Online Buyer Behaviour

Harsha H N, NU

Buyer Behaviour
Effective strategic marketing requires business planners to be almost obsessive about understanding the needs of their customers.
Brennan et al (2003)

The unique characteristics of the Internet offer new ways for consumers to interact with one another, organizations and the wider emarketplace. Cotte et al (2006)

Understanding Buyer Behaviour

Marketing Stimuli
Societal / Technological / Economic / Political / Legal

Other Stimuli

Product / Price / Place / Promotion / etc

Buyer characteristics

Buyers Black Box

Buyer decision process

Product / brand choice Dealer / web site choice Purchase timing Frequency Amount

Buyers Response

Consumer buying decision process

Problem recognition

Information search

Evaluation of alternatives

Purchase decision

Post-purchase behaviour

Online Buyer Behaviour

Although all steps in the consumer buying process might be affected by the Internet, its biggest impact is in the decision making process at the research stage. (Yahoo! Inc. and OMD 2006) The study cites three key determinants in the online information search as:
1. Trusted sites 2. Choice of brands to compare 3. Competitive prices

The Purchase Behaviour Matrix

In the Internet age, information about products is available from a myriad of off- and online sources. Furthermore, the purchase is not necessarily made from the vendor who provides the most significant information. Purchase behaviour variables for the web enabled customer include:
research
online online

purchase
online online

fulfillment
home delivery customer collects

purchased from
same vendor that provided the original information different vendor to that which provided the original information

Offline literature
online

online
offline

home delivery
customer collects

same vendor that provided the original information

different vendor to that which provided the original information

Online Customer Expectations

The Internet gives impetus to the marketers objectives shifting from helping the seller to sell, to helping the buyer to buy. Customers now expect to be facilitated in their research for the product that most suitably meets their wants and needs. The web is a pull media, meaning that the user, those to whom any marketing message is directed, requests the information rather than having it forced or pushed for the marketer this means the customer chooses which marketing messages they see.

Online B2C Buyer Behaviour

Two key aspects can be monitored to help assess that customers online behaviour: 1. Explicit behaviour based on:

2.

Data provided by the user; eg. a profile for registration to a site. Any recorded actions on the site; eg. signing up for an enewsletter or placing an order.

Implied behaviour based on data derived from the observation of a users actions as they interact with the site.

Online B2B Buyer Behaviour

Electronic communications not new Internet preceded by electronic data interchange (EDI). New technology accelerated adoption of:

Electronic exchange mechanisms E-supply chain management

Web presence must appeal to all members of decision making unit. Web now considered to be an essential tool of the trade in purchasing process.

Web Site Analytics

The online marketer must be aware of how the use of technology can help collect data that facilitates the analysis of online behaviour. E-metrics vary depending on site objectives:
Site objective Increase sales Potential e-metrics Sales value per visitor Average order size Conversion rate (sales / visitors) Visits to FAQ page Page downloads (eg instruction manuals) Conversion rate (leads / visitors) Discount vouchers download Number of visits/visitors Depth of visit (how many pages accessed)

Provide after-sales service Generate sales leads Develop brand

Behavioural & Contextual Targeting

Industry split on definitions,current status:
Contextual targeting Less complex no user date required. On-site ads in context with content of page. Behaviour prior or post of the user of no significance to ads posted. Behavioural targeting More complex user data required. Based on offline behavioural segmentation; eg benefits sought, purchase occasion, usage frequency etc. User data collection strategic activity.

Database Marketing
A list of customers and prospects records that enables strategic analysis, and individual selections for communication and customer service support. The data is organized around the customer. (Tapp 2005) Kotler (2003) suggests four examples of when database marketing is unlikely to be worthwhile: 1. Where the product is a once in a lifetime purchase. 2. Where customers show little loyalty to a brand. 3. Where the unit sale is very small. 4. Where the cost of gathering information is too high.

Database Composition
B2C Age Income Birthday Family unit Location Interests Hobbies Purchasing habits B2B Volume of previous purchases Frequency of previous purchases Profitability of customer Credit / debit history Customers share of organizations business Buying practices and patterns

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