Chapter 1

Consumer Behavior Online

Instructor: Hanniya AbidAssistant ProfessorCOMSATS Institute of Information Technology

Lecture 9E-MarketingObjectivesAfter this lecture, 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.

The Customers StoryA typical one-hour adventure in the life of a 25-year-old professional:Tunes his iPod to the latest Diggnation podcast while his TV is tuned to a soccer game and his cell phone and PC are within reach.Picks up his computer to find a blog mentioned during the podcast, sees a video on the blog and texts a friend about the video.

The Customers Story, cont.He 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.He is the new consumer: a multitasker attending to different media simultaneously.How can a marketer capture dollars from these behaviors?

Consumers in the 21st CenturyMany consumers use the Internet.Less connected groups tend to be:OlderLess educatedIn ethnic minority groupsChildlessRural Lower incomeConsumers in the 21st Century, cont.Global population has internet access.

Top ten countries account for 38% of all users and adoption rates range from 7-77%.

Internet usage in developed nations has reached a critical mass, leading marketers to ask more questions about consumer behavior on the Internet.

Internet Reaches Maturity: 1995-2010

7The Internet Exchange ProcessExchange is a basic marketing concept.It refers to the act of obtaining a desired object by offering something in return.Exchange occurs within the following contexts:Technological Social/cultural Legal

The Online Exchange Process

Technological ContextMore users connect to the Internet at home with broadband.Broadband users enjoy more multimedia games, music, and entertainment than do those accessing from a mobile device or 56K modem.The typical home has many different electronic devices for media and communication.Social and Cultural ContextsThe cornerstones for attracting customers online:ReputationRelevanceEngagementEngaging Customers

U.S. Daily Media Use

Legal ContextDespite piracy laws, illegally used software abounds.In spite of the Can-Spam law, the number of unsolicited emails has increased.However, when the recording industry sued illegal music file downloaders, consumer behavior changed.In 2002, 37% of online consumers shared music files.Only 23% shared files in 2004.

The Online Exchange Process

Individual Characteristics & ResourcesIndividual characteristics affect Internet use.Demographics such as age, income, education, ethnicity, and gender. Attitudes toward technology.Online skill and experience.Goal orientation.Consumer ResourcesConsumers perceive value as benefits minus costs.These costs constitute a consumers resources for exchange:Monetary costTime costEnergy and psychic costs

Combined Home/Work internet usage

The Online Exchange Process

Exchange OutcomesThere are 5 basic things that people do online:ConnectCreateEnjoyLearnTradeEach is ripe with marketing opportunity.Connecting Online

Creating & Uploading Content

Entertainment Online

23Learning and Getting Information

Trading Online

SummaryInternet and mobile communication has grown quickly than any other medium in history.Basic marketing concept of exchange applies.Cornerstones are: Reputation, Relevance & EngagementCosts that consumers exchange: money, time, energy and psychic costs.And of course! There is one more thingVisit an online classified ads website such as olx.com.pkAnd then examine classified ads in your local newspaperWhat differences do you see?What are some benefits to customers fromeach option?