CHAPTER:4

SLEPT Factors in the Macro-Environment:

1. Social Factors:
 These are all about how people feel and behave. For example,
what consumers think about using the internet for different
things. It's like understanding why some people prefer shopping
online while others prefer going to a store.
2. Legal and Ethical Factors:
 This is all about the rules and morals that govern how products
can be advertised and sold online. Governments and other
organizations make sure that people's rights, like privacy, are
protected when they're online.
3. Economic Factors:
 These factors are related to money and how it affects people's
buying habits. For example, when the economy is doing well,
people might spend more money online. But if it's not doing so
well, they might spend less.
4. Political Factors:
 This is about the decisions that governments and big international
groups make that can affect how the internet is used and
controlled. They set the rules for things like who can access the
internet and what they can do on it.
5. Technological Factors:
 This is all about how technology keeps changing and opening up
new ways to sell products. Think about how new gadgets or apps
change the way companies market their stuff online.
So, these factors basically cover everything from how people feel about using
the internet to the rules that governments and organizations make about it,
and even how technology keeps evolving and changing the game.
Social Factor
• Some of the key elements include:

• culture

• demographics such as age and gender

• social lifestyles

• domestic structures

• affluence/wealth

• religion.

1. Traditional Buying Behavior:

 In the past, when people bought things like groceries or other packaged goods, it
was usually a simple process. Companies would advertise their products to grab
people's attention (we call this the "stimulus"). Then, most of the decision-making
happened when the customer was in the store, looking at the product on the shelf.
We call this the "first moment of truth." After buying the product and trying it out at
home, customers formed their opinion about it, which we call the "second moment
of truth."

2. Google's ZMOT (Zero Moment of Truth):

 Nowadays, things are different because of the internet. Google came up with this
idea called ZMOT. It's like a loop where customers use the internet to check out stuff
before they buy it. They do things like read reviews, learn about products, and
compare them with other options. So, before they even go to the store, they already
have an idea of what they want. This is the "Zero Moment of Truth" because it's
happening before they even see the product in real life.

3. Impact of Online Reviews:

 Websites like TripAdvisor have become really popular because they let people share
their opinions and experiences with products and services online. These reviews are
super helpful for other people who are thinking about buying something. For
example, in the travel industry, lots of people read these reviews before booking
hotels or planning trips. Nearly 40% of consumers use these online reviews to help
make their decisions.

4. Showrooming:
  Showrooming is when people go to a physical store to look at a product but then
decide to buy it online instead. They might use their phone to check if they can get a
better deal online or find a special offer. This happens a lot because online shopping
can sometimes be cheaper or more convenient than buying in a store.

So, in simple terms, these paragraphs explain how the internet has changed the way people shop.
Now, they research products online, read reviews, and sometimes even buy things without ever
stepping foot in a store!

Legal Factors:

 Changes in laws can have a big impact on businesses. For example, it took Spotify a
while to start operating in Canada because they had to deal with the country's laws
about music royalties and copyrights. Some important legal things for businesses to
think about include:

 Data protection and privacy laws: These rules are about keeping people's
information safe, especially with emails. One big law that came into effect is
called the General Data Protection Regulation (GDPR), which started on May
25, 2018.

 Disability and discrimination laws: These laws make sure that everyone is
treated fairly and that people with disabilities have the same opportunities
as everyone else.

 Brand and trademark protection: This is about making sure that companies'
logos and names are protected so other people can't use them without
permission.

 Intellectual property rights: These rights protect things like inventions, art,
and writing from being copied without permission.

 Contract law: This is about making sure that agreements between people
and businesses are fair and followed.

 Online Advertising Law: There are specific rules about how companies can
advertise online to make sure they're being honest and not misleading
people.

So, these legal factors are important for businesses to understand and follow to make sure they're
operating within the law and protecting their rights and the rights of their customers.

Economic Factors:

1. Basic Understanding:

 Economic factors are about how an economy works and its overall condition. Some
examples include:

 Market Growth and Employment: This is about how much the economy is
growing and how many people have jobs.
  Inflation Rate: This is about how prices for things go up over time.

 Interest Rates: These are the rates at which people or businesses borrow
money.

 Monetary/Fiscal Policies: These are rules or decisions made by

governments about things like taxes and spending.

 Foreign Exchange Rates: This is about how much one country's money is
worth compared to another country's money.

2. Example of Dynamic Pricing:

 In e-commerce, there's something called dynamic pricing. This means that when
you're shopping online, the price of a product might change based on different
things happening in the market. So, for example:

 If a website sees that other stores are selling the same thing for more
money, they might increase their price.

 They might also change the price based on how many people are buying it,
what time of day it is, or even what device you're using to browse (like an
iPad).

 Sometimes, they might even raise the price if they think you're using an
expensive device because they might think you have more money to spend.

In simple terms, economic factors affect how businesses set prices, and in e-commerce, this can
mean that the price of a product might change depending on different factors like competition,
demand, and even what device you're using to shop.

