Available To Customers On The Web example essay topic

TABLE OF CONTENTS Page 1. Summary 32. Introduction 3 2.1 E-commerce consumer behaviour model 33. Intervening Variables 5 3.1 Customer service 5 3.2 Advertising 94. Conclusions 135. Bibliography 146.

Appendix A - Growth in Web advertising in millions of dollars per year 15 7. Appendix B - Consumer Information Processing Model of Choice 16 1. Summary This report presents briefly the generic e-commerce consumer behavior model. Its task is to show different ways the companies may use to win a customer and increase their profits concentrating on "intervening variables" represented in the model as far as E-commerce is concerned. The work is divided into three main parts. The introduction leads in the reader into general consumer behavior model.

The main part concentrates on vendor controlled techniques of reaching clients and keeping them with the company and in the end it's summing up the figures in the conclusion section. 2. Introduction The omnipresent nature of the internet and its universal access makes it an excellent platform for communicating more effectively with customers. To become a successful e-business initiative the company has to figure out how to lure costumers first and how to keep them without relaying on face-to-face interactions further. For marketers, the consumers are the natural starting-point for all decision-making. The consumers are at the centre of everything the marketing-oriented company does or plans: presumably, therefore, understanding how people think and behave in purchase situations is essential to the success of a company.

It is impossible to predict all clients' decisions but knowing the e-commerce consumer behaviour model enable the firm to increase its sales together with reducing the retailing costs. 2.1 E-commerce consumer behaviour model Economists tell us that people buy in order to maximis e utility and obtain "best value for money". Marketers tell us that the decision-making process is not necessarily based on economics. In fact, very few people consistently buy the cheapest version in the product class.

The model shows us that final customer decision depends on three factors: - Independent variables, the company cannot control or influence Personal characteristics such as: age, gender, education, ethnicity, lifestyle, psychological, knowledge, values, personality Environmental characteristics such as: social, cultural, legal, institutional, governmental - Intervening variables, the company can control and influence Stimulated by market such as: price, brand, promotions, advertising, product quality, design E-commerce systems such as: logistic support (payments, delivery), technical support (web design and content, intelligent agents, security), customer service (FAQs, e-mail, call centres, one-to-one contacts) All these factors lead the consumer to the decision process. Buying behaviour can be defined as acts of people involved in buying and using products. A few models are known trying to capture the customer buying behaviour (Howard - Sheth model, Blackwell model, the Bettman information - processing model etc. ), though they all have some similar attributes that should be regarded as the fundamental stages upon which the consumers' behaviour is developed and expressed. They are: I. Problem Recognition: This stage characterises the awareness of the consumer's need.

It establishes the 'barrier' between the desired state and the actual condition. Within this stage the marketer can stimulate the consumer through product information. II. Information Search: This stage is divided in a two possibilities. It involves an Internal Search (Memory) in order to retrieve information which will support the process and / or an External Search if it is believed that further information is needed.

Once again the role of the marketer could arise once the consumer is in the External Search phase. The result of this stage is the development of the possible alternatives.. Evaluation of Alternatives: This stage is concerned with the Consumer's need to establish criteria in order to enable the evaluation. The role of the marketer is also appearing in this stage by trying to 'shade' the alternatives. This stage might sometimes lead one step back, to the Information Search stage, if the consumer is not satisfied with the existing knowledge. IV.

Purchase Decision: This stage is the process of choice among the possible alternatives basically based on four main marketing factors. (Product, Price, Place, Promotion) V. Purchase: This stage differs from the one mentioned above only in the time dimension. Even though the decision could be made the actual purchase might take place after a period of time (e.g. due to product availability). VI. Post Purchase Evaluation: This stage is concerned with the satisfaction or dissatisfaction after a purchase is made, based on the rightfulness of the decision. The impact of that stage can be reduced by warranties, after sales communication, etc.

