I.
E-Commerce
Effects of customer purchase decision and marketing strategy
i. Consumer
behavior consumption and buying behavior
Consumer buying behavior can be define as "the dynamic interaction
of cognitive and affective elements, behavioral and environmental whereby
individuals create exchange behaviors", in other words, the set of
thoughts and feelings experienced by the individuals in addition to the actions
carried out in their consumption processes.
ii. Effects
of the e-commerce
Electronic commerce means that consumers have to look for merchants
through their individual websites. While virtual retailers can advertise both
in traditional media and on the Internet, some retailers do not consider that
consumers need to find them in some way on the Net, aspect whose solution lies
in the implementation of an online massive advertising to reach the virtual
target market. However, even if consumers come to enter the merchant Web site,
it is quite common that they are exclusively dedicated to collect information
without actually buying any products at that moment.
Consumers can use traditional and electronic channels, for visiting
stores or to complete the process of buying the actual product. They work
also distinguish four strategies that consumers could use to carry out
exchanges, combining these two types of channels. First, consumers could make
both electronically visit the store and purchase the product, simply making a
pure electronic exchange. A second strategy would be that the consumer
could use an electronic exchange through a computer-assisted store
(store-aided). In this case, the consumer goes first to a traditional store to
physically examine and gain experience about the product. Having taken the
decision on the desired product, the consumer would buy in a virtual
store. Third, consumers can choose to collect information on the Internet
about the product (web-aided) and then go to a regular store to make your
purchase. Finally, consumers can shop in traditional stores without using
Internet.
There are significant differences within the formats mentioned above
depending on the requirement of information that consumers need. For
example for products with a high degree of need of information, traditional
formats such as television offer substantial advantages. While for those
products that require only some text or just photographs, catalog and web
formats provide a sufficient level of information. However it is worth noting
that the changes in pricing policies of online stores formats and the freedom
and control over the purchasing process in addition to the vast amount of
information and the relative ease has developed a significant growth in virtual
stores.
iii. Virtual
and artificial environments
Virtual or artificial environment is any means that allows us to
communicate interactively with other users of the medium and the medium itself,
being able to provide us with information in any format and also not
necessarily sequentially. These environments are called Hypermedia
Computer Mediated Environments or, briefly, HCME's among them the most widely
known "Internet" or so called World Wide Web as a graphical
environment that can interact include different types of communication tools
and integrated systems in it. The ability to manage the virtual
environment for the consumer as well as the challenges posed by the
environment; introduce new competitive elements into this new medium
practically nonexistent in the physical environment (traditional).
However, even today the percentage of those who try to make a purchase
on the Web, fail and give up. One might think at first that the main reasons
for these failures are technical reasons such as failure in the connection or
similar. But On-Line Retailers would be wrong if they focus only on those
problems and forgot transaction related errors or the information required to
complete the purchase process and how ease to use is their website. In fact the
design and the quality of the website have effects in the business performance
of virtual stores.
iv. Importance
of the design in the adoption of the sales channel
The design and layout of the website carries great importance in online
consumer behavior because they are benchmarks with great influence on the purchase
decision process; aspects such as browsing speed, bandwidth, and content
definition and of course the creative aspects of the website. It is not just
that the online store is attractive, but the design must be an essential part
of the overall sales strategy. In addition the cultural elements must be taken
into account because of its significant influence on the design of the website.
However despite the predictions of great development of online sales to
the end consumer many studies are showing that these expectations are not being
carried out. The number of web sites and total sales is still marginal, and in
part, is caused by a poor design and navigation of the virtual stores.
Furthermore the adoption by consumers of this sales channel does not occur at
the same time or in the same way and there is a learning curve for Internet web
users ranging according to their personal characteristics.
v. Socio
demographic and cognitive variables
Socio-demographic variables affect perceptions of the virtual users
about the advantages of buying online regarding the conventional purchase. In
addition, behavioral variables influence the response to stimuli of purchase by
the effects marketing experience. Online users can be classified as "potential
buyers of Internet" and "internet buyers".
In general, cognitive states relate to aspects such as: how online
shoppers interpret the information from the display, the choice of sites and
alternative products, attitudes toward virtual stores, etc.
