Consumer Behaviour and Internet Marketing
The emergence of e-bay for online auctioning, Amazon.com for online shopping and the rise of numerous brick and mortar stores creating websites to promote their stores online all brings to our attention to how internet is becoming an essential to people’s lives. Knowing the rise of technology, businesses and consumers alike are setting up their own websites and blogs. However, many fail to attract the traffic that they need for their success of their websites. One of the contributing reasons for low online traffic is trying to cater to consumer demand without understanding their consumers and their purchase behaviour.
In the traditional marketplace, a typical consumer goes through the five-stage decision making process. Firstly, the consumer recognises a need (recognition of need/problem awareness), proceeds on to search information on which product or service will satisfy consumer’s need (information search). After which, consumer analyses a few options before choosing to purchase the appropriate one (evaluation of alternatives). After purchasing and consuming the product or service, the consumer makes a decision to whether continue or discontinue with product/and or service (Purchase and post-purchase evaluation).
To get an idea of how this works, let me explain to you with an example. A university student may want to purchase a car as buses are always running late and if she has to catch the earlier bus, she reaches university too early. In this instance, the obvious need for her is to purchase a car. She then starts to look at options on car websites and asks for advice from friends and family. After gathering as much information as possible, she lists down her choices of which she makes a decision to buy one. After purchasing it, she feels satisfied with the car as she arrives to school on time; neither too early nor late, it is also convenient for her to move around and she likes the car brand.
This may seem as a very simple example but at every stage of the decision making process, there are things that firms should take note of. At the first stage where there is a need for her to buy a car, car organisations must take into account whether the purchase is going to be a high or low involvement product for the student. Many car firms find purchase of cars as a high involvement purchase. However, it really depends on who your customer is and what is your customer really seeking. In this example, the girl is a student; therefore her budget will be relatively low. She will be most likely looking for a good second hand car and her immediate sources for information search will be her family and friends with car. She is unlikely to visit car showrooms as it will cost more.
Eventually, she may end up purchasing the same brand as what her family has or what her friends have as she has been observing for years how their cars work. This makes the purchase a low to medium involvement one as she has assurance for the brand from the experiences of her family and peers. Not only that, her post purchase evaluation will tend to be good as she is familiar with the brand. What organisations can learn from this example is the need to segment your market correctly and knowing that your customer do not stop at finding out which car models they like. It goes beyond demographic characteristics. There is a need to know their sources of information. That way, firms can segment their products and services better.
This same five stage decision making process can be applied to online marketspace as well. If cyber marketers know how the individual consumer makes a decision, they can analytically follow through in developing marketing strategies. Firstly, they should list out the different types of problem solving behaviours; routine, limited or extensive problem solving behaviours. Routine behaviour refers to the consumer making the purchase often and hence no great sense of personal involvement. Limited is similar to the student who got a car. Extensive refers to behaviour where consumer has to be highly involved in the purchase.
An example in the case of the cyberspace would be a dental clinic wanting a website. Since this is the first time the dental clinic is going online, the management will take extra care in looking for credible web design companies. Management will choose the most suitable web design firm based on its portfolio of customers. Therefore, web design companies who cater to all kinds of businesses must ensure they have the right mix (e.g. one website done for a vet clinic, one done for a battery operating firm, one for a disabled organisation). Potential clients will be more motivated to go with web design companies who are flexible and have done websites for a variety of businesses.
A good way to identify the problem solving behaviour of potential and current online consumers is to discover the level of perceived risk, frequency of purchase, optimum price consumer is willing to pay, previous experience in purchasing similar products or experience of product through peers and family, involvement in purchasing and people and search tools they use to get information content for decision making. You can then categorise your e-consumers according to high, medium or low levels. This will assist you in going through the decision making process smoothly.