3 The Online Consumer

LEARNING 08JECTIVES
After reading this chapter, you will be able to:
.Understand the concepts associated with the digital ecosystem
Link between digital paradigms and marketing
Understand online consumer behaviour
Get acquainted with the dynamics of the online consumer visit
Get familiar with metrics and their applications
Observe the difference between online behaviour in business-to-business
(B2B) and business-to-consumer (B2C) contexts
Get an insight into of database marketing

ndividualization changes the nature and quality of online transactions. It allows

Lthe online world to be adaptive, secure, and intelligent. This enables marketing to
successfully interact with the customers and react to their sophistication and knowledge.
Interaction can build intelligence into the system and by reacting to the specific immediate
needs and responding to the access method of the consumers, organizations can interact
with the consumers and subsequendy host content that is relevant to the consumer.

THE DIGITAL ECOSYSTEM

The digital ecosystem can be defined as the online universe that has a set of unique
characteristics opening up a multitude of opportunities for organizations towards a
better utilization of the latest ollerings fron the world of technology and generation of
higher return-on-investment (ROI).
Some of the features of the digital ecosystem (Fig. 3.la) are as follows:
The Internet today has been hailed as the most important invention of the twentieth
century, and digital marketing is transforming companies customization and
advertising It is an efficiency enhancer and entertainment provider.
Online activities can be both time saving and tine consuming Hence, organizations
and individuals necd to understand how to make time and money trade-olfs as they
 68 DIGITAL MARKETING

Consumer
Transformation Trade-offs Analysis Internet access

Access details
Effciency enhancer Time and money Analyze Internet
trade-offs
user demographics Quality and usage
Entertainment statistics
Gender, race, etc.
provider Time saving and
time consuming

ig. 3.1a Features of the digital ecosystem

enture lorward to utilize the online medium for personal and organizational growk

as well as brand proliferation.

W i t h ts increasing popularity, as noticed lrom more and more number of user

coming online, and services being offercd online in general, the Internet now occupiey

a central role in young educated pcople's lives,' all over India. Companies ned to
analyse Internet user demographics, gender, race, employment status, and education
parameters to segment and profile current and prospective consumers effectively
In addition, consumer Internet access details, quality, and usage statistics are also

significant.
The Rise of Digital Marketing
US Corporations were expected to increase their expenditure on digital marketing from
2.5% of revenue to 9% in 2013, overtaking IT spend as a percentage of revenue for
the first time. Not surprisingly, social media is where most marketers wanted to increase
spending, but mobile and tablet applications were not far behind. Brand building and
differentiation are the top reasons for digital marketing. (Fig. 3.16) followed by customer
communication and assessment of customer satisfaction of a product according to a
survey by Gartner on 250 firms with over $500 milion in annual revenues.

Top reasons for digital marketing include

Brand building and differentiation

Consumer communication
Understanding consumer satisfaction with product
Shop-ability or improving the ability of the shopper to
find and select products
Gathering product or service innovation insights
B2C sales relationships
Services associated with products to drive
differentiation

Fig.3.1b Reasons for digital marketing

Digital Paradigm and Marketing

The digital paradigm(Fig 3.Ie)plays two very significant roles in marketing influencti
consumer behaviour and harnesSing consumer intelligence. While it is vital lor
organization to evaluate co1sunier inlentions and provide consumers the necc
 THE ONLINE CONSUMER
69
Influencing consumer
The virtual behavlour
World

Harnessing consumer
intelligence

Fig.3.1c Marketing in a virtual world

information they are looking for,
data by studying the equally inmportant is the need for collecting consumer
consumer behavioural
patterns on the Internet and sulbsecqucntly
nurturing long-term relationships with consumers. The Internct has
commenced playing a very significant role in the marketing value chain subscquently
encompassing value identification, creation, and delivery, (Fig 3.2)
economics by reducing transaction cost and thereby impacting marketing
time. There seems to be
of the Internet
by consumers for various purposes, rapid adoption
online shopping* Consumer data including information search and
the buzzwords of
analysis, content analysis, and predictive modelling are
today and digital marketing coupled with digital media are the twin
growth engines for the organizations in contemporary times.

Consumer data
analysis
Impacting
Marketing
Economics
igital marketing Internet Content
analysis

Value identification
Value creation
Value delivery
Predictive
modelling
Fig.3.2 The potential of digital marketing

Consumer behaviour has changed dramatically in the

past decade. Nowalays,
consumers can order many customized products online, ranging trom sneakers
tocomputers. Many have replaced their daily newspapers with custonized, online
editions of these media and are increasingly receiving inlormation lrom online sources.
This has proliferated because these channels reflect an understanding of consumer
needs and consumer
behaviour
If experts want to ideutily the most profound
inffuences on consumer behaviour in recent times, the answer would be the Internet.
Consumers also recognize the substantial inpact the Internet has had on their shopping
behaviour. One of the reasons why the lnternet is dramatically changing consunmer
behaviour is that it search nuch more easily and elliciently than ever
helps us
belore.
The online consuner inay also have diflerent social and work environnent than the
70 DIGITAL MARKETING

offlime consumer The online consumer is generally more powerful, demanding and
utilitarian in his/her shopping expeditions. Consumers will appreciate business, which
value for consumer's time by employing technology, tools, information, and customer
service. Consumers are also not likely to buy anything online unless complete product
information is available.