Political Factors:

Basic Understanding:

Political factors are about the government and its decisions, both in a country and around the world.
Some areas to think about include:

Government/Leadership: This is about who is in charge and what decisions they're making.

Policies: These are the rules or plans that the government has for things like education, healthcare,
and the economy.

Tax Laws: These are the rules about how much tax people and businesses have to pay.

Internet Governance: This is about who controls the internet and what rules there are for using it.

Example for Digital Marketing:

In digital marketing, it's important to think about political factors, especially if a company is selling
things globally and using social media to talk to customers. For example:Some countries block
certain social media sites like Twitter, Facebook, or YouTube.

So, if a company wants to use social media to reach customers in those countries, they need to know
if those sites are blocked there.
In simple terms, political factors are about the government and its decisions, and in digital
marketing, it's important to know if certain countries block social media sites so that companies can
plan their marketing strategies accordingly.

Technology Factors:

1. Basic Understanding:

 Technology factors are about how new inventions and improvements in technology
change the way people and businesses do things.

 This includes things like connecting with others, buying stuff, and how we use
computers and other gadgets.

2. Improvements in Hardware and Software:

 When we talk about technology, we mean both the physical stuff (like computers,
phones, and tablets) and the programs and apps that run on them.

 As technology gets better, it changes how we do things. For example, the picture
(Figure 4.4) shows that fewer people are using desktop computers and more are
using mobile devices like smartphones and tablets.

3. Importance of Mobile Optimization:

 Because more people are using mobile devices, it's really important for businesses
to make sure their websites and apps work well on phones and tablets. We call this
"mobile optimization."

 This is especially important for digital marketing because companies want their
websites and ads to look good and work well on whatever device people are using,
whether it's a computer, phone, or tablet.

In simple terms, technology factors are about how new inventions and improvements in technology
change the way we do things. Businesses need to make sure their websites and ads work well on
mobile devices because more people are using them instead of desktop computers.

Cultural Factors:

1. Basic Understanding:

 Cultural factors are about how the society and its culture influence people's
behavior and preferences, especially in relation to things like buying stuff online.

 This includes how much people want to buy things online and what kinds of online
services they like to use.

2. Example with Blockbuster and Netflix:

  An example of cultural factors affecting business is Blockbuster. Their old way of
renting movies from physical stores didn't work anymore because more people
started using services like Netflix to stream videos online.

 This happened because people's cultural habits and preferences changed. They liked
the convenience of watching movies online instead of going to a store.

3. Impact of Smartphones:

 Nowadays, smartphones are changing how people do a lot of things, like talking to
friends, using social media, and even taking pictures.

 Because smartphones can do so much, people are using them more and more
instead of other gadgets. For example:

 People don't use traditional cameras as much because they can take good
pictures with their phones.

 Companies like Kodak and Polaroid, which used to make cameras and film,
had to close down because fewer people were buying their products.

 Even the way we use phones has changed. People use them more for things
like texting, social media, and watching videos than for making phone calls.

In simple terms, cultural factors influence what people want and how they behave. For example,
people's preference for watching movies online instead of going to a store affected companies like
Blockbuster. Also, smartphones have changed how we do things, like taking pictures and
communicating, which affected traditional camera companies.

Factors affecting e-commerce buying behaviour

• 1. Credit Card Information being stolen
• 2. Fake Online stores
• 3. Information will get sold
• 4. Unsure about what the product really look like
• 5. Lost orders
• 6. Need help from a salesperson
• However, the majority of online buyers in the EU
(68%) have said that they have not encountered
any problems when purchasing via the Internet.
Understanding Users' Access Requirements:

1. Basic Understanding:

 When we want to know if people will use a service online, we need to think about
how they access the internet and what they use it for.

 This means considering where they access the internet, what device they use (like a
computer or phone), and some other things called "webographics."

2. What are Webographics?:

 "Webographics" is a term that talks about different aspects of how people use the
internet. It includes:

 Usage Location: Do they access the internet from home or work?

 Access Device: What kind of device do they use, like a computer or a phone?

 Connection Speed: How fast is their internet connection? Is it fast like

broadband or slower like dial-up?

 Internet Service Provider (ISP): Which company provides their internet

connection?

 Experience Level: How familiar are they with using the internet?

 Usage Type: What do they use the internet for? For example, do they mostly
check email, shop online, or watch videos?

 Usage Level: How often and how much time do they spend online?

In simple terms, when we want to know if people will use an online service, we need to think about
where they access the internet, what device they use, and other things like how fast their internet is
and how experienced they are with using it. All these things help us understand what people might
want and need when they're online.

Consumers influenced by using the online channel

Understanding Online Buyer Behavior:

1. Basic Understanding:

 When we want to create good online services, we need to know how people behave
and what motivates them when they buy things online.
  This means looking at how both regular consumers and businesses use the internet
along with other ways of communicating when they're choosing and buying stuff.

2. Online Buyer Behavior Defined:

 "Online buyer behavior" means looking at how people and businesses use the
internet along with other ways of talking to each other when they're deciding to buy
something.

 So, it's about understanding how people shop online, what they look for, and why
they choose to buy certain products or services over others.

