E-commerce| Unit-5 | E-commerce Marketing and Advertising Concepts

  E-commerce

Unit 5 - E-commerce Marketing and Advertising Concepts

TU Syllabus:

Consumers Online: The Online Audience and Consumer Behavior; Digital Commerce Marketing and Advertising Strategies and Tools; Online Marketing Technologies; Understanding the Costs and Benefits of Online Marketing Communication

Consumer Online: The Online Audience and Consumer Behavior

Online Audience refers to individuals or groups who access the internet for information, shopping, or entertainment. They differ based on demographics (age, gender, income), psychographics (interests, values), and online habits.

Key Characteristics of Online Consumers:

• Accessibility: Always connected via smartphones, laptops, etc.
• Research-Oriented: Compare prices, read reviews before purchasing.
• Impatient: Expect quick responses and fast delivery.

Types of Online Audiences:

Casual Browsers: Visit sites without intent to buy (e.g., scrolling social media).

Researchers: Compare products/services (e.g., reading reviews on Amazon).

Shoppers: Actively purchase online (e.g., buying from Daraz).

Demographics: Age (Gen Z prefers TikTok, older users prefer email), gender, income levels, and location (urban vs. rural).

Psychographics: Interests (fashion, tech), values (sustainability), and lifestyle (busy professionals prefer quick shopping).

Example: A 25-year-old student in Kathmandu might use Instagram to discover trends, while a 40-year-old professional might Facebook/Google for detailed product specs.

Online Consumer Behavior

Online consumer behavior refers to the process and actions that individuals undertake when searching for, evaluating, selecting, purchasing, using, and disposing of products or services through digital platforms, such as websites, mobile apps, or social media.

Factor Influencing Consumer Behavior

1. Technological Factor

• Device Usage: The type of device affects how consumers shop online, with smartphones being the most popular for quick purchases. Laptops are often used for detailed research or bigger transactions. Example: A student in Nepal orders food on Foodmandu using a smartphone.
• Internet Speed and Access: Fast internet enables smooth browsing and quick purchases, while slow speeds frustrate users and reduce activity.Limited access in rural areas restricts online shopping to basic platforms. Example: A user in Pokhara abandons a Daraz cart due to slow internet.
• Security Concerns: Fear of fraud or data theft makes consumers hesitant to use cards online. Secure sites with clear safety features boost trust and encourage buying. Example: A Nepali shopper chooses cash-on-delivery on Hamrobazar over online payment.

2. Personal Factors

• Income and Education: Higher income allows purchases of premium items, while education drives research habits. Low-income or less-educated users prefer deals and simple options. Example: An educated professional buys a laptop after comparing reviews on Daraz.
• Profession:  Jobs influence what consumers buy online and how much time they spend shopping. Professionals may prioritize work tools, while students focus on affordable gadgets. Example: A teacher orders stationery online for classroom use.
• Age and Lifestyle:  Younger users buy trendy items quickly, while older ones focus on essentials. Busy lifestyles demand convenience, and active ones seek specific gear. Example: A 22-year-old student buys earphones on TikTok during a sale.

3. Psychological Factors

• Perception:  A positive view of a site or brand encourages purchases, while a negative one deters them. Perception is shaped by design, reviews, and past experiences. Example: A user trusts a site with clear images and buys a jacket.
• Motivation: Needs like food or desires like luxury items drive online shopping. Discounts and urgency can push consumers to act faster. Example: A Nepali buys a heater online due to cold weather.
• Beliefs and Attitudes:  Belief that online shopping is efficient promotes use; skepticism reduces it. Positive attitudes toward brands increase loyalty, while doubts cause hesitation. Example: A user avoids online payment due to a belief it’s risky.

4. Social Factors

• Social Media Influence: Influencers and trends on platforms like TikTok sway consumer choices. Peer posts or viral content create urgency to buy. Example: A teen buys a hoodie after seeing it on a TikTok influencer.
• Family and Peers: Recommendations from loved ones heavily influence online decisions. Family needs or joint choices shape what’s bought. Example: A student buys a phone on Daraz after a friend’s suggestion.
• Cultural Influence: Traditions and societal norms drive demand for certain items online. Festivals or local values affect purchase timing and preferences. Example: A Nepali buys gold jewelry online during Dhanteras.