ONLINE CONSUMER BEHAVIOUR

The Internet has bccome an important channel for companies to provide product
information and offer direct sales to their customers. Firms of all sizes and from all
industries have invested in Internet applications and are trying to establish a net presence.
People increasingly use the Internet to check out company or product information."
Websites are designed keeping in mind concepts of interactivity, feasibility, convenience,
and user requirements. Information regarding products and services must be easily
accessible and of high quality in terms of customer satisfaction. A consumer's intention
to purchase specific products may vary greatly, and hence predicting general intentions to
adopt the Internet for purchasing may be of limited use if customer motives to purchase
specific products are likely to differ
Website visitors may use both distant and nearby cues: consumers may click on a ink
because they seek that specific link. At other times, consumers click because they believe
that the link will bring them closer to what they seek. In summary, the motivations for
search vary, but regardless of the motivation, the online searcher continually judges
whether to continue to read, scroll, analyse, or click."
Online transactionscanbe viewed as instances of interactive marketing communications.
E-commerce is the ability of consumers to purchase products and services online, using
Internet technologies and associated infrastructure." The online consumer may also have
different social and work environment than the offline consumer. The online consumer
is generally more powerful, demanding, and utilitarian in his/her shopping expeditions?
Further, purchasing on the Internet has unique features that make it cdifferent from
the traditional shopping process. 0 If a website meets a customer's expectations, then the

customer is likely to reuse the website in the future, recommend it to his/her peers, and
become loyal.
On the other hand, if the website does not meet the customer's expectations, then the
customer is likely to switch to another website, and perhaps never go back to the initial
one." Therefore, the perceived quality of a website is an important determinant of such
expectations, resulting in the development of an attitude towards a particular website
and perhaps even garnering visitor loyalty.3
Although it has been argued that the capabilities embedded in an eservice technology
is
provide many potential benefits for customers, if customers think the too
technology
difficult to use, customers may reluse to use the e-service technology at all." Significantly
online store is important factor that allects each
information provided by an an

consumer's site loyalty and purchase behaviour:"

 THE ONLINE CONSUMER 1

EXHIBIT 3.1 Merging Real and Virtual Worlds

You know when you walk into a cosmetics store describes themselves as India's first 'discovery'
or an apparel store that you will get to sample or commerce portal. The process is quite simple: as a
try on the range of products avalilable before you registered member you get to try samples of the
make up your mind on what to buy. Imagine if top products of various high-end brands, receive
that was possible from the comfort of your living advice and reviews from other consumers, and
room where you do not have to visit stores, and earn points with every purchase. Every month
everything is delivered to your doorstep. premium members receive a unique box of
If the recently launched portal trynbuy.com is requested samples. If you like what you have
anything to go by, your wish might just come p e , you have the option of buying the full
true. Still in their infancy in India, trynbuy.com Product directly from them.
dn
r as

L I B R A R Y

CULTURAL IMPLICATIONS OF KEY WEB CHARACTERISTICcss

A major application of the Web can be seen in bridging gaps for orn a d d

by reducing cultural diversity and help in a greater cultural adaptability L i P

(Table 3.1) are a series of Web characteristics and the cultural implications of those
characteristics.

Table 3.1 Culture and the Web

Characteristic Cultural implication of the characteristic

The Web is a general open network having global The Web is viewed by people across culture thus lending
accessibility tself to vast cultural variability

Interactive nature of the Web The interactive nature of the Web makes it an ideal medium
to create culturally sensitive dialogue

Web is characterized by hyperlinks and self-search

option
Hyperlinks and self-search options rely on consumer
motivation to browse, therefore if Web content is not
customized for global customers on individual bases the
interactive efforts might be wasted

Web technologies can help capture customer data that Using customer databases and software, country-specific
can be used for mass customization
prohles can be created and used to make the websites
culturally adapted

Media convergence and broadband technology make

Web an ideal medium to interact with audio, vide0,
Medla convergence on the web can be used to develop
country-specinc themes, pictures, videos, and sounds to
graphic, and text Create localized websites

The websites that are culturally congruent or closely match

on the Web, the capacity to hold the visitors attention
the flow state' is the social perceptions of users are more likely to engage
an
important challenge
ne users
 /2 DIGITAL MARKETING
DYNAMICS OF ONLINE CONSUMER VISIT
At each visit on an online page, a consumer has thc chance to either continue the visit or
cxit. The average \Web visit is less than three page vicws, as it is totally dependent on
the
choice of a typical online visitor. The wehsite subsecquently has a short time to
perfum
the following drills:
Communicate with the visitors
To deliver a message
To build a brand image
T o engage in commerce
To persuade visitors
Table 3.2 explains two disparate consumer Web visit modcls the random surfer model
and the look ahead model.

Table 3.2 Models explaining short visit length

Model Explanations

Therandom surfer model It explains consumer visits of different length

50% per page chance of leaving for the first few page views, which then falls to 37%
per page chance of exit if the visit continues
web surfng as a flip of the coin
Consider
At each page, a visitor has a chance to continue the visit or exit
Exit pages only loosely connected to current
page quality
This model appears to be the best match for
experiential surfing
The look ahead model It explains the same pattern of short visits but with a different model of surfing
behaviour
Surfers are not flippinga coin with regard to leaving the pages but carefully balance
their time and efforts against the chance of
finding the desired information
The connection is higher when the
page corresponds to accomplishing a task or
daritying that the website does not match the visitors goa
This model appears to be the best match for task-directed visits
Soure Web vist modes, Hansom and Kalyanam, 2007.

