E-Commerce

1. E-Business Level 2 Instructor: Safaa S.Y. Dalloul Try to be the Best 2013-2014 E-Commerce Internet Consumers, E-services and Market Research

2. Elements of Lecture • Customer Behavior Online • Personal Characteristics and Demographics of Internet Surfers • Consumer Purchasing Decision Making • Matching Products with Customers (Personalization)

3. Elements of Lecture • Delivering Customer Service in Cyberspace and CRM • Market Research for Electronic Commerce • Intelligent Agents in Customer-Related Applications

4. A Company which changes its web site from passive to interactive get the advantage of customers care. • It will hear directly from its customers, even though it uses intermediaries for its sales. • The new interactive website allows company to learn more about its customers, while educating customers at the same time. Customer Behavior Online

5. Because companies work under increasing business environment pressure, they increase their competition efforts. • The major pressures are labeled in the 3C's: Competition, Customers, and Change. So, finding and retaining customers is a major critical success factor for most businesses. • The 3C's are needed to be controlled for success of companies' work. Customer Behavior Online

6. We will discuss the new relationships that companies such as Ritchey Design are attempting to build with their customers. The key to build such relations is understanding customer's behavior. • Consumer behavior is summarized in the electronic commerce model of Consumer Behavior. Customer Behavior Online

7. According to this model, the purchasing decision process is triggered by a customer's reaction to stimuli. • The process is then influenced by the buyer characteristics, the environment, the technology, the EC logistics and other factors. • Before we explore the details of the EC model, we need to describe who EC customers are, what they buy online and what the differences are between customers’ relations in direct sales versus intermediary-based markets. Model of EC Consumer Behavior

8. Model of EC Consumer Behavior

9. Individual consumers, who get much of the media attention • Organizational buyers who do most of the actual shopping in cyberspace, include governments, private corporations, resellers and public organizations. And their purchases are not intended for personal consumption. • Why is the consumer shopping? And what are the benefits of shopping online? Consumer Types

10. Consumers can also be classified into three other categories • Impulsivebuyers who purchase products quickly • Patientbuyers who purchase products after making some comparisons • Analyticalbuyers who do substantial research before making the decision to purchase products or services. PurchasesTypes and Experiences

11. The variables that influence the decision making process include: • Environmental variables, • Personal characteristics variables, and vendor-controlled variables. PersonalCharacteristics and Demographics of Internet Surfers

12. Social Variables: people are influenced by family members, friends, coworkers, and what is in fashion this year. Of special importance of ecommerce are discussion groups and internet communications, which communicate via chat rooms and bulletin boards and newsgroups. • Psychological Variables. Environmental variables

13. Cultural Variables: which make big difference if a consumer lives near Silicon Valley in California or in the mountains of Nepal, EC enhances the cultural impact on IT adoption. • Others: include the available information, government regulations, legal constraints and situational factors. Environmental variables Continued

14. Several variables are unique to individual customers. These include consumer resources, age, knowledge, gender, educational level, attitudes, motivation, marital status, personality, values, lifestyles, and more. • Several consumer demographics provide information on customer buying habits. Personal Characteristics and Personal Differences

15. The major demographics presented here include gender, age, marital status, educational level, occupation, and household income. • Therefore, most of the data presented here are related to Internet surfers (potential buyers) and are not about actual buyers. Personal Characteristics and Personal Differences Continued

16. It’s interesting to note that the more experience people have with the internet, the more likely they are to spend money online. • The two most cited reasons for not making purchases on the web are securityanddifficulty in judging the quality of the product. So users don’t make purchases because they have heard that buying on the web is not reliable or secure. Personal Characteristics and Personal Differences Continued

17. Five Roles in Purchasing Decision Making • Initiator: The person who first suggests or thinks of the idea of buying a particular product or service. • Influencer: A person whose advice or views carry some weight in making a final purchasing decision. • Decider: The person who ultimately makes a buying decision or any part of it, whether to buy, what to buy, how to buy, or where to buy. • Buyer: The person who makes an actual purchase. • User: The person who consumes or uses a product or service. ConsumerPurchasing Decision Making

18. When more than one individual play these roles, advertising and marketing strategies become very difficult. • Several models have been developed in an effort to describe the details of the purchase decision making process. • These models provide a framework of learning about the process in an attempt to predict, improve, or influence consumer decisions. Consumer Purchasing Decision Making Continued

19. It consists of five major phases, in each phase we can distinguish several activities and in some of them one or more decisions. • The five phases are : • Need identification. • Information Search. • Alternatives evaluation. • Purchase and delivery • After-purchase evaluation. ThePurchasing Decision-Making Model

