DIGITAL MARKETING

MMRK831
DR. M. MUGWATI
mugwatim@staff.msu.ac.zw/mzmugwati@gmail.com
COMMUNICATION
◻ mugwatim@staff.msu.ac.zw
◻ mzmugwati@gmail.com
◻ www.facebook.com/miriammugwati
◻ Skype: miriam.mugwati
◻ 0772433488
◻ 0719433488
MODULE INTRODUCTION
◻ Module Objectives
◻ •Understand the online value chain to drive
business success
◻ •Integrate social media techniques and trends into
traditional business strategies
◻ •Identify and capitalize on technology and digital
commerce trends
◻ •Understand metrics to gauge success of social
media and traditional internet business efforts
◻ •Formulate and enact Internet driven strategies
 Digital marketing
◻ Discussion: Analyse the following 4 pictures and
explain how developments in technology have
motivated businesses, in general, to adopt the
internet in order to implement e-commerce
strategies.
◻ Try to imagine the marketing activities that the
people in the pictures could be engaging in
 Crackberry Fund
8
 E-MARKETING DEFINITION
◻ American marketing Association
Activities, institutions, and processes facilitated by
digital technologies for creating, communicating
and
delivering value for customers and other
stakeholders
◻ “an adaptive, technology-enabled process by which
firms collaborate with customers and partners to
jointly create, communicate, deliver, and sustain
value for all stakeholders” (Kannan & Li, 2016)
 E-MARKETING DEFINITION
◻ The process of using digital technologies to acquire
customers and build customer preferences, promote
brands, retain customers and increase sales
(Financial Times, lexicon.ft.com)
Definitions: e-commerce

◻ Chaffey (2008) e-commerce is about buying online or

the ability to transact online. This includes online
shopping (e-tailing) and internet banking.
◻ Describes the buying, selling, and ex-changing of
products, services, and information via computer
networks, primarily the Internet
Definitions of e-commerce
◻Bocij, P., Chaffey, D., Greasley, A. and
Hickie, S., 2006)
◻Electronic Commerce refers to all
electronically mediated transactions
between an organization and its
stakeholders. By this definition, non-
financial transactions such as customer
requests for further information would also
be considered to be part of e-commerce.
Definitions of e-commerce
◻E-Commerce is divided into buy-side and
sell-side e-commerce.
◻Buy-side e-Commerce refers to
transactions to procure resources needed
by an organization from its suppliers.
◻Sell-side e-Commerce refers to
transactions involved with selling products
to an organization’s customers.
The process of E-commerce
Definitions: e-business
◻ Laudon and Laudon (2013): the application of digital
technologies to business processes within the firm.
◻ In value chain context, the efficiency of processes is
enhanced which results in lower cost, higher quality
products thus giving the customer better value. e.g.
Psmi clinics
◻ Lou Gerstner, IBM’s CEO, “e-business is all about time
cycle, speed, globalization, enhanced productivity,
reaching new customers, and sharing knowledge across
institutions for competitive advantage.”
Comparison of e-commerce, e-business, e-marketing

E-commerce e-marketing

◻ Selling of goods and ◻ Transacting online

◻ E-tailing
services
◻ Electronic value chains
◻ Transacting ◻ Getting closer to customers
◻ E-business through the Internet
◻ Adding value to products using
◻ Selling of goods and digital technology
services ◻ Communicating with customers
through digital media
◻ Transacting
◻ Internal commerce
◻ Use of the Internet to ◻ Market research
establish a value chain to
deliver goods and services
Role/application of e-marketing
◻ Procurement
◻ Buying and selling products and services
◻ Shopping
◻ Business collaboration
◻ Information gathering (on competitors, and so
forth)
◻ Providing customer service
◻ Communicating within organizations
◻ Providing seller support
◻ Publishing and distributing information
 E-Marketing environment
◻ International/global
◻ Infrastructure
◻ Political environment
◻ Economic environment
◻ Socio-cultural
◻ Legal environment
◻ What are consumers responding in relation to the
developments in the e-commerce environment?
◻ How are businesses reacting to the environmental
factors in relation to e-commerce adoption?
E-Marketing Strategy
◻ Plan that will achieve E-marketing objectives.
◻ Components of e-strategy
◻ Evolutionary stage
Targets market and positioning
Objectives
Mix of e-commerce tools
Online marketing mix
Dynamic dialogue
Integrated database
Evolutionary stages of E-strategy

