Dynamics of Behavioral Marketing Approaches for E-Commerce Business

Introduction

It initially sounded like a winning situation – absolute free money – for all internet access providers. By simply tracking their users personal surfing habits, they can effectively deliver ads to their target audience interests and claim a portion of the budding online advertising market heavily dominated by internet search companies, but these efforts to determine consumer interests through the internet in on a decline. Before we address the issues in Qatar, let’s take a more global perspective. A privacy storm issued through Nebula Inc. the Silicon Valley based firm that can assist web tracking. And its obvious partners the ISP providers failed to make a valid case that they should be a part of the advertising business, instead of being a channel that passes internet traffic to and fro. Gradually all cable and telephone companies that had tried NebuAd’s advertisement serving system have put aside expansion plans. In media interviews, company executives have blamed the unstable climate as congress has tightened federal laws. Firms like Google and Yahoo usually track users online could experience their online advertising growth slow down because of certain federal, state and consumer inhibitions with these practices is predicted by a financial research group. (Potter, 367, 2005)

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The Standford Group of Industries pointed to state legislation in New York and Connecticut to safeguard consumer’s online privacy along with the Trade commission for self regulation as well as complaints which will lead to worldwide increased regulation on online advertising. This research group also found that TNS Global found 42 percent of web users would decline the online tracking if given the choice. “We believe that the growing government involvement is going to provide consumers the option to opt out of online tracking, which will substantially reduce the web users that can be targeted through advertising.” The group said in statement. Some state that online advertising may be considered harmful to consumers. Also that the merger off Google and DoubleCLick would also have adverse affects, to such an extent that it will encourage more targeted advertising. But these critics can rarely provide concrete examples of such harms done. The typical aim of online advertising is ad impression is to limit the number of times an ad is exposed to a particular consumer. This means that after you have viewed a blue car about six or seven times the server will switch the image to a red one or another advertisement. This basically means that a viewer will see different ads opposing to a single advert. People believe that is good for both consumers and advertisers. People tend to get sick of watching same ads over and over again, till it turns repulsive. With development of technology there are ore effective ways of advertising through the internet which will allow effective matching between buyers and sellers. Again, a consumer would prefer to see relevant ads than being bombarded with tons of irrelevant advertisements. When on a travel site you really don’t want to see adverts of children toys, just like televisions that show irrelevant ads. (Nickels et al 2002)

Many if not all hate unsolicited marketing through telephone. So came into existence a regulation “do not call” answer. It is difficult to determine which particular online advertising practices and therefore makes it difficult to come up with a remedy. Websites which provide internet users with free content like downloading, email and social networking try to generate revenue through advertisements to pay journalist and web support costs. These websites should have a vote in whether they should be compelled to provide free content without the liberty of matching consumers to content of some basic criteria. It is an established fact that free sites are more respectable to privacy than paid sites. This is obvious as paid sites as required to acquire their users entity and real credit card numbers, while free website allow anonymous browsing. Google has always in the past and in the future involve it self in a better privacy policy debate regarding the internet privacy issue. Issues pertaining privacy and security of data are of great importance to Google, as maintaining user trust is essential for over success of the business. Google firstly has a strong incentive to practice a stricter and stronger privacy and secure policies in aim of safeguarding user data to retain market share. It is for this reason that till date Google has refused to display adverts from third party advertisements. The new proposed transaction will in no way change Google’s commitment to its privacy maintenance, and along with this Google is now in the process of developing a totally revamped privacy policy to address the added data gathering by third party advertisements. However with this step by Google many of its competitors have now vowed to develop services that will provide consumers with better privacy of data, simply addressing the robustness of recent debate on the privacy issue. It can be deduced that such completion will be greatly decline if Google takes over DoubleClick, while in reality we can see such competition intensify. Privacy is a pressing issue in the world of online advertisements. But it may not be an issue of a competition law to review. (Nickels et al, n.p., 2002)

Marketers are in a constant flux to develop new strategies and expand their markets and achieve advantages presented by economies of scale through globalization. The aim of every supplier all around the world is to effectively tap their target audience, to effective inform them of the commodity being offered and make a sale, many methods have been employed and revolutionized and of this the newest being digital advertising. This method provides the opportunity to easily manipulate and work with the content in hand. An example of this may be that data sent to mobiles and internet can be detected and traced easily. Online advertising has changed the realm of advertising in the past few decades by adding a lot more features t the conventional brick and mortar advertising could only imagine. Chief Executive Officer of the interactive advertising bureau (IAB) Mr. Rothenberg that the field of interactive marketing has been steadily growing and developed vitality and more areas of expansion are expected wince consumers in this age are spending double the time online compared to the past. (Potter, 367, 2005)

