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Chapter 4
Online Consumer Behavior,
Market Research, and Advertisement
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 1
Learning Objectives
1. Understand the decision-making process ofconsumer purchasing online.
2. Describe how companies are building one-to-one relationships with customers.
3. Explain how personalization is accomplishedonline.
4. Discuss the issues of e-loyalty and e-trust inEC.
5. Describe consumer market research in EC.
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 2
Learning Objectives
6. Describe Internet marketing in B2B, includingorganizational buyer behavior.
7. Describe the objectives of Web advertisingand its characteristics.
8. Describe the major advertising methods usedon the Web.
9. Describe various online advertisingstrategies and types of promotions.
10.Describe permission marketing, admanagement, localization, and otheradvertising-related issues.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 3
Learning about Consumer Behavior
and Purchasing Decisions Online
THE CONSUMER PURCHASEDECISION-MAKING PROCESSA Generic Purchasing-Decision Modelproduct brokering
Deciding what product to buy.merchant brokering
Deciding from whom (from what merchant) tobuy a product.
A Customer Decision Model in WebPurchasing
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 4
Learning about Consumer Behaviorand Purchasing Decisions Online
MASS MARKETING, MARKETSEGMENTATION, AND ONE-TO-ONE
MARKETING
one-to-one marketingMarketing that treats each customer in a
unique way.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 5
Personalization, Loyalty,
Satisfaction, and Trust in EC
personalizationThe matching of services, products, and
advertising content with individual
consumers and their preferences.
user profileThe requirements, preferences,
behaviors, and demographic traits of a
particular customer.
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 6
Personalization, Loyalty,Satisfaction, and Trust in EC
Major strategies used to compile userprofiles:
Solicit information directly from the userObserve what people are doing onlinecookieA data file that is placed on a users hard driveby a remote Web server, frequently withoutdisclosure or the users consent, that collects
information about the users activities at a site.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 7
Personalization, Loyalty,
Satisfaction, and Trust in EC
Build from previous purchase patternsPerform marketing researchMake inferences
behavioral targetingThe use of information collected on an individuals
Internet-browsing behavior to select which advertisementsto display to that individual.
Personalized servicesIndividual servicesUniversal services
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 8
Personalization, Loyalty,Satisfaction, and Trust in EC
CUSTOMER LOYALTYe-loyalty
Customer loyalty to an e-tailer or loyaltyprograms delivered online or supportedelectronically.
TRUST IN ECtrust
The psychological status of willingness todepend on another person or organization.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 9
Personalization, Loyalty,
Satisfaction, and Trust in EC
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 10
Personalization, Loyalty,Satisfaction, and Trust in EC
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 11
Market Research for EC
METHODS FOR CONDUCTINGMARKET RESEARCH ONLINE
WHAT ARE MARKETERS LOOKINGFOR IN EC MARKET RESEARCH?
Market Segmentation Research
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 12
Market Research for EC
MARKET RESEARCH FOR ONE-TO-ONE
Direct Solicitation of InformationImplementing web-based surveysOnline focus groups
Hearing directly from customers
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 13
Market Research for EC
Observing Customerstransaction log
A record of user activities at a companys Web site.
clickstream behaviorCustomer movements on the Internet.
Web bugsTiny graphics files embedded in e-mail messages and in
Web sites that transmit information about users and their
movements to a Web server.
spywareSoftware that gathers user information over an Internet
connection without the users knowledge.
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 14
Market Research for EC
clickstream dataData that occur inside the Webenvironment; they provide a trail of theusers activities (the users clickstreambehavior) in the Web site.
Web miningWeb mining explores both Web content datamining techniques for discovering andextracting information from Web documentsand Web usage.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 15
Market Research for EC
collaborative filteringA market research and personalization method thatuses customer data to predict, based on formulas
derived from behavioral sciences, what other
products or services a customer may enjoy;
predictions can be extended to other customerswith similar profiles.
Rule-based filteringContent-based filteringActivity-based filtering
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 16
Market Research for EC
LIMITATIONS OF ONLINE MARKETRESEARCH AND HOW TO
OVERCOME THEM
BIOMETRIC MARKETINGbiometricsAn individuals unique physical or behavioral
characteristics that can be used to identify
an individual precisely (e.g., fingerprints).
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 17
Internet Marketing in B2B
ORGANIZATIONAL BUYERBEHAVIOR
A Behavioral Model of OrganizationalBuyers
THE MARKETING AND ADVERTISINGPROCESSES IN B2B
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 18
Internet Marketing in B2B
METHODS FOR B2B ONLINEMARKETING
Targeting CustomersElectronic WholesalersOther B2B Marketing Services
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 19
Web Advertising
OVERVIEW OF WEB ADVERTISINGinteractive marketing
Online marketing, facilitated by the Internet,
by which marketers and advertisers can
interact directly with customers andconsumers can interact with advertisers/
vendors.
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Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 20
Web Advertising
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 21
Web Advertising
SOME INTERNET ADVERTISING TERMINOLOGY ad views
The number of times users call up a page that has a banneron it during a specific period; known as impressions or pageviews.
buttonA button is a small banner that is linked to a Web site. It cancontain downloadable software.
pageA page is an HTML (Hypertext Markup Language) documentthat may contain text, images, and other online elements,such as Java applets and multimedia files. It can begenerated statically or dynamically.
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 22
Web Advertising
click (click-through or ad click)A count made each time a visitor clicks onan advertising banner to access theadvertisers Web site.
