Consumer Usage Report - Ties with Chapter 7

Nielsen is a strong source of secondary research. Please take a look at the enclosed media report as you read chapter 7 so you can look at current statistics of media usage.

http://blog.nielsen.com/nielsenwire/mediauniverse/

Chapter 7 – Consumer Behavior Online

Consumer Statistics:

·      71% of U.S. consumers use the internet

·         Who are the 29% not connected?

o   Older, less educated, ethnic minority groups, no kids, rural & lower income

o   Net Evaders (2.3%) – internet is a waste. Don’t need/want. Embarrassed to learn how to use

o   Net Dropouts (4.9%) – tried but stopped. Too pricey, content concerns, technological issues. Lost access due to technology issues or when they moved, changed jobs or ill

o   Truly Unconnected (20%) – low income w/ little education. Socially unconnected, worried about content/crime, can’t afford, no computer, too complicated

o   Intermittent Users (1.8%) – are online but leave for extended time. worried about content/crime, tech issues, high cost, don’t think they have time or need it

·         2007: 1.4bn on internet (19% globe). Mostly developed nations à 5.4bn not online!

Do some of these reasons non-users give for not being connected seem like opportunities for smart marketing? Lots of psychological excuses.

 Inside The Internet Exchange Process:

Individual (traits,resources) <--Internet Exchange--> Outcomes (connect,create,enjoy,learn,trade)

              Marketing Stimuli can motivate the exchange process

·         Technological Context:

o   Home connection speeds – connection speed affects behavior (rich media, video, etc.)

o   Digital receiving devices

- Typical U.S. home has 26 different devices for media and communication. 

- Key is understanding which device YOUR customers prefer and targeting

                        Source: http://www.frankwbaker.com/mediause.htm

 ·         Social and Cultural Context:

o   Sophisticated consumers - Consumer has power. When & where they want to get info

- Consumer reviews vs. corporate advertising – who are you going to trust?

o   Info overload – hate of spam

o   Multitasking – lower attention spans

o   Home & work – boundaries disappearing

o   Online oxygen – consumers crave internet. Part of life.

o   Self-service – want to get info they need on their own and thru whatever device they prefer (track shipments, purchase, return, etc.)

o   Privacy and data security** - keep data confidential, ask permission before sending emails/alerts, protect from objectionable content

o   Online crime – viruses, hacking are major concerns

·         Legal Context:

o   Piracy laws

·         Individual Traits & Consumer Resources – beyond social & cultural trends

o   Demographics, positive attitude toward tech, online skill & experience (used to internet)

o   Online shoppers more goal orientated than experience orientated when shopping

- Go to site with specific product and/or price in mind

·         Appreciate breadth of product, no crowds, ease & info availability  (70% online shoppers are either price or convenience orientated)

o   Monetary Cost – discretionary income constraints and/or credit avail (big w/ teens)

- Digital Cash - https://student.paypal.com/us/cgi-bin/marketingweb?cmd=_render-content&content_ID=marketing_us/student_accounts

o   Time Cost – make sure sites are well organized. Can get in and out = value. 24/7

o   Energy & Psychic Costs – How much work is needed to complete a transaction? See return policy clearly, no technical issues

·         Internet exchange – marketing stimuli can promote exchange (ex. Amazon recommendations)

·         Outcomes – What value do you get for your money, time and energy

o   Connect – Communication (email, IM, phone) or build relationships

o   Create – create and post your own content (Facebook, LinkedIn, etc.)

o   Enjoy – simple entertainment

o   Learn – Access info (directions, movie times, weather, etc.)

o   Trade – Transaction orientated activities (buy, sell, rent, etc.)

Who Buys All Those Google Ads?

Wired magazine put together a really great visual summary of the impact that online advertising is having across all companies.  Google generated $37.9 billion in revenue during FY11 and the following breaks it down by industry and also the top 5 major players within each of those sectors.
http://www.wired.com/epicenter/2012/01/google-ad-buyers-infographic/

Are Online Surveys Asking The Right Questions?

Surveys are currently the most commonly used data collection method for marketers, according to MarketResearchCareers.com. On top of that, more marketing dollars are spent on online surveys than on any other survey research methodology. When it comes to conducting primary research online, a web survey may be the most convenient and efficient medium available to marketing professionals. We have all probably sent out a web survey to our peers for one reason or another, but how much thought have we put into determining what types of information gathering are best suited to online survey research?

