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Consumer Adoption

 

The consumer adoption process is a generally accepted conceptualization of the stages a consumer goes through when confronted with a new product of service.  According to the adoption process, the consumer must first become aware of the product; then develop an interest in it; perform some prepurchase evaluation; and then try the product, either as a consequence of a purchase or of a  marketer-sponsored promotion or incentive.  Two important stages follow trial.  First, the consumer must decide to purchase/continue purchasing the product, which can be behaviorally identified as adoption.  A harder to discern stage is that internalization, in which the product has become an integral part of the consumer’s lifestyle.  The internalization stage is particularly important in the case of technology.  Products or services with a high component of technology often require that consumers undergo a substantial learning process in order for it to be used successfully.  Only if consumers are willing to undertake the learning process, and only if the process is successful, is the product internalized and becomes an integral part of the consumer’s life.

 

Product Factors that Affect Diffusion of Innovations

 

1. Relative advantage – the degree to which product benefits are perceived to be superior to those of existing products.
2. Compatibility –the degree of consistency between the new product and consumer’s perceptions of and behaviors toward existing members of the product category.
3. Complexity – the extent to which the new product is difficult to learn to use.
4. Divisibility/trialability – the extent to which the new product can be tried on a limited or modular basis.
5. Communicability/observability – the degree to which the new product’s benefits are evident to or can be communicated to the prospective customer.

 

Global Innovation –IBM suggests that innovating in the Internet age is different in three ways:

 

1. Innovation occurs with greater rapidity across product types and national boundaries.
2. It requires collaboration across scientific and technical disciplines.
3. The traditional concept of intellectual property is being questioned.  It needs to evolve from being a possession that is hoarded to being a productive asset that is invested or even shared to encourage further progress.

 

Innovative Technologies

 

• Pervasive/ubiquitous computing
• Wireless internet
• Digital convergence

 

Characteristics of Pervasive Computing

 

According to IBM:

 

Pervasive computing aims to enable people to accomplish an increasing number or personal and professional transactions using a new class of intelligent and portable devices.  It gives people convenient access to relevant information stored on powerful networks, allowing them to easily take action anywhere, anytime.  These new intelligent appliances or “smart devices” are embedded with microprocessors that allow users to plug into intelligent networks and gain direct, simple, and secure access to both relevant information and services.  These devices are as simple to use as calculators, telephones, or kitchen toasters.

 

Speedpass—RFID-Based Payment System

 

The speedpass device is described as a “wand,” transponder, or fob.  The customer waves it in front of the Speedpass symbol on the gas pump or the store cash register to activate transaction.  The technology used is an RFID transponder (the wand) carried by the customer.  A reader inside the gas pump or inside the store verifies the customer’s system ID, processes the transaction, and prints a receipt if the customer opts to generate a receipt.  The customer’s credit card number and other personal information are not stored in the Speedpass signal system and therefore cannot be accessed during transmission.  Personalization information including the credit card to be used and whether the customer wants a printed receipt is part of the central database system.

 

6 A’s of pervasive computing

 

Access to Anyone who is Authorized, Anytime, Anywhere on Any Internet-enabled device.

 

Evolutionary Stages of Wireless

 

• 1G (analog devices) – first generation wireless telephones are an obsolete technology.  They were analog devices that offered relatively poor quality and could carry only voice transmissions
• 2G (digital;voice/data)—Second generation wireless telephones is digital and can handle both voice and data transmissions.  That includes e-mail and web pages.  Speeds for both voice and data transmissions are about 14.4 kbps (kilobits per second—a kilobit is 1,000 bits of data)
• 2.5G (enhancement of e-mail & internet access)—second-generation-lus wireless is an intermediate step.  It will involve the enhancement of existing technologies that improve the transmission of e-mail and wireless access to the Web pages.
• 3G (speed eventually equivalent to broadband)—the third generation is the technology  the wireless world is waiting for because it will eventually offer speeds equivalent to broadband.  Speeds are expected to start at about 56 kbps—about the speed of a good dial-up modem—and eventually reach 2 mbps (megabits per second—a megabit is 1 million bits)
• 4G—standards for 4G are in their infancy, but it is expected to be able to reach peak download speeds of 1 gbps (gigabit per second—a gigabit is 1 billion bits.)

