" Contemporar y Research in E-Marketing
Volume 2
Sandeep Krishnamurthy University of Washington, USA
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Published in the United States of America by Idea Group Publishing (an imprint of Idea Group Inc.) 701 E. Chocolate Avenue, Suite 200 Hershey PA 17033 Tel: 717-533-8845 Fax: 717-533-8661 E-mail: cust@idea-group.com Web site: http://www.idea-group.com and in the United Kingdom by Idea Group Publishing (an imprint of Idea Group Inc.) 3 Henrietta Street Covent Garden London WC2E 8LU Tel: 44 20 7240 0856 Fax: 44 20 7379 3313 Web site: http://www.eurospan.co.uk Copyright © 2006 by Idea Group Inc. All rights reserved. No part of this book may be reproduced, stored or distributed in any form or by any means, electronic or mechanical, including photocopying, without written permission from the publisher. Product or company names used in this book are for identification purposes only. Inclusion of the names of the products or companies does not indicate a claim of ownership by IGI of the trademark or registered trademark.
Library of Congress Cataloging-in-Publication Data Contemporary research in e-marketing / Sandeep Krishnamurthy, editor. v. <2 > cm. Includes bibliographical references and index. ISBN 1-59140-824-5 (h/c) — ISBN 1-59140-825-3 (s/c) — ISBN 1-59140-826-1 (eisbn) 1. Internet marketing. I. Krishnamurthy, Sandeep, 1967HF5415.1265.C67 2006 658.8’72—dc22 2004016288
British Cataloguing in Publication Data A Cataloguing in Publication record for this book is available from the British Library. All work contributed to this book is new, previously-unpublished material. The views expressed in this book are those of the authors, but not necessarily of the publisher.
Contemporary Research in E-Marketing
Volume 2
Table of Contents
Preface ............................................................................................................. vi
Chapter I. Evaluation of Web Sites on Information and Entertainment Properties: The Role of Involvement ......................................................... 1 Sanjeev Swami, Indian Institute of Technology, Kanpur, India Ram Krishna, Tata Consultancy Services, India Chapter II. An Examination of Consumer Behavior on eBay Motors ............................................................................................................ 40 Mark P. Sena, Xavier University, USA Gerald Braun, Xavier University, USA Chapter III. Job Search at Naukri.com: Case Study of a Successful Dot-Com Venture in India ........................................................................... 58 Sanjeev Swami, Indian Institute of Technology, Kanpur, India Chapter IV. User-Centered Design and Marketing: Online Customer Value ............................................................................................................... 88 Thomas W. Porter, University of North Carolina Wilmington, USA Chapter V. A Synthesis and Analysis of Behavioral and Policy Issues in Electronic Marketing Communications ............................................ 106 Merrill Warkentin, Mississippi State University, USA Robert S. Moore, Mississippi State University, USA Melissa Moore, Mississippi State University, USA
Chapter VI. Providing Value to Customers in E-Commerce Environments: The Customer’s Perspective ....................................... 119 Shailey Minocha, The Open University, UK Liisa H. Dawson, The Open University, UK Ann Blandford, University College London Interaction Centre, UK Nicola Millard, British Telecommunications PLC, UK Chapter VII. Key Success Requirements for Online Brand Management ............................................................................................... 147 Subir Bandyopadhyay, Indiana University Northwest, USA Rosemary Serjak, University of Ottawa, Canada Chapter VIII. The Evolution of the Theory and Practice of Marketing in Light of Information Technology ........................................................ 168 Daniela Andreini, University of Bergamo, Italy Chapter IX. The Internet and Global Markets ..................................... 216 José Manuel Ortega Egea, University of Almería, Spain Manuel Recio Menéndez, University of Almería, Spain Chapter X. Stance Analysis: Social Cues and Attitudes in Online Interaction .................................................................................................. 262 Peyton Mason, Linguistic Insights, Inc., USA Boyd Davis, University of North Carolina-Charlotte, USA Deborah Bosley, University of North Carolina-Charlotte, USA Chapter XI. Application of Internet-Based Marketing Instruments by Multichannel Retailers: A Web Site Analysis in the U.S. and the UK ......................................................................................................... 284 Maria Madlberger, Vienna University of Economics and Business Administration, Austria Chapter XII. The E-Mode of Brand Positioning: The Need for an Online Positioning Interface .................................................................... 304 S. Ramesh Kumar, Indian Institute of Management, Bangalore, India Chapter XIII. Locked In By Services: Willingness to Pay More and Switching Behavior in a Digital Environment ....................................... 322 Manlio Del Giudice, University of Milano-Bicocca, Italy Michel Polski, Grenoble Ecole de Management, France