As the Internet becomes a

major and popular source of inlormation, wvebsites oller
nunerous
opportunities for global companies to provide word-wide access to inlormation
about a ompany and its brands. The informational and
branding capabilities of
websites are now integral parts of integrated marketing communication programmes n
organizations. Sinilarly, creating unilorm brand inage is one of the key components of
gobal marketing strategy and webites with their global reach are mostly uscd to serve the
purpoe of display1ng a consistent brand image. Hence, il s becoming vital to understand
the cause and relevance of the consumer Visit the website.
on \Vell-structured product
inlormation that cannot be lound casily online is as much of a
problem as is having easily
accessible information that does not meet consurner's expectations. " Visitor choices natter
a great deal. Online onsurners are time conscious and are often willing to guuble with her
 THE ONLINE CONSUMER 73
money rather than time, as it is impossible to recover lost time, where a moderate financial
loss can be compensated. " Consumers will appreciate business, which value for customer's

time by employing technology, tools, information, and customer service. Consumers are
also not likely to buy anyhing online unless complete product information is available.
According to the study on Australian consumers," one of the main emerging characteristics
of online users is the growing lack of patience. Many researchers put their attention to
online consumer behaviour in order to discover the underlying rules of Internet marketing
Itis important to build up a safe and credible market evironment for online shopping" by
understanding the behaviour models of online decision-making behaviours.
The consumer's chance of staying on a website falls as the number of pages viewed
increases. This is usually the result of any time constraints the consumer may be facing or
an increase in his/her degree of involvement with the product/organization/website which
may have prompted him/her to leave at that point of time and subsequenty visit again.

How Consumers See and Understand Produet information Online

When buying products and services online, consumers are facing two fundamental
differences removal of physical presence and (as a compensation) abundance and
versatility of product information. In other words, a physical product has been replaced
by product information." It is important for eretailers to better understand how online
consumers interact with the Internet websites, that is, how they evaluate website attributes
and that is what makes them remain on the websites." In these days of Web mania,

everyone talks about the

e-commerce and e-business revolution and the Internet of the
new knowledge-based economy. The Web allows ebusinesses to provide customers with
increasingy accurate, timely, and inexpensive information. As a result, customers can

immediately compare prices and choose the supplier with the lowest price.

MODELS OF WEBSITE VISITS

Nowadays consumers spend significant time online and make the purchase decision by
making strategic comparisons between alternative and competing products, reading
consumer reviews and testimonials, making price and quality comparisons, and so
on. What is significant here? Is it the ability of a website to engage the consumer and
retain him/her for a significant time period on the site? In this context, it would be
vital for organizations to design websites which can cater to consumer need recognition,
information search, evaluation of alternatives, purchase decisions, and reduce post
to the consumer needs that
purchase dissonance. It is the ability of a website respond
to

will make the consumer stay on the site or end the Web visit. While the consumer level
of interest and degree of seriousness regarding the intormation search are important
determinants in the length of his/ her stay on a website, it is the analysis of the type
of online consumer behaviourtask-directed or experiential online consumer behaviour, that
will help an organization to build a consumer Web visit model and then, create ways to
increase the longevity of the consumer Web visit (Table 3.3).
74 DIGITAL MARKETING

Table 3.3 Taskdirected vs experiential online behaviour

Models of Web visits
Type of online consumer behaviour
Look ahead/surfer optlon model
Task-directed behaviour
In task-directed website visits, the user attempts to find The surfers do not have a chance of leaving, but carefully
balance their time and effort against the chance of finding
Out information to accomplish a task
the information they desire.
A user is activelyengagedin judging the
The look ahead model appears the best match for a task
and credibility of information, and
appropriateness
balancing additional information on a page against directed visit.

better alternatives elsewhere.

Experiential online behaviour The random surfer model

Experiential surfing is surfing for one's own benefit This is a more natural model for an experiential surfer, not
asa time using application. A website is a formof actively engaged in the discovery of specific information.
The random surfer model appears the best match for
programming channel, which either offers quality
entertainment or does not. experiential behaviour.

Source: N. Jain, V. Ahuja, 2011.

Goal-directed tasks possess an inherent structure that guides consumers when they
are engaged in linear, search-directed activities and an experiential ask is less structured
and supports non-linear, non-search-directed activities." Experiential and goal-directed
users would not weigh extrinsic and intrinsic motives in the same way when on the Web"

According to the recent research on consumer behaviour on the Internet users, there are
distinct consumer groups with different intentions and motivations," they are as follos

Exploration
Shopping
Quest for information
Task-directed behaviour other than shopping
The goal for a website designer secking a highly usable site is to anticipate problems
and create a good design from the start. Research indicates that both males and females
outine case-of-use as the most important factor in Web design, though it is generally
considered as an important criterion in a user's decision whether to continue using the
information system."
The data collected from the online domain has meaning lor organizations only if
is quantifialble and measurable. Well-defined emetrics (Table 3.4) help organizations in
comprehending the virtual environment.
The types of e-metrics gathered will depend on the objectives of the website. Those
objectives might include the following

Increasing revenue to the organization through direct sales

Providing afier sales service that enhances ofline ellorts
Generating sales leads that can be followed up using traditional ofline methods
Brand developmentcomplementing ofline branding
Reducing corporate costs by replacing tracditional modes of communication with
Internet-based technologies
 THE ONLINE CONSUMER 75
Table 3.4 E-metrics used to assess website intent
Website intent Parameter to be measured

Increase online sales Sales generated per visitor

In one individual visit
-

-Through online sale

-Through telephonic contact
-Through cash-on-delivery option
Total number of items per single order placed online
Online consumer conversion rates
Daily and weekly sales trends and patterns
Consumer website entry and exit pages
No. ofsites linking into the website
Source of online visit
Creation of re-purchase intent No. of visits to complaints page
Length ofthe visit
Online registration
Opt-in for company mails
Joining company onlineforums and blogs
Becoming consumer evangelist (online recommendations)
ldentification of potential customers No. of organizational online forums joined
Responses to e-mails
Responses to company mailers
Responses to organizational campaigns
No. of opt-ins (newsletter downloads, e-mail opt-ins, promotional schemes)
Consumer evangelists on online forums
Degree of positivity of online sentiment displayed

The typical traditional consumer decision-making process is comprised of the steps as

shown in Fig. 3.3.
Consumer buying decision process model

Problem recognition

Information search

Evaluation of alternatives

Purchase decision

Postpurchase behaviour

Fig. 3.3 The consumer decision-making process

76 DIGITAL MARKETING
DECISsION-MAKING
PROCESs

THE WEB AND CONSUMER

Web on the consumer's decision-making proce

the
the effects of
Recognizing customer value and he motives of consumers to use the
of
understanding the
sources

Internet are vital tor organizations.