 

Third generation systems have been deployed more rapidly in Japan, Korea, China, India, and Europe than in the US. Reasons for differences:

 

• Early/Satisfactory adoption of the wired Internet in the US—Users who have good access to and are satisfied with the wired internet are less likely to rush to adopt wireless (US).
• Lack of landline telephone infrastructure in developing countries.  It is faster and cheaper to deploy wireless services, and that is the option frequently chosen in areas where landline infrastructure is not already present (China, India).
• Compact geographic areas with dense populations.  This make wireless deployment cost-effective even if landline service is available (Europe).
• A cultural environment that is unusually receptive to electronic products.  The most visible manifestations of this have included the rapid adoption of cell phones and video games (Japan, Korea)
• Greater standardization of wireless transmission in other countries.  Europe’s GSM standard and Japan’s i-Mode are not only the wireless protocols in their respective geographic areas; they are more ubiquitous than the standards in the US.
• Political barriers to the granting of wireless licenses.  The US has been slower than most other countries to make broadband spectrum available to wireless service providers.  Because they have not been able to license sufficient bandwidth to offer broadband services, the wireless carriers have been restricted to offering service at speeds lower than 3G.

 

Wireless Standards

 

• CDMA (code division multiple access)—voice conversations are digitized and tagged with a code and transmitted over a radio frequency.  The mobile phone uses the code to pick the right conversation off the airways.  Speed 14.4kbps
• TDMA (time division multiple access)—it allows the carrier to divide a single radio frequency into multiple time slots, allowing a single channel to support multiple transmissions at the same time.  Speed 9.6 kbps
• GSM (global standard for Mobil Communications)—it is based on TDMA technology where phones that use GSM technology utilize Smart Identity Module (SIM) smart cards that contain the user’s account information.  The programmability of the smart card makes the phone useful in many nations, allows personalization, and facilitates renting and borrowing of phone.
• i-Mode—is its proprietary standard and provides services like Web access, e-mail, messaging, and personal calendars.  Transmission speed was initially only 9,600 kbps but it will increase as new generations of technology are rolled out.
• WiFi describes the use of the 802.11 communications protocol to make wireless local area networks (LANs) available to users in a given area.  These areas are known as wireless hotspots.  They are being deployed around the world and provide wireless access for a wide range of devices.

 

Strategic Drivers of Wireless

 

• Context—this means providing necessary information when and where the customer needs or wants it.  The content trigger is in the hands of the customer, not of the marketer.  Context in the wireless environment has two dimensions:
  • Localization—through the various geographic systems, the location of the user can be identified and information specific to that location can be provided.  A consumer driving down the highway can be beamed information about attractions in the area.
  • Personalization—the customer can select not only the type of information desired but also the frequency of information provision.  For example, the consumer may select specific stocks and specific price levels at which he or she wishes to be notified.
• Time Sensitive—screens are small and storage is limited, so information must be provided at the time appropriate to the customer, not convenient for the marketer.  As a customer passes a store in a shopping mall, he or she may be willing to receive a coupon for a purchase in that store, which can be saved or retained on the screen until the customer shows it when checking out.
• High Value—the coupon will have to have a reasonable value in order to make it welcome in the wireless context.
• Voice activation—there are many situations, driving in particular, in which it is not safe—and in many locales, not legal—to use the keyboard of a mobile device.  Voice activation is the solution in these situations.
• One-click payment mechanisms—consumers are not going to be willing to enter credit card information on mobile keyboards and may be uncomfortable with the idea of their credit card data being transmitted wirelessly.  They are not likely to be willing, either, to have numerous vendor-specific accounts, especially for micropayments.  A system in which payment is easily and securely authorized and billed to a single account will be necessary to enable frequent use of m-commerce services.
• Security—users must be assured that data transmissions are secure, and authentication services must be provided in a way that is suitable for the devices.  Embedded devices that identify the owner are one possibility.  Smart cards that can be inserted and removed to protect encoded information are another.
• Privacy—in addition to protecting personal data, providers of content and services will have to be sensitive to download times, lack of storage, and the fact that users are paying for airtime.  They must not abuse technological capabilities like geographic locational services.
• Expanded permission marketing—marketers will have to extend the concept of permission marketing beyond simple opt-in scenarios.  They must find out what kind of information consumers are willing to receive, how often they are willing to receive transmissions, and where they are willing to receive it.  This means an accurate customer database that is updated in real time