◻ 6 stages on how an organization’s e-

commerce activities will evolve online:
No web presence at all
Evolutionary stages of E-strategy
Basic website which is there just to make people
aware of it. www.okziminvestor.com
Informational site. www.shoprite.co.za
Simple interactive site providing information and
allows customers to make queries.
www.hippo.co.za
Interactive site which supports transactions
(shopping online, make payments).
www.foodworld.co.zw
Evolutionary stages of E-Strategy

◻ Fully interactive site which supports the entire

◻ buying process. It facilitates the full range of
exchanges. www.ebay.com
Types of
e-marketing/commerce
models/target markets
◻ Business to business (b2b)
◻ Digital communication between businesses
◻ Transactions between one business and another
◻ Internet has made it easier for firms to communicate and
to integrate their business functions.
◻ Examples of online B2B activities: track shipments,
inventory management, auctions (eBay can be used by
small businesses), service delivery (airliners)
◻ Revenue is much greater.
B2B Alliances and outsourcing
Types of e-marketing
models
◻ Business to consumer (b2c)
◻ Business sells to consumers
◻ Common type of trading both offline and online
◻ Internet allows businesses to sell products with multiple
channels
◻ B2C marketers can be clicks and mortar: store has a
physical presence through stores and branches as well
as an online trading facility. E.g Banks
◻ Pure play: Some firms have no physical presence, all
communication is done through the website or call
centre, there are no physical outlets. E.g ,
www.maruwa.co.zw
Types of e-marketing
models
Consumer to Business (C2B)
◻ Consumers make offers to businesses
◻ Consumers make known a particular need for a product or
service, and organizations compete to provide the product or
service to consumers. (An example would be Priceline.com,
bidorbuy.co.za where the customer names the price and
suppliers try to fulfill it.)
◻ Can join together to merge their buying power
◻ Large numbers of consumers now group together online to
buy collectively and to secure discounts.
◻ Examples are priceline.com/ bidorbuy.co.za
◻ Buyers simply post their offers on the auction sites
Types of e-marketing
models
Consumer to Consumer (C2C)
◻ Consumers can sell directly to each other e.g. eBay
◻ Social networking sites enable consumers to interact
socially. (Maslow's hierarchy of needs) e.g. Johnson’s
baby facebook page
◻ Chat rooms and discussion forums are also C2C.
Consumers who share interests join together to discuss
their interests or interact socially
◻ Consumers trust other consumers more than traditional
institutions. The consumer is in control.
Types of e-marketing models
Mobile marketing
Marketing activities undertaken on or with a mobile
device – e.g. a mobile phone or wireless internet,
laptop, tablet
Types of e-marketing models
Government to Citizen
◻ Commercial activities taking place between government
departments and the citizens of a country.
Government to government (G2G)
◻ Communication between government departments
◻ E-government
Objectives of e-marketing

◻ Selling :e-marketing site is set up to grow sales

e.g. Dell.com, amazon.com, zimazon.co.zw
◻ Site must be easy to navigate, safe and secure
◻ E-marketing site must give consumers
confidence that their financial and personal
information will be confidential and not
accessible by fraudsters or spam distributors.
◻ Internet bypasses geographical limitations
◻ Opens new markets
Objectives of e-marketing
◻ Serve: site may be set up to add value to the
consumers
◻ Give consumers a wider selection of the
company’s products (visit amazon.com’s site
◻ Give consumers an opportunity to discuss
their experiences with the product/service and
share views. E.g. Facebook, Twitter
◻ Offer greater customization to customers.
www.porsche.com site allows customers to
select features they and design their vehicle.
Objectives of e-marketing: (cont)

◻Serve
◻ Providing a lot of information, pictures, virtual
tours at low cost. www.wits.ac.za
◻ Allow consumers to share tips. E.g. support
rooms
◻ Metrics used to measure consumers
engagement with site: bounce rate(% who enter
site and leave immediately), duration on site,
number of people who searched for the brand.
Objectives of e-marketing
◻ Speak: websites can be used as a
communication channel to increase awareness of
brand, build the brand, shape opinion,
communicate special offers.
◻ Get closer to customers
◻ Identify customers needs through online
questionnaires.
◻ can observe customers and get to understand
them better through chat rooms, support forums
and blogs.
◻ Facebook page can make e-marketing
businesses get closer to their customers
Objectives of e-marketing