Web applications are becominp
offerings of the olfer to users (transparency, referrals,
due to the advantages they
increasingly popular on customer power" Interaction with
with other users, etc.) and their effect
contacts
needs (often for niche and highly personalized products
new customer
peers triggers attitudes are not limited tothe online
and alter buying attitudes. The new buying
to a recent survey of the
the traditional o n e . According
buying behaviour but extend to experience acroSs all channels3
c o n s u m e r s want a scamless buying
Sterling Committee,
the Web as a n e w marketplace component,
As a result, the Internet, and particularly
behaviour process. Next to the
time-honoured 'textbook' buying
further complicates the
behaviour, exposure
uncontrollable factors influencing the buying
personal and external providing
can affect the decision-making by
of customers to the company's marketing before the final
the consumer's black box where information is processed
inputs for marketers can influence the decision-making
consumer makes the final decision. Online
customers by engaging traditional and physical marketing tools but
process of the virtual The Web experience is a
delivering the proper online experience.
mainly by creating and stimuli, and products/
emotions, cues,
combination of online functionality, information,
of elements going beyond the 4Ps of the
services. In other words it is a complex mix
of delivering the Web experience is the
traditional marketing mix. The prime medium
between the firm and its online Web clients.
corporate website, the interfacing platform
experience elements-the marketing tools and actors under the control of the -marketer
the virtual interaction,
that can influence or shape the online consumer's behaviour during
becomes the basic premise for marketing to explore. The
Web experience is in this sense
in the traditional buying behaviour frameworks.
a new and additional input

BEHAVIOURAL TARGETING VS CONTEXTUAL TARGETING

marketing industry is adapting to and shaping the rules of targeting

consumers
The target
IP the
Internet. These online marketers use either the user's clickstream data
or
using the
address and personal information or the frequency of the online activity for the purpose.
This encompasses the concept of behavioural targeting.
in with
Contextual targeting encompasses placing advertisements where they are context

the content of the host website or page.

Offine, behavioural segmentation might be based on such elements as benefits sought,

The same rules apply to behavioura
purchase Occasions, usage frequency, or usage status.
targeting
Online Behaviour in a B2C Context
There are two aspects of online behaviour (Fig 3.4) that c a n be monitored to help asses
the customer's behaviour, they are as follows:
 THE ONLINE CONSUMER 77

Explicit behavlour
(data provlded by the user)
Consumer
online
behaviour

Implled behavlour
(data derlved from observatlon)

Fig.3.4 Types of online behaviour

Explicit behaviour is based on data provided by the user. This could include such
things as a user profile if membership or registration details were required to access
the site or make
purchase. In addition, any recorded actions on the site, like signing
a

up for an enewsletter or placing an order, would also be included.

Implied behaviour is based on data derived from the observation of a
user's actions
as they interact with the site.
Following is an example of online behaviour in a B2C context: Dominos, India
interacts extensively with its consumers on the online domain through blogs and online
communities. When a consumer logs into the Domino's blog using a well-defined login id
his/her explicit behaviour
and password, be monitored by the organization. Dominos
can
further studies consumer response patterns to identify the type of content that drives
consumer engagement levels, thus studying the implied behaviour of the participants
Topographic association
The concept of topographical association takes implied behaviour to a step further,
working on the premise that one individual's implied behaviour will be matched by
others. Amazon uses the concept well in their book sales. A search on a book title will
return a page that not only describes the book in question, but also includes a list of
similar or associated books designated as 'customers who bought this item also bought'
To encourage sales, there is also a feature that takes the most relevant of the 'also bought'
list and packages it with the sought book as a 'perfect partner, offering the two at a
discounted rate if they are purchased together.
Online Behaviour in a B2B Context
The decision-making unit for emarketing (Fig. 3.5), in a B2B context includes the following

Those who initiate the purchase procedure

Those who actually use the product
Those who have the authority to select the product

Those who influence the buying decision

Those who have the authority to make the purchase
 78 DIGITAL MARKETING

Those who initiate the purchase proceduree

Those who actually use the product

to select the product

Those who have the authority
Decision-making
unit in B28 context
the buying decision
Those who influence

to make the purchase

Those who have the authority

Fig. 3.5 Online decision-making

a n online marketing strategy

into account while developing
The above needs to be taken off users.
to influencers but put
technical content might appeal
For instance, complex
none.
to all might attract
A neutral website that appeals to small, medium, and
the market by providing a gateway
Dell's homepage segments such as healthcare and
sector solutions
large/global business solutions a s well as public

education.