Chapter XIV. Comparative Analysis of International Approaches to the Protection of Online Privacy ............................................................. 347 Peter O’Connor, ESSEC Business School, France About the Authors ..................................................................................... 365 Index ............................................................................................................ 372
vi
Preface
It is a pleasure to announce the second volume in the Contemporary Research in E-Marketing series. Volume 1 in this series was released in 2004 and has been very well received. This volume builds on the intellectual capital of Volume 1 by a compilation of interdisciplinary papers on the topic of e-marketing. The Internet and the Web continue to evolve at a rapid pace. Examples of innovative applications of these technologies in the domain of marketing abound. E-marketing has become standard practice all over the world. This volume offers an exciting set of papers that use different perspectives, theories, and research methodologies to enrich the burgeoning e-marketing literature. The first paper by Sanjeev Swami and Ram Krishna, “Evaluation of Web Sites on Information and Entertainment Properties: The Role of Involvement,” provides an excellent empirical examination of consumer involvement on how Web sites are evaluated. Web sites receive a continuum of visitors in terms of motivation. Some care deeply about the topic of the site and others are not so engaged. Swami and Krishna provide us with empirical data on the impact of involvement on online consumer behavior. Their results show that the consumer’s information and entertainment profiles significantly affect utilitarian and hedonic evaluations of involvement. They also find positive and significant relationships between the evaluations of involvement and affect toward the Web site. Most people think that products sold on eBay tend to be low-value, low-price products that one would encounter in a yard sale. It would perhaps be very surprising to many readers to learn that eBay Motors is the largest part of the company with an annual sales of $7.5 billion. The second paper by Mark Sena and Gerald Braun, “An Examination of Consumer Behavior on eBay Motors,” studies transactions in this product category. The findings of their study suggest
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that within selected data ranges, such factors as seller feedback ratings, number of pictures in item description, and seller type (dealer vs. individual) may affect the percentage of retail value that sellers are able to earn in eBay Motors auctions. Too often, discussions of e-marketing are limited to examples from America or Europe. If we are to acknowledge the truly global nature of e-marketing, it is imperative that we learn about the best practices in other areas of the world. The third chapter by Sanjeev Swami is titled, “Job Search at Naukri.com: Case Study of a Successful Dot-Com Venture in India.” This chapter is an in-depth analysis of an Indian company that has successfully competed with Monster India to establish an online portal for job hunters. Everyone agrees that providing customers with value is vital to the success of an online enterprise. Yet we know little about how one must design a Web site to maximize the consumer experience and to provide the greatest value. Thomas Porter fills this gap with his chapter, “User-Centered Design and Marketing: Online Customer Value.” Blending insights from marketing, consumer behavior, and human–computer interaction (HCI), Porter provides an incisive analysis of how Web design needs to be focused on the user. The model proposed in the paper based on means-end theory provides a theoretical explanation for linking Web site features and functions to perceptions of value by consumers. Communication is central to every marketing effort. In today’s multifaceted technology environment, consumers are inundated with marketing communications from all sorts of advertisers on all sorts of devices. The chapter by Merrill Warkentin, Robert Moore, and Melissa Moore, “A Synthesis and Analysis of Behavioral and Policy Issues in Electronic Marketing Communications,” provides an interdisciplinary synthesis of recent research concerning emerging electronic marketing communications. The chapter explores how different levels of