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(Subhasis Pattnaik)
PC13MBA005
CERTIFICATE OF THE GUIDE
TOWARDS
ONLINE
SHOPPING”
submitted by SUBHASISH
PATNAIK bearing the Roll no- PC13MBA005 is his own work and has been
carried out under my supervision. It is recommended that the candidate may now
be evaluated for his dissertation work by the college.
Meher
is done by me is an authentic
work carried out for the partial fulfilment of the requirement for the award of the
degree of MBA program in management under the guidance by Mr. PURNENDU
KUMAR PATRA
The matter embodied in the project work has not been submitted for the award of
any other degree, diploma or any other similar title or prizes to the best of my
knowledge and belief.
Subhasish Patnaik
Roll No. PC13MBA005
MBA 2nd Year
.
CONTENTS
CHAPTER – I
INTRODUCTION
1.1
1.2
1.3
1.4
Research objective
1.5
CHAPTER – II
REVIEW OF LITERATURE
2.1
National
2.2
International
CHAPTER – III
1-4
5 - 10
11 – 18
RESEARCH METHODOLOGY
29 – 35
DATA ANALYSIS
36 – 53
CHAPTER – VI
FINDING
54 - 55
CHAPTER – VI
56 - 61
CHAPTER – VII
BIBLIOGRAPHY
CHAPTER – IX
ANNEXURES
Chapter 1
INTRODUCTION
1
1.0 INTRODUCTION
Internet is changing the way consumers shop and buys goods and services, and has
rapidly evolved into a global phenomenon. Many companies have started using the
Internet with the aim of cutting marketing costs, thereby reducing the price of
their
products and services in order to stay ahead in highly competitive markets.
Companies
also use the Internet to convey, communicate and disseminate information, to sell
the
product, to take feedback and also to conduct satisfaction surveys with customers.
Customers use the Internet not only to buy the product online, but also to compare
prices, product features and after sale service facilities they will receive if
they
purchase the product from a particular store. Many experts are optimistic about the
prospect of online business.
In addition to the tremendous potential of the E-commerce market, the Internet
provides a unique opportunity for companies to more efficiently reach existing and
potential customers. Although most of the revenue of online transactions comes from
business-to-business commerce, the practitioners of business-to-consumer commerce
should not lose confidence. It has been more than a decade since business-
toconsumer E-commerce first evolved. Scholars and practitioners of electronic
commerce constantly strive to gain an improved insight into consumer behavior in
cyberspace. Along with the development of E-retailing, researchers continue to
explain E-consumers’ behaviour from different perspectives. Many of their studies
have posited new emergent factors or assumptions that are based on the traditional
models of consumer behaviour, and then examine their validity in the Internet
context.
Online shopping is definitely a great way to shop with everything available on the
websites. From clothes, gift items, food, home needs, medicines, and many more,
this
mode of shopping allows one to shop conveniently without hassle on spending hours
in a supermarket or shopping areas. The Internet with its wide array of information
nooks, allows the customer to go through various reviews of the product or service
before actually heading for purchases. These online shopping websites also have
daily
deals for the customer looking for discounts and store offerings.
2
1.1 SIGNIFICANCE OF THE STUDY
In recent years, online shopping has become very popular. The growth of technology
has made these a part and parcel of everyday lifestyle. The advent of plastic money
or
the debit /credit card and the smooth access to the World Wide Web has brought the
shops from around the world to the desktop. We personally have seen many of our
friends surfing through various online shopping sites and purchasing things.
Student
community has become so strong that even the parents seek the help and advice of
their children before conducting big purchases. This is solely because of their
exposure to web and social media. Moreover, while it comes to personal purchases,
students are very particular that they get best products available in the market
and seek
all the possible ways to secure the best products. This is where the role of online
shopping sites emerges. Students who are well versed in the use of internet and
active
in social media, know about online markets and have tried at least some of them.
