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1. Internet Consumer and
Market Research
Chapter 3

2. Building Customer Relationship: Ritchey
Design Inc.
Small business.
Designer and manufacturer of mountain
bike components.
The Problem
Early website was just a status symbol,
The site did not:
Offer enough customer information
Enable the company to gain insight into their
customers’ needs and wants

3. Ritchey Design Learns
About Customers (cont.)
The Solution
Customer surveys introduced on the site
Web Trader automatically saves and organizes
answers in the database.
This information is used to make marketing
decisions
Created an electronic product catalog
Visitors can browse through the product catalog
with detailed descriptions and graphics of
products.

4. Ritchey Design Learns
About Customers (cont.)
The Results
Ritchey does not yet sell directly to individuals
online, because the company wants to maintain its
existing distribution system.
Dealers can:
Place orders on the site
Learn about new products quickly
Site is basically used for market research and
advertising,
Now the company can hear from its customers
directly, learn from them and can educate them
also.

5. The Consumer Behavior Model
Business Pressures (3Cs)
Competition
Customers
Change
Finding and retaining a customers is major
critical success factor for all business.
Strengths of customers is increased due to
information.
Magnitude of the change is very high.
Every business need to control 3Cs to succeed,
or even to survive.

6. The Model of EC Consumer Behavior
(Fig. 3.1)
Decision making process is dependent to all these :-
Personal characteristics
 Gender, Age, Occupation, Education, Income
Environmental characteristics
 Social , family,
Stimuli (motivation)
 Marketing (Price , Promotion, Product, Quality)
 Others (economical, technology,)
Buyers Decisions
 What, When , where, which, how
Vendor controlled systems
 Logistics (payment, delivery)
 Technical support (website design, )
 Customer service (FAQ, call center)

8. Consumer Behavior
Consumer types
 Individual consumers who commands most of the media’s
attention
 Organizational buyers
Governments and public organizations
Private corporations
Resellers
Purchasing Types
 Valuable or valueless
 Impulse buyer or patient Buyer
Direct sales, Intermediaries and Customer
relations
It is the end user who supports everyone

9. Environmental Variables
Social variables—people are influenced by:
Family members, friends, co-workers, “what’s in
fashion this year”
Cultural/community variables—where the
consumer lives
Psychological variables –common beliefs
Other environmental variables:
Available information, government regulations,
legal constraints, situational factors
Personal characteristics and the
demographics of internet surfer

10. Personal Characteristics
and Individual Differences
Consumer demographic provide an indicator of buying:-
Age and gender
Marital status
Educational level
Ethnicity
Occupation
Household income
Internet Usage Profile
 Internet access options
 Length and frequency of use
 Access cost
Consumer buying patterns
 Surfer are purchasers
 Spending categories
 Security and quality perception

11. Consumer Purchasing Decision Making
Initiator
Influencer
 Decider
 Buyer
 User
Decision-Making model (Table 3.2)
1. Need identification
2. Information search
3. Evaluation of alternatives
4. Purchase and deliver
5. After-purchase evaluation

12. One to one and Relationship Marketing
Basic Idea
 No two customer are same: Treat different customer
differently
 Available to a customer and interact continuously
 Obvious attempt to build a long term association by
establishing a learning relationship with each customer
EC trust* and customer loyalty
By well defined rules
Good experience with EC
Realistic expectations
Referrals (word of mouth)
(Page 118)

13. Delivering customer service in cyber
space
Customer service is set of activities designed to
enhance the level of customer satisfaction
Types of customer service
Answering customer inquiries
Providing search and comparison capabilities
Providing technical and other information
Order status
Customization
Tools Available
Personalize web pages
FAQs, chat rooms, emails, Help Desks and call centers

14. Market Research for EC
Market research is gathering information about
economy, industry, firms, product, pricing, distribution,
promotion and consumer behavior
Market research process
 Problem Definition
 Research Methodology
 Data Collection
 Data Analysis
 Results
 Implementations
Online market research:
 utilizing the internet in research for efficient, faster and cheaper
data analysis
 Larger the sample size, greater accuracy and predicative
capabilities

15. Market Research for EC
The goal of market research is to find
information and knowledge that describes the
relationships among consumers, products,
marketing methods, and marketers.
Questionnaires
Telephone Surveys
Focus Groups

16. Market Research for EC
Market Segmentation
The process of dividing a consumer market
into logical groups for conducting marketing
research, advertising, and sales.
Segmenting options
Geography
Demographics
Psychographics
Benefits sought

17. Market Research for EC
Conducting Online Market Research
What are we looking for in EC Market Research?
Analyze personal profiles to explain and predict online
buying behavior.
Typical Questions
What are the purchase patterns for individuals and
groups?
What factors encourage online purchasing?
How can we distinguish real buyers from browsers?
How do individuals navigate?
What is the optimal web page design?

18. Market Research for EC
Online Market Research Methods
Web-based surveys
Online focus groups
Hearing directly from customers
Tracking customer movements
Transaction logs
Clickstream behavior
Cookies
Web bugs
Spyware

19. Market Research for EC
Limitations of Online Market Research
Having too much data
Accuracy of responses
Equipment failure
Ethics and legality of web tracking
Truly representative samples

20. Data Mining
Data mining—the process of searching a large
database to discover previously unknown patterns;
automates the process of finding predictive
information
New business opportunities generated by
conducting:
Automated prediction of trends and behaviors
Automated discovery of previously unknown
patterns and relationships

21. Intelligent agents
Intelligent agents are computer programs that
help the users to conduct routine tasks, search
and retrieve information and support decision
making. agents sense the environment and act
automatically e.g. My Yahoo
Intelligent agents for information search and filtering.
Intelligent agent for products and vendor finding
Intelligent agent for Negotiation
Intelligent agent for customer services

22. Internet Marketing in B2B
Organizational Buyer Behavior
Buy in large quantities
The number of organizational buyers is smaller than
individual but the transaction volumes are larger
Behavioral Model of Organizational Buyers
Organizational Influences Module

23. Organizational buyer
Characteristics
Demand
Purchase volume
Number of customer
Location of buyers
Distribution structure
Nature of buying
Nature of buying influence
Type of negotiations
Use of reciprocity
Use of leasing
Primary promotion method
B-to-B
Organizational
Larger
Fewer
Geographically
concentrated
More direct
More professional
Multiple
More complex
Yes
Greater
Personal selling
Retail
Individual
Smaller
Many
Dispersed
More indirect
More personal
Single
Simpler
No
Lesser
advertising