◻ Save: consumers’ time, money and effort

◻ E.g. Internet banking
◻ Distribution of digital products
◻ Saves time for firms: less information is printed
◻ Online application forms and catalogues.
www.avon.co.za
◻ Reduced transaction costs leading to better
prices for consumers.
◻ Disintermediation: Sell directly to the consumer,
cutting out intermediaries and their associated
costs. E.g. Travel industry.
Objectives of e-marketing
◻Sizzle: internet can be used to build the
brand by offering consumers a channel to
experience the brand.
◻Through virtual friends, games, build own
car, customer engagement (share photos)
◻ E.g. www.redbull.co.za consumers can
enjoy music, visuals and other content
which reinforces the brand
E-marketing models assignment
B2B ASSIGNMENT

◻This assignment requires you to visit websites and

analyse aspects of their business.
◻Visit the following sites: www.zimselector.com,
www.bidorbuy.co.za, www.tripadvisor.com
www.hammerandtongues.com
E-marketing assignment
For each site determine:
1.1 evolution stage of the site and provide reasons
for your answers. Explain how the digital merchant
is managing its brand based on the evolutionary stage
at which it is at.
1.2 e-marketing model and explain the digital
brand managent strategies being implemented
targeting the market
1.3 Identify the objective(s) being achieved. Use
both Dave Chaffey’s S model and the HOEM
 E-marketing tools
◻ The Internet
◻ Website
◻ E-Mails
◻ Mobile phones
◻ Personal Digital Appliances
◻ Databases
◻ Secured Online transactions
◻ Personal Computers
◻ These technologies change the way customers
interact with organizations. A key change is that
customers are expected to actively participate in the
service or product delivery process.
 THE INTERNET

◻ The Internet is a Global network of computers

◻ a layered phenomenon consisting of an information and

communication technology infrastructure, which can,
through universal agreements, use various applications,
which allow people and organisations to offer and buy
services, which may be used for economic, social,
cultural, educational, scientific, and other purposes”.
Source: Ben Tiggelaar, Internet Strategie
 Internet Services
◻ Information services offer information to the user.
Information: anything that is communicated in any form
of language (text, audio, visual)

◻ Contact services enable direct contact with the owner

of a website and with other users

◻ Transaction services allow organisations and

consumers to conduct business online and make
agreements
 Internet Services
◻ Entertainment services such as competitions
and games (gamification); contribute to a
positive experience of a website
◻ Relationship services include email
newsletters, social aspects of the web, loyalty
programs, etc. and aim to create possibilities for
permission Commerceand maintain long-term
relationships
 Types of Internet Networks
◻There are two types of networks that form
the internet. These are:
◻Intranets
◻Extranets
 Intranets
◻ An internal network confined to an organization. It runs
internally within the organization.
◻ Use a browser such as Mozilla Firefox, Internet Explorer,
Google Chrome etc.
◻ Can be used to store information within the organization
such as customer databases, inventory levels, financial
statements, staff information e.t.c.
◻ the intranet connects branches of a single organization
◻ Importance of the Intranet to the e-marketer
◻ ensures efficient service delivery
◻ Can be used to store information relating to customers,
suppliers or staff of an organization such as customer
 Intranet
◻ Stores information relating to inventory levels. E.g
hotel sector rooms available or ready for
occupation
◻ Databases assist in making everyone within the
organization to be customer focused.
◻ Comparison of sales between and amongst
branches may be done and be in a position to
implement appropriate strategies to improve sales
◻ A customer may be served from any branch of the
organisation through the Intranet.
 Extranets
◻ Link value chain members to the organization
e.g. suppliers of raw materials, manufacturer
and distribution.
◻ Extranet can link players within the same sector.

