Select a business involved in e-commerce and create a written report addressing the following about the company’s business model
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EBUS3090_Ch.9_Day212.pptxChapter 9
Marketing and Advertising in E-Commerce
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Learning Objectives
The purchase decision-making process
AIDA model
Players in the consumer decision process
Loyalty, Satisfaction, and Trust in E-Commerce
Mass Marketing, Market Segmentation, and Relationship Marketing
Marketing Research
Advertising
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Traditional Marketing
Mass Marketing
Marketing efforts were targeted to everyone (the “masses”).
One-way communication
Newspaper, TV, radio, catalog
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Market Segmentation
Marketing Segmentation is the practice of promoting a product or service to a subset of customers or prospects.
Marketing efforts can match segments better than the “mass”, providing a better response rate.
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Market Segmentation
Marketing Segmentation Methods
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Profitability valued customers are in one category
Risk score low-risk customers are in a special category
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Demographics
Age: 35 – 54 years
Household income: $75,000
Female: 67% Male: 33%
Into fashion and celebrities
Age: 35 years and over
Household income: $75,000
Female: 30% Male: 70%
Athletes
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https://sproutsocial.com/insights/new-social-media-demographics/#facebook
Guess the Age
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Guess the Age
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Shift to Relationship Marketing
Relationship Marketing
Marketing method that focuses on building a long-term relationship with customers
Deeper understanding of the customers
from segments to individuals
One-to-one Marketing
Marketing that treats each customer in a unique way
Communicate with customers as individuals
Develop products based on the customer’s explicit needs
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Marketing Research
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DATA
Marketing research consists of a set of techniques and principles for systematically collecting, recording, analyzing, and interpreting data that can aid decision makers involved in marketing goods, services, or ideas.
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Consists of a set of techniques and principles for systematically collecting, recoding, analyzing and interpreting data that can aid decision makers involved in marketing goods, services or ideas
The marketing research function links firms and organizations to their customers through data. By collecting data from customers, firms can better deliver products and services designed to meet their needs
Collecting
Recording
Analyzing
Interpreting
Decision Making
Data Collection Process
Secondary data are information that have been collected prior to the start of the focal research project.
Primary data are those data collected to address specific research needs
Focus group, interview, survey
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After answering why and how, researchers must determine where they can find the data. Discuss how the types of data required determine the methods used to collect them. If you can connect to your college library – look at some of the data sources at your own school. Dabases like mintel, tablebase, ABI inform and Business Source Premier are excellent sources of data.
Group activity: As a group, tackle a problem for a company (e.g., local retailer who appears to be losing customers), For this problem, list several research questions that secondary data can answer. Then list several questions that require primary data.
Planning Primary Data Collection
This table shows that designing a plan for primary data collection calls for a number of decisions on research approaches, contact methods, the sampling plan, and research instruments. The following slides discuss each of these decisions in detail.
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Observational
Survey
Experimental
Primary Data - Research Approaches
Observational research
Gathering primary data by observing relevant people, actions, and situations
Ethnographic research: Sending trained observers to watch and interact with consumers in their natural environments
Survey research
Asking people questions about their knowledge, attitudes, preferences, and buying behavior
Experimental research
Selecting matched groups of subjects, giving them different treatments, controlling related factors, and checking for differences in group responses
Observational and ethnographic research yield the kinds of details that don’t emerge from traditional research questionnaires or focus groups. For instance, Fisher-Price has established an observation lab in which it can observe the reactions children have to new toys.
A wide range of companies now use ethnographic research. For example, Coors insights teams frequent bars and other locations in a top-secret, small-town location—they call it the “Outpost”—within a day’s drive of Chicago. The researchers use the town as a real-life lab.
Survey research is the approach best suited for gathering descriptive information. The major advantage of survey research is its flexibility. Surveys addressing almost any marketing question or decision can be conducted by phone or mail, in person, or online. The disadvantages of survey research are that people may be unwilling to respond to unknown interviewers or answer questions about topics they consider private.
Whereas observation is best suited for exploratory research and surveys for descriptive research, experimental research is best suited for gathering causal information. Experimental research tries to explain cause-and-effect relationships. For example, before adding a new sandwich to its menu, McDonald’s might use experiments to test the effects on sales of two different prices it might charge.
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Primary Data—Focus Group
A group discussion (usually 8 to 12)
Focused on a series of topics led by a moderator
Unstructured method of inquiry; videotaped
Group members are encouraged to:
Express their own views on each topic
Elaborate on or react to the views of others
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Focus group is a mostly widely used in industry
A focus group interview involves
interviewing 8 to 12 people
in an informal group setting.
A skilled moderator leads the discussion, asking open-ended questions on topics of interest.
Ideally we want to get group dynamics, that is, people express their views and react upon other people’s views.
Common Focus Group Applications
Understanding Consumers
Attitudes and behavior concerning products/services
Product Planning
Generating ideas about new products
Advertising
Develop creative concepts and copy material
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Focus group is often used in these contexts. For example …
Primary Data
By entering the customer’s world, researchers can scrutinize how customers think and feel as it relates to their products
To better understand the challenges faced by elderly shoppers, this Kimberly-Clark executive tries to shop while wearing vision-impairment glasses and bulky gloves that simulate arthritis
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A survey is a systematic means of collecting information from people that generally uses a questionnaire.
