Consumer Behavior: In Today's Online World

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Information about Consumer Behavior: In Today's Online World
Business & Mgmt

Published on February 20, 2014

Author: whozien

Source: slideshare.net

Description

How do consumers obtain and process production information? In today's world this is fast changing. This is important for today's company to understand what is it's niche and how to reach it. This Powerpoint presentation is Based On: What marketers misunderstand about online reviews By Itamar Simonson and Emanuel Rosen, HBR: Jan-Feb 2014, pages 23-5.

Consumer Behavior Wafa Hozien, Ph.D. Assistant Professor, Virginia State University whozien@vsu.edu Based On: What marketers misunderstand about online reviews By Itamar Simonson and Emanuel Rosen, HBR: Jan-Feb 2014, pages 23-5.

Driving Decisions O Simonson and Rosen (2014) wrote: What marketers misunderstand about online reviews O Managers need to analyze what is driving buying decisions O Managers need to adjust strategies What marketers misunderstand about online reviews By Itamar Simonson and Emanuel Rosen, HBR: Jan-Feb 2014, pages 23-5.

Then. . . O The way consumers used to process information: O “You get what you pay for” O Is Brand A better than Brand B? O Dependent on information provided by manufacturers

Now. . . O Consumers today. . . O Consult Social Media O User generated reviews O Expert opinions O Peer to peer information

Every Marketer O Is aware of online reviews O But many ignore it

Unable to Change O Marketing products like they did a decade ago O There needs to be a shift O To account for future customers and opinions of existing customers

Created Two Tools O The Influence Mix and the O O continuum O To help marketers

Customer Purchase O Influenced by O (P) Prior preferences, Beliefs and Experiences O (M) Information from Marketers O (O) Input from Other people and from information services P=Prior Preferences; M=Marketers; O=Other/Information Services

This is the INFLUENCE MIX O Think of it as. . . Zero Sum Game O The greater the reliance on one source, the lower the need for the others O If the impact O on a purchase decision about a food processor goes up, the influence of M or P or both goes down P=Prior Preferences; M=Marketers; O=Other/Information Services

O has increased weight O But there are exceptions O Milk – habitual purchase O Tends to be dominated by P O Toothbrush – can be swayed by M – brand, packaging, point of purchase messages, etc. P=Prior Preferences; M=Marketers; O=Other/Information Services

Questions for Companies O To what extent do consumers depend on O when making decisions about their products? O Answer: On the O continuum O The closer product is closer to O dependent end the greater shift in how consumers evaluate info about it P=Prior Preferences; M=Marketers; O=Other/Information Services

Product Falls on O Continuum O Then consider the strategic implications in O O O O four realms Competitive Position Communication Market Research Product Segmentation P=Prior Preferences; M=Marketers; O=Other/Information Services

Competitive Position O In domains where customers depend on O O Branding takes less importance O Newcomers find relatively low barriers to entry P=Prior Preferences; M=Marketers; O=Other/Information Services

Communication O O dependent purchase decisions O For example: Cameras O Less dependent on celeberity endorsement and banner ads useless O Because Opinion Matters Most O Weight of Trusted Reviews Overrides ads P=Prior Preferences; M=Marketers; O=Other/Information Services

Therefore. . . O These types of companies need to O Generate user interest and O Promote ongoing flow of authentic and positive content P=Prior Preferences; M=Marketers; O=Other/Information Services

Market Research O Usually aims to measure P O It tries to predict the kinds of products consumers will like by assessing their preferences O Purchase decisions reliant on O P=Prior Preferences; M=Marketers; O=Other/Information Services

What to Measure? O Instead of Measuring individual consumers’ preferences, satisfaction and loyalty O Marketers should redirect resources to the O Systematic tracking, coding and quantifying of information O From review sites, user forums, and other social media P=Prior Preferences; M=Marketers; O=Other/Information Services

Where to Target O Shoppers in brink and mortar stores are often more susceptible to M than online shoppers are P=Prior Preferences; M=Marketers; O=Other/Information Services

Product Segmentation O Products location varies from country to country O What might be a hot commodity in Ireland may not be in the United States P=Prior Preferences; M=Marketers; O=Other/Information Services

Strategy Change O When communicating with segments that relay on M, a company can use advertising to build top of mind awareness, persuade customers, and position its offerings O Those strategies do not work for segments that rely on O O The degree to which customers rely on O varies situationally P=Prior Preferences; M=Marketers; O=Other/Information Services

Point of No Return O Increased reliance on Reviews O Yelp, TripAdvisor, and others are reliable sources O Consumers are increasing becoming researchers of product information P=Prior Preferences; M=Marketers; O=Other/Information Services

Start with Amazon O 30% of US consumers begin online purchase by going to Amazon to read product reviews O Google: Customers consult 10.4 sources of information before purchasing

The App Variable O Consumers who use apps such as shopsavvy to compare prices O Minimize the weight of M on their decisions O Even when doing Brick and Mortar shopping P=Prior Preferences; M=Marketers; O=Other/Information Services

Successful Companies O Closely track sources of information their customers turn to O Find the combination of marketing channels and tools best suited to the ways those consumers make decisions

Questions O Why do you think O In groups of two: Marketers ignore online reviews? O Give an example of a recent purchase you have made. What did you relay on in the Influence Mix? Why? O Give a company example of the use of: O Competitive Position O Communication O Market Research O Product Segmentation P=Prior Preferences; M=Marketers; O=Other/Information Services

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