online consumer buying process

Week 5 Presentation

Value conceptAIMAN HARIS BIN SHARIFFUDDIN 24115606

WOOI TEIK LIM 25093584

Question 1

Measure the business cost and value of a mobile computing system for the field service representatives

at Alliance Insurance Company (AIC), a fictitious company name based on some actual companies.

Use the Supplier Investment model to estimate business costs and Supplier Desired Benefits model

to estimate value.

Supplier’s investment• Material (hardware & software)

• People (IT department & technicians)

• Infrastructure (Server & backup system, Website, Generators for buildings)

• Processes (Software training and courses)

• Communication (Internet Connection)

Supplier’s desired benefits• Transactional equity

- Less process time in servicing clients, increasing ability to service even more clients compared to doing things manually

• Relationship equity

• - Customer loyalty

•Organizational equity

- Creating and customizing own mobile computing system, hence information and knowledge hard to be imitated and may only be mimicked at high cost to other companies

Supplier’s desired benefits• Value for employees

- Motivates them to work better and may increase work effectiveness, efficiency and performance

• Value for investors

- Grants higher returns, stronger revenue growth and in turn, an attractive profit margin

Question 2

What is the Customers’ Investments and Desired Benefits of buying a tour package from AirAsia.com?

Customers’ investmentAcquisition

-Physical cost

-Psychological cost

-Transaction cost

Consumption

-Physical/mental effort

Association

-Relationship

-Personal association

Memory

-Attitudes

-Perception

-Expectation

-Emotions

Risk

-Uncertainty

Customers’ desired benefitsIntrinsic value (product’s ability to do something)

-Online purchasing, cheap and affordable holiday

Extrinsic value (product desired for own sake)

-Feelings of purchasing a tour package online

Self oriented value (exclusive use)

-Going abroad travelling on a holiday

Other oriented value (impressing others)

-As a form of luxury

Active value (active use)

-Go on a holiday and not laze around at home

Reactive value (response from other products)

-Tourist attractions

Immediate value (instant gratification)

-Excitement of purchasing a tour package online

Deferred value (value over time)

-Enjoying the whole holiday itself

Question 3

In each stage of online consumer buying process, there are e-business values that can be provided to customers. Describe these values and provide some

website examples.

Online consumer decision process

Online consumer decision process

AwarenessVisit-

Engagement Purchase RepurchaseAttraction

Awareness• Customers identify a need

• Customers becomes aware of products and services

• E.g. Facebook banners

Email newsletter

• E-business value: Novelty

Online consumer decision process

AwarenessVisit-

Engagement Purchase RepurchaseAttraction

Attraction• Customers develop specification in terms of position, features, benefits and branding

•Search engine is the first place customers go to.

• Search engine optimisation (SEO) and affiliate marketing

• E.g.

• E-business value: Search and transaction cost efficiency

Online consumer decision process

AwarenessVisit-

Engagement Purchase RepurchaseAttraction

Visit-Engagement• Customers will eventually get “pulled” into clicking the links of websites

• E-business value: Search and transaction cost efficiency

Novelty

Information search Interactivity

Product comparison Customer engagement

Comparison searches within website Live chat systemPop-up offers

Wotif.com Groupon

Online consumer decision process

AwarenessVisit-

Engagement Purchase RepurchaseAttraction

Purchase• Customers are finalising their purchases

• To prevent walk-out, websites should have:

- Simple checkout process (Airasia)

- Efficient payment system (Airasia)

• Also, complementary products should be offered (Amazon)

• E-business value: Novelty

Complementarities

Purchase• Customers are finalising their purchases

• To prevent walk-out, websites should have:

- Simple checkout process (Airasia)

- Efficient payment system (Airasia)

• Also, complementary products should be offered (Ebay)

• E-business value: Novelty

Complementarities

Purchase• Customers are finalising their purchases

• To prevent walk-out, websites should have:

- Simple checkout process (Airasia)

- Efficient payment system (Airasia)

• Also, complementary products should be offered (Ebay)

• E-business value: Novelty

Complementarities

Online consumer decision process

AwarenessVisit-

Engagement Purchase RepurchaseAttraction

Repurchase• Customer retention

• Post-purchase dissonance - disatisfaction

• Solution: Customer Relationship Management

• Efficient customer service, call centers, return policies, weekly newsletter, discount voucher codes

• E.g.

• E-business value: Lock-in

Stages Values How Examples Metrics

Awareness NoveltyBanner Ads

Email newsletterFacebook

Email

AttractionSearch and

transaction cost efficiency

SEOAffiliate marketing

LelongLazada

Visit-Engagement

Search and transaction cost

efficiency

Comparison search 

AgodaWotif

Novelty Website interactionLazada

Groupon

Purchase

Novelty 

Simple checkoutPayment system

Airasia

ComplementaritiesComplementary

productsEbay

Repurchase Lock-inRelationship

marketingZalora

Question 4

What metrics can be used to measure these values (in question 3).

Stages Values How Examples Metrics

Awareness NoveltyBanner Ads

Email newsletterFacebook

Email

AttractionSearch and

transaction cost efficiency

SEOAffiliate marketing

LelongLazada

Visit-Engagement

Search and transaction cost

efficiency

Comparison search 

AgodaWotif

Novelty Website interactionLazada

Groupon

Purchase

Novelty 

Simple checkoutPayment system

Airasia

ComplementaritiesComplementary

productsEbay

Repurchase Lock-inRelationship

marketingZalora

Number of ImpressionsEmail open rate

Ad Click Through RatesOrganic and inorganic search engine

Unique visitorsNumber of on-site searches

Bounce rates

Number of complementaries purchased per transaction

Conversion rateCheckout page completion percentage

Rate of plugins usageAverage time spent on site

Top exit pages

The number of returning customersSubscription email click-to-open rate

Loyalty coupon redemption rateCustomer lifetime value