Hence that On-Line Retailers must framed the term attitude, as
an affective response and cognitive system have focused on the individual as a
process of interpretation that elicits information or statements related to
knowledge, beliefs and learning within the virtual environment which is
immersed.
II. Target
market segments
i. Behavioral
learning theories and stimulus
Consumer learning can be behavioral or cognitive. The behavioral
learning theories part of the so called stimulus-response characterized it is
considered that a given subject has learned if he acts or responds in a
predictable way to a known stimulus. In the other hand cognitive learning is
caused by exposure to certain information.
Similarly, previous satisfaction provided by a brand can lead to repeat
purchases resulting in shopping habit. In this case, the consumer has reduced
their needs to evaluate different alternatives (brands). In this way means that
the habit is a way to ensure satisfaction based on past experience and
simplifying the purchase decision process by reducing the need to search for
information and evaluation of the brand. Thus, the habit would lead to
purchases that are opposed to complex processes of buying decision.
Understanding procurement by habit requires an understanding of the principles
governing consumer learning. The habit can lead to brand loyalty or inertia.
Thus, brand loyalty is repeat purchase by establishing commitment to a
particular brand. But when the previous satisfaction with a product that is not
overly important leads the consumer to buy the same brand, the phenomenon referred
to is that of inertia. The consumer learning processes occur because consumers
learn from past experience that affects their future behavior.
ii. Cognitive
learning
Cognitive learning occurs when people interpret information from the
environment and create new knowledge or meanings. Normally, these new meanings
modify their existing knowledge structures that have in memory. The contact
that consumers have with products and services can occur via three pathways:
- Use direct personal experience:
In this case, On-Line Retailers use a variety of strategies such
as free trials of products to cause consumer direct experience about their
products.
- Vicarious experience about
the product: Consumers can acquire indirect knowledge about the product by
observing how others use the products. On-Line Retailers can indirect
cause these experiences through demonstrations that take place within the
point of sale (videos and chats on their website).
- Interpretation of the
information related to the product: information from means of
communication of personal sources such as friends, family and special
interest groups. On-Line Retailers can use reference system of users
boards.
The interpretation of information on products and services can lead to
three types or levels of knowledge learned: addition, adjustment and
restructuring.
First addition once consumers interpret information about products and
services, add new knowledge, meanings and beliefs to their existing knowledge
structures. Second adjustment as consumers gain experience with a product,
knowledge structures tend to become larger and more complex by adding
processes. At the same time, consumers can adjust their knowledge structures to
make them more precise and generalizable. Finally restructuring involves the
review of an associative network of knowledge, which may include the creation
of new structures of meaning and / or reorganization of an ancient knowledge
structure.
It is worth noting for On-Line Retailers that the addition,
sometimes and the adjustment can occur without cognitive effort, while
restructuring involves extensive cognitive effort, substantial thought and
reasoning process. In fact, the introduction of a new product that is quite
different from the present, may force consumers to restructure their existing
knowledge about the product / location to accommodate the same.
iii. Virtual
consumers
There have been many efforts to classify or segment buyers into
different virtual categories. Probably the earliest qualified consumers
(conventional) as "economic, individual, ethical and apathetic." With
the resurgence of the virtual user, a significant number of authors have
performed such classifications of a consumer, whose main purpose is focused on
identifying groups of related virtual consumers and generate strategies to suit
their profiles.
iv. Characteristics
and variables of the buying process
The adoption by consumers of virtual channels such as On-Line
Retailers does not occur at the same time or in the same way, in fact
there is a learning curve for the consumers according to their personal
characteristics.
In this sense and by analysing the adoption curve proposed by Rodgers
the “early adapters” played an important role as transmitters of use. The
so-called "early majority", is characterized from its incorporation
and it is crucial in facilitating the consolidation of the medium. The
"late majority", that group consists of future Internet users will
access when enjoy wide acceptance (as is already happening in places such as
the United States). Finally, the "laggards" are risk averse
individuals who access the Internet when most of the market and previously
accessed.