The study is very relevant because it can give a clear picture of the future of
online
markets in India and the emerging trends in this particular field. The various
factors
that influence online shopping habits and its merits and demerits are also dealt
with.The study also tries to have a comparison of online shopping habits among
different age group as well as income group.
To know the consumers awareness and perception about the products and
services provided on internet.
2.
To know how it provides products and services and satisfies their customers.
3.
3
1.
2.
3.
4.
1.4RESEARCH OBJECTIVE
1. To analysethe consumer interest on online marketing.
2. To determine the factors affecting online buying.
3. To evaluate the growth of online marketing.
4. To forsee the demand of online shopping in india.
5. To study the impact of traditional retailer over the online retailer.
6. To gather information regarding growing sector for online purchasing.
7. To understand the barriers of online marketing.
8. To know the consumers awareness and perception about the products and services
provided on internet
9. To examine what the consumer had bought and what they want to purchase in the
near future.
4
CHAPTER -2
LITRETURE REVIEW
5
CHAPTER-2
REVIEW OF LITRETURE
A literature review is a select analysis of existing research which is relevant to
your topic,
showing how it relates to your investigation. It explains and justifies how your
investigation
may help answer some of the questions or gaps in this area of research.
A literature review is not a straightforward summary of everything you have read on
the topic
and it is not a chronological description of what was discovered in your field.
6
relative ideas expressed in the literature that associated with this subject.
Furthermore,
a number of hypotheses will be tested to answer the research questions that
mentioned
already in the introduction. Due to the recent research shows that internet
shopping
becomes a full and effective business model (Black, 2005), therefore there are
several
studies that already investigated more or less related on internet shopping and
consumer behaviour. In the following chapter, some point of view will be taken from
literatures, and needs careful review to achieve them as the basis of the
subsequent
research investigation.
J.SINHA 2010The number of people engaged in various online activities is increasing
every day. While the number of online shoppers is increasing, it is not
proportional to
that of brick-and-mortar shoppers. Research has tried to explain the dismal
performance of online shopping as compared to the physical shopping format.
Reasons for the lower level of Internet sales have been cited as being perceived
risk in
carrying out an online transaction, socio-psychological factors (Like - influence
of
friends and relatives) and infrastructural limitations (Availability of Internet,
computers, credit-cards, cyber laws etc.). Under the purview of aforementioned
factors this study tried understanding the online shopping behavior of Indian
consumers. Socio-psychological factors and infrastructure have been found
influential
factors while the perceived risk surprisingly is not significant as a whole but at
gender
level there was significant difference between the online behavior of male and
female
due to risk perception.
Lal studied the determinants of adoption of Information Technology (IT) in
India. The study was based on 59 electrical and electronic goods manufacturing
firmssituated in NOIDA. Semi-structured questionnaire were used to collect the
data.
The study examined the factors influencing the degree of IT adoption by firms. The
factors included are entrepreneur characteristics measured by entrepreneur’s
qualification, importance given to market share, R&D and quality consciousness,
firm’s international orientation factors measured by import and export intensity,
work
force skill and firm size. The sample firms were divided into four categories
depending on their intensity of IT.
7
2.2 INTERNATIONAL REVIEW OF LITREATURE
E-Business probably began with electronic data interchange in the 1960s (Zwass,
1996).
However, (Melao, 2008) suggests that it was only in the 1990s, primarily via the
Internet, that eBusiness has emerged as a core feature of many organizations. In
his opinion, the hope was that
e-Business would revolutionize the ways in which organizations interact with
customers,
employees, suppliers and partners. Some saw e- Business as part of a recipe to stay
competitive in
the global economy.
Christy
M.
K.
Cheung,
Lei
Zhu,
Timothy
Kwong,
Gloria
W.W.