Researchers must choose a group of customers who represent the customers of interest, or a sample, and then generalize their opinions to describe all customers with the same characteristics.
Survey methods
Telephone surveys
Mail surveys
Face-to-face surveys (at home, mall intercept)
Online surveys (tight deadline; smaller budget; high response rate)
Primary Data—Surveys
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Most widely used method for primary data collection.
Best suited for gathering descriptive information.
Different Types of Secondary Data
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After answering why and how, researchers must determine where they can find the data. Discuss how the types of data required determine the methods used to collect them. If you can connect to your college library – look at some of the data sources at your own school. Dabases like mintel, tablebase, ABI inform and Business Source Premier are excellent sources of data.
Group activity: As a group, tackle a problem for a company (e.g., local retailer who appears to be losing customers), For this problem, list several research questions that secondary data can answer. Then list several questions that require primary data.
Inexpensive External Secondary Data
Sales data from the Census of Retail Trade and County Business Patterns
Demographic data from the U.S. Census
Syndicated External Secondary Data
Available for a fee from commercial research firms such as IRI, NPDP, ACNielsen, etc...
Internal Secondary Data
Come from customer information and purchase history.
Stored in data warehouses and requires data mining techniques to extract valuable information.
Includes the price, sales, growth, advertising and promotion spending (i.e., medical mask).
Firms (McDonald’s & Kellogg’s) can use it to get data on brand preference and product usage.
Survey—Structured and Unstructured Questions
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Marketing research relies heavily on questionnaires, and questionnaire design is virtually an art form. Ask students the advantages and disadvantages of each type of question (unstructured and structured).
Group activity: Create a questionnaire. First determine the form of the questions (i.e., structured versus unstructured). On the basis of these questions, what types of analysis will you be able to perform on your collected data?
Survey—Questionnaire Design
How much money did you spend on groceries last quarter?
What not to do when designing a questionnaire
Do you like to shop for clothing and food?
Rate how safe BMW is on a
Scale of 1 to 10, with 1 being not
Safe and 10 being very safe.
BMW is the safest car on the road, right?
Did you dye your gray hair?
To what extent do you believe fast food contributes to adult obesity using a five point scale?
Fast food is responsible for adult obesity: Agree/Disagree
Important Terms
Population
Population infers to all members of a specified group.
Sample
Sample infers to the subset selected from the population that was used in the study.
| Population | Sample |
| American college students | 300 UT students |
| Dell customers | 50 dell customers who participated focus group discussions |
| American drivers | 1000 Ford owners |
Terms
Census
If all the respondents in a population are asked to provide information, such survey is called census.
Sampling
Selection of a subset of individuals from within a population to estimate characteristics of the whole population.
Sampling
Census
Probability Sampling
Sampling frame is the source material or device from which a sample is drawn.
Sampling frame is crucial in probability sampling.
If the sampling frame is a poor fit to the population of interest, random sampling from that frame cannot fix the problem.
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Population
Sample
Sampling Frame
Sampling Technique
What you want to study
What you actually observe in the data
Inference
Web Advertising
SOME BASIC INTERNET ADVERTISING TERMINOLOGY
ad views
The number of times users call up a page that has a banner on it during a specific period; known as impressions or page views
button
A small banner that is linked to a website; may contain downloadable software
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Web Advertising
CPM (cost per mille, i.e., 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 actually make a purchase
click-through rate/ratio (CTR)
The percentage of visitors who are exposed to a banner ad and click on it
hit
A request for data from a Web page or file
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
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Web Advertising
visit
A series of requests during one navigation of a website; a pause of a certain length of time ends a visit
stickiness
Characteristic that influences the average length of time a visitor stays in a site
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
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Quiz
conversion rate
The percentage of clickers who actually make a purchase
click-through rate/ratio (CTR)
The percentage of visitors who are exposed to a banner ad and click on it
CPM (cost per mille, i.e., thousand impressions)
The fee an advertiser pays for each 1,000 times a page with a banner ad is shown
hit
A request for data from a Web page or file
stickiness
Characteristic that influences the average length of time a visitor stays in a site
visit
A series of requests during one navigation of a website; a pause of a certain length of time ends a visit
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Reasons web advertising is growing
Advertising Online and Its Advantages
Cost
Richness of format
Personalization
Timeliness
Location-based
Linking
Digital branding
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Online Advertising Methods
e-mail marketing
A form of direct marketing which uses e-mail as a means of communicating commercial messages to an audience
e-mail advertising
Adding advertisements to e-mail messages sent to customers
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
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Online Advertising Methods
search advertising
A method of placing online advertisements on Web pages that show results from search engine queries
URL Listing
Keyword Advertising
search engine optimization (SEO)
The craft of increasing site rank on search engines; the optimizer uses the ranking algorithm of the search engine (which may be different for different search engines) and best search phrases, and tailors the ad accordingly
Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
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Copyright © 2012 Pearson Education, Inc. Publishing as Prentice Hall
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