Unit 3Internet 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 characteristicsDemographics: 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 characteristicsDemographics: 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 characteristicsDemographics: 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 characteristicsDemographics: 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 characteristicsDemographics: 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 characteristicsPersonal 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 characteristicsPersonal 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 characteristicsPersonal 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 characteristicsPersonal characteristics:

Gregariousness

Consumer characteristicsPersonal 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 characteristicsConsumer lifestyles Defined: It is the activities, interests and

opinions of consumers – in sum, their “pattern of living”

Consumer characteristicsConsumer 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-makingRoutine decision-making Mundane purchasing by the consumer that

requires very little thought process

Levels of decision-makingLimited decision-making Limited decision-making – It involves a greater

number of thought processes

Levels of decision-makingExtensive 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/cultureStore, 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