Some of the factors mentioned above can be controlled by the firm so that it can influence on customer but the final decisions, buy or not, what to buy, where from and finally for how much, always are up to the current client. They are called Dependent variables. 3. Intervening variables This paper will concentrate on the most important part of the e-commerce consumer behaviour model as far as the company view is concerned. The vender controlled variables gives a great opportunity to win a customer. Among all of them, two should be paid a large attention to: Customer service and Advertising.

3.1 Customer service When people look at e-commerce on the Internet, they complain that the value of the products sold directly on the web is still less than one percent of the value of products sold through other channels. They point out that few companies, including Amazon. com, are making profits from sales to consumers. This short sighted criticism ignores the fact that the web is already a highly profitable medium for reducing the costs. Most large companies today are spending millions of dollars on customer service. Hundreds of customer service representatives (CSRs) are answering customer questions and selling products. Many of the CSR functions can be performed by a good web site.

Look at the work of a CSR. She takes scores of incoming calls per day. She has a computer linked to the company's main server. As customers ask her questions, she manipulates her mouse and her keyboard to get the answers on her screen. Then she reads the answers over the phone to the customers. She gives information and she takes orders.

A typical call to a CSR costs about $7. In most cases, a really good web site can replace a high percentage of the CSR function. The method is to give the customers the same access to the company server that the CSR has. Here is what is happening now: Here is the new system: Instead of paying for a toll free call, and the cost of a customer service representative who is reading off of a computer screen, companies are learning that their customers can look at that same screen directly on the internet, and get the answers themselves. What's more, customers like it better. In example, if the company spends $10 million per year on the customer service shifting only 30% of their CSR work to the web site will bring $3 million saving.

That is the promise of the web. Profits like this can come about only if customers will use the web instead of calling a CSR. To achieve that, the web site has to be as good as or better than the services provided by a CSR. Moreover, the web site has to be publicized so that your customers know about it. Personalizing build friendly personal relationship that a good CSR has. If you have ever bought on Amazon. com, later each time you click on their web site it says, "Welcome back your name" not just because it is a neat thing to say.

They say it because it keeps majority coming back. It is also a good idea to have a Live Agent function on the web site. Studies show that 74% of web shopping is abandoned at checkout. The reason is that at the last minute, people may have questions that the web site doesn't answer. Providing a text chat with a live agent solves the problem. CSRs can handle four text chats at once.

This is what NTL does as an internet provider. Instead of calling customer service and waiting for a free agent, what takes up to 10 min, you may describe your problem to a chat agent who will solve your matter in 5 min. The big savings come from inviting customers to come into the company to read the same screens that the employees do. Customers become part of company family. This is real relationship marketing. If you are about to organize a business meeting and you are looking for a suitable hotel near London visit the Marriot. com.

Within this site you will get all information you need looking for an adequate place implementing your demands. A few years ego you would have to call a number of hotels asking for interesting data's before choosing the right one. Nowadays it can all be done through the internet within several minutes. Right now, Marriott's meeting planner web site is way ahead of the other hotel chains. But this type of web site is not just for hotels. Every business-to-business company in the world can profit by opening up their internal company data and making it available to customers on the web.

There are three reasons: - The web site will probably pay for itself in the saving of free calls and operator time - It may increase sales to new prospects (although that is not a sure thing) - It provides a way to recognize and build relationships with customers that will improve loyalty and retention As the figures shows, building the loyalty is even more important than winning new clients. Companies should learn more about their visitors. Employ One-to-One strategies for tailoring their experience and products to their needs. A global goal should be to establish long-lasting relationships with your, which in effect re-establish switching costs into their lives and choose you as their preferred vendor. The customers are looking for assistance, support and social connection. Providing them with the forums to get to know and support each other, will often find rapid financial rewards.

Toshiba gives us a great example of One-to-One marketing. After buying one of their products and registering you are personally informed about any news and upgrades you might be interested in via e-mail. They know all their customers thanks to the surveys you fill in during the registration process. From: Hello Marcin, Here are the latest software updates for your machine: PC: Satellite A 50 Type: Acoustic Silencer Language: English Operating system: Windows XPClick on this link to read the full article. web driver details. j sp?