CPM (cost per thousand impressions)The fee an advertiser pays for each 1,000
times a page with a banner ad is shown.conversion rate
The percentage of clickers who actuallymake a purchase.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 23
Web Advertising
click-through rateThe percentage of visitors who are exposed to abanner ad and click on it.
click-through ratioThe ratio between the number of clicks on a bannerad and the number of times it is seen by viewers;
measures the success of a banner in attracting
visitors to click on the ad.
hitA request for data from a Web page or file.
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 24
Web Advertising
visitA series of requests during one navigation of a Website; a pause of a certain length of time ends a visit.
unique visitsA count of the number of visitors entering a site,regardless of how many pages are viewed per visit.
stickinessCharacteristic that influences the average length oftime a visitor stays in a site.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 25
Web Advertising
advertising networksSpecialized firms that offer customized
Web advertising, such as brokering ads
and targeting ads to select groups of
consumers.
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 26
Online Advertising Methods
bannerOn a Web page, a graphic advertising display
linked to the advertisers Web page.
keyword bannersBanner ads that appear when a predetermined
word is queried from a search engine.random banners
Banner ads that appear at random, not as the
result of the users action.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 27
Online Advertising Methods
banner swappingAn agreement between two companies to
each display the others banner ad on its
Web site.
banner exchangesMarkets in which companies can trade or
exchange placement of banner ads on each
others Web sites.
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 28
Online Advertising Methods
POP-UP AND SIMILAR ADSpop-up ad
An ad that appears in a separate window before,after, or during Internet surfing or when reading e-mail.
pop-under adAn ad that appears underneath the current browserwindow, so when the user closes the active windowthe ad is still on the screen.
interstitialAn initial Web page or a portion of it that is used tocapture the users attention for a short time whileother content is loading.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 29
Online Advertising Methods
E-MAIL ADVERTISINGE-Mail Advertising ManagementE-mail hoaxesFraud
E-Mail Advertising Methods andSuccessesNEWSPAPER-LIKE AND CLASSIFIED
ADS
Classified Ads
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 30
Online Advertising Methods
SEARCH ENGINE ADVERTISEMENTImproving a Companys Search-Engine
Ranking (Optimization)
Paid Search-Engine InclusionAdvertising in social networks
GoogleThe Online Advertising King
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 31
Online Advertising Methods
ADVERTISING IN CHAT ROOMS,BLOGS, AND SOCIAL NETWORKS
Advertise in Videos
OTHER FORMS OF ADVERTISINGadvertorialAn advertisement disguised to look like
editorial content or general information.
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 32
Online Advertising Methods
Web 2.0 and AdvertisingAdvertising in NewslettersPosting Press Releases Onlineadvergaming
The practice of using computer games to
advertise a product, an organization, or aviewpoint.
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 33
Advertising Strategies
and Promotions Online
affiliate marketingA marketing arrangement by which anorganization refers consumers to the sellingcompanys Web site.
ADS AS A COMMODITY
viral marketingWord-of-mouth marketing by which customerspromote a product or service by telling othersabout it.Viral Marketing in Social Networks
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Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 34
Advertising Strategiesand Promotions Online
CUSTOMIZING ADS Webcasting
A free Internet news service that broadcasts personalizednews and information, including seminars, in categoriesselected by the user.
ONLINE EVENTS, PROMOTIONS, ANDATTRACTIONS Live Web Events admediaries
Third-party vendors that conduct promotions, especially large-scale ones.
Selling Space by Pixels: The Case of Million DollarHomepage
Advertising in Second Life and Other Virtual Worlds
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 35
Advertising Strategies
and Promotions Online
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 36
Special Advertising Topics
PERMISSION ADVERTISINGspamming
Using e-mail to send unwanted ads
(sometimes floods of ads).
permission advertising (permissionmarketing)
Advertising (marketing) strategy in which
customers agree to accept advertising and
marketing materials (known as opt-in).
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 37
Special Advertising Topics
ADVERTISEMENT AS A REVENUEMODEL
MEASURING ONLINEADVERTISINGS EFFECTIVENESS
WIRELESS ADVERTISINGAD CONTENTSOFTWARE AGENTS IN MARKETING
AND ADVERTISING APPLICATIONS
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 38
Managerial Issues
1. Do we understand our customers?2. Who will conduct the market research?3. Are customers satisfied with our Web site?4. How can we use social networks for advertising?5. How do we decide where to advertise?6. What is our commitment to Web advertising, and how
will we coordinate Web and traditional advertising?
7. Should we integrate our Internet and non-Internetmarketing campaigns?
8. What ethical issues should we consider?9. Are any metrics available to guide advertisers?10.Which Internet marketing/advertising channel to use?
Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 39
Summary
1. The online consumer decision-making process.2. Building one-to-one relationships with customers.3. Online personalization.4. Increasing loyalty and trust.5. EC customer market research.6. B2B Internet marketing methods and organizational
buyers.
7. Objectives and characteristics of Web advertising.8. Major online advertising methods.9. Various advertising strategies and types of promotions.10.Permission marketing, ad management, and
localization.
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Chapter 4
Copyright 2009 Pearson Education,Inc. Publishing as Prentice Hall 40
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system, or transmitted, in any form or by any means, electronic,mechanical, photocopying, recording, or otherwise, without the prior written
permission of the publisher. Printed in the United States of America.