WEB 2.0 AND MARKETING

is termed has ushered in a tremendous possibility
The Read/Write Web or Web 2.0 as it
for emarketers: the opportunity of
c u s t o m e r advocacy. Even in the case
of product
as travel and vacation services),
vendors
categories previously considered as generic (such
discover that they can gain and retain customers by offering
something more than only
reviews posted o n different forums o r online
low prices. There is evidence that customer
much more powerful as marketing tools than
communities, Web blogs, and podcasts are
influence of blogs and podcasts is increasing significantly
expert product reviews," as the
The third way to utilize Web 2.0 media is to engage these as tools of direct, personalized
TIME
one-to-one marketingBrick-and-mortar firms such as Nike, Disney, Coca Cola,
are already experimenting with social
The Hearst Media. part media as of their
magazine,
and feedback.
direct marketing strategy seeking communication, interaction,
customer

content and
They do this by introducing Web 2.0 websites based on user-generated
encouraging social networking and community forming These sites offer their customer
the possibility to reach their peers, exchange information and experiences.
Another option is to actively participate in the Web 2.0 domain by launching corporate
blogs and podcasts. Marketing needs to engage in prospect profiling to address some
key issues. A prospect is an individual who might express some interest in becoming
a

customer. Some of these issues related to finding a new consumer are as follows:
How does a typical prospect find out about the firm's products?
Does the message the firm delivers, gain the attention of the intended target audiencer
Does it address the requirements o f the target market, a n d d o e s it suggest benethts or a

means for satislying them? Is the message appropriately positioned?

 THE ONLINE CONSUMER 79
Does the promotion elort effectively inform, persuade, cducate, and remind custonet
about the firm's products?

Does the firm establish

budgets and mcasure
effectiveness of promotional eitorts
Truly good prospects are not only interestecd in becoming customers, they can altord
become customers, they will be profitable become customers, unlikely
to to
defraud the company and ikely to pay their bills, and if treated well they will be loyal
they are
to
customers and recommend others. No matter how simple or sophisticated the definition
of a prospect, the hrst task is to target them. To target the consumers or prospects as they
may be called, two isues need to be looked at; they are as follows:

a marketing communication channel

what brings the prospect to engage with a particular channel

The collaborative Web offers tools to

help a firm address of these issues by
most
to the marketing mix. By provicding an online medium for interacting to build social and
inclusion
business relationships with consumers, sharing information, collaborating and building
consumer engagement, these tools allow marketing to foster brand relationships between
consumers and the brand. The shift in customer needs is reflected in the growing demand
for online services, particularty in the Web 2.0 domain, where the Web provides a response
to the exploratory consumer browsing leading a prospect to online material related to the
brand. Customer preferences and experiences about the products and services offered, either
in traditional or electronic outdets, is not exclusively based on information made available

through traditional mass media or corporate websites any In the Web 2.0era,
more.
preferences and decisions are increasingly based on inputs provided by parties beyond the
customer

control of online marketers which are peer reviews, referrals, blogs, tagging, social networks,

EXHIBIT 3.2 Home Shop 18-Billy, Sunny, and the Indian Consumer
HomeShop18 is an online and on-air retail and are sad, go shopping. The company used cats
stribution venture of Network 18 Group, India. called Billy and Sunny for the campaign-these
HomeShop18 was launched in 2008 as India's represented fluffy, loveable, agile, inteligent,
24-hour home shopping TV channel, where cool
s1
dnchors performed live
creatures.
demonstration ofproducts The company also launched a wacky and
n sale. A company, which established itself as
engaging micro-site called Shopping Makes
srOng name in Indian retalil, because of high Me Happy. With Live Contests, FunZones and
eVIsion penetration, was fast to leverage the Caturday Sales, Shopping Zodiacs, Shopping
yowth of the Internet. HomeShop18 launched Heavens, and Special Offers, the site provided
odfmeshop18.com, which soon became one a cool online hangout for the Indian consumer
Ue most
thriving e-commerce portals in Indla. who wanted an interesting online shopping
HomeSho latest 360° media campaign experience.
on the universally
accepted truth of it you
80 DIGITAL MARKETING

began delvino
c o n t e n t . When companies
of user-generatcd
used locus groups extensively
other forms
online forums, and
lor value exploration, they customers liked
into the consumer's
cognitive space leedback o n how well
used to collect
the several mnethodologies competitiveness in the
as one of complexity and
with the increasing
cetain poducts. However, to help organizations
reach out to
n e w e r ways
oflering
business world, and witlh technology the inadequacies
of the previously used
involve them,
c o n s u m e r s in meaningfiul
ways and view' of the
wanted to get a '360-degree
n e w e r options. Companies
media made firms try which companies move a
helped
Web offered a spectrum
customers, and the collaborative with their consumerS.

in the direction of market sensing and interacting

step ahead

RESEARCH ILLUSTRATION
to websites and
online traffic,
questions for marketers related
There are some obvious

as follows:
does a consumer venture online?
Why what is his/her intention?
clicks on a particular feature on a website,
Ifa consumers

information about a product on the product website,

If a consumer is searching for to click on?
what is the website feature (attribute) he/she is most likely
(attributes such as About us, Contact us). What
E a c h website has so many features
(attributes) perform for the website?
functions do these features

This rescarch illustration attempts to answer these questions.