In the online buying process socio demographic variables influence user
perceptions about the benefits of purchase online. In addition, behavioral
variables influence the response to marketing stimuli of purchase in function
of the experience. Specifically, in the group of "innovators"
(relatively younger, with higher educational level and higher income than later
adopters and non-adopters, those two groups require higher levels of
stimulation than early adopters and majority. These observations have great
importance for On-Line Retailers because they must design their web
pages to profile their target markets including dynamic elements and appealing
to their emotions.
Other studies have virtual consumers classified according to their
propensity to purchase virtually; in order to identify characteristics
associated consumers more profitable. Such studies have classified online users
as "potential buyers of Internet" and "internet buyers".
Meanwhile, others classified based on virtual consumer information search
process, differentiating between "observer" and "direct
search" and suggests that online stores should be designed to cater for
both types of web users, both for those who know exactly what they look like
and for those who only want to take a look at the web.
v. Segmentation
by analyzing clickstream
Demographic variables when combined with behavioral variables there is a
significant and complete predictable online segmentation his four variables
are:
(1) Length of session: duration of the user session measured in
minutes
(2) Expected time on each page: Length of time spent by the user on
each page before clicking on the next
(3) Concentration on category: Maximum percentage of the total time
spent on those sites, which are classified in the same category
(4) Familiarity with the website after the site visit at least
three occasions
Virtual consumer segments obtained using this segmentation based on the
virtual behavior are the so-called "loiterers" and "surfers"
that visit familiar places, although the "loiterers" focus on a
category such as books while surfer browse aimlessly. For the "fast"
are attracted to short visits in search of specific information. The "Just
the Facts" but also seek specific information from related sites, which is
more likely to complete the purchase. Users on "single mission" also
focus on sites of a single category, but do so to visit unknown sites in search
of information they need. Web users "do it again" remain more time
overall and visit past places frequently visited. Finally, the
"information please" have less chance to focus on a point of familiar
sites, gathering information from anywhere.
These segments provide specific guidelines for marketing actions. For
example, if On-Line Retailers wants to establish a brand image with
teens and young adults who are limited in the segment of "loitering",
they can use the technique of advertising pop-up linked to those sites visited
by these segments.
III. Marketing
strategy towards their targets
i. Effects
of the design of online stores
Online Retailers must profile their customers according to their
activities by performing a cluster analysis using benchmark the intentions of
the individuals in the virtual environment.
ii. Activities
of Internet purchase process in On-Line Retailers
1) Identification of the parties involved in the exchange: On-Line
Retailers must locate potential customer, which in turn starts the process
to recognize certain shortcomings looking for products to try to satisfy them.
Both parties use the Internet to gather information and make the first contact.
The buyer may choose to use search engines to locate the seller offers and try
to channel the demand requirements using the information generated by the user
navigation patterns.
2) Exchange of information between the parties: On-Line
Retailers must exchange information through various means such as email,
forums, chats and real time, etc.
(3) Argument: the process of sale presentation assortment comes with
arguments by which On-Line Retailers tries to show product features,
benefits and other issues of interest to the user (answer questions, FAQ-
Frequently Asked Questions, etc.) plus finally persuaded to opt for the
acquisition of their products.
(4) Closing sale: the On-Line Retailers shopping basket with
which the request is made is easy to add the desired products and quantities
needed, resulting in the sum of prices on the spot, while allowing close the
deal and transmit the order.
(5) Electronic Payment: credit card, bank transaction or pay-pal.
(6) After-sales service: operation tracking distribution and product
delivery, either through the network or through other physical channels. The
resources used in the network to advise the client are, among others, the
answers to the FAQ, e-mail and telephone services over the
Internet. On-Line Retailers tries to keep the customer in the long
run, should report on new products that fit their profile, interest on the view
that they deserve and products purchased, etc.
iii. Marketing
strategies and implications of consumer behavior
The fact that the main characteristic of online stores is the
interactivity and connectivity with customers those in charge of the marketing
department should consider how models of advertising and media can be adapted
to the interactivity and connectivity. The consumer interaction is given in
many ways for example new product design; development of a product strategy and
innovation marketing or differentiated content therefore online stores must do
not forget the look of the design and atmosphere.
The design and layout of the website, are of great importance because
they may be the only points of reference with a great influence on the purchase
decision process for consumers. Therefore, not only must the virtual establishment
be attractive, but to use the design as an essential part of the overall sales
strategy and must not forget the cultural element because of its significant
influence on the design of the website.
