesDistribution
Customer
Customer
Customer
1960s-1980sDatabase Marketing, as we know it today, appeared in theearly 1980s as companies began using databasemanagement systems to “close-the-loop” and measuremarketing program results to better target future marketing
efforts.
Sales Driven
Company Product
Advertising
Sales
Distribution
Customer
“How”
1900-1950sA Sales-Driven Company is one that createstop-of-mind awareness, beats the bushes forbusiness, and pushes its products into themarket. Advertising, sales and distributionare critical to a company of this nature.
Product Driven
Company
Customer
“What”Product
19th CenturyA Product-Driven Companycreates a product and pushes itout the door; the focus is on“what” the company sells.
Marketing Timeline
Prentice Hall, 200239
Customer Relationship Management (CRM) (cont.)
Justifying customer service and CRM programs—2 problems
Most of the benefits are intangibleSubstantial benefits reaped only from loyal customers, after several yearsMetrics—standards to determine appropriate level of customer support
Response and download timesUp-to-date site and availability of relevant contentOthers
Prentice Hall, 200240
Customer Relationship Management (CRM) (cont.)
1-800-FLOWERS Buy by telephone, retail shops, and onlineOnline and offline promotionsE-mail order confirmation
Blackstar (music retailer)Thanks customers by e-mailProvides toll-free telephone numberProvides tracking system
Amazon.comConvenience, selection, value, special servicesE-mail order confirmationPersonalized services
Federal Express (FedEx)Package tracking serviceAbility to calculate delivery costs, online shipping forms, arrange pickup, find local drop box
Examples of superb customer service
Prentice Hall, 200241
Market Research for EC
Aim– find relationship between
ConsumersProductsMarketing methodsMarketers through information
In order to improve customer service
Discover marketing opportunities and issuesEstablish marketing plansBetter understand the purchasing processEvaluate marketing performance
Prentice Hall, 200242
Market Research Process
Market segmentation—divide consumer market into groups to conduct marketing research, advertising, sales
Prentice Hall, 200243
Market Research for EC (cont.)
Conducting online market research—powerful tool for research regarding:
Consumer behaviorDiscover of new marketsConsumer interest in new products
Internet-based market researchInteractive—allowing personal contactGives better understanding of customer, market, and competition
Prentice Hall, 200244
Online Market Research Process & Results
Online market research methods—fast, cheap, data collection
Source: Based on Vassos (1996), pp. 66-68.
Prentice Hall, 200245
Market Research for EC (cont.)
Online market research methods (cont.)Conducting Web-based surveysLimitations of online research
Not suitable for every customer or product Skewed toward highly educated males with high disposable income
May be unreliable, biasedMore knowledge is needed
Prentice Hall, 200246
Market Research for EC (cont.)
Online market research methods (cont.)Data mining—searching for valuable business information in extremely large databasesNew business opportunities generated by conducting:
Automated prediction of trends and behaviorsAutomated discovery of previously unknown patterns and relationships
Web mining—mining meaningful patterns from Web resources
Prentice Hall, 200247
Market Research for EC (cont.)
Datamining (cont.)Major characteristics and objectives of data mining:
Relevant data difficult to find in huge databasesTools help find information buried in corporate files or public records“Miner” uses “data drills” for easy access to answers, may find valuable, unexpected resultsTools combined with spreadsheets for easy analysis of resultsYields: associations, sequences, classifications, clusters, forecasting
Prentice Hall, 200248
A Framework for Classifying EC Agents
The purchasing decision- making process: agent classification
Prentice Hall, 200249
Intelligent Agents in Customer-related Applications (cont.)
Need identification—helps determine what to buy to satisfy a specific need by looking for specific products information and critically evaluating them
Examples:Salesmountain.com—specifically requested items for individual customersDiscogs.com—sample and buy musicNetcactus.com—help choose giftsQuerybot.com/shopping—looks for deals and finds related information on requested items
Prentice Hall, 200250
Intelligent Agents in Customer-related Applications (cont.)
Merchant brokering—intelligent agents for finding vendors
Bargainfinder from Andersen Consulting (first product brokering agent—no longer exists)
Queried the price of a specific CD from a number of online vendors and returned a list of prices (unsuccessful)
Jango (embedded in excite program)Originates the requests from the user’s site instead of from Jango’s vendors have no way to determine whether the request is from a real customer or from the agentProvides product reviews
Prentice Hall, 200251
Intelligent Agents in Customer-related Applications (cont.)
Merchant brokering (cont.)Kasbah from MIT Lab (product & services comparison agent)—no longer operating
Users wanting to sell or to buy a product, assign the task to an agent who is then sent out to proactively seek buyers or sellers
Purchase and delivery—arrange payment and delivery of goods
After sale service and evaluation—automatic answering agents respond to customer queries and remind them of maintenance needs
Prentice Hall, 200252
Intelligent Agents in Customer-related Applications (cont.)
Negotiation—price and other terms of transactions are determined
KasbahMultiple agents—users create agents for the purpose of selling or buying goods3 strategies: anxious, cool-headed and frugal
Tete-@-tete (no longer in operation)Parameters: price, warranty, delivery time, service contracts, return policy, loan option and other value added servicesUse information acquired during the first two stages of the purchasing decision model to evaluate each single offer