MIS 381 Lecture Notes Chapter Six

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Chapter Six

E-commerce Marketing and Advertising


Concepts
Lecture Notes
:Consumer Behavior Model

The study of consumer behavior is a social science discipline that attempts to model
and understand the behavior of humans in a marketplace. Several social science
disciplines play roles in this study, including sociology, psychology, and economics.
Model of consumer behavior attempt to predict or explain what consumer purchase
and why, when and how much and why they buy. The expectation is that if the
consumer decision making process can be understood, firms will have a much better
idea how to market and sell their products. The following figure illustrate a general
consumer behavior model that takes into account a wide range of factors that
.influence a consumer's marketplace decisions

A General Model of Consumer Behavior *

*:General Online Behavior Model

The previous model is similar for online and offline behavior. However, the -
general model of consumer behavior requires modification to take into account
new factors, and the unique features of e-commerce that allow new opportunities
.to interact with the consumer online also need to be accounted for
*General online consumer behavior model

Product characteristics-

Website features: latency, usability, security-

User characteristics, Attitudes toward online purchasing, Perceptions about -


control over Web environment

:Clickstream behavior *

Clickstream behavior is very important in predicting online consumer behavior. It


refers to the transaction log that consumers establish as they move about the web;
from a search engine to a variety of sites, then to a single site, then to a single page,
.and then, finally, to a decision to purchase

:Most Important Factors Shaping Decisions to Purchase Online

Research studies show that there are two main factors that shape the decision to -
.purchase online, these factors are utility and trust

:a) Utility

)Better prices, convenience, ease of use, speed(

Consumers want good deals, bargains, convenience, and speed of -


delivery. In short, consumers are looking for utility

:b) Trust

)Perception of credibility, perceived risk (

Sellers can develop trust among online consumers by building strong -


reputations of honesty, fairness, and delivery of quality products.
Online sellers who develop trust among consumers are able to charge
.a premium price for their online products and services

A review of the literature suggests that the most important factors -


leading to a trusting online relationship are perception of website
.credibility, ease of use, and perceived risk

Features of E-marketing (versus traditional)*

More personalized -

More participatory -

More peer - to-peer and more communal -

:E-marketing tools *

The basic marketing and advertising tools for attracting e-commerce


:consumers are

Search engine marketing -

Display ad marketing -

E-mail marketing -

Affiliate marketing -

Viral marketing-

Social marketing and advertising -

Mobile marketing and advertising -

Local marketing -

A) Search engine marketing


The process of search marketing is called SEM. Essentially; there are -
two different types of search with which marketers are concerned.
These types of search are paid search, often called pay-per-click (PPC)
.and unpaid search

The process of paying for search involves paying for advertising that -
show up on the top or the side (and sometimes the bottom) of the
search engine results pages (SERP). This type of search marketing is
called paid search because the advertiser pays the website hosting
the advertising (Google, Yahoo) money every time someone clicks on
.an advertisement

:Search Engine Optimization (SEO)

It is the process of optimizing the website to rank higher in the search


engine results pages, and thus increase the amount of organic traffic
.on the website

The main difference between Search Engine Optimization (SEO) *


and Pay Per Click (PPC) or paid search, is that traffic coming from SEO
is organic or free while traffic generated from PPC and paid search is
.not free (as the name implies that you have to pay a cost per click)

:Ranking Factors of a web page

Frequency of updates-1

Keywords-2

Grammar and spelling-3

Bounce rate-4

Click Through Rate (CTR)-5

Relevancy of backlinks and internal links-6

Website loading speed-7

Website structure-8
:Frequency of updates-1

Fresh content or the content that is usually updated help the website
.to rank better in the search engine results pages

:Keywords-2

Keywords relevance is a significant factor for a better rank. Google


AdWords and Google trends help website owners to identify which
keyword related to their business and are the most searched for in
the search engines. Understanding what keywords drive the most
traffic, and how to combine them to the right relevant content are
.viewed to be one of the key aspects in search engine optimization

:Grammar and spelling-3

Proper spelling and grammar are signals of quality writing,


professionalism, and credibility and search engines (like Google)
usually rank websites with high-quality content over websites with
.poor-quality content in search engine results pages

:Bounce rate-4

Bounce rate is one of the factors that affect the ranking in in search
engines. Bounce rate represents the percentage of visitors who enter
the site and then leave "bounce" rather than continuing to view
.other pages within the same site

:Click-Through Rates (CTR)-5

Another factor that affects the ranking of a web page is (Click-


Through Rates or CTR) which refers to the proportion of users
viewing banner adverts and click on them. It is calculated as the
.number of click-throughs divided by the number of ad impressions

:Relevancy of backlinks and internal links-6

Relevancy of backlinks and internal links plays a significant role in


.search engine optimization

:Website loading speed-7


Site speed is part of Google ranking factors, in addition that a slow-
.to-load page can be a huge problem for bounce rate

:Website structure-8

The way a site and its pages are organized affects search engine
.optimization strategy

:B) Display ad marketing

:Display ad includes the following

Banner ads: a promotional message in a rectangular box at the top -


.or the bottom of a computer screen

Rich media ads: as employing animation and sound-

Interstitial ads: a way of placing a full-page message between the -


.current and destination pages of a user

Video ads: TV-like advertisement that appears as an in-page video -


commercial or before, during, or after content far more effective
than other display formats

Sponsorships: a paid effort to tie an advertiser's name to an event, -


or a venue in a way that reinforces its brand in a positive, yet not
.overtly commercial manner

:C) E-mail marketing

Messages sent directly to interested users-

:Benefits include

Inexpensive-

Measuring and tracking responses-

Personalization and targeting-


:Three main challenges

Spam-

Anti-spam software-

Poorly targeted purchased e-mail lists-

:D) Affiliate marketing

Commission fee paid to other websites for sending customers to their -


website

:E) Viral marketing

The process of getting customers to pass along a company's marketing -


.message to friends, family, and colleagues

:F) Social media marketing

The use of online social networks (such as Facebook, Instagram, Twitter, -


.Pinterest) and communities to build brands and drive sales revenues

:G) Mobile marketing

Mobile marketing is a multi-channel, digital marketing strategy aimed at -


reaching a target audience on their smartphones, tablets, via websites,
.email, SMS, social media network sites, and apps

:H) Local marketing

Local marketing is a marketing strategy that targets consumers within a -


.certain radius of the physical location(s) of a business

After the introduction of Google maps, online local marketing began to -


.rapidly expand

Location based marketing: targets marketing messages to users based on -


.their location

Generally, Local marketing and geo-targeting of ads (geo-targeting of ads -


involves sending ads based on the user's locations) can be used by
.restaurants, supermarkets or stores target local audiences
:E-marketing planning*

The SOSTAC framework summarizes the different stages that should be involved
.in a marketing strategy from strategy development to implementation

:The stages involved can be summarized as

?Situation – where are we now-

?Objectives – where do we want to be-

?Strategy – how do we get there -

?Tactics – how exactly do we get there-

?Action – what is our plan-

?Control – did we get there-

:E-marketing plan comprises

Situation analysis-
E-marketing objectives-

Strategies for target market-

:Tactics for marketing mix-

Product -

Price-

Place-

Promotion (communication mix)-

Actions, control and monitoring-

:SWOT Analysis example


:The marketing mix elements

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