In addition On-Line Retailers must determine the basis of
preference according to consumer behavior, give expression to the basket items
that consumers do not buy or tastes expressed in ratings that users give to
certain products or services and these system must be used among other similar
products to recommend purchases based on other customers who have made the
assessment of the products.
IV. Strategies
and recommendations
i. Main
models of consumer behavior on the Internet
Before to mentioned any strategies and recommendation is worth to review
the main research carried out on models of consumer behavior in virtual
environments affecting the influence of personal factors on consumer purchase
decision:
·
Li, Kuo & Russell (1999) studied the influence of socio demographic
variables, buying motives, the knowledge of the channel and the perceived
usefulness of Internet buying behavior.
·
Swaminathan, Lep-kowska-White & Rao (1999) studied the determinants
of the conversion of a surfer on a buyer.
·
Jarvenpaa, Tractinsky, Saarinen & Vitale (1999) studied the
antecedents and consequences of consumer trust in the virtual establishment.
·
Goldsmith (2002) studied the history of the intention to purchase
through Internet.
·
Jee and Lee (2002) analyzed the antecedents of perceived interactivity
on the website and their influence on purchase intent through the network.
ii. Projected
virtual service tangibility
Physical representation and partnership strategies are need to maximize
the effectiveness in an electronic context of a service virtual company; the
goal is to increase the tangibility of the service through the manipulation of
signals of the e-scape company. Specifically, a physical representation
strategy focuses on the tangible elements that are part of the service.
In the case of On-Line Retailers for example, the manipulation
signals can be tangible objects that could be included on the website as well
as a partnership strategy focuses on the tangible that are not directly part of
the service but are linked to it. Finally, the strategy of the documentation
describes the value of the service through the use of facts and figures. For
example, On-Line Retailers can mention delivery on time percentages
or their safety check out standards.
The documentation it is an effective strategy to increase the
tangibility of services, resulting in more positive evaluations of the service
and the website. Overall, the author concludes that by increasing the
tangibility of the service companies such as On-Line Retailers can
create a more positive assessment by the consumers. In addition, environmental
manipulation reduces the perceived risk associated with the service itself, and
consequently, this leads to a more positive response by consumers.
iii. Effects
of store design for positioning of online shoppers
Three main factors are required by On-Line Retailers to gain a
good position with customers:
Factor 1: Reliability, the fulfillment of the promises On-Line
Retailers made, their attention to allegations quick, easy navigation and
effective, meeting the deadlines, the correct performance of the service the
first time, the adequate presentation of the product and its features, and the
transmission of a positive image in their transactions.
Factor 2: Trust: the information aspects of the buying process or
product availability, the incorporation of security features, confirmation of
the purchase, the possibility of making payment through different means and the
confidentiality of customer data.
Factor 3: Communication: the information given in the web, communication
with people with similar interests, access to other websites, individual
attention, customer service 24 hours and the web design.
iv. Affective
and cognitive states
Affective and cognitive components that make up the emotions of
individuals are but affective and cognitive responses that are causing consumer
external stimuli from the environment. Affective responses can be favorable or
unfavorable and vary in intensity. For example that affectivity includes: (a)
relative intensity of emotions such as love or anger, (b) less strong feeling
states such as satisfaction or frustration, (c) mood as boredom or relaxation,
and (d) affable attitudes from the individual to a particular product. The
types of affective responses such as feelings, for example, may be favorable or
unfavorable. The mood can also be positive (relaxation) or negative (sadness).
The four types of affective elements differ in the level of arousal or intensity
that are experienced by consumers.
The emotional reactions of consumers towards the environment can
influence their cognition during the decision process (to go to a store with
good humor can cause you to spend more money on it that if you're in a bad
mood). Affectivity associated with the individual's mood influences their
cognitive process during purchase thus will be more likely to think about the
qualities of subject matter favorable in the case of On-Line Retailers the
main emotional components represented by the pleasure or enjoyment (pride,
affection, gratitude, joy), activation (interest, surprise, involvement) and
domination (impotence, powerlessness, sadness, fear, disgust).