 

Industry Self Regulation

 

• Choice—consumers are required to opt in to each marketing program.  Segmentation or location-based messaging is prohibited unless consumers have provided verifiable personal data for that specific program.
• Control—consumers must easily be able to opt out of any message stream.
• Customization—data should be collected and used to send relevant messages, and to restrict messages to categories specifically requested by the consumers.
• Consideration—the consumer must receive something of value for being willing to receive the advertising.
• Constraint—the MMA explains that “the marketer, content provider, or aggregator must provide a global ‘throttling mechanism’ capable of managing the number of messages received by an individual consumer.  The purpose of the throttle is to effectively manage and limit mobile messaging programs to a reasonable number of programs, defaulted to a maximum of 2 new campaigns per week.”  They add that the consumer may opt in to additional messages.
• Confidentiality—the marketer must have a privacy policy that meets TRUSTe’s standards and abide by their electronic list policies.

 

Digital Convergence

 

It is the power of digital media to combine voice, video, data, text, and money in new applications, devices, and networks.

 

It is driven by the desire of consumers and B2B users to perform a variety of tasks on the go.

• Phone calls
• Internet access for content like news, weather
• Take, export, and e-mail pictures
• Music and video downloads
• Games
• Search, especially local

 

Converged Devices

 

• Cell phones with GPS positioning technology accessible by local 911 systems
• Camera phones, most of which have access to e-mail and to the internet
• Phones that open to reveal a full function keyboard and color display screen
• Phones with Bluetooth (short-range wireless) capability, allowing them to communicate with other wireless devices in range.
• PDA devices primarily designed for high-volume e-mail that include other functionality like phone and internet access
• Tablet PCs, lightweight laptop PCs that have the capability of deciphering handwritten notes recorded with a stylus on the screen
• A ballpoint pen that includes a computer and a small camera with educational programs for children
• Game players that include functions from internet access to MP3 players for music
• Touch screens in places like kiosks and taxis that provide content and internet access

 

Wireless Household

 

• A refrigerator that can monitor contents and use the internet to place reorders for home delivery
• A washing machine that can access the internet to download programs for new fabrics or washing problems
• TV that permits pausing of the current program and other DVD-like features

The power of the Clickstream to Produce Internet Metrics

·         It can tell how many orders it has lost as a result of the out of-stock condition.

·         It can tell that visitors must look through several pages to find the desired item.  One way of ascertaining this is to see that they are following circuitous paths through the site instead of going straight to the product.

·         It can capture customer names, one of whom can be a gift-giver and one of whom, based on current knowledge, can be a fly fisher.

Uses of Metrics

1.       The data point to possible usability problems that need to be examined and corrected.

2.       The data are used  to generate site effectiveness measures that are essential for a number of marketing purposes:

a.       Managing the site

b.      Determining advertising rates for the site

c.       Understanding the impact of marketing programs like e-mail and online advertising campaigns

3.       They provide a mother lode of data that can be mined to develop an in-depth understanding of visitor behavior on the site, which will in turn help improve the site with new features and marketing programs.

4.       Since internet users are becoming aware that these data exists, they are concerned about the loss of privacy, even though they may not understand the results of its use by Marketers

Multiple Perspectives on Effectiveness

·         Usability/Usability testing—the way visitors look at the site, the way they gauge its ease of use and value to them.

