E-COMMERCE

CHAPTER 3

INTERNET / E PURCHASING DECISION MAKING PROCESS

ROLE OF INVOLVED PEOPLE

a. Initiator. A persona who first thinks of buying a particular product / service.
b. Influencer. A person whose advice carries weight in making a final buying
decision for product / service.
c. Decider. A person who ultimately makes a buying decision.
d. Buyer. A person who makes an actual purchase of for product / service.
e. User. A person who consumes or uses a product or service.

DECISION MAKING MODELS

1. Purchasing Decision Making Models. It is consist of five major phases as
shown in a model below. In each phase, we can distinguish several activities.
Although these stages offer a general guidance to the consumers decision making
process, but not to be assumed that it will always proceed in same order. The
Iterative & Repetition aspects in the process are explained below;-
a. Iterative. It means to look at the errors & shortfalls occurring at any
phases of the process and carry out repeat action activities, starting from
any stage of the phases less the phase /step one.
b. Repetition. It means to look at the errors & shortfalls occurring at any
phases of the process and carry out repeat action activities, starting from
any stage of the phases including the phase /step one.
Model Generic / Purchasing Decision Making Process
Need Identification (Recognition)

Info Collection (What & whom?)

Alternative Eval, Negotiation & Selection

Purchase & Delivery (Execute)

After Sales - Purchase Activity / Services, Eval

2. Customer Decision Model in Web Purchasing. In this model , each phase of the
purchasing can be supported by both CDSS facilities & generic Internet & Web
facilities; CDSS facilities support specific decision in the process, while generic
technologies provide information & enhance communication.
3. A Model of Internet Consumer Satisfaction. This model is based on the
assumption that a repeat Web purchase is mainly determined by customer
satisfaction. Understanding these & similar models is essential for :-
a. Development of consumer relationship
b. Increasing customers satisfaction.

DATA MINING

Definition
It is a tool that the marketers use to sift through the large amount of data in order
to analyze the buying habits.
Starting Process.
Large companies such as retailers, build large database in the form of warehouses
to store the information i.e, customers daily accumulated data , and while searching of
valuable business information through this would mean the start of data mining process.

Capabilities of Data Mining

1. Automated prediction of trends & behaviors.
a. Data mining automates the process of finding predictive information in
large databases.
b. Data mining can use data on past promotional mailings to identify the
targets favorably responding the future mailings.

2. Automated discovery of previously unknown patterns.

a. Data mining tools identify previously hidden patterns.
b. An example of pattern discovery is the analysis of retail sales data to
identify apparently unrelated products that are often purchased together.
 Characteristics &Objective of Data Mining
1. Relevant data are often difficult to locate in very large databases.
2. In some cases the data are consolidated in a data warehouse and data marts.
3. The miner is often an end user, empowered by data drills & other power
query tools.
4. Striking it rich often involves finding unexpected, valuable results.
5. Data mining tools are easily combined with spread sheets and other end-user
software development tools.
6. Data mining yields five types of information:-
a. Association
b Sequences
c Classifications
d Clusters
e Forecasting.

Well Known Tools of Data Mining

1. Neural Computing. It is a machine learning approach by which historical data

can be examined for patterns.
2. Intelligent Agents. It is one of the most promising approaches to retrieve
information from the Internet or from intranet-based databases .
3. Association Analysis. It is an approach that uses a specialized set of algorithms
that sorts through large data sets and expresses statistical rules among items.
4 A Sample of Data Mining Applications. According to a prediction, that by
year 2000 at least half of all the Fortune 1000 companies world wide will be using
data mining technology.
 PROCEDURE FOR INTERNET SHOPPING
(On Line Shopping Life Cycle)

1. Determination of Preliminary Requirement. Suppose Tom as his first need

determination, wants to access the Internet by buying a personal computer installed with
a word processor & spreadsheet software in it. He may buy if price is matching his kitty.
2. Search for Available Items. Tom can start by consulting one of the search
engines listed which will help him in searching of aval items by entering / visit several
online department stores, discount stores, auction sites, and factory outlets..
3. Compare the Candidate Items with Multiple Perspective. E-Broker Compare
Net helps Tom in following two ways.
a. Searching for the products as required
b. Display the comparison table in terms of specification and price.
4. Place an Order. Suppose Tom has selected a PC from Dell, he can place the
items in the shopping cart and click the checkout button to order.
5. Pay for the Goods. To pay with a credit card, buyers select a card type and
key-in the name of the card, card number, and expiration date, much as when shopping
over the phone.
6. Receive the Delivered Items and Inspect their Quality. As the selected items
are ordered and paid for, the vendor will arrange the delivery. In this example, Dell may
use its own truck, whereas Amazon will ask Fed Ex to deliver.
7. Contact the Vendor to Get After Service and Support, or Return the Goods if
Disappointed. Suppose, Tom needs support in installing the system, the intel service
department may provide physical assistance. While, his neighbor, who bought a computer
from Dell, consulted Dells service on Dells home page and found there may be no need
for a physical visit.
 MODEL

Personality Characters Environmental Characterizes

Age, gender, education, Social, Family, Communities
personality. Life style, values
psychological, knowledge.

Buyers Decisions
Stimuli Buy or not,
Mark Others what to buy
Purchase Eco Decision
where & when
Promotion Tech making process
how much to spend
Product Pol repleat purchases.
Quality Culture

Vender Contacted System

Log Sp Tech Sp Customer Svc
Payment Web Design FAO
Delivery Int Agent E-mail
Call Centre
One to one