THE INFLUENCE OF DIGITAL MARKETING ON CONSUMER BEHAVIOUR: A CASE STUDY OF ALIBABA
Xiaobing Huang, Professor, School of Business, Gannan Normal University, China, Huangxiaobing1234@126.com
Xiaolian Liu，Lecturer, School of History and Tourism, Gannan Normal University,China, firstname.lastname@example.org
Colin Fisher, Professor, School of Management , UCL University, London, UK, email@example.com
Anargul Rakhmetzhan， Senior Lecturer， International Relations Faculty, Al-Farabi Kazakh National University, Kazakhstan, Rakhmetzhan.Anargul@kaznu.kz
ISSN: 1555-1983 (Online)
The innovation of digital revolution where the traditional marketing tends to turned on their head in some cases, and studying consumers is background to successful marketing. Therefore, successful companies understand well recognise their segment buyer upside down and inside out. Because have better understanding of online customers is even important and they have different characterises and attitude to both acquiring knowledge and buying online. Plus, the same person would act differently in different situation. For instance, same customer would plan and act differently online than offline. However, in an offline marketing environment there are a number tried and tasted techniques which help marketers understand how recipients have responded to communication (Baler, 2008; Kaushik, 2008).
Lee (2010) describe that the internet and digital marketing have shift the traditional marketing to business dynamics, which is beneficial, for example, small brands have opportunities to access to global market places and can attract customers all over the world in new efficient ways. On top of this, marketers, regardless of who are your best customers, need to understand customers’ mind-set, customer’s attitude and aspiration. For example, every year 11th of November is considered as ‘single’s day’ in chia, so that day people try to shopping online crazy, because most of the products are discount and highly promoted. Generally speaking, the e- buyers are different from the offline customers. Duo to, online customers have power than ever before, initially, they have got more power, rights and time consuming as well.
In terms of building strong communication and relationships with your customers, marketers should initially study who are your customers? Their expectation? and more.
1.2.1 Support Satisficing Behaviour
Pickton and Broderick (2001) and Full (2005) Wartime and Fenwich (2008) outline that surprisingly, not all online customers prepare to shop online than real physical shopping. They just try to get good deal and being in control. The key reason of online shopping maybe the significance of time-compressed. In fact, time saving can satisfy several needs simultaneously as the time saved can be spent fulfilling a range of unfilled needs. However, Shaffey and Smith (2008) point out that some products such as electronic goods, tickets clothes and books have higher percentage rate of online. It is no surprises that most of successful platform like Alibaba, offer key activities – entertainment, facilitate- of socializing, product information, purchasing and entertainment through search engine, email and chat, product guide and so on.
1.2.2 Managing Customer Expectation
Fluffing the gap between customer’s expectation and and delivery is the successful managing customer’s expectation. On top of that, expectation can be managed by entering into an informal or formal agreement as to what service the customers can expect through customer service guarantees. Ultimately, marketers in terms of findings above must deliver the servise and support from physical fulfilment (NMA, 2008). An example for this, Alibaba customers are highly loyal, and make a definite choice to purchase a minority product. Moreover, online support services minimised the risks and give confident to customers (Briefly and shortly discussed here, further information available in literature review chapter).
1.2.3 Online Information Processing
The best digital marketing platforms concentrate on how consumers deal with information, which include first stage is exposure. For example, if the content for present is not long enough, customers are not able to process it. If the changes too fast, the massage will not be received. Second stage is attention. The human mind has limited capability to pick up everything in the screen. So marketers have to consider everything and teste- colouring, design and more. Finally, the last stage is all about comprehension and acceptance(Fogg, 2015; Halvorson, 2010).
Alibaba has mentioned many different ways above, coming of next, a brief information about Alibaba will be discussed.
1.1 Research Question and Research Objectives
The purpose of this work is to lay the foundations for the study of consumer behaviour and digital marketing’s theoretical framework and what you read which will take you on a journey into the digital marketing, and how social media, Information Technology and digital revolution affect the consumer behaviour.
How does digital marketing influence on consumer behaviour and failure or success of organisation?
Research Objectives and aims:
- To critically review digital marketing and consumer behaviour literature and identify key characters of digital marketing.
- To compare and contrast the difference between digital marketing and traditional marketing strategies that businesses can adopt with specific focuses on.