When pursuing certain kinds of data, surveys can often lead to misleading results. In his small business marketing column, Mark Healy suggests that when people are asked to give reasons for their past behavior the responses tend to be contrived and inaccurate. The reason may lie in the fact that a good portion of our decision making is irrational. Consequently we have a tendency to rationalize behavior that we find irrational in hindsight. This is not to say that surveys are not at all useful in characterizing consumer behavior. When it comes to gathering quantifiable facts, surveys are ideal. The key is to ask the right kinds of questions.


Read the full article here.


In a follow-up article, Healy goes into more detail about the types of information gathering for which surveys are appropriate. Surveys are great when it comes to answering the questions, Who, What, Where and When. These are purely factual and require little or no judgment. Why and How, on the other hand, involve opinions and are not easily quantifiable. It would be difficult to provide adequate multiple choice responses for a Why question, for example, because the possibilities are infinite. Leaving an open-ended response option is a common workaround, but this technique can create problems when assembling the final survey results, especially with a large sample size. For a survey to be effective, suitable questions must be combined with a sound survey design that asks those questions in a way that will generate the best results.


Read the follow-up article here.

CHAPTER 2!

Strategic Planning – The Managerial process of developing and maintaining a viable fit between the organization’s objectives, skills, and resources and its changing market opportunities. (Kotler and Keller 2006)

Part of this is to identify the firm’s goals – growth, competitive position, geographic scope, etc.

Performance Metrics – Specific measures designed to evaluate the effectiveness and efficiency of the e-business and e-marketing operations.

Strategy – Means to achieve a goal.

E-business strategy – The deployment of enterprise resources to capitalize on technologies for reaching specified objectives that ultimately improve performance and create sustainable competitive advantage.

E-marketing strategy – the design of marketing strategy that capitalizes on the organization’s electronic or information technology capabilities to reach specified objectives; the combination of technology and marketing strategy.

Business model – A method by which the organization sustains itself in the long term and includes its value proposition for partners and customers as well as its revenue streams.

Critical components to appraise a business model – Customer value, scope, price, revenue sources, connected activities, implementation, capabilities, sustainability.

E-business Model – A method by which the organization sustains itself in the long term using information technology.

Marketing concept – Social and economic justification of an organization is the satisfaction of customer wants and needs while meeting organizational objectives.

Organizations should ask these questions prior to embarking on any e-business strategy – 1. Are the business models likely to change in my industry? 2. What does the answer to question 1 mean to my company? 3. When do I need to be ready? 4. How do I get there from here?

Pure Play – Dot-com, Amazon, Myspace – Online businesses that do not have any sort of brick and mortar presence.

Enterprise – Online and offline, Dell, most retailers. E-Commerce – online transactions, either in a single sale or in a subscription format. Virtual worlds – subscription based “avatar” like thing, re: Second Life, WoW. Direct Distribution – basically what the name says. Content sponsorship – e-commerce in which companies sell ads either on their site or through email. Portal – point of entry to the internet; Yahoo, AOL. Social Networking – I hope you guys all know what these are. Online brokers – intermediaries who assist in purchase negotiations without actually representing buyers or sellers, such as E*Trade. Different types of online agents: selling, manufacturing, purchasing, shopping, and reverse auction agents.

Business Process – Customer Relationship Management – retaining and growing business and individual customers through strategies that ensure their satisfaction with the firm and its products. Knowledge management – combination of a firm’s database, the technology used to create the system, and the transformation of data into useful info and knowledge. Supply chain management – coordination of the distribution channel to deliver products more effectively and efficiently to customers. Community building - the use of websites to draw groups of special interest users. Affiliate programs – when firms put a link to someone else’s retail website and earn a commission on all purchases by referred customers. Database marketing – collecting, analyzing, and disseminating electronic information about customers, prospects, and products to increase profits. Enterprise resource planning (ERP) – back-office system for order entry, purchasing, invoicing, and inventory control. Mass customization – Internet’s unique ability to customize marketing mixes electronically and automatically to the individual level.

Activity – Email, Blog. Types of E-Business models - Online purchasing, order processing, e-mail, content publishing, business intelligence, online advertising and PR, online sales promotions, pricing strategies.

Performance metrics to come shortly!