◻ Makes use of the WAN

◻ Examples of extranets: RTGS, Zimswitch
 EXTRANETS
◻ Raw materials can be procured online;
manufacturers can be informed of products to be
produced in terms of size, colour e.t.c. e.g. Ok
Zimbabwe and Tongaat Hulett
◻ Assist an organization to manage its inventory
effectively.
◻ Ensures efficient service delivery
Electronic retailing strategies
Understand what e-tailing is
Understand drivers and impediments to
e-commerce
See how the Internet can be used by e-tailers
Determine which products are better suited to
the internet
Reflect upon disintermediation and re-
intermediation
What is online retailing?
◻ Online retailers are defined as “those retailers who use
the tools of the Internet, whether they be email-based or
web-based, for any or all aspects of business and sales,
that is negotiation, confirmation, authorisation and
conclusion of sale of tangible, physical goods.”
◻ “Online version of traditional retail; [which] includes
virtual merchant (online retail store only), Bricksand-
Clicks e-retailers (online distribution channel for a
company that also has physical store), Catalog
Merchants (online version of direct mail catalog),
Manufacturers selling directly over the web” (Laudon &
Traver, 2010).
◻ Business to consumer markets and the sale of tangible
physical goods.
 Strategies for distributing
products/services online
Types of e-tailers
Direct Selling e.g. Dell.Com, HP.Com
◻ Manufacturer sells directly to the consumer or business
customer.
◻ They may either be single or multi-channel
manufacturers who sell to consumers directly online
without the intervention of middlemen.
◻ Results in disintermediation since firm no longer needs
the services of wholesalers and retailers
 Manufacturer Manufacturer Manufacturer

Wholesaler

Electronic
Distributor Disintermediation Intermediaries

Retailer

Consumers Consumers Consumers

Traditional distribution Direct Commerce through Internet Electronic

system Intermediaries
Types of E-Tailers
◻ It leads to more rapid delivery and the
manufacturer has the ability to claim a piece of
the middleman’s margin.
◻ It leads to channel conflict. (to discuss the
conflicts that arise and the strategies to minimize
them.)
Intermediation
◻ There was speculation that the Internet would
eliminate intermediaries in the supply chain.
◻ The process of shortening the supply chain is
known as disintermediation
◻ New intermediaries often arise to facilitate the
shortened supply chain. This is known as re-
intermediation
◻ Re-intermediation means that the intermediary
function is shifted rather than completely
eliminated.
Implications of re-intermediation

◻ Discussion on the implications of re-ntermediation

using the Travel agency, hospitality and airline
industry
Types of e-tailers

◻Informediary
◻ Online organization that aggregates and
distributes information e.g. market research
firm
Types of e-tailers
◻Traditional retailers with websites
◻ Traditional brick and mortar retailers with a fully
established transactional website
◻ Sell through both stores and interactive
websites and mobile devices. (mixed mode
channels). Need to achieve omni-channels
◻ Now there are online retailers with traditional
brick and mortar shops. e.g Amazon Go.
◻ Products are distributed through traditional
distribution channels although distributors may
be networked to the seller allowing the seller to
Challenges encountered by
clicks and mortar retailers
◻ High cost of physical buildings
◻ High cost of large sales staff
◻ Need to coordinate prices across channels (prices of
goods sold online and offline differ.
◻ The need to develop methods of handling cross channel
returns from multiple locations.
◻ Building a credible website
◻ Hiring new skilled staff
◻ Building rapid response order entity and fulfillment
systems. Leveraging existing assets and competencies
to the new technology environment
 Electronic retailing
◻ Nielson (2015) The top 10 products/services globally
sold online:
❖ books,
❖ clothing/accessories/shoes,
❖ airline ticket/reservations,
❖ electronic equipment,
❖ tours/hotel reservations,
❖ cosmetics/nutrition supplies,
❖ event tickets,
❖ computer hardware,
 Category Total %
Food, beverages & groceries 24 700 000 15
Books, stationery 18 750 000 11.5
Music 14 850 000 9
Sports and recreation 14 650 000 9
DVDs, movies and videos 13 500 000 8.5
Electronics and photography 12 600 000 8
Flowers, gifts and cards 11 100 000 7
Home and garden 9 950 000 6.5
Apparel, accessories and shoes 9 350 000 6
Arts, collectibles and jewelry 5 500 000 3.5
Heath and beauty 4 650 000 3
Other 22 575 000 14