Online Purchase Decision Process

1. Problem/Need Recognition: This is the first step where a consumer realizes they have a need or problem that requires something new, like a product or service, to solve it, starting their online buying journey. It can happen because of a personal feeling, such as needing food when hungry, or something outside, like seeing an advertisement for a cool gadget, making them aware they want it. Example: For instance, a student in Nepal notices their phone isn’t working well because the battery runs out fast, so they understand they need to get a new one to keep up with studies and friends.

2. Information Search: After knowing they need something, consumers go online to find out more, using websites, apps, or search tools like Google to look for products that can meet their need. They check things like product details, prices, or what other people say about it, taking advantage of how much information is available online to learn before deciding. For instance, The same student goes online and types “best phones under Rs. 20,000” into Google, then visits Daraz to see what phones are available, reading descriptions and customer comments to get a good idea of their options.

3. Evaluation of Alternatives: In this step, consumers take the information they found and compare different products they could buy, looking at things like cost, quality, or how well each fits what they want. They might use online tools, read reviews, or watch videos to see which option is the best, making this easier because everything is right there on their screen. The student looks at a few phones on Daraz and compares them, checking which one has a better battery or camera by reading what other buyers wrote and looking at the prices to pick the right one for their budget.

4. Purchase Decision: Now, the consumer chooses one product and buys it online, deciding based on what they learned and things like how easy it is to pay or how fast it will arrive at their home. They’re more likely to buy if the website feels safe and offers good deals, turning their research into an actual purchase with a few clicks. After comparing, the student picks a phone on Daraz and buys it using cash-on-delivery because there’s a discount during Dashain, feeling confident since Daraz is a known site with quick delivery.

5.Post-Purchase Behavior: Once the purchase is done, consumers think about whether they’re happy with what they got, like if it works well or arrived on time, which affects if they’ll shop there again. They might tell others what they think by writing a review online or talking to friends, sharing their experience in a way that can help or warn other shoppers. Example: The student gets the phone, loves how it works, and writes a review on Daraz saying “Great phone, fast delivery!”—this makes them want to use Daraz again and tells their classmates about it too.

Digital Commerce Marketing and Advertising Strategies and Tools

Digital marketing commerce refers to the use of online platforms and digital tools to promote and sell products or services directly to consumers through the internet. It combines marketing efforts—like advertisements and social media—with e-commerce activities, such as managing online stores, to drive sales and build customer relationships in a digital space.

Advertising Strategies

Search Engine Optimization (SEO): SEO is a strategy where businesses improve their website to rank higher on search engines like Google by using specific words, good content, and technical fixes, so people find them easily without paying for ads. It’s effective because it brings in customers who are searching for related products or services naturally, building long-term visibility and trust.  Example: A Nepali online bookstore adds keywords like “best novels in Nepal” to their site, so they appear on Google’s first page when students search, leading to more visits and sales.

Search Engine Marketing (SEM): SEM involves paying for ads on search engines like Google to appear when people search for specific terms, helping businesses connect with customers who are already interested. It’s effective because it targets people actively looking for solutions, boosting website visits and sales quickly. Example: A Nepali clothing store runs a Google ad for “buy kurtas online in Kathmandu,” driving traffic to their site during festive seasons.

Social Media Marketing: This strategy uses platforms like Facebook, Instagram, or TikTok to promote products through posts, stories, or ads, engaging users with visuals and interactive content. It works well because it reaches large audiences where they spend time, building brand awareness and encouraging purchases. Example: A Nepali phone seller posts a video of a new model on Instagram, targeting youth aged 18–25, leading to more online orders.

Content Marketing with Ads: Businesses create useful content like blogs or videos and promote it with paid ads to attract customers, focusing on informing rather than hard selling. It builds trust and interest over time, making people more likely to buy later. Example: A Nepali tea company promotes a blog post about “Health Benefits of Himalayan Tea” on Facebook, linking readers to their online shop.