- To identify key theories of consumer behaviour and explore the critical factors influencing the behaviour of Alibaba’s consumer.
- To make a recommendation for online business to make a use of digital marketing to create the value.
- Investigate digital marketing strategy
and find out what are the success criteria that will indicate that digital business objectives have been met and the benefits delivered? How do they encourage people to take control and responsibility? critically look inside the online customer’s mind.
2.1 Introduction to Ideas and Academic Explanation in Digital Competences & Consumer Behaviour Research
Consumer behaviour is the initial study of from individuals to group, form group to organisations and the process how they select products, secure, use and dispose it, experience, service or knowledge to satisfy needs, these processes have impact on the not only consumer also society (Kelly, 1996; Friestad and Wright, 1994; McMahon, 1996), which is overall view of consumer behaviour than traditional view, which is however attempting to concentrating on the buyer and final profit process (Roberts, 1999; Mergenhangen, 1997). A great number of studies reveals two gaps between border view of consumer behaviour and traditional one. First, the traditional studies tended to concentrate and focus on full range benefiting and full filling customer’s needs with excellent goods and service. Of course whether goods or service is the first reason speak about customer behaviour. However, indirect influence on conception decision as well as the consequences beyond that. Table 2.1 illustrates that reveals the gap between traditional consumer behaviour and border view (Hirschman et al., 1994; Richins, 1991; Ansoff, 1957).
Table 2.1 Selected studies on Consumer Behaviour
|Source||Type||Key arguments and view|
|Deighton (1996)||border view||Consumer behavior is depends on not only external factor which include normally marking, culture, technology, economical and political issues and more, also internal factor, for example: personal attitude, believes, education background, motivation and more.|
|Kaydo (1997)||traditional||In terms of The Traditional Theory of Choice, U=(X1, X2,…..Xn)！(U is utility, X is service and goods) indicates that the more customers spend the more bigger profit will be made, according to the formula we also can speculate that the more service activities and the more goods sale which means profitable.|
|EConsultancy(2005)||border view||internet based model has approached and more attracted consumers because of fish decision making availabilities. In face, this classified factors also has influences customers behaviour, which also make customers easy to understand sash sharing and storing ideas, knowledge and information by internet process.|
|Ansoff et al. (1957)||traditional view||According to the traditional approach to customer behaviour, the consumers are likely to select the most popular bundle among all the bundle available, which means consumer has a great number of preferences over all the alternative bundle.|
|Belk and Brucks (1993)||traditional view||Belk and Brucks defined consumer behaviour as the process where consumers make decision to buy product or service to satisfy their needs and desire.|
|Geyskens et al. (2002)||border view||A comparison between traditional customer behaviour and customer behaviour illustrates that there are wide range of availabilities to satisfy customers needs, which means the decision making process for customers are well defined than traditional one.|
|Deighton (1996)||traditional view||Traditional consumer behaviour is the process of satisfy customers needs by selecting and purchasing goods and service.|
|Chaffey (2015)||border view||Consumer behaviour is the initial study of from individuals to group, form group to organisations and the process how they select products, secure, use and dispose it, experience, service or knowledge to satisfy needs, these processes have impact on the not only consumer also society|
Compiled by authors for this research
2.1.1 Consumer Behaviour Theory: Approaches and Models
If you stop and think for a moment: Why study consumer behaviour? You’d realise that studying consumer behaviour can be important to you for a number of reason. To begin with, in market economies, business stand for not only purchasing products, organising service managing employee or building accounting system (Genaro and Armas, 2002; Jon Spayde, 2002; Elizabeth and Hirschman, 2006; Jagdish, Shethm Banwari and Newman, 2006), but also retaining and attracting customer (Kazdin, 2010; Kelly, 2006; Kennerley et al. 2010; Kuyken, 2006; Dudley et al. 2006; Kazantzis et al. 2002; Hsia and Iwamasa, 2006).