20. The first phase, need identification, occurs when consumer is faced with an imbalance between actual and desired states of a need. • Here, a marketer’s goal is to get the consumer to recognize such imbalance and then convince this consumer that the product or service the seller offers will certainly fill in the gap between the two states ThePurchasing Decision-Making Model

21. In the phase two, Searches for information, on the various alternatives available to satisfy the need. Here we differentiate between a decision of what products to buy -- product brokering, and from whom to buy it--merchant brokering. • This stage is basically an information search, which can occur internally, externally or both. ThePurchasing Decision-Making Model

22. The internal information search is the process of recalling information stored in the memory. • The external information search: seeks information in the outside environment, typically in internet databases. One example is searching in google.com search engine. ThePurchasing Decision-Making Model

23. The third phase, Alternatives, come after the consumer will have a result of searched information generate a set of alternatives to him. • In the third phase, consumer will use the information stored in the memory and obtained from outside sources to develop a set of criteria. ThePurchasing Decision-Making Model

24. The phase four of making a purchasing decision starts now. • Finally the post purchasing stage of customer service i.e. maintenance and evaluation of the usefulness of the product. This process can also be seen as life cycle in which at the end the product is disposed of. ThePurchasing Decision-Making Model

25. The above model used and developed to build a framework, called the consumer decision support system CDSS. • This framework can help companies in using internet technologies to improve, influence, and control the decision process. ThePurchasing Decision-Making Model

26. One-to-One Marketing : An Overview • It’s type of the Relationship Marketing. Which is the overt attempt of exchange partners to build a long-term association, characterized by purposeful cooperation and mutual dependence on the development of social as well as structural bonds? • To be genuine one-to-one marketer, a company must change its behavior toward an individual customer based on what they know about the customer. So one-to-one market treats different customers differently. Matching Products with Customers

27. One-to-One Marketing : An Overview • One of the benefits of doing business over the Internet is that it enables companies to better communicate with customers and better understand customers’ needs and buying habits, amazon.com emails customers announcements of new books published in a customer’s area of interest. Matching Products with Customers

28. One-to-One Marketing : An Overview • The actual detailed mechanics of building a one-to-one relationship depend on understanding the various ways customers are different and how these differences should affect the firm’s behavior toward particular, individual customers. Matching Products with Customers

29. One-to-One Marketing : An Overview • A company increases loyalty in its own customers, by establishing a learning relationship with each customer, starting with the most valuable customers. • The learning relationship is a relationship that gets better with every new interaction. Matching Products with Customers

30. Issues in EC-Based One-to-One Marketing • Customer Loyalty: it’s the degree to which a customer will stay with a specific vendor or brand. It’s an important element in customer purchasing behavior. • Customer loyalty is one of the most significant contributors to profitability. • By keeping customers loyal a company can increase its profits because customers will buy more and over time sales will grow. Matching Products with Customers

31. Issues in EC-Based One-to-One Marketing • Cognitive Needs: gaining information about current and potential customers’ needs and converting those needs into demand is more feasible in EC than in any other marketing channel. • E-Loyalty: it’s simply a customer loyalty to an e-tailer. • Trust: The psychological status of involved parties who are willing to pursue further interaction to achieve a planned goal. Matching Products with Customers

32. Issues in EC-Based One-to-One Marketing • Personalization: it refers to the process of matching content, services, or products to individuals. The matching process is based on what a company knows about the individual user, this information is usually referred to as a user profile which defines customer preferences, behaviors and demographics. Matching Products with Customers (Personalization)

33. Issues in EC-Based One-to-One Marketing • Personalization forms: • Rule-based filtering: a company asks the consumer a series of yes/no multiple choice questions, the question may range from personal information to the specific information the customer is looking for on the web site. • Content-Based Filtering: with this technique, vendors ask users to specify certain favorite products. Based on these user preferences, the vendor’s system will recommend additional products to the user. Matching Products with Customers (Personalization)

34. Issues in EC-Based One-to-One Marketing • Personalization forms: • Constraint-based filtering: similar to content-based, but requires users to provide information about the preferred products. However, instead of asking many questions regarding specifications of products, takes as input a sequence of demographic and other constraints to represent a user’s preferences. • Learning-agent technology: here, users don’t answer any questions because their preferences are collected by cookies or other technologies while they surf the web. Matching Products with Customers (Personalization)

35. Issues in EC-Based One-to-One Marketing • Personalization forms: • Collaborating Filtering: A personalization method that uses customer data to predict, based on formulas derived from behavioral sciences, what other products or services a customer may enjoy; predictions can be extended to other customers with similar profiles. Matching Products with Customers (Personalization)