marketing information acquisition and integration could impact consumer perceptions and behaviors. The next chapter by Shailey Minocha, Liisa Dawson, Ann Blandford, and Nicola Millard, “Providing Value to Customer in E-Commerce Environments: The Customer’s Perspective,” comes to us from the United Kingdom. Borrowing from the HCI literature and using intensive research, these authors provide us with a new way to understand online service quality and maximize the total consumer experience (TCE). Their framework of online service quality (ESEQUAL) promises to have a major impact on the practice of e-marketing. This article also represents a truly remarkable collaboration with members of academia and industry. Online brands help us make sense of the abundance of information online. Encountering a familiar brand online is akin to meeting a friend in an alien environment. Yet managing brands online provide unique challenges. In the chapter by Subir Bandyopadhyay and Rosemary Serjak, “Key Success Requirements for
viii
Online Brand Management,” we learn about what the brand manager can do to manage brands online and integrate them with physical brands for a successful consumer experience. Daniela Andreini’s chapter, “The Evolution of the Theory and Practice of Marketing in Light of Information Technology,” is a theoretical examination of the place of e-marketing in the marketing theory literature. This Italian author provides an exhaustive analysis of the different theoretical perspectives of e-marketing and then integrates it with the known theoretical frameworks in marketing. The next chapter comes to us from Spain. The work of José Manuel Ortega Egea and Manuel Recio Menéndez, “The Internet and Global Markets,” is a theoretical overview of how the Internet is affecting global markets. Online marketing research may well be the killer application that e-marketers have been waiting for. Online focus groups provide us with unique advantages. The biggest stated disadvantage may be that we lose body language and hence, an understanding of how things are said and not just what is said. The next chapter by Peyton Mason, Boyd Davis, and Deborah Bosley, “Stance Analysis: Social Cues and Attitudes in Online Interaction,” introduces us to the notion of stance and describes how we could measure this construct using multivariate techniques, using an ongoing example taken from an online financial focus group. They review differences in stance between online real-time focus groups and online chat, as well as between online and face-to-face focus groups; and finally, they proffer examples of stance analysis in two very different online focus groups: older adults discussing financial services and teenagers discussing clothes. Their work could very well be the missing piece in our understanding of online research and is a must-read for everyone interested in using the Internet as a research tool. The next chapter comes to us from an Austrian author—Maria Madlberger— who provides us with a fascinating comparative analysis in her paper, “Application of Internet-Based Marketing Instruments by Multichannel Retailers: A Web Site Analysis in the United States and the United Kingdom.” Her findings are provocative. She found that the observed multichannel retailers still prefer “traditional” retail marketing instruments on their online shops and often do without innovative Internet-based marketing instruments such as personalization or content and information offering. Additionally, they did not find fewer-than-expected differences between the observed U.S. and U.K. retailers. The next chapter comes to us from S. Ramesh Kumar, and his work, “The EMode of Brand Positioning: The Need for an Online Positioning Interface,” takes on the issue of the positioning of online brands. Drawing from global as well as Indian examples, Kumar provides us with potential positioning frameworks.
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The chapter by Manlio Del Giudice and Michel Polski is titled, “Locked In By Services: Willingness to Pay More and Switching Behavior in a Digital Environment.” They discuss a dynamic model of cognitive and behavioral e-loyalty. Using results from an empirical study, their chapter focuses on the determinants of the switching behavior online and on the opportunity to change Web site usability using a powerful lock-in strategy. The last chapter is by Peter O’Connor which comes to us from France. His paper titled, “A Comparative Analysis of International Approaches to the Protection of Online Privacy,” compares the self-regulation approach epitomized by the United States with the comprehensive omnibus legislative approach mandated by the European Union. This collection of articles is expected to add to an already-considerable literature and to enhance our understanding of this intrinsically interdisciplinary and global phenomenon.
