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Business to consumer

Business to consumer. Age 35-49 Gender 63% Male Income (Median) $60-74 K Education (College) 56% Married 63%. E-commerce sales by categories. Category Sales ($B) Growth (1yr) Orders Total 6.28 205 % 71.3 Computer goods 2.84 194 % 14.13 Entertainment 1.28 290 % 28.86

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Business to consumer

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  1. Business to consumer • Age 35-49 • Gender 63% Male • Income (Median) $60-74 K • Education (College) 56% • Married 63%

  2. E-commerce sales by categories Category Sales ($B) Growth (1yr) Orders Total 6.28 205 % 71.3 Computer goods 2.84 194 % 14.13 Entertainment 1.28 290 % 28.86 Consumer goods 0.73 206 % 9.06 Gifts 0.61 347 % 10.26 Apparel 0.50 152 % 5.06 Food/Wine 0.25 44 % 3.18 Home/Garden 0.06 274 % 0.73

  3. What is driving business? • Referral sources - • Web 50% (email - 18.5%, AOL -16%) • Friend/WOM - 30% • Offline experience w/retailer - 30% • Print - 15% (especially catalogs) • TV - 2.4% • Radio - 1%

  4. Day of week • Offline retailers - peak on Sat/Sun • Online - fairly even throughout the week • Slowest days are Sat/Sun • sales decline as week progresses

  5. Importance weights • Product representation • prices • selection • delivery • ease of ordering • information • customer support • shipping and handling • privacy policy • navigation and looks Teens, young adults, average income adults with no kids Price most important For mature adults, gift buyers 1. product representation 2. customer support .. 5. price

  6. Consumer Behavior • Expectations have changed • Expect customized products • Want full access to own account information • Want the experience to be fun and entertaining • Want to interact with the ad, not just read it • Opportunities • personalization • community building • interaction

  7. Interactivity • Depends on: • Direct communication • Individual choice • Friendly technology

  8. Consumer Behavior Impact of interactive site = increased usage • Frequent use of service • Invest more time to understand site capabilities • Increase duration of online activities Real World • Charles Schwab: 20% increase in revenue and 30% increase in profits after going online

  9. Communication Methods Broadcast Direct Targeting Dialogue

  10. Communication Trend Dynamic Personal Impersonal Static

  11. Individual Choice • Unlimited choice produces information processing overload • Need for organization and suggestion to simplify task • Consumers need selection and suggestion • Selection + Suggestion = Value

  12. Selection and suggestionSheth and Sisodia (1997) • Selection • Greater value consciousness • Power shift to consumers • Shopping on demand • Suggestion - increases loyalty • Greater personalization • Co-creation • Automation of consumption

  13. Similarities • Media = real lifeReeves and Nash • People treat machines and software just like people • Politeness • Personality • Gender bias • Media quality

  14. Differences • Lack of social cues • Group dynamics • Flaming - speak incessantly on relatively uninteresting subject or with a patently ridiculous attitude • Why is there more flaming in email communications ? • Lack of feedback - harder to judge disapproval and confusion • Text is not as rich as personal interaction - need to use stronger words and images • Lack of social cues and anonymity - causes people to be braver • Implication for customer service

  15. Differences • Quality cues • How to communicate quality • Hanson and Putler (96) varied the number of downloads • Need for independent verification • Cognitive difficulty • Keyword search or browse or both ?

  16. Value of Online CommunitiesHagel and Armstrong • Communities of transaction • buy, sell, deliver info e.g. Virtual Vineyards • Communities of Interest • Special topics, high degree of interpersonal communication, e.g. GardenWeb, Motley Fool • Communities of fantasy • Red Dragon Inn, ESPNet • Communities of relationship • life experiences, cancer forum, divorce • Try to provide all four as far as possible - travel industry - source of long term first mover advantage

  17. Online Communities – Advantages • encourage communication • Message boards, chat rooms, instant messaging • focus social interaction • Members log in for hours a day vs. minutes • Businesses are active community builders • Improves organization’s communication ability • Virtual gathering places provide power to consumer • Online communities can alter the nature of marketing

  18. Online Communities – Disadvantages • isolate individuals • Typing at a keyboard isn’t real socializing • lead to psychological problems • Depression, loneliness • lead to shallow relationships

  19. Types of Community Tools

  20. Designing the community • Narrow focus - small size • Broad market - less passionate interaction

  21. Operating the community • Executive moderator • manage large number of system operators • moderate discussions • transform low quality to intense interaction • Community merchandiser • Executive editor - programming, external content • Archivist • Usage analyst • New product developer

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