Chan,
MoezLimayem,(2002) The topic of online consumer behavior has been examined under
variouscontexts over the years. Although researchers from a variety of business
disciplines have
made significant progress over the past few years, the scope of these studies is
rather broad, the
studies appear relatively fragmented and no unifying theoretical model is found in
this research
area. In view of this, provide an exhaustive review of the literature and propose a
research
framework with three key building blocks (intention, adoption, and continuance) so
as to analyze
the online consumer behavior in a systematic way. This proposed framework not only
provides us
with a cohesive view of online consumer behavior, but also serves as a salient
guideline for
researchers in this area.
Burke, R.R. (2002), Trust is a key factor that determines the success of Business
toConsumer
(B2C) e-commerce transactions. Previous researchers have identified several
critical factors that
influence trust in the context of online shopping. This research focuses on
available security
measures which assure online shopper_s safety and great sales promotions and online
deals which
stimulate customers to shop online.
Abel Stephen (2003) in his paper represents the findings of research studies that
address e-commerce
design and associated consumer behavior. The innovation of e-commerce has affected
not only the
marketplace through the facilitation of the exchange of goods and services, but
also human behavior
in response to the mechanisms of online services. Researchers have identified and
hypothesized on
relevant subject matters ranging from Web usability, marketing channels and other
factors influencing
online buying behavior. Though researchers have focused on what appear different
aspects of online
buying behavior, their studies may be shown to be interrelated and interdependent,
even to the extent
of revealing constructs upon which e-commerce, in terms of future design and
research, could be
built.
8
empathy are unobservable. In contrast, trust may play a central role here in
enhancing customer
satisfaction. Model trust as an endogenously formed entity that ultimately impacts
customer
satisfaction, and we elucidate the linkages between trust and other factors related
to the performance
of the online service provider and to the service environment.
9
affordability of merchandise, customer service and ease of use of the shopping
site. In
another study, Jarvenpaa et al. [2000] tested a model of consumer attitude towards
specific
webbase stores, in which perceptions of the store's reputation and size were
assumed to affect
consumer trust of the retailer. The level of trust was positively related to the
attitude toward
the store, and inversely related to the perception of the risks involved in buying
from that
store. Jarvenpaa et al. [2000] concluded that the attitude and the risk perception
affected the
consumer's intention to buy from the store.
Consumer risk perceptions and concerns regarding online shopping are mainly related
to
aspects involving the privacy and security of personal information, the security of
online
transaction systems and the uncertainty of product quality. Trust is interwoven
with risk
[McAllister, 1995]. One of the consequences of trust is that it reduces the
consumer’s
perception of risk associated with opportunistic behavior by the seller [Ganesan,
1994]. Lack
of trust is frequently reported as the reason for consumers not purchasing from
Internet shops,
as trust is regarded as an important factor under conditions of uncertainty and
risk in
traditional theories.
Mayer et al. [1995] developed a model which combines traditional marketing
philosophy on
consumer motivation to buy and the trust model. In this model, trust propensity;
which is a
personality trait possessed by buyers; is an important antecedent of trust. In
Internet
shopping, there is not much information available to the buyer regarding the
seller, prior to
purchase. A buyer with a high propensity to trust will more likely be a potential
customer
than a buyer with a lower propensity.
Purchase decisions are ultimately guided by consumers' perceptions of the product
or service. Of
course, the critical nature of perceptions as they relate to purchase behaviour has
been repeatedly
demonstrated in advertising and marketing research. Negative perceptions of the
product, service,
brand, or company almost always translate to a lost sale or, at a minimum,
expressed lower intentions
to purchase the advertised product or service. If the goal is to increase online
spending among
consumers, particularly female consumers, then consumers' perceptions of online
shopping are
ultimately matters the most. Presumably, the more positive consumers perceive the
online buying
experience the more likely they will make online purchases. The primary construct
that we believe
will have a bearing on perceptual differences between male and female internet
shoppers is emotion.