ID = 35917&OSID = 10&driverLanguage = 13&selectedLanguage = 13&driverCountry = 41&selectedCountry = 0 PC: Satellite A 50 Type: Management Console Language: Universal Operating system: Windows XPClick on this link to read the full article. web driver details. j sp? ID = 35931&OSID = 10&driverLanguage = 42&selectedLanguage = 13&driverCountry = 41&selectedCountry = 0 If you wish to unsubscribe from these email alerts, please click on the link below to change your profile on the Toshiba website. web basic. j sp? NEXT PAGE = registration alerts subscriptions. jsp Buying from Toshiba you get not only a quality product but also a professional customer service. You become a "family member".

3.2 Advertising The Internet has grown so fast that virtually all large companies are trying to decide how to use it to reach their customers. In traditional advertising, firms ask for help a media expert. He studies the demographics of the company customers, figures out which media they pay attention to, and places ads based on careful targeting and cost forecast. Media targeting has been a science for the past thirty years. A modern marketer would assume that the same techniques should be used for the Web.

But much of advertising methods design for reaching an audience over the years does not apply to the web. Marketers, using those principles in web advertising, will lose, and fail. The basic lesson is that direct marketing, whether by direct mail, radio, TV, or print, is expensive. To reduce the costs, companies must carefully target their message using the right lists or the right media. On the web, the waste cost is very low. It is worth it to cast your net very wide to reach audiences that you could not possibly address with traditional media.

A common advertising try to create an image in the mind of the viewer. Web publicity, on the other hand, is trying to get the viewer to respond, it has focused on banner ads which are placed on hundreds of sites. When a viewer clicks on a banner, he is usually transported to the advertiser's site where he sees their products and prices, and may place an order. Banner advertising is paid for by CPM, cost per thousand impressions. An impression occurs when a viewer clicks on to a site that contains your banner. On the web, you get immediate feedback on what is working and what is not working.

There are four steps that a customer goes through in making a purchase on the web: o Click on a Website that contains banners. This is called an impression. It cost advertiser from $5 to $70 per thousand impressions. o Click on a banner in the Website, which transports the clicker to company's Website. That is called a response.

The firm can measure the response rates and figure out a cost per response. o The clicker views offerings and fills out a form. This is called a lead. The company can measure the percentage of responses that become leads, and the cost per lead. o The clicker buys the product by giving a credit card number and authorizing the purchase. This is called a sale. The company again can measure the lead conversion rate and the cost per sale. Advertisers are only responsible for the first two steps.

They can get people to visit their site, creating impressions. They can encourage people to click on your banner, creating a response. The last two steps are up to the marketers on each web site. Viewers can and do get lost at each step along the way. Web advertising differs from traditional media in a number of ways: Traditional Media Web Advertising High cost of waste Low cost of waste Single messages Multiple Messages Delayed feedback Immediate Feedback Hard to adjust Real time testing & tuning Traditional advertising usually involves single messages.

What is more, the company cannot afford to send a couple of letters to each household to measure which one works best. On the web, it is possible to change the message every hour every day, and expose customers to many different approaches. The results are available immediately due to the large audience and the simplicity of applying changes. Which company could afford running a new TV advertisement every week and even if it could, establishing the results by a group of specialists would take a month. The web offers such figures in a week time.

There has been dynamic growth in web advertising in the last couple of years. Pages are being created very fast. There is an overflow of unsold ad space. Much of the space is really inexpensive.

And, all of it can be measured and tracked. There is another popular among some companies form of advertisement. Pop-up windows. Pop-up ads are a form of web advertisements that appear in a separate window, more often as a full screen over laying the current window. These advertisements, unlikely the banner ones, do require the user to take some form of action even if it is to simply close the window. Unless one takes such action he is unable to search the Web without being interrupted, yet still engage an action with the advertisement if desired, at a later time unlike other forms of web advertising.