Total 162 175 000 100

Why have food, beverages and groceries
retailers in Zimbabwe not yet adopted
online selling of their products?
Online distribution channels (cont)
◻ Online Malls e.g. Fashion Mall.Com
◻ Like their offline counterparts, they generate
revenue by collecting ‘rent’ and by charging for
services they provide to merchants who sell on
their site
◻ Challenges
◻ Building a ‘centrally located ‘website quickly and
from scratch
◻ Success depends on the retail merchants they
recruit to the mall
E-tailers (cont)
◻ Catalog Merchants
◻ Established companies that have a national offline
catalog operation as their largest retail channel, but who
have developed online capabilities
◻ They incur high costs for printing and mailing
◻ Virtual Merchants
◻ Building a business and a brand name very quickly
(starts operating from the internet and has no physical
presence.
◻ Many competitors in the virtual market place (some of
whom actually have a physical presence)
◻ Incur substantial costs to build and maintain and a
Electronic retailers (cont)
◻ Large customer acquisition costs
◻ Steep learning curve
◻ Need to quickly achieve operating efficiencies in order to
preserve a profit
◻ How to Overcome Challenges
◻ Online retailers must have established brand names
◻ Loyal customer base
◻ Extraordinary inventory control and fulfillment systems
◻ Cultivate new competences
◻ Come up with a carefully developed business plan
Advantages of Internet for e-tailers

◻ Cost
◻ Flexible physical location and reach:
◻ Larger variety of goods and wide inventory
◻ Flexible time: 24/7
◻ Greater communication ability
◻ Consumer data collection through cookies and web
usage
◻ Customers avoid unpleasant sales environments
◻ Promotional capabilities online
◻ Dynamic pricing
Disadvantages of the Internet for e-tailers

◻ Cost: maintenance and sales service

◻ Size of the market
◻ Fulfilment problems: Slow deliveries
◻ Payment and security concerns
◻ No physical immediacy
◻ Lack of sensory appreciation of product
◻ Lack of sales persons and personal service
◻ Lack of social environment
◻ Cost of customer acquisition
◻ Technological issues: Zimbabwean users pay high costs
for Internet usage.
◻ Availability of a number of credit facilities offline
◻ Difficulty in returning goods
Uses of the Internet for retail

◻ Sale of goods
◻ Ordering goods
◻ Communication with suppliers and customers
◻ Market research
◻ Promotional tool
Product consideration when
setting up an e-tailer
◻ Goods high in search and credence qualities do well on
the Internet, these are:
Information rich products
Product evaluation without personal interact or product
trial
Value to weight ratio
Products easy to customise
Products with widely dispersed target markets
Products usually sold in bricks ‘n mortar environments
◻ Replenishment-driven goods
◻ Convenience goods
◻ Speciality goods
◻ The culture of direct commerce
E-Business Models
◻ A business model is a summary of how a company will
generate revenue, its target customers, core product
offering, value added services and partnership
arrangements electronically.
◻ They can also be explained in terms of the type of
website that the company intends to set up so as to be
able to serve its customers.
◻ Assist in decreasing a firm’s internal costs, improve the
value proposition for customers and partners and
increase the enterprise’s revenue streams.
Types of Internet retail business models

◻ Internet retail business models can be classified

in several ways:
The degree to which the retailer is online
■ Pure play e-tailers: have only one retailing
channel- the Internet
■ Clicks ‘n bricks (multichannel retailers): e-
tailers that are also offline retailers
■ Catalogue retailers
■ Bricks ‘n mortar stores: physical stores
Types of e-business models
◻ E-shops/ Transactional Sites
◻ Company’s first stage for creating online presence.
◻ Manufacturers or retailers make products available for
purchase online
◻ In general, any company that initiates a web site with the
purpose of only having the internet presence has actually
created a primary form of e-shop.
◻ Business exchange costs are extremely low for both the firm
and the consumer, as it eliminates the physical costs of retail
stores or even, in some cases, warehousing costs.
◻ Revenue is generated from either online or offline
transactions.

 
Types of e-business models
◻ E- Commerce– conducting online transactions through
selling goods and services online, E – tailers (Online
retailers), buy products, sell them online and distribute
them using traditional methods. Some e.tailers may sell
digital products (software, music videos, media) and
distribute them online (Amazon.com or itunes.com.)
payment is made online.
◻ On-line brokers – firms may decide to set website to
act as intermediaries in purchase negotiations without
actually representing either buyers or sellers. (Just like
insurance brokers). Revenue stream in these models is
commission or fee based e.g. www.zimselector.com
www.hippo.co.za .
 Types of e-business models
◻ E- Mail – used to communicate with different stakeholders in
order to save on printing and mailing costs. Sales can also be
generated through e-mails sent to customers.
◻ Content Publisher - firms create valuable content of services
on their websites in order to draw high traffic levels.
◻ Virtual Malls – hosts multiple online merchants. Promotes
the websites and takes a fee for its services e.g. Kelkoo.com,
Pricerunner, www.indigosquare.com
◻ Online directories- look at www.zimyellow.co.zw. The
website makes revenue through listing companies on its site.
The listed company pays a fee to the host for being listed.
Types of e-business models
◻ Online Advertising – firm buys net space on someone else’s
website for online adverts or firm uses its own website for online
adverts
◻ Business Intelligence – gathering of data about competitors,
markets and consumers products and selling such information to
third parties. www.bizrate.com
◻ Community sites/Social Network.
◻ enables community interactions between consumers. (C2C Site).
◻ Interactions include posting comments, replying to comments,
rating content, blog postings and commenting on blog postings.
◻ Advertising is their main revenue source.
◻ used to establish loyalty among customers and facilitate obtaining
feedback from them.
 Types of e-business models