Related to emotion are two additional constructs, trust and convenience. (Robertson
, Zielinski and
Ward, 1984)
10
CHAPTER - 3
OVERVIEW OF THE INDUSTRY
11
OVERVIEW OF THE INDUSTRY
3.1 ONLINE SHOPPING IN INDIA
The birth and growth of Internet has been the biggest event of the century. E-
commerce in
India has come a long way from a timid beginning in the 1999-2000 to a period where
one
can sell and find all sorts of stuff from a high end product to a meager peanut
online. Most
corporations are using Internet to represent their product range and services so
that it is
accessible to the global market and to reach out to a larger range of their
audience.
Computers and the Internet have completely changed the way one handles day-to-day
transactions; online shopping is one of them. The Internet has brought about
sweeping
changes in the purchasing habits of the people. In the comfort of one's home,
office or cyber
cafe or anywhere across the globe, one can log on and buy just about anything from
apparel,
books, music and diamond jewellery to digital cameras, mobile phones, MP3 players,
video
games, movie tickets, rail and air tickets. Ease, simplicity, convenience and
security are the
key factors turning the users to buy online.
E-commerce revenues in the country are projected to reach Rs 2,300 crore in the
year 200607, growing at 95 per cent over 2004-05(Source: Internet and Mobile
Association of India,
IAMAI). This pertains to the business-to-consumer (B2C) segment. It may be too
early to do
a comparison with the e-commerce scenes in countries such as the US where billions
of
dollars are spent online but the business in India is growing exponentially every
year, albeit
from a smaller base, the total revenues have reached a respectful size.
12
3.2 Recent Developments
The number of users logging on to the Internet is growing by leaps and bounds. The
number
of Indians who are online is expected to touch to 100 million by 2007-08, from the
present
38.5 million according to the research conducted by IAMAI. The numbers indicate a
growing
sense of comfort with the use of Internet for shopping. Accompanying this growth,
there is an
increasing maturity in the way people use the Internet. It's a classical curve.
Online users
typically start by using e-mail, gradually move on to browsing for news,
information and
entertainment, and finally graduate to shopping and conducting business online.
Online sales
have registered a huge jump and what was a concept five years ago is now beginning
to hit
the mainstream levels. Roughly 10 percent of the world's population more than 627
million
people have shopped online at least once, in India it is just sprouted and
beginning to perish.
Internet is now going beyond the simple exchange of information to a shopping
paradise.
This medium is far bigger than expected, but many retailers and marketers are not
using it to
its full potential.
Indian customers are increasingly getting comfortable with online shopping, and
there is a
higher acceptability for the concept. India has 25 million Internet users and more
is now
turning to online shopping. There has been an influx of online shopping sites in
India with
many companies hitching onto the Internet bandwagon. The revenues from online
shopping
are expected to more than double by 2006-07. According to IAMAI, the average number
of
transactions per month in India has gone up from 2 lakh in 2003-04 to 4.4 lakh in
2004-05
and has doubled to 7.95 lakh transactions per month in the year 2005-06. The online
sales
during the festival season had increased rapidly especially during Diwali and
Ramzan which
recorded a sales of Rs115 crore, a 117 per cent increase from the Rs53 crore in the
year 200405(source IAMAI). These figures clearly show that online shopping has
truly come of age
13
and consumers are keen to shop on the net. Effective customer communication on
products
plus reduced shipping costs and timely delivery has helped online marketers to
seize a slice
of the Rs 115 crore sales.
Online shopping has become the latest trend among shoppers. Indians are becoming
more
comfortable with e-commerce. The consumer’s attitude has been evolving towards
online
purchases. It has become increasingly positive over the years. The attitudes that
drive people
to shop online, such as
convenience, price comparison and choice are improving tremendously in India.