A research study was conducted to find out the following:
attractiveness
attribute index which was indicative of website
Calculate a website intentions they cater to,
Classify website attributes according to the online shoppers'

for visiting product and brand websites

Examine the relationship between the evaluations of the relative importance of
the attribute
various website attributes, with respect to the function performed by
were collected through hard copy
Exploratory research was used for this study. Data
the 'snowball sampling technique'
questionnaires and also through online media using
where
for data collection. Snowball sampling is a non-probability sampling technique
Thus the
existing study subjects recruit future subjects from amongst their acquaintances.
As the sample builds up, enough
sample group appears to grow like rolling snowball.a

data is gathered to be useful for research. A statistical procedure known as principle

method (PCM) of analysis was used for data reduction.
components

Pilot Study
Identification of industry verticals and companies.
The list of top 22 industry verticals, Indian Council for Market Research (ICMR)
and 4Ps B&M Survey, 2010 was used to identify the following industry verticals
automobile, IT, education, and fast-moving consumer goods (FMCG), and the
banking,
top 10 companies across all five verticals were subsequently used for the study.
 THE ONLINE CONSUMER 81
Creation of
Research Instruments
Creation of a scoring grid lor
extraction of websitc attributes.
Setsof organizalional websites, undcr each
to extract an exhaustive list of website
industry vertical werc evaluated qualitatveiy
attributes, which helped in the formulation ot the
research instrument a scoring grid for each
The scoring grid was created to ascertain
industry.
the presence/absence of the respectave
website attributes across the
company websites (Table 3.5) and was further used to
calculate a website attribute index. A value of 1 was assigned when the attribute was
present and O was assigned when the attribute was not present in the evaluation grid.
The website attribute index (Table 3.6) was calculated by summing up the attributes tor
cach website and dividing it by the maximum possible number of attributes. The top three
zerticals showing a high websile atribute index
were
used for the next phase of the study.
Vertical-specific evaluation grids were developed to collect primary data from consumers
across the automobile, banking, and FMCG sectors, where the consumers were asked to
rate each website attribute determining whether they would click on it or not.
The prerequisites for a consuner to fill the questionnaire were as follows:
A n active Internet usage least 1-2 hours a day
rate of at
Active consumption of products pertaining to the respective vertical

Table 3.5 Industry verticals and companies

Industry vertical Companies

Automobile Ford, Chevrolet, Audi, Honda, Mercedes, Fiat, Hyundai, Toyota, BMW, Tata

Banking SBI, ICICI, SCB India, HDFC, OBC, ING VYSYA, Bank of Baroda, Awis, ICICL, Indusind
Wipro, Dell, Cisco, Accenture, Apple, Reliance, Tata Steel, TCS, Infosys, L&T

DPSR.K. Puram (Delhi), Ryan International School(Noidal. Kothari National School, Mayoor
International School (Noida), Amity International School (Noida), Jaypee Institute of
Education
Informational Technology (Noida), lIM(Ahmadabad), IT (Delhi), IMT (Ghaziabad), IIFT (Delhi)

FMCG HUL, ITC Ltd, Nestle, Dabur, Asian Paints, P&G, Cadbury, Amul, Britannia, Marico

Table 3.6 Website attribute index

S. no Sector Attribute index

0.72609
Automobie
2 Banking 0.66207

T 0.36071

0.32068
Education
FMCG 0.4444
-
82 DIGITAL MARKETING

and IT verticals. The

was carricd out lor the automobile, banking, he
Further rescarch
intent behind venturing online.
website attributes were linked to the consumcr

the ones that follow:

The attributes cmpirically loaded onto

Consumer intent to cxplore

Shopping
Quest for information
intent
Task-directed behaviour other than shopping attributes that represent the
The aimed at identifying the dimensions of website
study
intentions of c o n s u m e r s for visiting product and brand websites, and examined the
with respect to the functions performed
relationship between various website attributes
by the attribute.
The following website attributes were empirically identified as contributing to a specific

type of consumer intent, across a specific industry vertical (Table 3.7-3.9).

Automobile sector
Table 3.7 Automobile sector

Task-directed behaviour
Exploration Shopping Quest for information other than shopping

Price Request for quote About u Careers

Media centre Service booking Online community Pre-owned cars
Customer care Buying Contact us
Search E-brochure
Dealership enquiry Test drive
Product and model services
Accessories
Sitemap
Privacy
Worldwide
News events
Community

Banking sector
Table 3.8 Banking sector

Exploration Shopping Task-directed behaviour

Quest for information other than shopping
Internet banking Phone and mobile banking About us Career and recruitment
Complaints and Ratings Hindi
suggestions Personal banking Rail tickets
New and important
Whole sale banks
Worldwide locations
Agricultural-rural banking information
NRI services
Customer care

Continued)
 THE ONLINE CONSUMER 83
Corporate banking List of holidays
SME
Wealth management
Debit andcredit cards
Contact us
ATM centre
Banks open on Sunday
Priority banking
Private banking
Home loans
Deposit schemes
Interest ratee

FMCG sector
Table 3.9 FMCG sector

Task-directed behaviour
Exploration Shopping Quest for info other than shopping

Company structure Brands and information About us cdreers

Reports History FAQ
Society Partner information
Investors Employee information social
Case studies responsibility
Awards and Calendar
recognition
Expert help
Search
Press release

Cooking
Downloads
Stock quotes
Insider trading
Leadership in business
Echoupal
Shareholder value
Collaborate with us

Implications and Conclusions

The main purpose of the Internet is to make information readily available, and a
website should be designed so that finding the required information amongst the
website content is as easy as possible. Since it is easy for consumers to move to other
sites, website attributes assume substantial significance.
The purpose of this study was to identify the dimensions of website attributes that
represent online shoppers' intentions for visiting product and brand websites and
cxamine the relationship between their evaluations of the relative importance of
various website atributes, with respect to he function performed by the attribute
Exploration, shopping, quest for information, and task-directed behaviour other than
Snopping are the primary consumer intents for venturing online and relevant website
84 DIGITAL MARKETING

attributes cater to these consumer intents. The results have been listed separately for

the automobile, banking, and FMCG verticals

While search engine optimization, online promotions, and viral marketing provide
new avenues for generation of Web trafic for organizations, the website remains the
most basic organizational entity, that is, the ery basic component ol any online traffic
abil
generation. It is in inmproving website attributes, navigability, and search hat
increases consumer sensitivity to the websites and while quenching his/her need for
intormation, providing a good sensory experience, can engage the consumer to spend

more time on the website.

