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1. E-MARKETING/6E
CHAPTER 5

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7-2 CHAPTER 5 OBJECTIVES
 After reading Chapter 5 you will be able to:
 Discuss general statistics about the Internet
population.
 Describe the Internet exchange process and the
technological, social/cultural and legal context
in which consumers participate in this process.
 Outline the broad individual characteristics and
consumer resources that consumers bring to
the online exchange.
 Highlight the four main categories of outcomes
that consumers seek from online exchanges.

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7-3 THE CUSTOMER’S STORY
 A typical one-hour adventure in the life of a
25-year-old professional, Justin:
 Tunes his iPod to the latest Diggnation
podcast while his TV is tuned to a soccer
game and his smartphone and tablet are
within reach.
 Picks up his computer / tablet to find a
blog mentioned during the podcast, sees a
video on the blog , transmit it on his TV set
and texts a friend about the video.

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THE CUSTOMER’S STORY,
CONT.
 Justin searches for the video title on
Google and finds a job posting on Vimeo,
an online video-posting site.
 He posts a link to the video and Vimeo site
to his Twitter stream.
 Justin is the new consumer: a multitasker
attending to different media simultaneously.
 How can a marketer capture dollars from
advertising online, selling music downloads,
charging fees for social media subscriptions?

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CONSUMERS IN THE
21ST CENTURY, CONT.
 In 2011, 2.3 billion people had access to
the Internet, 32.7% of the global
population.
 Internet usage in developed nations has
reached a critical mass, leading
marketers to ask more questions about
consumer behavior on the Internet.

6. CONSUMER SHOPPING
BEHAVIOR ONLINE
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 Many consumer behavior principles that describe
offline buyer behavior also apply to online
behavior.
1. Buying process steps:
 need identification
 information search
 alternative evaluation
 purchase and post-purchase activities
2. Hierarchy of Effects model
3. AIDA model: attention, interest, desire, and action
4. Word of mouth (WOM)
CONSUMER BEHAVIOR
ONLINE

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 The table will explains some consumer
behavior theories for online buyer behavior.
 Scarcity
 Popularity
 Affinity
 Authority
 Consistency
 Reciprocity
CONSUMER BEHAVIOR
ONLINE, CONT.

9. SOCIAL PSYCHOLOGY OF
SOCIAL SHOPPING
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 Exchange is a basic marketing concept.
 It refers to the act of obtaining a desired object
from someone by offering something in
return.
 Exchange occurs within the following contexts:
 Technological
 Social/cultural
 Legal
 The exchange is often motivated by marketing
stimuli.
THE INTERNET EXCHANGE
PROCESS
Describe the
Internet
exchange
process and
the
technological,
social/cultural
and legal
context in
which
consumers
participate in
this process.

11. THE ONLINE
EXCHANGE PROCESS
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TECHNOLOGICAL CONTEXT
 The focus is upon two important
developments affecting online consumer
behavior:
 Home connection speeds
 The changing landscape of digital –
content receiving devices (e.g.
smartphones)
 Web 2.0 technologies

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TECHNOLOGICAL CONTEXT,
CONT.
 Home connection speeds
 66-77% of online Americans connect to the
internet at home with broadband.
 Broadband users enjoy more multimedia
games, music, and entertainment because
they download quickly.
 Customers access from handheld devices
(e.g. smartphones…) tend to access
Facebook, news, weather, stock quotes, and
other low graphic data services

14. TECHNOLOGICAL CONTEXT,
CONT.
 Receiving devices
 The typical U.S. home has 26 different
electronic devices for media and
communication.
 Streaming music, TV and video growing
 Web 2.0 Technologies
 Also referred to as social media (second-
generation internet technologies)
 The key is to learn which devices an organization’s
customers and prospects own and prefer to use
for connecting
 Telematics uses GPS technology in automobiles
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15. TELEMATICS
• A
communication
System in an
automobile that
uses a global
positioning
system (GPS) for
interactive
communication
• Allows drivers
to receive
directions and
internet content
or send for
emergency help
• It allows
marketers to
send
information &
entertainment
to automobiles
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16. SOCIAL AND CULTURAL
CONTEXTS
 Three
cornerstones for
attracting
customers online:
 Reputation
 Relevance
 Engagement
 Brand image and
reputation are based
on the market’s
perception.
 Consumers trust each
other more than
advertising
 Consumers utilize
social media channels
for advice
 Marketers must join
the conversation,
learn from customers
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17. SOCIAL AND CULTURAL
CONTEXTS, CONT.
 Three
cornerstones for
attracting
customers online:
 Reputation
 Relevance
 Engagement
 Consumers don’t like
being interrupted
with irrelevant
communication.
 Consumers enjoy
relevant
communication
 Marketers use
behavioral targeting
and keyword
advertising
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18. SOCIAL AND CULTURAL
CONTEXTS, CONT.
 Three
cornerstones for
attracting
customers online:
 Reputation
 Relevance
 Engagement
 Marketers must
provide relevant
content or
entertainment.
 Three pillars of
customer
engagement:
 content
engagement
 media engagement
 engagement
marketing activities
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SOCIAL AND CULTURAL
CONTEXTS, CONT.
 The following are general social/cultural
trends having a huge affect on exchanges
 Information overload
 Multitasking
 Home & work
 I want what I want when I want it
 Online oxygen
 Connectivity
 “In the know”
 Self-service
 Privacy & data security
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 In spite of the Can-Spam law, the number of
unsolicited emails has increased.
 Despite piracy laws, illegally used software
abounds.
 When The Recording Industry Association of
America (RIAA) sued illegal music file
downloaders, consumer behavior changed.
 In 2002, 37% of online consumers shared
music files, but the percentage has dropped.
 RIAA still claims $12.5B in annual losses from
music piracy.
LEGAL CONTEXT

