Instructor’s Manual
Chapter 4
Online Consumer Behavior, Market Research, and
Advertisement
Learning Objectives
Upon completion of this chapter, you will be able to:
1. Describe the factors that influence consumer behavior online.
2. Understand the decision-making process of consumer purchasing online.
3.Describe segmentation and how companies are building one–to-one relationships with
customers.
4. Explain how consumer behavior can be analyzed for creating personalized services.
5. Discuss the issues of e-loyalty and e-trust in electronic commerce (EC).
6. Describe consumer market research in EC.
7. Describe the objectives of Web advertising and its characteristics.
8. Describe the major advertising methods used on the Web.
9. Describe various online advertising strategies and types of promotions.
10. Describe permission marketing, ad management, localization, and other advertising-related
issues.
Content
Opening Case: Netflix Increases Sales Using DVD Recommendations and Advertisements
4.1 Learning About Consumer Purchasing Online
4.2 Personalization, Loyalty, Satisfaction, and Trust in EC
4.4 Web Advertising
4.6 Advertising in Social Networks and the Web 2.0 Environment
4.8 Special Advertising Topics
Supplementary Videos for this Chapter
1. Web 2.0 Advertising Crucial in a Word of Mouth World (6 min)
A description of how Web 2.0 tools, such as blogs and social networks, facilitate viral
advertisement.
3. What is Data Mining (for an association)? (6:05 min)
Chapter 4
Page 3
Answers to Pause/Break Section Review Questions
4.1 Section Review Question
1. List the five phases of the generic purchasing-decision model.
2. Use an example to explain the five phases in the generic purchasing-decision model.
Student examples will vary.
3. Describe the supporting functions available in Web-based purchasing.
This model is divided into three parts. The first part examines the three stages of buyer behavior:
4. Describe the major players in a buy decision.
5. Define the one-to-one marketing approach.
4.2 Section Review Questions
1. Explain how personalization (matching people with goods/services) is done.
Personalization of goods and services for unique individuals requires information from the
2. List the methods of customer profiling.
3. Define loyalty and describe e-loyalty.
4. Describe the issue of trust in EC and how to increase it.
5. What influences customer satisfaction online? Why do companies need to monitor it?
4.3 Section Review Question
1. Describe the objectives of market research.
2. Define and describe segmentation.
Market segmentation is the process of dividing a customer market into logical groups for
3. Describe how market research is done online and the major market research methods.
Online market research is very similar to the research that would be done off-line. Online
4. List the major methods of data collection in the Web 2.0 environment.
A variety of potential methods exist and they are listed on page 142.
5. Describe the role of Weblogs and clickstream analysis.
6. Relate cookies, Web bugs, and spyware to market research.
7. Describe the limitations of online market research.
The major limitation of online market research is the sample and characteristics of Web users.
Section 4.4 Review Questions
1. Define Web advertising and the major terms associated with it.
Web advertising is the use of the World Wide Web to advertise to customers. Some important
2. Draw and explain the advertising cycle.
This cycle is seen in Exhibit 4.3
3. Describe the reasons for growth in Web advertising.
Advertisers are looking to the Web because it is a viable advertising medium. Individuals may be
4. Describe emerging Internet advertising approaches.
5. List the major benefits of Web advertising.
Chapter 4
Page 6
Section 4.5 Review Questions
1. Define banner ads and describe their benefits and limitations.
2. Describe banner swapping and banner exchanges.
3. Describe the issues surrounding pop ups and similar ads.
4. Explain how e-mail is used for advertising.
It is possible for advertisers to send out large volumes of advertisements contained inside e-mail
5. Describe advertising via classified ads.
6. Describe the search engine optimization technique.
7. Describe Google’s AdWord and AdSense.
8. Describe viral marketing (advertisement) on the Web.
Section 4.6 Review Questions
1. Describe advertising on social networks.
Chapter 4
Page 7
2. Describe video ads and their advertising approach.
3. List success factors of video ads.
4. How do social networks provide viral marketing?
Section 4.7 Review Questions
1. Discuss the process and value of affiliate marketing.
2. How does the ads-as-a-commodity strategy work?
3. What are personalized ads?
4. What is a live event?
5. List some typical Internet promotions.
Section 4.8 Review Questions
1. Describe permission advertising.
Chapter 4
Page 8
2. What is localization? What are the major issues in localizing Web pages?
3. How is wireless advertising practiced?
4. What is the importance of ad content?
5. Describe the role of software agents in advertising.
6. Define localization in advertising.
EC Application Cases
EC Application Case 4.1: Internet Market Research Expedites Time-To-Market at Proctor &
Gamble
1. How did P&G reduce time-to-market?
2. What was data mining used for?
3. What research methods were used?
Chapter 4
Page 9
Individual Discussion Questions
1. Discuss the similarities and differences between data mining, text mining, and Web mining.
2. Discuss the importance of videos as an advertising media.
3. Relate banner swapping with a banner exchange.
4. Discuss why banners are popular in Internet advertising.
Banners are popular in Internet advertising because they provide several advantages to advertisers.
5. Explain how Google generates targeted ads.
6. Discuss the relationship between market research and advertisement (see Atlas Solutions at
atlassolutions.com for a start).
