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Chapter 7: Consumer Behavior Online
Learning Objectives
Consumers in the Twenty-first Century
Since 1994, the Internet has grown more quickly than any other medium in history. Nearly 1 billion people are currently online worldwide. However, there are still 5 billion people that are not. This chapter will examine reasons for such a high rate on non-online citizens and how e-marketers are adjusting to the fact that the percentage of citizens online may never exceed 25%.

(PPT 7-2)

Inside the Internet Exchange Process
Exchange is a basic marketing concept that refers to the act of obtaining a desired object from someone by offering something in return. When consumers purchase a product, they are exchanging money for desired goods or services. Technical Context Two important developments are shaping online consumer behavior today – home connection speeds and the changing landscape of digital receiving devices such as cell phones. Online speeds and the type of equipment used to access the Internet determine whether a consumer accesses high or low graphic Web sites. Telematics is a communication system in an automobile that uses a global positioning system (GPS) for interactive communication between firms and drivers. Social and Cultural Contexts The Web is training consumers to help themselves to almost anything they want when and where they please. Some of the social/cultural trends that are affecting online exchanges are: Information overload, time poverty, home and work, I want what I want when I want it, online oxygen, self-service, sophisticated consumer, privacy and data security, and online crime. Legal Context In spite of piracy laws, illegally used software abounds. In spite of the new CanSpam law, the number of unsolicited e-mails has actually increased. However, the RIAA (Recording Industry Association of America) sued thousands of illegal music file downloaders and had a significant affect on online consumer behavior. Individual Characteristics and Resources Beyond general social and cultural trends, individuals vary in their online behavior. Individual Differences – Internet users differ in their needs and desires, and differ from nonusers. Online attitude and skills vary in degree according to whether they are users or nonusers. Differences will be examined in the outline.

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Consumer Resources – Consumer value is the benefits minus the costs (money, time energy and psychic costs). Monetary – Debit cards, credit cards, electronic checks (digital money), splash plastic or Paypal. Time – Consumers want to receive appropriate benefits for the time they spend online. The average user goes online 29 times a month and is online 49 minutes each time. Energy and Psychic Costs – Sometimes consumers feel it is too much trouble to turn on the computer, log onto the Internet, and check e-mail, especially for dial-up users. Internet Exchange – The actual moment when exchange occurs. Bookmarks and hyperlinks in emails assist consumers in finding specific sites, information, or specials. Exchange Outcomes – There are four basic things that people do online – connect, enjoy, learn and trade. Each is ripe with marketing opportunity. Connect – The Internet allows consumers to interact with individuals and organizations using two-way communication. Email, chat rooms, Internet phone calls and virtual postcards are the most popular ways for users to connect. Create – The Internet has created an ability to connect that has surpassed all previous expectations. Sites like linkedin.com, facebook.com, myspace.com and flickr.com allow users to connect in virtually any means possible. Enjoy – The Internet is a source of enjoyment for many consumers. Experts believe that the Internet will become consumer’s main source of entertainment within the next few years, overtaking the television. Learn – Consumers can access information to learn things in such...
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