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Unit 3

Unit 3. Internet Consumers. Learning outcomes. Describe and understand the characteristics of Internet surfers and electronic commerce purchasers. Understand the process of consumer purchasing decision making. Id the consumer’s shopping procedure on the Internet

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Unit 3

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  1. Unit 3 Internet Consumers

  2. Learning outcomes • Describe and understand the characteristics of Internet surfers and electronic commerce purchasers. • Understand the process of consumer purchasing decision making. • Id the consumer’s shopping procedure on the Internet • Understand the types of comparison-shopping aids

  3. Definition of web activities • Information accumulation • Communication • Surfing • Shopping

  4. Consumer behaviour online

  5. Consumer characteristics • Age • Income • Gender • Demographics • Family & occupation • Education

  6. Consumer characteristics Demographics: Age • Younger users • They engage in more exploratory behaviour • They have low income levels • They use the Internet for communication activities • They have time on their hands Clip 1

  7. Consumer characteristics Demographics: Age • Older users • They use the internet for communication purposes • They are prime Internet shoppers • Their usage of the Internet depends on their personality characteristics

  8. Consumer characteristics Demographics: Gender • Female users • They are more likely to engage in exploratory behaviour • They spend less time online • They buy less online • They are cautious online, especially in terms of privacy and security issues

  9. Consumer characteristics Demographics: Gender • Male users • They spend more time online • They buy more online • They are more liberal with their private information • They are more likely to take action when they feel their privacy have been violated

  10. Consumer characteristics Demographics: Education • Internet users have been characterised as having a higher education level than non-users • Higher levels of education reduce technology and computer anxiety and create a more positive technology schema

  11. Consumer characteristics Demographics: Income • Internet users have been found to have higher-than-average-income • Higher incomes are associated with higher levels of education • Income levels provide an indication of whether basic Internet access can be afforded • And indicates access to credit facilities

  12. Consumer characteristics Demographics: Family composition and occupational status • The presence or absence and the age of the youngest child influence the users’ use of the Internet as a shopping tool

  13. The Digital Native Alphabet _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ _________ Name: ________________________ _________

  14. Consumer characteristics Personal characteristics • Technology readiness • innovativeness • Gregarious • ness

  15. Consumer characteristics Personal characteristics: Consumer innovativeness Defined: It is the degree to which an individual is receptive to new ideas and makes innovative decisions independently from others

  16. Consumer characteristics Personal characteristics: Consumer innovativeness • General innovativeness • whether a consumer will try new things • Domain specific innovativeness • Focuses on the consumer’s affinity towards one domain or one category

  17. Consumer characteristics Personal characteristics: Technology readiness • Defined: It is the extent to which an individual is open and receptive to new technologies • People with this trait usually exhibit a willingness and desire to be at the foreground of technological change

  18. Consumer characteristics Personal characteristics: Technology Schema • Related to technology readiness is technology schema • Technology schema defined: It is an organised and arranged set of expectations and beliefs that one holds about technology

  19. Consumer characteristics Personal characteristics: Gregariousness

  20. Consumer characteristics Personal characteristics: Gregariousness • People who are unable to have proper social relations offline are able to spend time communicating with others online by using: • chat rooms, • discussion forums & • listservs • There is a belief that the Internet acts as a surrogate social network

  21. Personal characteristics: Gregariousness An example of a forum

  22. Consumer characteristics Consumer lifestyles • Defined: It is the activities, interests and opinions of consumers – in sum, their “pattern of living”

  23. Consumer characteristics Consumer lifestyles • Four important factors influence consumer lifestyles: • Attitudes towards technology • Time pressure • Occupational demands • Stage in the family life cycle

  24. Consumer decision-making

  25. Levels of decision-making • Consumer decision-making can be viewed in terms of three levels: • Routine decision-making • Limited decision-making • Extensive decision-making

  26. Levels of decision-making Routine decision-making • Mundane purchasing by the consumer that requires very little thought process

  27. Levels of decision-making Limited decision-making • Limited decision-making – It involves a greater number of thought processes

  28. Levels of decision-making Extensive decision-making • Extensive decision-making – It involves a great deal of search, a large consideration set and a far-reaching evaluation of alternatives

  29. Role players in consumer purchasing decision making • Initiator-suggests/thinks of buying a particular brand or service. • Influencer-advice/views carry weight in making a final buying decision. • Decider-makes a buying decision or any part of it. • Buyer-makes the actual purchase. • User-consumes or uses a product or service.

  30. Environmental/social characteristics • Language/culture Store, product and service characteristics Access

  31. Environmental/social characteristics Store, product and service characteristics • Type of goods • The type of product, service or information will influence consumer behaviour • Products have different characteristics

  32. Environmental/social characteristics 3 criteria that determine consumer behaviour : • Experiential = need to experience product first, e.g. food, books, CD. – only info goods are easy to sell on net. • Search = need to find info first e.g. insurance – easy to sell on net. • Credence = need repeated use before effects felt, e.g gym

  33. Environmental/social characteristics Store, product and service characteristics • Brand • Brands provide assurance of quality and recourse to established companies • Brands are information processing short cuts • The brand represents a safe choice • Brands are important when dealing with experience and credence goods • Brands are used as time-saving devices

  34. Environmental/social characteristics • Guess the Brand

  35. Environmental/social characteristics Store, product and service characteristics • Offline presence • A store’s offline presence is important to many consumers • It provides assurance that the consumer is dealing with an established dealer

  36. Environmental/social characteristics Store, product and service characteristics • Variety • The variety of goods offered online is an important consideration for Internet adaptation in any country

  37. Environmental/social characteristics Language/culture • The presence of information in consumers’ own language and about their own culture and country on the Internet has a large impact on whether or not they use the Internet

  38. Environmental/social characteristics Access • Where the consumer accesses the Internet influences their behaviour • Most South Africans access the Internet from work • Access to credit facilities also play an important role

  39. Purchase detractors: perceived risks • The greatest barriers to Internet use are security and privacy • Cybercrime defined includes Spam and outright fraud

  40. Purchase detractors: perceived risks • Due to the large number of possible cybercrimes, consumers are concerned with: • Security and confidentiality of transactions • Supplier authenticity • Trust in suppliers • The ability of suppliers to deliver the product or service promised • The legal enforceability of contracts • Clip 2

  41. Purchase detractors: perceived risks • Other barriers to consumer adoption of the Internet are: • Conservative shopping habits • Limitations in bandwidth technology • Long download times • Lack of e-tailer profitability • Distribution problems

  42. Online communities • The Internet differs in that it is a • One-to-one medium (e-mail) • Many-to-many medium (chat-rooms) • Technology has facilitated the creation of new communities, where people discuss issues with each other without being bound by geography

  43. Online communities • Both online and offline communities can be viewed as groups linked by social relationships and a sense of belonging or by common bonds and a sense of shared identity

  44. Online communities • Not all members of Internet communities are influenced equally • Lurkers – They follow the discussion online, but never interact with fellow members (others might not even know the person exists)

  45. Online communities • Posters – They participate in the discussions by posting messages to listserv, chat rooms, bulletin boards or discussion forums • Posters are more influenced by the opinions of others, develop relationship with other members and see themselves as members of the community

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