Online Consumer behavior

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Online Consumer behavior:

When learning about online consumer behavior it is also important to know the myths of both ways of consumer behavior; (6)

Myths of traditional consumer:

o Only the elite look at customerisation

o Price happens to be the bait set by the seller.

o The consumer is always on the couch

o It's all about location

o Consumers are always the islands

o Customers will accept what we tell them.(6)

Myths of online consumer:

o People don't really want to be troubled with shopping

o Efficiency is the most that matters

o Consumers are always looking for a fair and better price

o The ease of visiting stores will lead to more purchasing

o The internet is fascinating and attractive.(6)

Human motivations:

o Self-affirmation

o Symbolic meaning

o Scripts of shopping

o Experience

o Social influences

o Let's now describe online consumers:


1. Demographics: Age, education, income, gender

2. Psychographics: Religious values, social values, personality traits,

3. Combined demographic data with lifestyle data.

(6)Customers should be made aware of the reasons and benefits of shopping online.

o Time consuming,. Convenience, best price, one-stop shopping.


It's always known that the form of money actually affects its meaning to the customers. The difference is tangibility.

The internet environment separates the meaning of money from its physical being, may facilitate transaction for unexpected, undesired or aversive transactions. It may also discourage transaction that provides the consumer with pleasure.(6)


The two types of online information are:

Information as an end

- Information is the product itself

Read online news, like news letters.

- Information as a means to an end

like information search to buy a car.(6)

Information search:

The search on internet makes it difficult for the customers as it facilitates through the wide array of information available on the internet and the variety of search engines.

Economics of information:

People will always search for information as long as the benefits of each new piece are not exceeded by the costs of it.

As the cost decreases alternatively the amount on consideration increases.(6)

Information overload:

Given limits to people's processing capabilities, larger amounts of information to consider may result in poorer quality decision.

Types of goods:

Search: The benefits of consumption can be understood just with attribute descriptions.

Experience: Can be evaluated only after being consumed.

Credence: Can't be easily evaluated even after being consumed.

As our company is selling goods and services, the difference between what goods and services are looked at are:

Goods: Tangibility, Specificity

Services: Inseparability, Heterogeneity, Perish ability.

Status: The rank or evaluation of one person, relative to the comparison of group of peers.

Scarcity: This is the only motivating fat or for status.

Love: The effects of internet on emotional well being are:

o Very positive

o Decreases the amount of interpersonal interaction.

o Fewer social cues.

Company revenue, structure and process:

Met centricity: The percentage of revenues due to online activity as a portion of the total revenues earned by a company.

Platform approach: Operating in a team across different organizational functions.

Internet time: Expectation about the amount of time shortened.

Information acceleration: Product cycles shortened.(6)

Challenges of online marketing: 5C's

Company: Employee growth rate and decreased employee productivity due to web surfing.

Channel: Internet works as a distribution model also manages the transmission of distribution related information.

Consumer: Low search costs

Condition: Marketing activities are directly affected by the environmental factors such as technology and public policy.

Competition: Shorter product cycles and decreased product differentiation also same product and different means of consumption.

Deciding on which markets to target is a very key strategic consideration for the company. (6)

Segmentation/target strategy:

Our Company's online customers would have different demographic characteristics and needs and behavior to other customers. The company will have to follow different approaches to segmentation and also target specific segments of the market. (3)

Positioning and differentiation strategy:

In online environment the competitor's products and price ranges also differ. Developing an appropriate online value proposition would become very effective.

In online marketing our company will have to target those customer groupings with the highest propensity to access, choose and then buy online.

Segmentation involves understanding the groupings of the customer in a target market. This is to understanding their needs and also potential as a revenue source to develop a strategy to satisfy the segments while maximizing the company's revenue. (2) (4)

In online marketing, market segments will be analyses to asses:

The current market size and the company's future market share with the segment.

Competitor market share with segments

Needs of each segment

Company and competitors offers and proposition ofr each segment across all the aspects of buying process. (5)

Few customer segments for the company to target would be:

* the most profitable customers – using the Internet to provide tailored offers to the top 20 per cent of customers by profit may result in more repeat business and cross-sales;

* particular members of the buying unit– the site should provide detailed information for different interests which supports the buying decision

As visitors use online services they can potentially pass through seven or more stages. Once companies have defined these groups and setup the customer relationship management infrastructure to categorize customers in this way, they can then deliver targeted messages, either by personalized on-site messaging or through E-mails that are triggered automatically due to different rules. (2) (5) (4)

Identify customer profile characteristics

This is a traditional segmentation based on the type of customer. For our company this would include, this will include age, sex and geography

As a company once we have selected the most appropriate segments for our products and services the company would develop a strategy to target its specific audiences. As a company we then select the most appropriate way to target the audience.

As a company once we have selected and decided on our target markets and the most appropriate segments for its products and services we would develop a strategy to target our specific audiences. The company then selects the most appropriate way to target the audience by emails, banner advertising and viral marketing.

Positioning on internet is very important for the company as it refers to how the company and its products are perceived by the customers. In this particular industry, people would refer to safer ways at it is concerned with physical presentation. (4) (1)

The company will have to do its home work on a safer side and in a most efficient manner in order to avoid any risks. The market should be segmented on on basis and targeted and positioned based on the human behavior in order to suffer any kind of losses after the launch of the product. It is always very risky to launch a product in the market with out really surveying about the customers.


1. Cox, B. and Koelzer, W. (2004) Internet marketing, Upper Saddle River, N.J.: Pearson/Prentice Hal. Retrieved April29, 2010

2. Groucutt, J. and Griseri, P. (2004) Mastering e-business, Houndmills [England]; New York: Palgrave Macmillan. Retrieved April 28, 2010

3. Retrieved April 28, 2010

4. Mohammed, R.A., Fisher, R.J., Jaworski, B.J, and Cahill, M.A. (2002) Internet marketing: building advantage in the networked economy, Boston: McGraw-Hill. Retrieved April 28, 2010.

5. Reedy, J. and Schullo, S. (2004) Electronic marketing: integrating electronic resources into the marketing process, Mason, Ohio: Thomson/South-Western. Retrieved April 28, 2010

6. Sial, S. (2009, February 2). Online Consumer Behavior. Retrieved April 30, 2010