T h i s research focuses on linking consumer intents to venture online, with the website

attributes of a set of websites across three different industry verticals. The objective is
to aid organizations in matching website attributes with relevant consumer intentions
and consumer behaviour typology. Satiation, boredom, or the completion of a task

results in the culmination of a typical website visit.

Detailed analysis of consumer behaviour can not only aid manipulation of website
attributes to have more and more attributes catering to the relevant consumer intent,
but also, aid organizations in choosing the right website visit model, based on specific

consumer behaviour
These studies will eventually have applications in the domains of connecting the
nature of the website visit to the pattern of visit length it generates.
(The above research illustration was extracted from Jain, N., Ahuja, V., Medury, Y., (2012
Internet marketing and consumers online: Identification of website attributes catering to
1GI
specific consumer intents in a digital paradigm'. International Journal of Onlne Marketing,
Global Publications, Vol. 23), pp. 69-81, ISSN-2156-1753).

DATABASE MARKETING

Database marketing is a form of direct marketing using databases of customers in

combination with other databases to generate personalized communications that

drive targeted marketing efforts at both strategic and tactical levels. A marketing
database is a list of customers' and 'prospects' that enables strategic analysis, and

individual selections for communication and customer service support. The data
is organized around a customer. Compared to other forms of marketing, brandng
for example, the analysis of the outcome of database marketing efforts is relativey
straightforward, for this reason it can be described as 'marketing with measurabe
results'.
Database marketing involves the gathering, storing, and mining of data that can
used to provide information on customers that might be useful in future marketing elo
(Fig 3.6). Technology has provided the marketer with the means to collect and store ar
quantities of data on all their customers. Every company, no matter how decentraie
now has the abiliy to consolidate customer information and to gain a much be
 THE ONLINE CONSUMER 8 5

Database marketing

Gathering Storing Mining

data
data data

RFM analysis Strategic analysis

Marketing
database

Data warehousing process

Transactional applications
B28 databases
-Data extraction and
transformation tools Volume of previous purchases
Data scrubbing tools Frequency of previous purchases
Data movement tools -Profitability of customer
-Data repository tools -Credit/debit history
-Data access tools Customer's share of
Data delivery tools organization's business
-Buying practices and patterns

Fig. 3.6 Database marketing

picture of who its customers are, what products and services they buy, and hOw they like
to be served.
As with all aspects of business practice, database marketing must bring an ROI which
may be substantial if the practice is to be successlul. In mainstream direct marketing,
key measures such as recency, frequency, and monetary value (RFM) provide essential
data capture elements as part of the electronic customer relationship management
(-CRM) and data warehousing functions for marketing purposes. The danger for any
database marketer is to design a support system that contains to0 many ficlds and holds
too much customer data. A balance must be struck between having too much and too
little customer data.
Components of a genuine data warehousing process are" as follows:

Transactional applications To data is stored in appropriate format

ensure

Data extractionand transformation tools To read data for business critical applications
86 DIGITAL MARKETING

bc inaccurate, out of date,

tools Todetect or remove raw data that may
D a t a serubbing data
lormatted. It also inclhudes de-duplication of
incomplete, o r inappropriately
To cdata lrom immediate
warehouseto the data mainly
Data morvement tools move

but now more scctor-spccific tools

referred to as extract, transforn, and load (ETL)
re available
Data epository tools To maintain metadata
and prescnt data
Data access tools lo retrieve, view, manipulate, analysc,
retricve data salcly lor the end-
To communicate and deliver, storc, and
Dala delivery
user accCss

of the
An emarketer gather data specific to the individual's online habits, some
may
examples are as lollows:

How often does the user access the Web

How much time do they spend online in a single session
When do they go online
At what time of the day do they go online
What type of access do they have
Where do they access the Web

Similarly a B2B database may include the following information:

Volume of previous purchases
Frequency of previous purchases
Profitability of customer
Credit/debit history
Customer's share of organization's business
Buying practices and patterns

GEARING UP FOR NEW ONLINE CONSUMERS

It is clear to organizations that the online world has reshaped consumer behaviour.
face the challenges posed by the evolving
Companies are gearing up
three ways, (Fig 3.7) as follows:
to consumer in

Companies are focusing on analytics

Companies have adaptive mind-sets which are open to change
Companies respond to consumers immediately by scaling offerings rapidly when they
see a positive response

Analytical Toolkit
Accenture's research (2011) suggests that organizations should invest in an analytica
toolkit. Companies should advanced
use
analytics identify
to and bridge gaps
between their businesses and consumers. Many companies are getting much better
a
understanding customers by using analytics and most importantly, by using data-derived
insights to design and improve the customer
experience.
 THE ONLINE CONSUMER 87

Managing online
consumers

Analytical toolkit Adaptive mind-sets Scalablity

Fig. 3.7 Managing online consumers

CGustomer analytcs is the process by which data from customer behaviour is used to help
make key business decisions via market segmentation and predictive analytics. This
information is used by businesses for direct marketing, site selection, and customer
relationship management. Marketing provides services in order to satisfy customers.
With that in mind, the productive system is considered from its beginning at the
production level, to the end of the cycle at the consumer. Customer analytics plays a
very important role in the prediction of customer behaviour today. Customer analytics
tool to
helps companies in turning their data into something they can really use-a
drive their business forward. It is the intersection of hard science and common sense
where data transforms into the ultimate marketing tool for companies. By spendinga
great deal of time with focus groups and testing ideas key audiences to extract the
on

nuances of consumer behaviour, business intelligence groups in organizations are able

to study what their consumers like and dislike.
In the virtual world, data needs to be collected about the information circulating about
company in the online domain (Fig. 3.8). There are well-defined social media analytics
tools which aid in collecting and analysing this information drawn from the
companies
online sphere. This topic is addressed in detail in Chapter 5.
is quite significant is the
In addition, a
key element of an analytical toolkit which
talent.
ability to hire, retain, and train in-house analytics