Hawkins (2001) pointed out that weather all marketing decisions or regulations are based on assumptions about consumer behaviour, which includes a focus on relationship between what people think, fell, and do. This statement can be organised consumer behaviour theories and models. As a matter of fact that, it has been suggested there are five- Economic Man, Psychodynamic, Behaviourist, Cognitive and Humanistic- typological decision making classifications by different approaches. In particularly, Economic man introduces consumer behaviour, which related to a great number of issues effecting purchasing, consumption activities and consumers. However, it has frequently been argued that these steps seen to be no longer considered as realistic decision making (cScape, 2008). Stewart (1994) outlines that psychodynamic tradition is broadly influences through ‘Instinctive forces’, that work beyond conscious though. On this point of view, Ribeanx (1978) argues that psychodynamic approach is behaviour tenet to be driven by biological factors, instead of environmental stimulation and individual cognitive. Behaviourism illustrates that people’s action, thought or felling, which are caused internal and external factors (Jacob and Robert, 1978). Coming up next, following will critically evaluate cognitive models of consumer behaviour, which will describe broad range of theoretical framework and consumer activities based on Alibaba group.
2.1.2 Cognitive Model and Structure of Consumer Behaviour
Customer value is difference between all the benefits derived from a total products and all the costs of acquiring those benefits (Beck et al. 1979; Rachman, 1997). For instance, simply, people can a numbers of benefit from having a car, including transportation flexibility, social statement, comfort, please and more. However, at the same time people pay fir securing those benefits- gasoline, insurance, environmental pollution and parking fees (Hayes et al. 2004; Crane, 2009; Wells, 2009). That example illustrates that it is the difference between the total benefit and total cost that is constitutes consumer value. Ultimately, it is significant to understand value from the customer perspective. Because providing superior customer value requires the organisation to do better job as well as build awesome marketing strategy. On this point of view Beck (1989) also contributes different view that it is crucial to understand customer behaviour for any organisation, because of consumer reaction also determining the success or failure of the strategy. Note again that cognitive model of consumer behaviour is one of the key theoretical framework foundation, which initially explain the behaviour of customers. Cognitive model requires a through understanding relationship between those influencing factors and consumer decision making process (includes analytical and prescriptive model), which is standing for, particularly, recognising problem, researching information, alternative evaluating, making a decision and evaluating outcome. Again, our main focus is here to critically evaluate fanatical model, which include consumer decision model and theory of buyer behaviour (Crane, 2009). Additionally, prescriptive model framework includes theory of planned behaviour and theory of reasons action.
2.1.3 Analytic Cognitive approach: The Theory of Buyers Behaviour
The first simplest model of customer buying decision is that suggests by Howayd in 1963 and based on empirical phenomena which is exactly buying behaviour of individuals. It is useful to look at this model in more detail before we going on to other case (Naddor, 1966). More specifically, however, 1969 Howard and Sheth had come together and created model named ‘Theory of Buyers Behaviour’, which explains how does a great number of factors- social, marketing, psychological and elements- influences on consumer buyer behaviour (Odland, 1981; Bacon, 1971).
The fundamental structure of buyer’s behaviour is introduced by Howard and Sheth (1969) in Figure 2.3, which doesn’t include exogenous variables in this work. The maid idea of this model illustrates that inputs can be considered as the environmental stimuli, which include significate products, services and brands. Furthermore, customers before they making buying decision are influenced by marketing process through advertising, social stimuli and more (Howard and Sheth, 1969).
It is shown in Figure2.4 that there are two type of hypothetical categories: perceptual construct and learning outcomes. Initially, perceptual approach includes firstly the buyers tend to control and evaluate stimulus information, which called sensitivity of information; secondly, how do consigners mater be information or how do change and fitting their existing behaviour, which called perceptual bias. Lastly, how do consumers research reliable information and knowledge about their choices, which called search for information. Ultimately, combination of those three constructs applies whole process and control.
However, the main argument is made here is that by Allen in order to obtain some simple result based on perceptual construct (1995), it should need t assume a specific knowledge based upon learning theory concepts: motive is related to goals driving action. Evoked set consumer different type of consumption ability. Decision mediators: the buyers metal behaviours. Predisposition: a skills and understand about social statement. Inhibitors: some limited resources which my limit consumer choices. Lastly, satisfaction: a response from consumer’s base of decision they made (Barnes, 2001; Baudrillard, 1999; Belk, 1988).
