Connected Consumers Online

CONSUMERS IN THE TWENTY-FIRST

CENTURY
• Read page 190
CONSUMER BEHAVIOR ONLINE

Consumer behavior models apply to all buying decisions

1. Consumers experience all or many of the buying process steps: need
identification, information search, alternative evaluation , purchase and post
purchase activities.
2. Consumers also go through a hierarchy of effects model—from first becoming
aware of the product or brand, then developing an attitude as positive or negative,
and possibly concluding with some behavior, such as registering online or
purchasing the product.
CONSUMER BEHAVIOR ONLINE

• 3. Marketers often use an AIDA model to entice buyers: attention, interest,

desire, and action. Japan’s top ad agency, Dentsu, Inc., modified this model in
2004 for the social media environment by replacing “desire” with “search” and
adding “share” with others: attention, interest, search, action, and share .
• 4.Word of mouth has been used forever when people share their product
experiences with friends and family; however, an online share can quickly
reach the entire connected world.
CONSUMER BEHAVIOR ONLINE

Key theories about consumer buying behavior follow:

• Scarcity: When a product is scarce, it will create more demand, such as a
discount offered for a “limited time only.” .
• Popularity: Formerly called the bandwagon effect, consumers are more likely
to purchase a brand that their friends or many others like and use (the most
popular brand in its category gathers more buyers). This is why many people
send requests to “Like” their Facebook pages and why Amazon five-star
product reviews lead people to believe it is a great book or CD.
CONSUMER BEHAVIOR ONLINE

• Affinity: Consumers are persuaded by friends and family because they like and
trust them. Viral marketing is based on this principle—you are likely to watch a
You- Tube video when someone you trust sends the link to you or purchase
something that your social network friends highly recommend.
• Authority: If a celebrity or other famous figure uses and recommends a
particular brand, social network, or Web site, it will become more popular. If
you like Lady Gaga and she recommends a new artist, you are more likely to
purchase a CD from that artist.
CONSUMER BEHAVIOR ONLINE

• Consistency: When individuals hold particular beliefs and attitudes about a

product, it is hard to change them. Also called cognitive consistency, this
explains habitual buying patterns or consistently using the same online news or
weather site for information. It also explains why you take a chance on Lady
Gaga’s recommendation if you like her, and don’t if you dislike her music.
• Reciprocity: Do me a favor and I owe you. This is why free product samples in
grocery stores or 30-day free software trial downloads tend to increase product
sales of that item around the sampling period.
INSIDE THE INTERNET EXCHANGE
PROCESS
Exchange is a basic marketing concept that refers to the act of obtaining a valued
object from someone by offering something in return.
Technological Context : Here we focus upon three important developments affecting online
consumer behavior today
1. Home connection speeds;
2. The changing landscape of digital-content receiving devices such as smartphones,
televisions, and many more;
3. Web 2.0 technologies.
INSIDE THE INTERNET EXCHANGE
PROCESS
Home Connection Speeds
Estimates ranged from 66 to 77 percent of online Americans connected to the internet at home with
broadband (fast) internet service in 2012.
Receiving Devices
The typical U.S. home has 26 different electronic devices for media and communication, according to
the Consumer Electronics Association.
Web 2.0 Technologies
The term Web 2.0 is often used synonymously with social media and refers to second-generation
internet technologies behind blogs, wikis, social networks, product review sites, image and video
upload sites
INSIDE THE INTERNET EXCHANGE
PROCESS
Social and Cultural Contexts
Three cornerstones for attracting today’s customers online
are :
Reputation
Relevance
Engagement
INSIDE THE INTERNET EXCHANGE
PROCESS
Reputation
• Brand image and reputation are based on the market’s perception. Companies
with good reputations are authentic, are honest, apologize for errors, and follow
through on brand promises. In reward, they receive more recommendations from
customers, enjoy longer and more profitable relationships, and sell more products
and services. One of the most important social trends is that oftentimes consumers
trust each other more than they trust advertising or companies, and when the
product conversation turns negative it can hurt a company’s reputation.
INSIDE THE INTERNET EXCHANGE
PROCESS
Relevance
• Consumers don’t hate all advertising— they just don’t like being interrupted with
irrelevant communication. This is why the national telephone “do not call” registry
has been such a success for consumers, who report receiving fewer telemarketing
calls since registering. Conversely, the large number of online users who opt in to
receive e-mail messages from companies they patronize enjoy and welcome
relevant communication.
• It takes research, insight, two-way communication, and presenting the right product
to the right customer at the right time.
Engagement
• The key to drawing internet users is to provide relevant content or
entertainment. According to Time, Inc., the three pillars of customer
engagement are content engagement, media engagement, and engagement
marketing activities. The consumer story that opened this chapter is an example
of interesting content that engaged the user into following the path to learn
more and share with friends. The more relevant, entertaining, and emotion-
laden the content, the more likely it will be to involve the audience.