Internet has recently gained a lot of popularity in third world countries. In countries like Qatar when research was carried out it was found that internet usage had grown by over sixteen percent. The majority of which contained digital subscriber’s line, internet accounts have risen from fifty thousand to about eighty thousand. With the growth of internet based businesses like Armex international limited. A courier provider who opens clients’ mailboxes in UK and USA for their online shipping accounts. Today internet advertisements are able to track down users with the use of cookies and other complicated algorithms to provide the accurate information to the end user. In this way companies can efficiently spend their marketing budgets; by targeting only those potential users. This is made realizable by using the various media options i.e. cost per mile or cost per click of mouse and cost per acquisition. As an example may be a company as per wish may buy advertising space but only to be shown on an oil and gas website and only when a certain individual us accessing the particular pages to maximize revenue to achieve these certain results, behavioral approaches targeting the advertisements for internets are used. Companies like Phorm or NebuAd are said to have developed new software’s that are pre installed on networks of internet service providers which usually intercept web pages requests generated by the users and they surf the internet. These pages in question are delivered as per request but are scanned for certain key words to build a general profile of the user’s interest. These profiles are then used in targeting consumers more effectively. The future still presents to be a little is expected to get more technologically sophisticated as seen in movies like the minority report where the actor Tom Cruise passes by a billboard and the billboard recognizes him and says “Hello Tom.” (Potter, 367, 2005)

Research background / Significance of Study

The framework within which this study is being conducted constitutes the contributions of the behavioral marketing models that have been recommended and adopted by various business organisations in the technology savvy milieu. Behavioral and relationship marketing models have been hailed for their feasibility and effectiveness in fostering long term relationship between business organisations and the clientele base. The models play expediently into conceptual and strategic thrusts aimed at precipitating customer retention for e-businesses establishments. It is in this conceptual and theoretical framework/extension that this study has been spurred in the objective of; among other things, exploring the feasibility of direct and behavioral marketing models in enhancing management and marketing approaches to yield meaningful proportions of customer retention in e-commence business landscapes.

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Significance of study

The study will lay valuable contributions in various bodies of knowledge related to the domains of marketing and business management as well as well inform e-business marketing strategy formulations and implementations. More specifically the study has a wealth of novel insights regards the feasible ways of enhancing customer retention particularly for e-commerce and e-business typical business establishments.

The study will empower professionals in the related business management and leadership domains with innovative ways of shifting from typically product pushing orientations to customer satisfaction paradigmatic inclinations. The study has valuable contributions in the development of models for e-business personnel empowerment with regards to customer problem resolutions. This will highlight the significance of streamlining personnel into active involvement in marketing management stratagems aimed at fostering lasting relationships with the clientele through the cyber interface. Apparently the thrust has direct positive implications for the optimization of service provisions and product promotion through the utilisation merits of cyber technology

On another dimension, it will be expedient in contemporary marketing studies and management to consider novel ways of expanding service and offering customers a wide range spectrum of products. The study thus lays formidable contributions on various bodies of knowledge ranging from marketing strategy and management, sustainability, and customer satisfaction, risk management, for the e-business sectors and beyond.

Purpose and Aims of study

The purpose of the study is explore feasible dynamics of behavioral marketing approaches that can be adopted by e-commerce and all other business forms that have acute e-tech thrust in their multidimensional business models.

Aims of study

The study aims to achieve the following:

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  • To establishment the relationship between behavioral marketing and customer retention in cyber business interfaces
  • To establish if especially e-business management as a discipline has means at its disposal to ensure and enhance customer retention
  • To asses the merits that various marketing models offer for the challenges of retaining clientele bases for e-busineses.

Research Questions

The research exercise is hinged on the following research questions:

  • Is there a relationship between behavioral marketing and customer retention?
  • Do firms have business management and marketing models germane for ensuring and enhancing customer retention?
  • What merits do different marketing approaches offer for strategies of achieving meaningful customer retention trough the cyber landscape?

Research Hypothesis and Research Propositions

In light of the foregoing, the research will be premised in the understanding that businesses (e-businesses) face stern challenges on the fronts and objectives of retaining customers and consolidating their growth and sustainability prospects. This is illustrated by the fact that in cyber domain competition for business is just a click away. The research drive proposes the conduct a deep thrust into exploring the dynamics of effectiveness and efficiency behavioral marketing models in the pretext that performance has direct impact of customer satisfaction and that particulate marketing models offer feasible concepts for the accomplishments of customer retention and satisfaction strategic goals.