·         Traffic and audience measurement—a set of techniques used to provide effectiveness data vital to marketing management.

·         Site performance—involves data that are needed by site technicians to gauge and improve site performance.

What is the Purpose of Usability Testing

·         It is exclusively designed to see if the site works in a user-friendly fashion according to the expectations of members of the target market.

·         Ensuirng that it is easy for visitors to navigate and, in general, to find desired content quickly and efficiently on a web site.

·         Essentially qualitative, and they are performed by target site users, not by technicians.

Stages of Usability Testing

·         Concept testing—the earliest stage and reflects none of the actual site programing.  In testing at this stage, one or more concept boards are shown to respondents, such as focus groups, who critique it from the perspective of how logical they perceive it to be and how easy they think it would be to use.

·         Prototype Testing—is the second level where the site design is complete and at least some parts of the site are fully functional.  Testing a  prototype affords an opportunity to get reactions to the appearance of the site and to get some information about the degree to which the site structure is consistent with customer expectations.

·         Full Usability Testing—it indicates that they site has been uploaded to a server and is fully functioning, even though it is not accessible to the general public.

Enterprise Metrics:  Site Performance

·         IT specialists maintain and tune site

·         Marketers must be aware of site performance > visitor experience, because the traffic and audience data information has direct relevance to marketing programs

Enterprise Metrics:  Business Performance

·         Traffic data describe activity on the site.  These data include metrics such as number of visitors, sessions, and page views.

·         Audience data describe both the behavior of people on the site—where they come from, what paths they take through the site, and whether they take desired actions—and the people themselves using both anonymous and identified profile data.

1.       Hit Counters (Site Administered)

a.       A small piece of software that can be added to a web site to provide a few basic metrics.  A hit counter is a few lines of HTML code that are placed on each page in the site that the owner wants to measure.

2.       Server Request Log Files (Purchased Service)

a.       Are created by the server that houses the web site

b.      Each time a browser requests a file in order to build a web page, it generates an entry in the server request log.

c.       Each graphic on a web page is a serparate file, and there can be several content files on a single page.

                                                  i.      If for example, a web page that has 3 graphics and one content blocking, each time that page is accessed, four hits are registered on the server log.  A hit is counted for each file on the page.

d.      Server Request Log Records:

                                                  i.      The IP address of the requesting computer

                                                ii.      Date and time of request

                                              iii.      Code indicating whether request was successful or not

                                               iv.      Number of bytes of data transferred

                                                 v.      Referring site

                                               vi.      Type and version of web browser making request

                                             vii.      Operating system of computer making request

3.       Coded Pages—Tracking web site visitors (Purchased service)

a.       Also known as data tag, pixel tag, transparent GIF, we bug, web beacon, and others.

b.      It’s a new method of collecting data, on the “browser(user’s) side” of the information transaction instead of on the “server side.”

c.       The typical file used to implement coded pages is 1 pixel by 1 pixel, and it is placed on the web page itself, where it usually is invisible

d.      The tag is part of the page that is requested  by and served to the user’s browser.  The file then sends data back to the server.

e.      Working with cookies, the tag can send back detailed information about the visitor’s activity on the page.  On the surface, the data are the same as those collected by server log.

f.        Advantages over server log data:

                                                  i.      Data may be more accurate.

                                                ii.      Data collected by web bugs has smaller storage requirements so they only store relevant data.

                                              iii.      When data are collected in this manner, it permits real-time processing and viewing of site metrics.

4.       Collecting Panel Usage Data

a.       Similar to the panels in the general marketing research process

                                                  i.      Size of the universe to be sampled

                                                ii.      Segments that are to be broken

b.      Specialized software is downloaded onto the participant’s computer to record the clickstream data.

c.       Benefits over server logs:

                                                  i.      The source of the data is unambiguous, source is known, which it often is not with server logs.