In simple terms, understanding online buyer behavior is about figuring out how people and
businesses use the internet to shop and what influences their decisions to buy things online. This
helps companies make better online services that people will like and use.

MOTIVATION FOR USE OF ONLINE SERVICE

1. Psychographic Segmentation: Marketers can group users based on their knowledge,

attitudes, and responses to a brand, product, or service. Demographics tell us who the buyer
is, while psychographics tell us why they buy. Psychographic segmentation breaks down
customers based on different characteristics such as occasion, benefits sought, usage rate,
user status, and loyalty status.

 This is a method used by marketers to divide customers into groups based on their
psychological traits, lifestyle, values, and interests. It helps marketers understand
why customers make purchasing decisions beyond just basic demographics like age
and gender. Here's a breakdown of the elements mentioned:

 Occasion: This refers to when customers purchase or think about buying a

product. For example, do they buy it for special occasions or regularly?

 Benefits Sought: Why are customers considering the product? Are they
looking to solve a problem or improve their lives in some way?

 Usage Rate: How often do customers use the product? Are they heavy
users, moderate users, or occasional users?

 User Status: What is the customer's relationship with the product? Are they
first-time users, regular users, or have they stopped using it?

 Loyalty Status: Are customers loyal to the brand, or are they likely to switch
to a competitor?

2. Revised Web Motivation Inventory (WMI):

 This is a framework developed to understand why people use the internet. It

identifies four main motivations:

 Research: People use the internet to find information, whether it's for work,
school, or personal interest.
  Communication: This includes socializing with others through platforms like
social media, email, or messaging apps.

 Surfing: People use the internet for entertainment purposes, like watching
videos, playing games, or browsing websites.

 Shopping: This refers to buying products or services online, from clothes and
electronics to groceries and services.

3. Understanding Online Consumer Behavior:

 This section explores how consumers behave when making purchases online. Here's
a deeper look at the points mentioned:

 It takes time for consumers to feel confident about buying expensive or

complex products online because they may need more information or
reassurance.

 Most EU online shoppers prefer buying certain products online, such as

clothes and sports goods, while fewer purchase items like e-learning
material.

In summary, understanding psychographic segmentation helps marketers tailor their strategies to

meet the diverse needs and motivations of different customer groups. The WMI framework provides
insights into why people use the internet, guiding marketers in creating targeted online experiences.
Analyzing online consumer behavior helps businesses identify trends and preferences, allowing them
to optimize their digital marketing efforts accordingly.

Business Demand for Digital Business Services:

1. B2B Market Complexity:

 In the business-to-business (B2B) market, demand for digital services varies a lot.
This is because different types of organizations and people within those
organizations have different needs.

 Understanding this variation is crucial for segmenting the B2B target market
effectively.

2. Profiling Business Demand:

 Businesses need to be profiled based on several factors:

 Variation in Organization Characteristics:

 Size of Company: This includes factors like the number of

employees or the company's revenue.

 Industry Sector and Products: What industry the company is in and

what it sells.
  Organization Type: Whether the company is private, public,
government-owned, or non-profit.

 Division: Different parts of the same company might have different

digital service needs.

 Country and Region: Where the company is located can also affect
its digital demands.

 Individual Role:

 Job Title and Function: What role someone has in the company and
what tasks they're responsible for.

 Role in Buying Decision: How much influence they have over

purchasing decisions.

 Department: Different departments within a company might have

unique digital requirements.

 Product Interest: What products or services someone is interested

in.

 Demographics: Basic information about individuals, like their age,

gender, and possibly social group.

 B2B Profiles: Profiles based on business-to-business interactions and

needs.

 We can also profile how businesses use the internet, similar to how we profile
consumers:

 Percentage of Companies with Access: In the B2B market, more companies

have internet access compared to the business-to-consumer (B2C) market.

 Influenced Online: Businesses use the internet a lot to find suppliers,

especially in larger companies.

 Purchases Online: Understanding how businesses buy online differs from

country to country, so it's essential to adapt digital strategies accordingly.

In summary, the complexity of the B2B market requires understanding the various needs of different
organizations and individuals within those organizations. This involves profiling businesses based on
factors like size, industry, and individual roles, as well as understanding how businesses use the
internet to find suppliers and make purchases. This knowledge helps tailor digital strategies to meet
the specific needs of businesses effectively.
Ethical Issues and Data Protection:

1. Privacy:

 This is about knowing what information is kept about you. Think of it like keeping
personal things private. For example, your name, address, or medical history.

2. Accuracy:

 Accuracy is making sure that the information about you is correct. It's like double-
checking to ensure your name is spelled right or your address is accurate.

3. Property:

 Property means knowing who owns the information about you and how it can be
shared. It's like knowing if your information belongs to you or someone else, and
how it can be used or transferred.

4. Accessibility:

 Accessibility is about who can see or use your information and under what
conditions. It's like controlling who gets access to your personal things and setting
rules for who can see them.

So, it's basically about making sure that your personal information is kept private, accurate, and only
accessible by the right people, while also understanding who owns it and how it can be used.