Consumer Online Buying BehaviorWhere is the Buy Button?

Susanne TumpfartSusanne Tumpfart

1. Advisor: Colin Egan, BA MBA2. Advisor: Helga Wannerer, MA

� Research Question� Motivation & Background

Content

� Motivation & Background� The Consumer� The Market� Research Method� Analysis - Groupon� Conclusion

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� (1) How does the consumer online buying behavior operate?

Research Question

behavior operate?

� (2) Which influencing factors are crucial to the shopping decision?

� (3) What drives the consumer to shop online?

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� Interests in the B2C market� Understanding of the online market

Motivation & Background

� Understanding of the online market � Online marketing as the present and future

marketing channel� In-depth information in the consumer online buying

behavior

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The Consumer – Psychological Factors

� Motivation� Learning

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� Learning� Involvement� Memory� Attitude� Consumer decision-making process

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The Consumer – Psychological Factors

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Model of Consumer behaviorSource: Kotler (2011)

Motivation

� Humanistic theory MaslowHerzberg

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Herzberg

� Theory of cognitive dissonance

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Learning

� Classical Learning ���� Pavlov� Operant Learning ����Trial and error learning

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� Operant Learning ����Trial and error learning � Positive/Negative Reinforcement/Punishment� Insight Learning� Latent Learning� Observational Learning

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Consumer Decision -Making Process

� Levels Extensive problem -solvingLimited problem -solving

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Limited problem -solvingHabitual decision-making

� Types Complex buying behaviorDissonance-reducing buying behaviorVariety-seeking behavior Habitual buying behavior

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Consumer Decision -Making Process

� Stages Problem RecognitionInformation Search

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Information Search Evaluation of AlternativesPurchase DecisionPost-Purchase Decision

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The Market

� History� E-commerce

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� E-commerce� Types of e-Marketing� E-Retailing� Market Study Austria

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The Market – Types of E -Marketing

� E-Mail marketing� Permission marketing

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� Permission marketing� Mobile marketing� Online advertising� Search Engine marketing� Social media marketing� Viral marketing� Website Design

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The Market – E-Retailing (1/2)

� Navigation� Product pages

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� Product pages� Cross and up-selling� Frequently asked question site� Calls to action� Wish list

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The Market – E-Retailing (2/2)

� In-site search facility� Price details and shipping costs

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� Price details and shipping costs� Contact information/Customer Support� Methods of payment� Security

� Fully depicted buying process

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Market Study Austria

� 79% search actively for information� 84% male and 74% female

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� 44.5% (2011) – 10.9% (2003) online shoppers � Clothes & Sports, Travel & Accommodation, Books,..� 82.9% website Austrian companies� 464 million EUR/ 13.6% total turnover on sales (201 0) through

e-commerce

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Research Method

� Research Process

Phase I Phase II Phase III Phase IV

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� Exploratory Research – Secondary Data� Literature Review – Qualitative approach

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fDetermine the Research

Problem

Select theAppropriateResearch

Design

fExecute theResearch

Design

Communicatethe Research

Results

Phase I Phase II Phase III Phase IV

Groupon

� Background of business model� Facts: 142.87 million subscribers (2011)

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� Facts: 142.87 million subscribers (2011)1.6 billion U.S. dollars revenue (2011)400 markets and thousand of cities

� Price Discrimination & Advertising – merchant� 83% experience goods (dinning, tickets and lifestyle products)

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Groupon

� Growth challenges- unpatentable & simple to replicate

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- unpatentable & simple to replicate - 600-700 copycats- exceed of the capacity of the merchant- competitors tailor the daily deals and proximity to the user improve deal density

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Groupon

� Growth challenges- LivingSocial smartphone app - within a half

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- LivingSocial smartphone app - within a half mile of merchant - redeemed from 11 a.m. to 2 p.m.

- push in new markets, travel, goods and tickets- merger and acquisition- IPO Nov 2011 raise of another 748.5 million

U. S. dollars

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Groupon

� Comparison LivingSocial- undercut Groupons ’ 50% fee charge

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- undercut Groupons ’ 50% fee charge- operates in “hyperlocal” markets - Amazon invested 175 million U. S. dollars- acquiring of Ticket Monster South Korea

� Facebook failed after four months� Local Competition Newspaper & Co

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Conclusion

� Social Interaction� Variety -seeking

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� Variety -seeking� Convenience� Information search� Easy to use� Hyperchoices� Fully depicted buying process� Reassurance of wise choice

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Thank you !

Susanne Tumpfart