◻ Affiliate programs – firm puts a link on another

organization’s website and earns a commission on all
purchases from referred customers. e.g. Amazon.com
link on Dave Chaffey’s weblog.
◻ Portals e.g. www.yahoo.com – Portal refers to a
gateway to information.
◻ Portal sites are intermediaries
◻ They are search engines,
◻ portals can offer additional services such as destinations
for news, games, directory, and shopping comparison
and customer lists. e.g. American Online portal is used
for communication, help them find other websites, offer
entertaining Commerceand conduct e-commerce.
Types of e-business models
◻ Online agents – can either be manufacturers or buying
agents representing sellers or buyers respectively. On
the virtual market, manufacturers’ agents create a
website to an entire industry to sell a product e.g
Travelocity.com. is an online travel agent
◻ Pure – Play
◻ No specific e-business models exist because S.C.A in
the industry depends on redefining the rules of the game
in the industry and offering greater customer value. (This
can be through the combination of a number of different
e-business models. E.g. www.aliexpress.com
 Business revenue models

Subscription revenue model

◻A company offers content or services and charges
a subscription fee for access to some or all of its
offerings.
◻To successfully overcome the disinclination of
users to pay for content, the content offered must be
perceived as a high-value-added, premium offering
that is not readily available elsewhere nor easily
replicated.
 Business revenue models
Freemium
◻Companies give away a certain level of product or
services for free, but then charge a subscription fee for
premium levels of the product or service.
◻The freemium pricing model is a cross-subsidy online
marketing strategy where users are offered a basic service
for free, but must pay for premium or add-on services. The
people who pay for the premium services hopefully will
pay for all the free riders on the service.
 Business revenue models
Freemium
◻Difficult to convert the eyeballs into paying
customers. Free sites attract hundreds of millions of
price-sensitive “free loaders” who have no intention
of ever paying for anything, and who switch from
one free service to another at the very mention of
charges.
 Online consumer behaviour

Online consumer behaviour

 Types of E-Consumers
◻ Online browsers cannot be treated equally:
Direct purchasers who purchase right away online
Search and deliberation buyers who search for
purchases that they do eventually intend to buy
Hedonic browsers who are Internet surfers engaged in
electronic window shopping
Knowledge builders who often engage in ongoing
searches to improve their knowledge of the market or
of a particular product area. Opinion leaders would
engage in such behaviour
 Consumer Issues
◻ There are a number of consumer issues that
are important to Internet retailers.
Technical issues are important as they replace the
conventional retail store ambience:
■ Access speed
■ Speed of navigation and downloading
■ Network security issues
■ Bandwidth
■ Access restrictions
Consumer Issues (contd)
Consumer individual characteristics
■ Highly educated, younger and have higher household
incomes.
■ Consumer resources, knowledge, beliefs, values and
attitudes affect consumer computer self-efficacy.
■ Self-efficacy influences online behaviour
■ Even if consumers have the necessary facilities to use the
Internet, they need computer skills
■ E-tailers can help by using online and offline media,
advertising security issues.
■ Consumers can be overwhelmed by the information overload
so e-tailers must make their sites easily navigable
Consumer Issues
◻ Shopping experience
Live entertainment is not easily replicated online
How to make the surfing experience pleasant
Internet communities can be built around the
brand or product lines i.e. chat-rooms
encourage conversation
UNDERSTANDING E-CUSTOMERS

◻ CUSTOMER ONLINE FEARS AND PHOBIAS

◻ Security risks: stolen credit cards; hackers; viruses;
SPAM; lack of privacy
◻ Computers being taken over remotely.
◻ Anxiety due to not knowing what to do over the Internet
◻ Fear of getting lost
◻ Too much information
◻ Fear of inaccurate information
◻ Fear of how the Internet will destroy the lives of
individuals, families and the whole of society
◻ Cyber stalkers, hate mail, fake mail, mail bombs
 
Fears cont.