Pay-Per-Click (PPC) Advertising: PPC lets businesses pay only when someone clicks their ad, which can appear on search engines or websites, offering a cost-effective way to reach interested buyers. It’s useful for controlling budgets while targeting people ready to take action.  Example: A Pokhara travel agency runs a PPC ad on Google for “cheap flights to Mustang,” paying only when travelers click to book.

Retargeting Ads: Retargeting shows ads to people who visited a site but didn’t buy, reminding them of products to bring them back and complete the purchase. It’s powerful because it focuses on users already familiar with the brand, increasing sales chances. Example: A student browses shoes on Daraz but leaves; later, they see an ad for those shoes on YouTube and return to buy.

Email Marketing: This strategy sends targeted emails with offers, updates, or product info to people who’ve signed up, keeping them engaged and encouraging repeat purchases. It’s effective because it’s personal and direct, reaching customers right in their inbox with tailored messages. Example: A Nepali handicraft store emails a “20% off” coupon to past buyers, prompting them to order again during Dashain.

Affiliate Marketing: Businesses pay partners (affiliates) like bloggers or websites a commission to promote their products and drive sales through special links. It works by expanding reach through trusted voices, only costing money when sales happen. Example: A Nepali gadget site pays a tech blogger to review a phone, earning a commission when readers buy it via the blog’s link.

Influencer Marketing: Companies team up with popular online personalities (influencers) on platforms like Instagram or YouTube to promote products to their followers. It’s successful because followers trust influencers, making them more likely to try recommended items. Example: A Kathmandu makeup brand pays a TikTok influencer to show their lipstick, leading followers to buy it online.

Advertising Tools

Google Ads: This tool helps businesses create ads that appear on Google searches or partner sites, targeting users by keywords with options to set budgets and track results like clicks or sales. It’s popular because it reaches millions and provides clear data to improve campaigns. Example: A Nepali electronics shop uses Google Ads to promote laptops to people searching “best laptops under Rs. 50,000,” increasing store visits.

Facebook Ads Manager: A tool for running ads on Facebook and Instagram, it allows businesses to choose who sees them (like age or interests) and use visuals to grab attention. It’s handy because it’s easy to use and targets social media users effectively for better engagement. Example: A Kathmandu café runs a Facebook ad for a new coffee flavor, targeting coffee fans aged 20–35, leading to more online orders.

Mailchimp: Mailchimp sends ad emails to customers, sharing deals or news, and tracks who opens or clicks them to measure how well they work. It’s useful for staying connected with buyers and encouraging sales with personal messages. Example: A Nepali handicraft store uses Mailchimp to email a “10% off” deal, encouraging past buyers to shop again.

Hootsuite: Hootsuite schedules and posts ads on social media like Twitter or Instagram at the best times, showing how many people engage with them. It saves time and helps businesses stay active online to reach more customers consistently. Example: A Nepali travel company schedules tour package ads on Facebook via Hootsuite, gaining more bookings from timely posts.

Google Analytics: This tool tracks how people interact with ads and websites, showing clicks, sales, or visits to help businesses understand what’s effective. It’s key for improving ads by analyzing customer behavior and campaign success over time. Example: A Nepali bookstore uses Google Analytics to see a PPC ad for textbooks led to 100 sales, refining their next campaign.

Shopify: Shopify is an e-commerce platform that also offers tools to create ads, manage online stores, and track sales, helping businesses sell directly online. It’s useful because it simplifies selling and integrates marketing with a store setup for smooth operations. Example: A Nepali jewelry seller uses Shopify to run ads for necklaces and sees which ones sell best, adjusting their stock accordingly.

HubSpot: HubSpot is a tool that combines customer relationship management (CRM), email marketing, and ad tracking, helping businesses manage leads and run campaigns from one place. It’s valuable because it connects marketing efforts with sales data, making it easier to target and convert customers. Example: A Nepali clothing brand uses HubSpot to send personalized sale emails and track which customers buy, improving their next campaign.