1.       International IP address can be difficult to identify

                                                ii.      A person who uses the internet from both home and work can be identified as same person through carefully planned and maintained panel data.

                                              iii.      The measurement firm can collect demographic and behavioral data from panel households

                                               iv.      Produces longitudinal data

5.       Basic Metrics

a.       Traffic—measures simply document site activity:

                                                  i.      Hits—the number of files requested

                                                ii.      Impressions—the number of times an ad banner is requested by a browser

                                              iii.      Page views—the number of times a web page is requested

                                               iv.      Sessions—the amount of activity on a site during a specific period

                                                 v.      Click-throughs—the number of times visitors come to the site by clicking on an ad

b.      Audience—measures provide data about the people who visit the site:

                                                  i.      Visitors—the number of people who visit a site

1.       Total or unique during a specified time frame

2.       Unidentified or identified (registered or customer)

                                                ii.      Unduplicated audience—the visitors that are unique to a web site

                                              iii.      Behavior on the site:

1.       Number of page views

2.       Session time

3.       Path through the site

4.       Shopping cart abandonment

5.       Entry page (many visitors do not enter through the home page)

c.       Campaign—measures provide data about the effectiveness of marketing efforts

                                                  i.      By communication channels: e-mail, mail, online banners, etc.

                                                ii.      By offer:free shipping versus 25% off, for example

                                              iii.      Search effectiveness by keyword

d.      Common metrics follow:

                                                  i.      Average number of visits per day

                                                ii.      Number of page views

                                              iii.      Average visitor session length last month

                                               iv.      Number of hits for each hour of the day

                                                 v.      Paid search results for the most recent 7-day period

                                               vi.      Etc.

6.       Traffict, Audience, and Campaign Metrics

a.       Report Dashboard

                                                  i.      Type of presentation that allows marketers easy, real-time access to important reports directly from their desktop.

                                                ii.      The metrics report page visits, number of visits, the percentage of all visits, the average duration of the visits, the average number of pages viewed per visit, and the revenue produced by the set of visits

b.      Marketing Campaign Reports

                                                  i.      number of reports can be available in a single category:

1.       calendar feature

a.       allows the marketer to select any day, week, month, or other specific time period for the report

b.      produce comparative reports by selecting two time frames for comparison of a particular reporting item

c.       Browser-Based Reports

                                                  i.      Report shown in browser format

                                                ii.      Data that are overlayed on the page represent the percentage of visitors who click through on each link on the page.

                                              iii.      Data shows number of visitors who see the page, how much time they spend, where they came from, and where they go when they exit the page.

                                               iv.      Another panel shows the specific sites from which the visitors come, search engines, affiliates, newsletters, and so forth

d.      Path Analysis

                                                  i.      Shows the basic steps that would result in successful task completion

                                                ii.      The center arrow shows the basic steps

                                              iii.      The data to the left show the entry points

                                               iv.      The data to the right show the exit points

                                                 v.      People who are backtracking are experiencing navigational problems

                                               vi.      Visitors who exit may still be looking for the same product

e.      Segmenting by Behavior and Channel

                                                  i.      When segmenting visitors, by behavior pattern or by information provided by the visitor, is important to many types of marketing decisions

                                                ii.      When there is a difference between the pages most viewed by demographic groups—say men, women, and teenagers—the site will be able to charge more for advertising that is able to target a specific demographic.

                                              iii.      It can also show multichannel behavior, shown in the form of a “conversion funnel”

1.       Shows the number of potential customers who begin the purchase process, the number who remain at each stage in the process, and the number who complete the purchase task.

7.       Exposure versus Action

a.       CPM (cost per thousand advertising impressions)

                                                  i.      Primary pricing mechanism for many media, including the internet

b.      CPA ( cost per action) or CPC (cost per click)

                                                  i.      Cost per click-through

                                                ii.      Cost per order (synonymous with cost per sale and cost per conversion)

                                              iii.      Cost per lead

                                               iv.      Cost per qualified lead