Dissertation Core Hypotheses

The major hypothetical position of the study is interested in establishing and illuminating the dynamics and essence of behavioral marketing on the cyber interface as exemplified by the Google marketing strategies. The hypothesis is leveraged on other sub-hypothetical positions (below) as a way of conducting a holistic approach towards the answering of research questions

Sub-hypotheses

The sub-hypotheses enlist that there are particular marketing theories that offer feasible tenets and concepts for enhancement of performance, efficiency and retaining e-businesses’ clientele pools. From another dimension it is supposable that companies are facing stern challenges posed by stiffening the cyber markets competition. E-commerce firms are thus in quest for more effective marketing approaches and strategies to achieve customer satisfaction, retention and thus leverage their growth and sustainability.

Hypothetical thrust

The trust of the study is based on the point of confluence for the dimensions of achieving marketing effectiveness, enhancing performance customer retention and customer satisfaction. The conceptual nucleus of the point confluences pitting the foregoing dimensions defines the object of this study in line with e-business companies’ strategic approaches to achieving growth and sustainability as well as competitiveness goals.

Surmised Relationships

There is a surmised relationship between behavioral marketing approaches and customer retention. There is also a further supposed relationship between a company’s levels of customer retention and profitability. The study will test these presented hypotheses to arrive at meaningful establishments as responses to research questions as well as culminate in comprehensive conclusions and recommendations.

Variables to Be Tested

The research thrust will entail the testing of perceived relationship between customer retention e-businesses and their margins of profitability. The study supposes that companies which employ feasible e-marketing models have better profit margins than the companies with low customer retention figures. Reichheld et al (1990) claim that a 5% improvement in customer retention can cause an increase in profitability of between 25 and 85 percent (in terms of net present value) depending on the industry. This will be tested by drawing some data on company performances with regards to the impact of that on companies’ profitability.

Motivation for Study

The study has been spurred by the identified need to explore the dynamics that charcterise challenges faced by e-commerce and e-business firm with regards to the variables of marketing models, customer retention and the major goals of growth, competitiveness and long term sustainability.

Justification and significance of Study

The study will also make significant contributions in the way of highlighting the gaps that exist between customer expectation and the customers’ perceptions of the services rendered e-business establishments. Further more the study entails perceivably feasible means of diminishing the negative gaps and ensuring that perceptions of the customers are noted and where need be, addressed in all means effective for the accomplishments of customer satisfaction as one of the long term strategy elements of achieving customer satisfaction and hence retention.

By extension the study also presents points of confluence and divergence in the pool of propositions and concepts entailed in a plethora of research contributions by various professionals, authors and scholars. The significance of the exploration of the contributions lies in the way of evaluating presented models and concepts of customer retention and hence the capacity to evaluate and adopt feasible models that will suffice for the custom needs of different e-commerce firms’ endeavors and strategies of business growth and long term sustainability.

The study will shed light into presenting the dynamic of customer retention as holistic and multi-dimensional paradigm that must engage Business Strategic IT/IS, marketing management and customer orientated business thrust for e-commerce.

Overview

Chapter 1

The first chapter of the study entails the research content component which deals with enunciating the broader theoretical and conceptual framework within which the research is being conducted. Also included in the first chapter is the significance of the study whose import serves to state and indicate why and how the study is necessary and valuable to various bodies of knowledge.

The first chapter also presents the research questions which have spurred the study and which the study attempts to answer. The aims of the study are also encapsulated in the initial chapter which also conations the research ideology and methodology components that deal with delineating on selected research models and stating why the used models have been deemed feasible. The chapter culminates in the description of major findings of the study which is a summation of the core concepts in the thrust of outcomes of secondary research approaches employed for the study.

Chapter 2

The second chapter of the study presents multiple contributions that have furnished the scope and objectives for this study. The chapter present major concepts and perspectives provided by various scholars and authors on the interlinked subjects related to the concept focus of this study.

Among other concepts and theoretical contributions in the second chapter, the chapter largely constitutes the nuances from reviewed literature on the relationship between behavioral marketing approaches and customer satisfaction and the relationship of these to the rate of customer retention and the models of marketing that can be adopted and employed by e-businesses to enhance customer retention in the markets.

Chapter 3

The third chapter presents an application analysis of the study which in essence is a conceptual application of research findings to the dynamics of behavioral marketing sector in the manner of enhancing customer retention and business growth. This component examines and outlines how e-businesses can tap the merits of direct and relationship marketing, transformational organisational leadership among other formulas; to achieve meaningful customer retention.

Chapter 4

The final chapter is a presentation of conclusion and recommendations. The conclusions are in the manner of collating findings and their implications whilst also taking a direct thrust in answering research questions. The recommendations are propositions and suggestions offered to various professionals including the marketing, management and leadership personnel in the cyber business interfaces. Recommendations also entail propositions on focus areas that need to be considered in further research and studies related to the scope and objectives of this particular research focused on behavioral marketing thrust and customer retention for e-commerce and e-businesses.

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