Sandeep Krishnamurthy University of Washington, Bothell, USA
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Evaluation of Web Sites on Information and Entertainment Properties 1
Chapter I
Evaluation of Web Sites on Information and Entertainment Properties:
The Role of Involvement
Sanjeev Swami, Indian Institute of Technology, Kanpur, India Ram Krishna, Tata Consultancy Services, India
Abstract
This paper addresses the role of consumer involvement in Web site evaluation. We investigate the factors that lead the consumer to be involved with one site more than another. Based on previous research, we use the psychological constructs, information-seeking tendency, and focused attention (Baumgartner & Steenkamp, 1996; Novak, Hoffman, & Yung, 2000) to define the “information profile” of a consumer; and sensation-seeking tendency and mood variability to define the “entertainment profile” of the consumer (Eliashberg & Sawhney, 1994). The information and entertainment factors are hypothesized to affect consumers’ utilitarian (need, value) and hedonic (interest, appeal) evaluations of involvement, respectively, and ultimately, the affect toward the Web site (Holbrook & Hirschman, 1982; Mano & Oliver, 1993; Zaichkowsky, 1985, 1994). We examine these evaluations for various Web sites, whose respective information and
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2 Swami and Krishna
entertainment profiles are defined using elements such as informativeness, organization, and entertainment properties (Chen & Wells, 1999). The Web site properties are hypothesized to moderate the relationships between individuals’ profiles and their evaluations of involvement and affect. We conducted our study using three surveys: (1) collection of data for classifying Web sites on information and entertainment properties, (2) collection of data for measurement of involvement, and (3) collection of data for time-based measurement of involvement. Our results show that the consumer’s information and entertainment profiles significantly affect utilitarian and hedonic evaluations of involvement. We also find positive and significant relationships between the evaluations of involvement and affect toward the Web site. Further, we find that the Web site’s informationspecific properties moderate the relationship between information profile of the consumer and his/her utilitarian evaluation of involvement. A set of results from representative time-based evaluations of involvement shows that the respective elements of evaluation of involvement show increase/ decrease over time if there is a match/mismatch between the user and site properties.
Introduction
The Internet has evolved as a dynamic new medium of information, entertainment, and commerce. Penetration levels have increased dramatically and new business opportunities have been created online (Hanson, 2000). Analysts have remained upbeat about the potential of e-commerce and predicted that traditional U.S. companies using digital marketing will spend $63 billion on it annually by 2005; and that online retailing in Europe will grow to 152 billion Euros in 2006 (Forrester Research, 2001; Forrester Research BV, 2001). However, amidst all the excitement about the Internet, the importance of the most significant entity behind all this attention—the consumer—must be recognized. This is important since the consequences of the lack of in-depth understanding of the consumer could be devastating as manifested in many dot-com failures (Mahajan, Srinivasan, & Wind, 2002; Varianini & Vaturi, 2000). In general, online consumers are younger, more educated, and more affluent than the general population (Hanson, 2000). Consumers visit the Web for entertainment (e.g., multiuser games, online discussions or chat rooms, music, videos), buying goods or services (e.g., online banking, online shopping, financial services, electronic catalogs, reverse auction), searching for information (e.g., reading news, searching online databases), communication (e.g., e-mail, chat),
Copyright © 2006, Idea Group Inc. Copying or distributing in print or electronic forms without written permission of Idea Group Inc. is prohibited.
Evaluation of Web Sites on Information and Entertainment Properties 3
and education and training (e.g., interactive education, online training) (Hanson, 2000; Kolakata & Whinston, 2000; Korgaonkar & Wolin, 1999; Krishnamurthy, 2002; Nielsen, 1999a). However, a concern appears to be the fact that 80% of individuals do not revisit Web sites (Nvision, 1999). This suggests that winning the online consumer requires a deeper analysis and understanding of his/her behavior and developing an appropriate marketing strategy. The first step in this direction should be converting casual first-time visitors into loyal users who are inclined to revisit the site. This recommends development of “sticky,” or involving We..."
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