Emotions mediate the relationship between advertising and consumer
responses, independently measuring attitudes toward advertising and attitudes
toward the brand. In the same way, On-Line Retailers advertising, as
a part of the web site environment, affects the perception of virtual user on
their website.
V. Conclusion
strengths and weaknesses of marketing strategy
i.
1-click On-Line Retailers
Overall online shoppers consider unimportant elements such as leisure
and entertainment in virtual stores. These are not key elements when selecting
an establishment online either for an actual purchase or to request commercial
information. Nor elements of communication with people with similar interest
whether forums, chats, etc. Consumers of the four segments showed a poorly
differentiated behavior in terms of the overall perception of the service,
satisfaction and future purchase intention, and this is quite favorable. The
data indicates that the virtual stores as On-Line Retailers when
visited show an acceptable level in the design of its offer and the services
provided to the users.
Other aspect to include for online consumers is the confidentiality and
reliability of the service provided by On-Line Retailers. Users are
concerned about the security of their data and transactions, and that the
processes are made properly and problems are resolved efficiently. Consumer
particularly appreciate the confirmation that the purchase process is
successful, the financial arrangement, the image of trust and reliability that
gives virtual setting, and that it contains clear information on how to
purchase. These aspects are very relevant to the concern about privacy and
security.
In short, On-Line Retailers environment, formed by the
physical characteristics thereof, directly influences consumer responses by the
emotional state that occurs, which leads to increase or decrease the purchasing
activity. When the situational characteristics that make activating the
consumer environment and generate positive emotional states it will tend to
stay longer in the establishment, which means increasing the likelihood of
buying more products in the store.
In fact, the valuations of individuals on the emotions experienced
before the establishment environment significantly predicted measures such as
rejection approach or the pleasure of buying the property, the desire to spend
more time on it and explore it, the feelings affiliation with others, the
desire to return and likelihood of spending more money than expected.
Furthermore, satisfied customers are more likely to recommend and use again.
ii.
Buyers state of mind and their
satisfaction
A positive relationship between emotional states and individual
satisfaction on behavioral intentions and, specifically, about loyalty. In
general terms loyalty constitute the approach behavior of the individual to the
store caused by the application of the environmental stimuli that produce
positive emotional state, in addition to satisfaction during consumer shopping
experience. And this in time may produce a behavior related approach, in
particular with possible future repeat purchase and recommendation of the
establishment to others.
In short, it is time to mention that there is a relationship of
interdependence between each of the elements making up the study of consumer
behavior, in particular, its internal states and cognitive-affective, behavior
and the surrounding environment.
iii. Elements
of consumer analysis and their influence in the environment
Affective and cognitive states can change consumer behavior and the
environment. Behavior can change the internal states of the individual and the
environment. In addition, the environment can change the internal states and
consumer behavior. The development of marketing strategies, therefore, must
include a joint analysis of these elements relationships because their
direction can have a change in any given time.
Furthermore, analysis of the consumer environment is necessary to observe
what factors influence consumers currently on and what changes are occurring,
so that, depending on the previous analysis applies the most appropriate
marketing strategy. In this sense, the analysis of the consumer could not
finish when the marketing strategy has been implemented, but should continue
investigating the effects of such a strategy and if it could be changed to
increase their effectiveness.
iii.
Marketing strategies
Recommendation systems are adapted from the suggestions from friends or
others to the Internet environment. These processes in turn are divided into
two stages one that occurs on-line and the other. The development of a
well-founded strategy requires to be developed at an early stage, where there
is prior knowledge of the consumers interested and behavior, later to be
offered a solution to the problem created by information overload on the
Internet. These systems represent a useful application in solving this problem,
especially if we consider the scope of product recommended information in the
context of e-commerce and distance education or virtual.
Companies can choose to create, organize, evaluate and analyze a
database of consumers (database marketing) based on any of the above sources.
This is useful for marketing strategies, such as making recommendations to
those same users. In this sense, this capability is especially necessary
for On-Line Retailers characterized by applying a relational approach
in the management of their business, which enhances the establishment and
maintenance of relationships with their customers. Specifically, the
systematization of recommendations provides customers sustain them over time,
increasing their satisfaction and improving the long-term financial results
of On-Line Retailers.