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 Individual Differences: Individual
characteristics affect Internet use.
1. Demographics such as age, income,
education, ethnicity, and gender.
2. Attitudes toward technology.
3. Online skill and experience.
4. Social media experts
5. Goal orientation Vs. experience orientation,
Online shoppers tend to be more goal-
oriented.
INDIVIDUAL CHARACTERISTICS
& RESOURCES
Outline the
broad
individual
characteristics
and consumer
resources that
consumers
bring to the
online
exchange.

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7-22 CONSUMER RESOURCES
 Consumers perceive value as
Value = Benefits - Costs
 These costs constitute a consumer’s
resources for exchange:
 Monetary cost
 Time cost
 Energy and psychic costs

23. CONSUMER RESOURCES, CONT.
MONETARY COST
 Enough income is needed to exchange for goods and
services, and to afford a computer, smartphone, tablet &
ISP for Internet access.
 Credit cards (but some people don’t want them or can’t
get them)
 Debit cards
 Electronic checks (digital money)
 Smart cards (Splash plastic)
 PayPal (50 million customers)
 Innovative forms of digital money
 South Korea: electronic chips included in some mobiles
 Japan: Casio watch
 Spain with RFID chips implanted in the arm.
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24. CONSUMER RESOURCES, CONT.
TIME COST
 Poverty of time is a major concern for
today’s consumers.
 Consumers want to receive appropriate
benefits for the time they spend online.
 Users want ease of use and efficiency
 The Internet helps people manage scarce time
 consumers are 100% involved when online
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25. CONSUMER RESOURCES, CONT.
ENERGY AND PSYCHIC COSTS
 Sometimes consumers feel it is
 Energy Costs
 Too much trouble to turn on the computer,
 log on to the Internet, and
 check e-mail, especially for dial-up users.
 Psychic Costs
 Web pages are too complicated
 Orders are dropped in the “shopping cart”
 Shipping prices are high
 Checkout process is too long or confusing
 Checkout requires too much personal information
 Site requires registration before purchase
 Site is unstable
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26. INTERNET EXCHANGE
 The actual moment comes when exchange
occurs over the Internet.
 Browser favorites and social bookmarks
help consumers quickly jump to their
favorite online retailer
 Bookmarks and hyperlinks in emails assist
consumers in finding specific sites,
information, or specials.
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Highlight the
four main
categories of
outcomes
that
consumers
seek from
online
exchanges.

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7-27 EXCHANGE OUTCOMES
 There are 6 basic things that people do
online:
 Connect
 Create
 Enjoy
 Learn
 Trade
 Give
 Each is suitable for marketing opportunity.

28. EXCHANGE OUTCOMES, CONT.
 Connect
 Create
 Enjoy
 Learn
 Trade
 The Internet allows
consumers to interact
with individuals and
organizations using
two-way
communication.
 E-mail,
 Text messages
 Tweets
 Facebook wall posts
 Phone calls; Skype
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29. EXCHANGE OUTCOMES, CONT.
 Connect
 Create
 Enjoy
 Learn
 Trade
 The Internet has
created an ability to
connect.
 Creation of multimedia
to connect with
friends, businesses and
colleagues.
 Facebook
 Twitter
 LinkedIn
 Flickr
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30. EXCHANGE OUTCOMES, CONT.
 Connect
 Create
 Enjoy
 Learn
 Trade
 Give
 Many people use the
Internet to enjoy
entertainment.
 Audio and visual
entertainment
 Music
 Movies
 Celebrity news
 Sports
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31. EXCHANGE OUTCOMES, CONT.
 Connect
 Create
 Enjoy
 Learn
 Trade
 Give
 Consumers can
access information to
learn things online
 News,
 Driving directions,
 Travel information,
 Jobs,
 Weather,
 Sports,
 Radio broadcasts.
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32. EXCHANGE OUTCOMES, CONT.
 Connect
 Create
 Enjoy
 Learn
 Trade
 Give
 Transaction-oriented
activities
 71% of Internet
users have
purchased products
online
 Users seek
information before
they buy
 Statistics for the
average Internet
consumer
 Shops online for 1 hour
per day
 Makes 21 purchases a
year
 57% say the Internet has
made them better
consumers
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33. EXCHANGE OUTCOMES, CONT.
 Connect
 Create
 Enjoy
 Learn
 Trade
 Give
 Creation of
multimedia content
to benefit others
 86% of consumers
worldwide want
business to focus
on society’s
interests
 25% made an
online donation to
charity in 2011
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