Factors impacting 0nline Consumer Behaviour:

Attracting and winning customers in a highly competitive environment is the driver to the marketing efforts of companies with an online presence. Understanding the online consumer behaviour would thus, be necessary to ensure online sales. Traditionally consumer buying process has been classified into the following steps: 1. Problem identification 2. Information search 3. Alternatives evaluation 4. Purchasing decision 5. Post-purchase behaviour (Brassington and Pettitt, 2003) The distinction between the conventional and online buying process is that the later has an additional step added to the process: The step of building trust or confidence (Lee, 2002; Liebermann and Stashevsky, 2002) Moving on to the factors affecting the online consumers, they are broken down in to uncontrollable and controllable factors. Uncontrollable factors: Consumer characteristics Environmental influences Controllable factors: Product/service characteristics Medium characteristics Merchant/intermediary characteristics (Park and Kim, 2003) Online marketers can impact this decision making process of additionally mainly by creating and delivering the proper online experience, the Web experience: a combination of online functionality, information, emotions, cues, stimuli and products/services. This would be additional Controllable factor.

Fig: forces influencing the online consumers behaviour Web Experience: Keeping in mind that the online customer is both, a shopper as well as an information-seeker, the Web experience includes features such as searching, browsing, finding, selecting, comparing and evaluating information as well as interacting and transacting with the online firm. (Efthymios Constantinides, 2004) This Web experience is a key element for not only e-retailers but, also the multi channel vendors. Sites need to be designed in a manner so as to address the clients product needs and expectations, as well as to assist the customers through the steps of the buying process. Creating the Web Experience: 5 factors have been identified as necessary to create a web experience. They have been grouped into 3 broad elements. The table lists these factors: 1. Functionality factors: Usability Functionality factors Interactivity
Customer service/after sales Interaction with company personnel Customization Network effects

Convenience Site navigation Information architecture Ordering/payment process Search facilities and process Site speed Findability/accessibility

2. Psychological factors: Psychological factors Trust

Transaction Security Customer data misuse Customer data safety Uncertainty reducing elements Guarantees/return policies

3. Content factors: Content factors Aesthetics

Design Presentation quality Design elements Style/atmosphere

Marketing mix
Communication Product Fulfilment Price Promotion Characteristics

E-loyalty:
Often times the focus in the online environment is on customer acquisition, which no attention given to customer retention. E-loyalty is a concept defined to create a customer retention strategy. Ironically, contrary to the view that the web customer is fickle by nature, shifting to new available choices rapidly, they are actually very sticky, both in the B2C as well as in the B2B environment. Thus, gaining the loyalty of the profitable existing customers, rather than catering to the whims of the one-time price sensitive customers is the strategy that should be employed in order to guarantee consistent online sales. Economies of e-commerce: The cost of acquisition of a customer in the web space is often times much higher than in traditional retail, but the profit growth from a repeat customer accelerates at a much higher pace in the web space. This feature coupled with the amplified effect of referrals through word-of-mouse as compared to word-of-mouth, gives sufficient economic reason to help develop e-loyalty. (Reichheld and Schefter, 2000) Loyal customer informally also take up the role of advertising for the company and also serve as a service helpdesk.

Fig: customer life-cycle economies of e-commerce Gaining Trust: As discussed earlier gaining trust is now an integral part of the consumer buying process. (Efthymios Constantinides, 2004) Trust is a precursor to loyalty. Online customers would prefer a known and trusted website over price and product offerings. Thus, trust is a more important element over price. (Reichheld and Schefter, 2000) Getting the right customers: Having an online presence makes a company accessible to any on-line customer anytime, thus making it tempting for the marketer to attract as many customers as possible. Such an

indiscriminate way to acquire customers would undermine profitability. Thus, there is a need for focus. 1. The first step here is to assess the different categories of online customers. Contrary to popular believe, a large segment of online consumers are looking for convenience over price. Brand-seekers too are an important segment. 2. The design and marketing effort of the site should be in line with the kind of customers you want to attract. Loyalists, it was found, came to the site through referrals. Butterflies, on the other hand, were attracted to it through promotional discounts. 3. Use of technology to track consumer preferences and transactions would help develop customized offers which would further help develop loyalty.

Determinants of Prices Online:

In the online space, interestingly, the same product could have different prices when hosted on different websites. For instance, an online marketplace and a shop bot could have differences in prices for the same products. (A shop bot is a website, where only information is provided and are linked to the vendor website for completion of transaction.) The reason for these price dispersions could be due to both, market inefficiencies and seller characteristics. Sometimes a consumer would be willing to pay a premium for a product on a certain website. Research has indicated that providing the following information on your website, justifies to a certain extent in the mind of the consumer, the price difference/premium being charged by you as a vendor. (DiRusso, Mudambi and Schuff, 2011)

Fig: factors behind price dispersions

References: 1. Efthymios Constantinides, (2004),"Influencing the online consumer's behavior: the Web experience", Internet Research, Vol. 14 Iss: 2 pp. 111 126 2. Frederick F. Reichheld and Phil Schefter, (2000), E-Loyalty: Your Secret Weapon on the Web, Harvard Business Review, July-Aug:2000 3. David J. DiRusso, Susan M. Mudambi, David Schuff, (2011),"Determinants of prices in an online marketplace", Journal of Product & Brand Management, Vol. 20 Iss: 5 pp. 420 - 428 4. Chung-Hoon Park, Young-Gul Kim, (2003),"Identifying key factors affecting consumer purchase behavior in an online shopping context", International Journal of Retail & Distribution Management, Vol. 31 Iss: 1 pp. 16 - 29 5. Liebermann, Y. and Stashevsky, S. (2002), Perceived risks as barriers to Internet and e-commerce usage, Qualitative Market Research, Vol. 5 No. 2, pp. 291-300. 6. Brassington, F. and Pettitt, S. (2003), Principles of Marketing, 3rd ed., PrenticeHall/Financial Times, Englewood Cliffs, NJ.