36. Customer Service is a series of activities designed to enhance customer satisfaction, that is, the feeling that a product or service has met the customer's expectation. • Customer service is responsible for resolving problems customers encounter in any phase of the purchase decision-making process. Delivering Customer Service in Cyberspace and CRM

37. E-Services • When customer services are supplied over the internet, sometimes automatically, it's referred to as e-service. • E-service often provides online help for online transactions. In addition, even if a product is purchased off-line, customer service may be provided online. Delivering Customer Service in Cyberspace and CRM

38. E-Services • There are three levels of service: • Foundation of Service: this includes the minimum necessary services such as site responsibilities, site effectiveness and order fulfillment. • Customer-Centered services: these are services that make the difference; they include order tracing, configuration and customization, and security/trust. • Value added services: these are extra services such as dynamic brokering, online auctions or online training and education. Delivering Customer Service in Cyberspace and CRM

39. Product Life Cycle • There are four phases for a product life cycle, they are presented as follows: • Requirements: Assisting the customer to determine his or her needs, for example by photographs of a product, video presentations, textual description articles, etc. • Acquisition: Helping the customer to acquire a specific product or service, e.g., online order entry, negotiations, closing of sale, downloadable software. Delivering Customer Service in Cyberspace and CRM

40. Product Life Cycle • There are four phases for a product life cycle, they are presented as follows: • Ownership: supporting the customer on an ongoing basis, e.g. interactive online user groups, online technical support, frequently asked questions and answers, resource libraries, newsletters and online renewal of subscriptions. • Retirement: Helping the client to dispose of a service or product when the product is no longer of use to the customer, e.g. online resale, classified ads. Delivering Customer Service in Cyberspace and CRM

41. CRM: an approach that recognizes that customers are the core of the business and that a company's success depends on effectively managed their relationship with them. • Customer Service Functions: The form the customers' service take on the web, such as answering customer inquiries, providing search and comparison capabilities, providing technical information to customers, allowing customers to track order status and allowing customers to place an online order. Delivering Customer Service in Cyberspace and CRM

42. Customer Service Tools: the followings are some tools used in serving customers and satisfying there needs by answering their inquiries related to some specific products or services. Delivering Customer Service in Cyberspace and CRM

43. Personalized Web Pages: • The tool which gives the ability for customers to create their own pages. These pages can be used to record customer purchases and preferences. • FAQs • Frequently Asked Questions, a feature which is simple and inexpensive that can be used to handle repetitive customer questions. However, FAQs can't answer all customers' questions, nonstandard questions should be sent and responded to via email. Delivering Customer Service in Cyberspace and CRM

44. Tracking Tools • Companies can supply customers with tracking tools so that customers can track their own orders, saving the company time and money. Customers generally like tracking tools as it gives them a quick and easy way to check on the status of their purchased products. Delivering Customer Service in Cyberspace and CRM

45. Help desks and call centers • One of the most important customer service tools, by which customers can drop in at physical site or communicate by telephone, fax, or email. Because the communications was initially conducted by telephone, the remote help desk is often called the call center. Delivering Customer Service in Cyberspace and CRMCustomer Relationship Management

46. Help desks and call centers • A help desk or call centre is a place where all customer contact is directed. • Staff of the call centre has access to the necessary information to provide service to customers. • There are a number of organizations that provide this service for a variety of companies thereby keeping the costs down for each organization. Delivering Customer Service in Cyberspace and CRM

47. Real-Time Service Chat • By using products like Live Person from liveperson.com or WebexOncall from webex.com, you can deliver personal services either as a text-base chat or audio. • Many companies have found that a single support representative can work with several customers simultaneously when using a text-based service. • The benefits of voice/audio are obvious but add significantly to the cost. Delivering Customer Service in Cyberspace and CRM

48. E-Learning as a Service • An even more sophisticated way to deliver product and service support is by using one of the many video-based, e-learning services. • These are offered in two ways: • First as an archived or library product; and second, as real time. • A real-time service that represents one of the new breeds of offerings is Essential Talk from the Essential Talk Network. Delivering Customer Service in Cyberspace and CRM

49. E-Learning as a Service • This service operates like a radio talk show with broadcast quality sound and interactivity using either posted chat or phone-in. • One way to use this service is to record a session on a particular topic and then make it available from a library as users require the information. • These sessions could be comprehensive “how to’s” with voice, slides, documents, and diagrams made available to the user Delivering Customer Service in Cyberspace and CRM

50. The goal of market research is to find information and knowledge that describes the relationships among consumers, products, marketing methods, and marketers. • Another goal is to discover marketing opportunities and issues, to establish marketing plans, to better understand the purchasing process, and to evaluate marketing performance. Market Research for Electronic Commerce