◻ Poor quality product

◻ Product not being delivered
◻ Wrong product being delivered
◻ Misrepresentation of product
◻ Defective products being delivered
Managing consumer fears

Consumer fears may be managed through FAQs

Assignment 2
See assignment 1 under classwork on Google classroom.
Managing Customer Expectations

Customers have high expectations when buying online

1. Understanding expectations
◻ Use customer research and site benchmarking to help in
meeting customer expectations.
◻ Use standard frameworks to establish the gap between
expectation and delivery and prioritize to solve the worst
shortcomings.
◻ Use scenario to identify the customer expectations of
using the services on your site
 Managing consumer expectations
2. Setting and communicating the service promise
◻ Expectations can best be managed by entering into
an informal or formal agreement as to what service
the customer can expect through customer service
guarantee or promises
◻ It is better to under promise than to over promise. E.g.
a book retailer that delivers books in two days when 3
days were promised will earn the customer’s loyalty
better than a retailer who promises 1 day but delivers
in 2.
Managing consumer expectations
3. Delivering the service promise
◻Commitments must be delivered through on-site
services, support from employees and physical fulfillment.
◻If commitments are not met, online credibility is
destroyed then customer may not return.
◻Examples of service promises and guarantees: e-
mail response; product specifications; price; product
availability; delivery time; return guarantees
Customer Journey / Customer
Experience Cycle
◻ A customer journey map tells the story of the
customer’s experience: from initial contact, through
the process of engagement and into a long-term
relationship.
◻ It talks about the user’s feelings, motivations and
questions for each of these touchpoints.
◻ Gives managers an overview of the customer’s
experience.
◻ Helps managers to identify opportunities to
enhance the experience
Customer Journey / Customer
Experience Cycle
The Customer Journey & the
(e)commerce toolbox
 The customer journey
◻ The 'customer journey' is continuously becoming
more complex. An increasing range of factors,
platforms and channels influence the decision
making process.
◻ Businesses need to think in terms of cross-media
concepts and focus on finding the optimal match
of messages with channels, platforms and
devices.
 The customer Journey
◻ Online content is very powerful and the level of
consumer engagement determines the success of
content.
◻ There are new approaches to measuring success.
◻ Four key areas of measuring success: involvement,
interaction, intimacy and influence.
 The role of trust

◻ Internet represents risk:

cannot monitor the safety and security of sending personal and financial
information
cannot physically check the quality of the products
do not always know who the other party is
do not always know the physical location of the other party
Purchasers (not sellers) incur nearly all of the risks
◻ 3 main factors influence consumer trust in Internet shopping:
Trustworthiness of e-tailer
Trustworthiness of Internet shopping medium
Contextual factors
Minor factors like size, branding, and the presence of a physical store
Trustworthiness of e-tailer
•Ability
•Integrity
The role of trust
•benevolence

Trustworthiness of Internet
Shopping medium
•Technical competence
•Reliability
•Understanding of medium Individual trust
propensity
•Consumer
demographics Consumer trust
Contextual factors •Personality in Internet
•Effectiveness of third party characteristics shopping
certification •Clue seeking
•Effectiveness of security
infrastructure
•Current media reportage

Other factors
•Size
•Branding
•Presence of physical store
The pillars of retailing
◻ Solving customer’s problems
◻ Treating customers with respect
◻ Connecting with customers’ emotions
◻ Setting the fairest (not the lowest) price
◻ Saving your customers’ time
Service quality
Key dimensions of Internet service quality

Dimension Description

Performance How well does an e-Commerce business accomplish the set of

tasks that customers expect it to perform? Performance
includes delivery fulfillment and transaction efficiency
Access To what extent does an e-Commerce business provide a wide
variety of products from all over the world? Access includes
variety and universality
Security To what extent does an e-Commerce business foster
perceptions of trust, assurance and freedom from risk? Security
concerns comprise financial as well as nonfinancial issues.
Sensation To what extent does an Internet service provider pay attention to
aesthetic aspects of the online shopping experience?

Information What is the nature of information provided by an online

business. Information includes quantity and credibility
considerations