It seems quit hard to anticipate and fulfil consumers’s expectation and needs without have better understanding of those processes. On the other hand, Baudrillard argued that at some point decision making process of consumers depends extensively on customer’s attitude as well as better understanding of goods class (1999). In such situation, customers may understand product information before making decision. Finally, the main output of attention, comprehension, attitude, intention and purchase represent consumer’s response.
However, in terms of recent research, a comparison between the theory of consumer buying behaviour and the nature consumer behaviour demonstrates that the conceptual model of condemner behaviour is simple both conceptually sound and intuitively appealing. Initial discussion is made here is Figure 2.5 shows that different type of internal and external factors tends to influence on individually development of subsequent as well as self- concepts, which has mentioned previous section. These self concepts and lifestyle produce needs and desires, many of which requires consumption decision to satisfy (Hawkins, 2001). In particularly, external influences from large scale macro-group to smaller, more micro- group influences. Moreover, culture is perhaps themes perceive influences on consumer behaviour. Coming up next: internal factors begin with perception, the process by which individuals receive and assign meaning to stimuli. This includes learning, memory, motives, personality emotions and attitudes. Again, sufficient knowledge of consumer behaviour currently exists to provide a usable guide to marketing practice for any organisations. In the next section, it will provide a brief overview so that you can see how they fit together. Discussion and the text move through the model.
To conclude, how how many consumers make decision throughput the day? Some without any thought. What should people buy? What should they eat today? Hayes et al. (2004) illustrated that what constitutes consumer behaviour are the total value (benefit) and total cost. On this point of view, in terms of Cognitive model, Beck et al. (1979) requires a through understanding relationship between those influencing factors and consumer decision making process (includes analytical and prescriptive model), which is standing for, particularly, recognising problem, researching information, alternative evaluating, making a decision and evaluating outcome. More importantly, Hawkins and Mothersbaugh (2007) outline that weather traditional marketing or digital, social marketing decisions are made because of the knowledge and assumption of consumer behaviour. Moreover, Hasan also points out that men tend to more engaged with online shopping because of behaviours, attitude and habits. On the other hand, Chen (2013) argues that According to his questionnaire in Alibaba platform the statistical rate of online shopping male and female is tend to be same.
Ultimately, weather different scholar’s studies or cognitive theory, it can be hypothesized that the reason weather companies or organisations need to study customer behaviour perspective is because it will help companies make informed decision about your foray into the digital marketing arena.
2.2 Consumers in Their Social and Cultural Setting
Social group and family demands special attention from consumer researchers. The social group has also been affected by modern and non modern’s elements, resulting in a number of different aspect of family (Halvorson, 2010; Kuyken, 2006).
2.2.1 Social Influences on Customer Behaviour
In many cases, group influences are instrumental in determining an individuals buying decision. Therefore, many of decisions made by consumers are take within the environment of the family and are thus affected by desire and attitude of other family members. Consumer can express individuality but within the safety of group (Aaker, 1998). For instance, consumer from college and student seem to be more popular than others. In fact, they have access to a great number of resources. Because they are kind of socialized and have known information like special privileges, expensive cars, top brands, generous allowances and more. Ultimately, they are more influenced on digital marketing and more (Alba et al., 1997).
2.2.2 Social Class and Consumer Behaviour
the sense of social class, customers normally grounded haves and have-nots in terms of family background, income and also occupation (Buzan, 2006). Consequently, social class does affect the possibility of access to resources. That’s why markets always segment customers base on those labels. Ott (2011) argues that researcher do study based upon social class, not because of have better understand of customer’s behaviour in different way to segment, but also social class also affects taste and life style, and then people have different life style, they also have different way of consumption. Consumers from different background, different income, and different social class tend to have different behaviour.
2.2.3 The Cultural Influences of Consumer Behaviour
without considering cultural context which mostly consumers are made, consumer conception cannot be understandable. The cultural aspect of attitude, life style and behaviour is the significantly considerable one of the issues (Grane, 2009). Therefore, weather in digital marketing or traditional marketing, marketers should take culture into account and understand how the cultural environment where customers live creates the value of products and services. However, Hawkins and Mothersbaugh have strong statement that the culture seems to not only shape and regulate the priorities customers usually attaches to Varity products and activities, and also it also regulates the failure or success of that available services or products (2007).
