Online Shopping

“Cognitive Dissonance” and how to ease it

Cognitive dissonance is an insecure feeling, or lingering doubts, consumers sometimes have after making large purchases. One way to reduce Cognitive dissonance (CD) is to introduce full money back guarantee on dissatisfaction within a stated time period, say 2-3 weeks after purchase. Another way to reduce CD is by allowing product evaluations where the user is allowed to use the product for a limited time period and then has the option whether to buy it or not. As a marketing manager of a desktop software, I will make the trial version of the software available for free download over the internet. Users can freely download, test, evaluate and then extend the trial period if they wish to, by purchasing the product. This way, the users are devoid of any dissatisfaction after purchase, since they have evaluated the software fully.

Article Copyright – Deepesh Joseph (2003-2020)

Research Reference:
1. Williams C. (2007). Management (4th ed., ). Thomson South Western.

Influencing Problem recognition of customers

The consumer can be influenced by exposing him to some stimuli that makes him realize about his potential need or desire for something. A good method will be to expose him to some sort of advertisement. For example as a marketing manager of a ABC company that produces dandruff
remover shampoos, I will work on collaborating with Wal-Mart to display multimedia advertisement on the TV terminals at the cash counter, showing how a person is greatly satisfied and relieved by the use of ABCshampoo.

Article Copyright – Deepesh Joseph (2003-2020)

Research Reference:

1. Williams C. (2007). Management (4th ed., ). Thomson South Western.

Market segmentation

Market segmentation is the process of separating the varied market into segments, each of which has similar characteristics. For example, a cosmetic company may segment its market according to age and sex, thus concentrating on baby lotion (age), adult shampoo (age), after-shave (sex) and eye-liner (sex). The organization could then do research in each segment to study how large a market is for its products and arrive at products that is of high value and quality for that particular segment.

Article Copyright – Deepesh Joseph (2003-2020)

Research Reference:
1. Williams C. (2007). Management (4th ed., ). Thomson South Western.

Simple NPV & ROI calculation (Example 001)

Case: A company invests $15000 and receives a $11000 cash benefit at the end of the first year and a $12100 cash benefit at the end of the second year. (Assume Cost of Money = 10%)

Calculation:

NPV = Σ P = 10000 + 10000 – 15000 = 5000
ROI = NPV/Initial investment = 5000/15000 = 33.33%

"Not only is shopping melting into everything, but everything is melting into shopping"

“Not only is shopping melting into everything, but everything is melting into shopping”

(The above sentence is taken from the referred article)

The article ‘The mauling of America’, by Wittman K., introduces the consumer oriented nature of retail architectures. The article brings into light the most visible forms of ‘Gruen effect’ where the consumer is forced to buy/shop more and more, even though he doesn’t intend to buy more. Citing various examples of malls to casinos to restaurants, the author describes how the architecture is designed to support endless shopping by attracting as many customers. The effect of this global phenomenon is so powerful that even airports have become just another center for shopping.

In the article ‘Designed to shop’ by Dupree C., highlights the effect that globalization and modernization has on the retail architecture. It talks about how architecture has changed its nature from “frozen music” to “junkspaces”, when the focus is now on shopping and nothing else. The reason for this is the shift in priorities from public interest to revenue making. The article cites various examples including the artificial rain forests created in Mirage Casino-Hotel (Las Vegas), where the atmosphere is fine-tuned to favor consumption.

Both the articles focus on a single point – “The effect of consumption oriented culture on the architectural design of retail stores and other public service monuments” The question that need to be asked here is – “Is it good or bad for the original intended architecture?” If the net effect leads to “junkspaces” rather than “frozen music”, it is probably not good. The idea is – if everything is focussed on revenue generation (eg: melting shopping into everything), we might fall back from the core vision of the architecture to support public interest. Also, it is important that the architecture should lead to satisfying the organization’s ultimate goal to market itself and generate revenues. So we need to strike a balance between user interests and organization’s goal to increase revenue. The same concept can be applied to IA/web site design where we should try to create a balanced approach between user needs and organization’s need to market its products and services. The web site architecture may incorporate online marketing principles which would be beneficial to make customers spend more time on the website, exploring its content and services.

Analysis of amazon.com

amazon.com is not far from creating Gruen effect using its online shopping and marketing techniques. The web site design is optimized in such a way that any activity could potentially melt down to online shopping and thus creation of revenue. The main features that support this situation are the consistent top navigation system (organizing the departments in terms of frequently used items), optimized search system and varied forms of cross-selling techniques.

Prominent and consistent location of departments list prompts user to try out exploring all departments, event though he is not interested. The content organization on the home page is fine tuned to display graphics of all everyday items such as electronics, apparels and sports items. One of the major website architectural components that supports attracting users to all available deals is the implementation of associative relationships. The personalized recommendation section allows user to receive/view product recommendations based on preset decision points or based on previous shopping behavior. Thus, by supporting the user’s primary need to seek and find the required stuff, web site strikes balance between the user needs and the site’s ultimate goal to market its products and generate revenue.

Reference:

Wittman K. (Nov., 1997). The Mauling of America. Retrieved from http://www.citypages.com/1997-11-26/news/the-mauling-of-america on May, 2008.
Dupree C. (Nov., 1997). Designed To Shop. Retrieved from http://harvardmagazine.com/2002/07/designed-to-shop.html on May, 2008.

(c) Deepesh Joseph, 2004-2009