Customer
analytics

Analytical
toolkit

Social media
analytics

Fig. 3.8 The analytical toolkit for online consumers

88 DIGITAL MARKETING

Adaptive Mind-sets
The twin forces of political reform and digital technology have shilted the balance
ol power from developed markets to the deeloping world and from institutions such
as governments to individuals, who exercise their new power as consumers to gain

ntormation to their advantage. The digital age has obliterated the scripted, one-way
fow of information that existed during the era of just a few channels. Companics used
to communicate in highly controlled, carefully crafted messages. Now corporations and
consumers are engaged in unplanned, unscripted discussions. Executives now understand

that any person has the potential to create a profit-threatening crisis just by hitting 'send'.
At the same time, these devices and activities are generating massive amounts of data

that can offer insights into consumers' lives.

This change means global markets operate at remarkable speed. Against this backdrop,
companies are struggling to adapt to more powerful consumers, the increasingly rapid

pace of competition, and the threat of disruptive innovation. Manyexecutives

constant
are recognizing that the traditional organization characterized by highly structured
processes, functional depth, and the isolation of the consumer perspective in a single
function-is too slow, too expensive, and too ineffective lor today's consumers and
markets. The consumer-focused enterprise reflects an emerging approach that's evident
in the organizational discussions, organizational structures, and new approaches to
consumer engagement. Companies need to locus on their leadership and strategies to

ensure that they develop adaptive mind-sets

Leadership
The most senior executives have increased their focus on online consumers, who are
simply too powerful to be ignored, the chief marketing officer (CMO) leads the cultural
transformation, moving the focus on consumer perspective beyond its traditional
marketing function and into core processes. This development is similar to how the
importance of technology has forced the chief information officer (CIO) to take on a
more strategic role. The emergence of new sources of consumer information, such as
social media, has made it possible to quantify the impact of marketing efforts in granular
detail. Concurrently, consumer behaviour and purchasing habits are generating greater
volumes of information, elevating the importance of data analyics to business decision
making Forward-thinking CMOs are developing organizational capabilities to aggregate
and interpret this information. The increasingly global nature of competition adds
another layer of complexity to this lask and that is companies must cater to consumer
tastes in Bombay, Bogota, and Boston. To meet these challenges, CMOs are gaining
greater authority and ifuence. Some companies have even combined the CMO and
CIO positions-an acknowledgement of how vital technology has become to servings
customers. Others have created the position of chief customer officer (CCO), a
executive in charge of marketing, sales, customer experience, communications, and other
functions. These moves share a common objective which is to put the consumer at the
 THE ONLINE CONSUMER 89
centre of the conversation and
across departments.
bridge the organizational silos that impede collaboraton

Strategy
The new
strategy-development processes are founded on deeper insights about online
consumers, not simply how they behave,
but what motivates them. Truly understanding
consumers in a global is as challenging, as using these
context
innovations. All these changes are
insights to drive disruptive
occurring while the process for strategy development
moves froma highly scripted, structured process to an adaptive, inventive one.
Agile Organizations Demonstrating Scalability
uth Accenture's rescarch in the above field further suggests that smart organizations react
upordi fiexibly to changing consumer behaviour, scaling offerings rapidly after identily1ng
a successtul response. In the successful
companies two hallmarks identify the agile
organization. They respond to change rapidly, through acquisitions and investments.
And they learn quickly from the changing environment, immediately sharing what thecy
discover with stakeholders. Online auctioneer eBay's early recognition of what they call

resourceful consumers-thrifty typesbacked

to sell directly to other consumers
who online platforms to buy used products
use
by an aggressive, rapid-response acquisition
or

strategy, is a perfect example of the first hallmark. In 2000, newly launched e-commerce
business PayPal, with its popular peer-to-peer electronic payment system, averaged
about 50 times more payments per day than eBay's proprietary online payment offering
In 2002, eBay completed the acquisition of Pay Pal. Following the acquisition, PayPal
grew rapidly within the auction site; up until the global economic recession in 2008,
eBay's payment business grew more than 30% in revenues each year. By the end of
2011, PayPal accounted for 38% of eBay's total revenues. In 2007, cBay expanded its
portfolio of collaborative businesses acquiring StubHub, the "fan-to-fan' cvent-ticket
by
reseller. Like PayPal, StubHub's growth soon began to that eBay's
outpace of
site. Despite its later agreements with larger sports teams and venues, the composition of
auction
StubHub's growth was 65%o of its tickets in 2011. However, itcame from individual and
part-time resellers indicateing the growing power of the collaborative economy.
Retailers, for example, must meet the expectations of consumers accustomed to buying

goods online at competitive prices and having them delivered quickly. And they must do
so while creating offerings that are distinct enough to address individual preferences
while still mecting expected standards of social and environmental responsibility.
to square the circle, and
For many juggling these demands may seem like trying
business leaders might feel daunted by the challenge. The answer lies in responding
to change with analytical skil, an adaptive mind-set, and an agle organization. The
scale advantages of the large with the tailored approach of
successful wedding of the
the small, the traditional benefits of the old and the cutting edge of the new should be
the target of the organizations. By achieving the right balance between sets of extremes,
businesses can convert consumer change to their advantage.