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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
Understand the types of comparison-shopping aids
Definition of web activities
Information accumulation Communication Surfing Shopping
Consumer behaviour online
Consumer characteristics
AgeGender
Education
Income
Family & occupation
Demographics
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
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
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
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
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
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
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
The Digital Native Alphabet
Name: ________________________
_________
_________ _________ _________ _________ _________
_________ _________
_________
_________
_________ _________
_________
_________ __________________ _________
_________ __________________
_________
_________ __________________ _________ _________
Consumer characteristics
Personal characteristics
innovativeness
Technology readiness
Gregariousness
Consumer characteristicsPersonal characteristics: Consumer
innovativeness Defined: It is the degree to which an individual is
receptive to new ideas and makes innovative decisions independently from others
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
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
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
Consumer characteristics
Personal characteristics: Gregariousness
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
Personal characteristics: GregariousnessAn example of a forum
Consumer characteristics
Consumer lifestyles Defined: It is the activities, interests and
opinions of consumers – in sum, their “pattern of living”
Consumer characteristics
Consumer lifestyles Four important factors influence
consumer lifestyles:› Attitudes towards technology› Time pressure› Occupational demands› Stage in the family life cycle
Consumer decision-making
Levels of decision-making
Consumer decision-making can be viewed in terms of three levels:› Routine decision-making› Limited decision-making› Extensive decision-making
Levels of decision-making
Routine decision-making Mundane purchasing by the consumer that
requires very little thought process
Levels of decision-making
Limited decision-making Limited decision-making – It involves a greater
number of thought processes
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
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.
Environmental/social characteristics
Language/culture
Store, product and service characteristics
Access
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
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
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
Environmental/social characteristics
Guess the Brand
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
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
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
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
Purchase detractors: perceived risks
The greatest barriers to Internet use are security and privacy
Cybercrime defined includes Spam and outright fraud
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
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
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
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
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)
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