7. Discuss the advantages and limitations of listing a company’s URL with various search engines.
8. How can a company use Facebook for advertising? (Hint: See Online File W4.13.)
9. Examine some Web avatars and try to interact with them. Discuss the potential benefits and
10. When you buy a banner ad, you actually lease space for a specific time period. In
milliondollarhomepage.com you buy the space forever. Compare and discuss.
Class Discussion Questions
1. Is it ethical for a vendor to enter a chat room operated by a competitor and pose queries?
2. Some suggest that cookies should be made illegal. Discuss.
Student opinions and responses will vary.
3. Netflix.com, amazon.com, and others view historical purchases as input available for use in
their recommendation systems. Some believe that this is an invasion of privacy. Debate this issue.
Student opinions and responses will vary.
4. Some say that you cannot provide one-to-one advertising without violating privacy. Discuss.
Student opinions and responses will vary.
5. Some say that people come to social networks to socialize and they will not accept ads.
Discuss.
Student opinions and responses will vary.
6. What strategic implication do you see for companies that use videos, mobile devices, and social
networks as platforms for advertising?
Student opinions and responses will vary.
Internet Exercises
(Note: URLs may change over time; please check the Internet Exercises on the Turban Web
site for possible updates: www.pearsonhighered.com/turban.)
1. Enter netflix.com/affiliates. Describe the value of the program as a marketing channel.
2. Examine a market research Web site (such as acnielsen.com or claritas.com). Discuss what
might motivate a consumer to provide answers to market research questions.
3. Enter mysimon.com and share your experiences about how the information you provide might
be used by the company for marketing in a specific industry (e.g., the clothing market).
4. Enter marketingterms.com and conduct a search by key words as well as by category. Check
the definitions of 10 key terms in this chapter.
Student answers will vary.
5. Enter 2020research.com, infosurv.com and marketingsherpa.com, and identify areas for
market research about customers.
6. Enter en-us.nielsen.com/tab/industries/media and view the demos on e-market research. Then
go to clickz.com and find its offerings. Summarize your findings.
Student responses will vary.
7. Enter selfpromotion.com and find some interesting promotion ideas for the Web.
Student responses will vary.
8. Enter hotwire.com and espn.com. Identify all the advertising methods used on each site. Can you
find those that are targeted advertisements? What revenue sources can you find on the ESPN site?
(Try to find at least seven.)
Student reports will vary.
9. Visit adweek.com, wdfm.com, ad-tech.com, iab.com, and adage.com and find new developments
in Internet advertisement. Write a report based on your findings.
Student reports will vary.
10. Enter clairol.com to determine your best hair color. You can upload your own photo to the
studio and see how different shades look on you. You can try different hairstyles. It is also for men.
How can these activities increase branding? How can they increase sales?
Student reports will vary.
11. What resources do you find to be most useful at targetonline.com, clickz.com, admedia.org, i-
m.com, and wdfm.com? Describe useful information for online marketing that you have found from
these Web sites.
Student reports will vary.
12. Enter linkedin.com (you can sign in as a member for free) and find what marketing and
advertising a company can conduct there.
13. Enter zoomwerang.com and learn how it facilitates online surveys. Examine the various
products, including those that supplement the surveys. Write a report.
Student reports will vary.
14. Enter pewinternet.org and pewreasearch.org. What research do they conduct that is relevant
to B2C? To B2B? Write a report.
Chapter 4
Page 13
15. Enter omniture.com. How does it help with site optimization? What other services does it
provide?
Team Assignments and Role Playing
1. Enter harrisinteractive.com, infosurv.com and similar sites. Have each team member examine
the free marketing tools and related tutorials and demos. Each team will try to find a similar site
and compare the two. Write a report discussing the team’s findings.
2. Each team will choose one advertising method and conduct an in-depth investigation of the
major players in that part of the ad industry. For example, direct e-mail is relatively inexpensive.
Visit the-dma.org to learn about direct mail. Then visit bulletmail.com, ezinemanager.com,
permissiondirect.com, and venturedirect.com. Each team will prepare and present an argument as
to why its method is superior.
Student reports will vary.
3. In this exercise, each team member will enter uproar.com, to play games and win prizes. What
could be better? This site is the destination of choice for game and sweepstakes junkies and for
those who wish to reach a mass audience of fun-loving people. Relate the games to advertising and
marketing.
Student reports will vary.
4. Netflix, Amazon.com, and others view historical purchases as input available for use in their
recommendation systems. Some believe that this is an invasion of privacy. Debate this issue.
Student reports will vary.
5. Enter autonlab.org and download tools for conducting data mining analysis (these downloads
are free). Get data on customer shopping and analyze it.
Student reports will vary.
6. Create two teams. One will investigate advertising practices on craigslist.org and the other on
kijiji.com. Each team will prepare a list of practices used by the sites. The differences should then
be summarized.
Student reports will vary.
Answers to End-of-Chapter Real-World Case Questions: TOYOTA SCION
GOES SOCIAL FOR ADVERTISING AND MARKET RESEARCH
1. Identify all advertising actions and relate them to the methods described in this chapter.
2. Identify all activities that can be considered market research.
3. What can increase loyalty?
4. Identify personalization methods provided by Scion.
5. Find advertisement and market research activities conducted by Scion that are not cited in this
case.
Student searches will vary.
6. Identify viral marketing activities in this case.