Here is different argument made by Michael et al. (2006) actually the relationship between culture and consumer behaviour is responding each other, not the culture is influencing the customer behaviour. On the other hand, the products and services also reflect cultural assessments. For example: food convenience and family structure upon cultural base. And The Body Shop is all about made natural materials, but it is not animal tested.
2.2.4 Age and Consumer Identity
consumer who are in same age group seem to have similar life style, common behaviour and they also share common memories. Therefore, marketers probably segment one or two age group. However, Blanchard (2011) outlines that the senior subculture is the most popular and large market.
2.3 Digital Marketing Fundamentals: Strategy, Implementation and Practice
In the face of Economic Internationalisation and significantly interconnected world a great number of industries attempt to introduce their marketing performance globally (Chaffey, 2015; Aaker, 1991; Aaker and Williams, 1998; Aaker and Keller, 1990; Abraham and Lodish, 1990). As a matter of fact, weather the rapid advancement of digital innovation or social media have been applied in a variety way. However, in the world’s rapid economic growth, an successful organisation is not only concerned with the overall scope of marketing competences and how organisations add value to constituent business (how the business should compete with particular market), but also the an organisation’s competences deliver effectively value to consumer, in particularly, in terms of strategic marketing capability (tangible resources and intangible resources), and competences (ability, talent, skill and power). Notable examples of that is Alibaba group which not only readily made Multi- sided platforms to bring buyers and and sellers together with its online side and also Alibaba is capable of doing anything to the world. This application of internet and other social media media is poses of course a great number of new opportunities and challenges. It has been called digital marketing (Rogers, 1983). Before focus on the definition of marketing emphasises, it is necessary to definite definition of marketing. Marketing is the management process for identifying, anticipating, and satisfying customers requirements profitability (Chaffey, 2012). Just what exactly is digital marketing? And if it’s new what does it replace? A great number of scholars have defined digital marketing differently. Kiani (1988) defined digital marketing as “Achieving marketing objectivities through applying digital technologies.”This statement reminds us the investment in internet marketing is the result of technology.
Digital marketing explores information beyond internet marketing, mobile adverting, digital display adverting and other different forms of digital media. According to the recent research of Berger and Milkman (2012), Blanchard (2011), and Bubula (2002) they defined differently digital marketing terms. Main idea is that a great number of forms are used in the digital marketing forms including as e-marketing, digital marketing, interactive marketing, social media marketing and interactive marketing, and each have their own specific meaning (see figure 2.6).
Figure 2.6 Defining digital marketing terms
|E- Marketing||Berger and Milkman (2012)||Performance of facilitated or accomplished marketing through electronic devices, technologies, tools and platforms. For example: TV advertising, However, it does not exclude both older analogue and digital technologies.|
|Digital Marketing||Blanchard (2011)||Processes of utilising digital electronic technologies and distribution channels like: Web, digital radio, email, and creating digital data base on consumer behaviour to reach market.|
|Direct Marketing||Bubula (2012)||One of the specific form of marketing that through sending its databases or communications directly to consumers in terms of addressable media such as email, telephone and text message.|
|Interactive Marketing||Ott (2011)||Not all interact marketing is electronic, for example in this sense communication is made by face to face or two ways dialogue.|
According to the Figure 2.5, it can be seen there are different type of explanation. Baines et al. (2011) made strong argument that internet marketing is just one form of digital marketing which exclude the use of some digital broadcast media. However, according to Anon (2012), it can be included a wide array resources for instance internet advertising, direct email, social media marketing and adverb- gaming. Moreover, Baines and O’Shaughnessy (2011) initially explained that a form of digital marketing also includes web marketing and online marketing, additionally, a form of marketing communication purposes of delivering marketing messages to customers including as display advertising, classified listings, rich media and also social media sites. On this point of view Berger and Milkman (2012) outline that internet marketing seeks to increase the visibility of website in search engine result pages through the use of website search engine.
Based on those different explanations above it can be hypothesizedthat digital marketing activities can be grounded internet advertising, search marketing, email marketing, viral marketing, social media and also mobile marketing.