Simplifying, they do create another window in the user's screen that the user did not request. This can be considered somewhat annoying and is by a majority that is why programs such as Google Toolbar contain pop-up blocker software. There are even pup ups saying: "Buy our software, and protect yourself from pop-ups like this one!" . In recent weeks, soft were makers and advertisers went further. There are Web sites that instead of showing an advertisement trys to convince people to download a soft were. This is done by pop ups appearing as a Windows security window saying: 'Do you accept this download?' If the consumer clicks 'Yes,' an application is automatically installed.

Accepting such an offer, the customer doesn't know what kind of software he is installing and what for. The pop ups makers relay on the fact that most people tend to say: "YES", especially those who are less familiar with computers. But there is even a greater "threat" from some sites. They contain programs that are automatically installed on the user computer without asking for his permission. The customer doesn't even see the process on screen. Often such software includes viruses that automatically redirect user to specified Web site or change the home page setting in the Internet Explorer configuration.

There is one well known practitioner: Gator, now known as Clara Corporation. The company created a program that helped to manage passwords and user ID's. A helpful application for some users had some questionable features build in. In 2001 the company came under fire for selling ads that appeared over the ads already existing on major sites such as Yahoo. com. Downloading ads are the latest instruments in the advertisers' hands that help to aggressively distribute technology to a wider audience. Over few last years Net advertising went through far changes as the companies sow the possibility of cutting costs.

As a result ads become bigger or use a sound to attract attention. But this kind of practices are known on the large web sites while in less "jammed" areas of the Net, the tactics can be even harder. Some Web sites lunch up to 10 pop ups or use a trick called "mousetrapping" in which the site lunches multiply windows as only the visitor tries to exit the page it makes the viewer confused and as a result the chances that he would install the ad software increase. Among the sites that automatic downloads have appeared on are Innovators of Wrestling, MP 3 Yes. com.

Such sites often launch so many pop-up windows it's hard to determine where the download originated. Other redirects you to number of pages as soon as you try to close the main one. When talking about Web advertising GAIN Publishing must be mentioned. It distributes a variety of software products and operates, based on customer behaviour, advertising Network. As we can read thanks to The Gain many web sites and programs are free in exchange they agree to display online ads based on consumer online surfing behaviour. The ads that are displayed by the software are simply the advertisements of companies that compete with the ones whose Web site you are visiting.

Moreover, once installed on a computer, the Gain software is very difficult to uninstall even impossible by inexperienced user. These kinds of practices are rather annoying especially for users who have just begun their Web "adventure". E-commerce still needs lots of trust and customers need to be assured that their possible transaction is secured. They won't fell safe as long as such advertising forms will continue.

4. Conclusions With the accelerating pace of technology change, shrinking product life cycles, of products and services, and hyper-competition, companies are struggling to maintain a competitive advantage. Without customers any kind of business would fall and winning them has always been a challenge. But nowadays even large audiences do not guarantee big profits. Companies are looking for new techniques that would allow them to cut the costs connected with retailing. They begin to realize that earning clients' loyalty is worth playing as the investment returns quickly and brings larger profits later on.

In the 21 century we cannot imagine our lives without computers. They have become part of our reality. The internet projected for the military use at the beginning, is generally accessible medium today. It brings great possibility for every company active on whichever market to attract more customers at lower price and what is more to keep them with the firm.

Implementing E-commerce into customer service section of the business both decrease the costs and bring happiness to the clients. Similarly Web advertising allows marketers to release their imagination and creativeness to "catch" still growing internet audience. They should though keep the thin border between advertising and persuading. Your customers are coming to your Web site for information, transactions, and to get help. Nowadays, one sure way to achieve a sustainable advantage is by knowing your customers better than your competition and acting on this knowledge faster and more effectively. 5.

Bibliography

1. Field C., 1996 "Retailing on the Internet"2.
Robert F. Hartley, 2004 "Zar z^1 i marketing.