Hotjar: Hotjar tracks user behavior on websites with heatmaps and recordings, showing where people click or stop, helping businesses improve their site and ads. It’s great for understanding what customers like or find confusing, leading to better marketing decisions. Example: A Nepali online gift shop uses Hotjar to see users ignore a checkout button, then moves it higher, increasing sales.

Moz: Moz helps businesses improve their SEO and track ad performance by analyzing keywords, site ranking, and competitors, making it easier to get noticed online. It’s effective for planning smarter campaigns by showing what works in search results. Example: A Nepali travel agency uses Moz to find popular keywords like “trekking in Nepal,” boosting their site’s rank and ad clicks.

Online Marketing Technologies

Same as Advertising strategies ( SEO, SEM, Content marketing .............all)

Understanding the Costs and Benefits of Online Marketing Communication

Costs of Online Marketing Communication

Financial Costs: Businesses need to spend money on creating ads, buying tools, or hiring people to manage online campaigns, which can add up quickly depending on the scale. This investment is necessary to reach customers but can strain budgets, especially for small companies starting out. Example: A Nepali clothing store spends Rs. 10,000 monthly on Google Ads and Rs. 5,000 on a graphic designer to make attractive banners.

Time Costs: Planning, creating content, and monitoring online communication takes a lot of time, as businesses must keep updating posts or replying to customers to stay relevant. This effort can slow down other work if not managed well, making it a hidden cost of staying active online. Example: A Kathmandu café owner spends 2 hours daily posting on Instagram and answering customer messages about new flavors.

Technology Costs: Companies must pay for software, websites, or fast internet to run smooth online communication, and these expenses grow with more advanced tools or bigger audiences. Without this tech, campaigns can fail, but it’s a cost that not every business can afford easily. Example: A Nepali travel agency pays Rs. 3,000 monthly for Mailchimp and Rs. 10,000 yearly for a website host to send emails and attract tourists.

Opportunity Costs: Focusing on one type of online communication, like social media ads, might mean missing out on other methods, like email campaigns, which could also work well. This trade-off can limit growth if businesses don’t balance their efforts across different channels. Example: A Pokhara gift shop spends all its budget on Facebook ads and misses the chance to reach older customers through Google search ads.

Benefits of Online Marketing Communication

Wide Reach: Online communication lets businesses connect with people across cities or even countries at a low cost, unlike traditional ads that stay local. This global access helps small companies grow fast by finding new customers beyond their physical area. Example: A Nepali handicraft store uses Instagram to sell handmade rugs to buyers in the USA, reaching thousands without a physical shop there.

Cost Efficiency: Compared to TV or newspaper ads, online methods like social media posts or emails are cheaper and can reach more people for less money. This makes it easier for businesses to get results without spending a lot, especially with free tools or small budgets. Example: A Biratnagar bakery spends Rs. 2,000 on a Facebook ad and reaches 5,000 people, cheaper than a Rs. 10,000 newspaper ad for fewer readers.

Measurable Results: Businesses can track exactly how many people see, click, or buy from online communication using tools like Google Analytics, making it easy to see what works. This data helps them improve campaigns quickly, unlike traditional ads where results are harder to measure. Example: A Nepali phone seller sees their Google ad got 200 clicks and 20 sales, so they adjust it to focus on top-selling models.

Customer Engagement: Online channels let businesses talk directly to customers through comments, chats, or emails, building stronger connections and trust over time. This two-way interaction makes customers feel valued and more likely to buy again or recommend the brand. Example: A Kathmandu shoe store replies to a customer’s query on Instagram about sizes, leading to a sale and a happy review.

Flexibility: Companies can change online communication fast—like updating an ad or sending a new email—if something isn’t working or a trend pops up. This quick adaptability helps them stay relevant and grab opportunities that traditional methods can’t match. Example: During Dashain, a Nepali electronics shop switches their ad from TVs to festive lights in a day, boosting sales instantly.