‘Digital marketing is the application of the internet and related digital technologies in connection with traditional communication to achieve marketing objectives’ (Chaffey and Elisa- Chadwick, 2012). According to the Financial Times, it is the process of marketing of products and services through internet marketing to reach customers. The main concept is introducing brand to customers through digital media which include research engine marketing, online display advertising, mobile phone, Email and so on. However, Weinberg argues that digital meriting is not only use figural channel to reach consumers, it also also needs to have better understanding of consumer behaviour. Moreover, digital media also requires companies create valued and qualified platform to customers on for example, mobile phone, Facebook, Twitter and so on. For instance, simply, it can be considered Pizza Hut as a successful fart food company, which created wonderful App for customers. In fact, jut with three weeks’ time, its app was downloaded more than one hundred thousand times. Considering the behaviour of large group of people in the surface of social, digital and information technology setting, firstly, it is super important to figure out ‘how consumers see the world and themselves through digital technology’, secondly, explore the way ‘consumers as decision-makers’where customers apply useful knowledge they are asked to know, lastly, further expands the focus on ‘culture and European culture’(Ott, 2011). There are many network communication ways which marketers suppose to review as process of communications channel, however before we explain the different channel of digital media, it is significant to describe how they can support business goal. There is a practical framework developed by Smart Insights (2010), which explains how the digital channels work. In particularly, there’re three main step:
First step: Reach- build awareness of a brand, build web presence about brand and service.
Second step: Interact- through website motivate audience to engage with product or service.
Third step: Convert- build strong customer relationship through achieve retention goal.
To explore the range of social media sites and tools, digital marketing is the most popular marketing process through network, which involves motivating customers communication. As it has already mentioned, there are many online communication tools, and to assist with planning, Chaffy and Smith (2008) suggested that digital marketing approaches are can be grouped into six main categories shown in Figure 2.7 Six categories of e- communications tools or media channels.
- Search engine marketing: typing message on research engine to find out detail information when customers types specific keywords.
2. Online PR: mentioning your company, brand or service on third party websites. Social network, blogs, podcasts or feeds are likely to be listed by your targeted customers.
3. Online partnership: adapting as well as organising long-term arrangement to communicate with customers.
4. Display advertising: use of online advertisement, for example, banner ads or rich media to achieve brand awareness.
5. Opt- in e- mail marketing: through via email within third party e- newsletter or the use of an in house list for customer attraction.
6. Social media marketing: companies participate and make advertisement about their product on Viral marketing. Social media marketing is an important category of digital marketing which involves encouraging customer communications.
Ultimately, consumer behaviour towards digital marketing, what is the relationship between two?
Firstly, by well tracking the customer behaviour, whether organisations or small and medium sized enterprises may have rich profit as well as easy to target and segment customers based on similar profiles (Baines et al., 2013). Secondly, Cheung et al. (2005) pointed out that how should originations evaluate actual customer behaviour in terms of digital marketing when that behaviour often different from how customers say they will behave? What is going on consumers’ minds when they decide whether buy or not. Basically, through digital marketing in terms of consume behaviour we can target differently with different tools. In fact, digital marketing has positive influences on consumer behaviour. As a matter of fact, those explanations above can have hypothesized that digital marketing in any forms has positive influences on consumer behaviour. Therefore, digital marketing provides the power to not only giving all information about specific product or service but also motivate. Moreover, through digital marketing, consumers also influence other buyers. Additionally, by digital marketing processing, organisations easily can have feedback from online.
Finally, the questionnaire attempt to indicate and interoperate how digital marketing performance affect customer’s behaviour in China, as a great number of perspective has been highlighted in the academic literature. For example, in the literature review section, researchers illustrated that weather digital marketing performance or digital marketing platforms stimulate customer’s behaviour than traditional shopping. In fact, statistical evidence shows that approximately 33% responders tend to access Alibaba platforms three times a week. However, of course, some customers would love to shop physically.
As a matter of fact, noticeable similarities between research findings and academic literature in the chapter of literature review section are founded and highlighted in this chapter, particularly, digital marketing in any forms has positive influences on consumer behaviour. Therefore, digital marketing provides the power to not only giving all information about specific product or service but also motivate. Moreover, through digital marketing, consumers also influence other buyers. Additionally, by digital marketing processing, organisations easily can have feedback from online. However, new literature and findings also are introduced in terms of feedback from responders.
In short, this chapter discussed and analysed the result of findings in relation to the relevant available literature in the literature review chapter. The next and final chapter will be conclusion of whole research.
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