Though a miniscule amount in the global context, the Indian online shoppers’
population
would make its presence felt quite remarkably. The potential of the Indian e-market
can be
gauged from the fact that 16 percent of Indian consumers want to buy online in the
next six
months, making it the third most online-potential country after Korea (28 percent)
and
Australia (26 percent) (Source:IMRB). This is an indication of a growing breed of
Indian
consumers who are not only better equipped but also more confident of the online
transactions. Indian businesses have also grown mature enough to move up the IT
curve and
they are considering Business to consumer (B2C) e-commerce a viable revenue model.
Some
of the companies that have benefited are baazee.com, indiatimes.com, rediff.com,
indiamart.com, fabmart.com, traveljini.com and sifymall.com.
Indiamart.com has witnessed a growth of more than ten times in just two years in
its online
gifts domain. In the online travel domain, the company was able to generate an
average
$8,000 worth of room bookings/month for its premium client. It is expected to touch
$1520,000/month/client by the year-end, which is over 100 percent growth
(Source:Indiamart).
Brick-and-mortar businesses are also building up e-commerce revenues. In the year
2005-06
14
Samsung India recorded a 120 percent jump in online buying from its site over the
year 20042004
05 (Source: Samsung). Nirula’s witnessed more than double growth in its B2C e-
commerce
e
revenues in the year 2005-06
06 and is positive for the next one to two years (Source: Nirula’s).
Companies like eBay India have seen a large increase in the number of sellers and
buyers
from B and C cities
ties and in a year the eBay community (buyers and sellers) base has increased
to 1.7 million users, which shows that more Indians are shopping online (Source:
eBay).
Online sales are currently marked by a single digit growth, but the leading garment
retailers
retail
like Pantaloon, Shoppers’ Stop and Globus have already made business strategies to
enter
into the world of e-retailing.
retailing. Famous apparel brand Zodiac has already started online stores.
The main motive of these retailers through online sales is to reach the
the global markets and the
small towns where they do not have the outlets. Thus the India's Internet shopping
sector is
preparing for a massive growth, which is fuelled by increasing broadband usage and
growing
e-commerce.
Flipkart.com is an e-commerce
commerce website founded
by SachinBansal and BinnyBansal in 2007. Both
are from IIT Delhi Alumni and also worked in
Amazon.com.
FlipKart.com
15
eBay is an online shopping website a consumer
to consumer corporation which helps the people
and businessman to buy and sell products
worldwide. It is operated to almost 30 countries.
Ebay.in
Snapdeal.com
16
It is an online shopping commerce for Home;
Lifestyle & Fashion e-retailer
retailer founded in 2009
BigShoeBazaar.com has a user base of about 1.5
million people. Yebhi.com offers lifestyle &
Home products and products from a range of
some 250 brands to its customers dealing in
Shoes, Apparels, Bags, Mobiles, Cameras,
Sunglasses, Watches, Home furnishing, Home
decor, Home ware, Lingerie and Fragrances.
It ranks #1,782 among Alexa traffic ranking. It
ranks #4 in Google page ranking. Advertising
revenue is about $1.4 million. It receives 617,284
page views per day generating $1,852 in
advertising revenue. It has recently shown 6.70
Growth among traffic ranking. The page loading is
about 2 sec which is faster than 39% of sites
s
around the world.
17
Shopclues.com initiate free delivery services at the
doorsteps of customers through reputed courier
services to nearly 10,000 cities across the country.
They even initiate a 30-day
day return guarantee if unable
to meet customer satisfaction. One of the
leading online
shopping
companies
in India,
Shopclues.com accepts online payment through major
credit and debit cards, including net banking services.
The online shopping website service employs more
than 400 personnel for effective handling of the
business and is even fundedd by national institutional
investors.
18
CHAPTER - 4
THEORIES OF THE STUDY
19
4.1 INTRODUCTION TO THE STUDY
The Internet has entered the mainstream consciousness over the past decade. This
has
happened primarily because the web has got a graphical interface and Internet has
moved from governmental control to private hands. The activities which are
happening on the Internet are email and instant messaging, general web surfing or
browsing, reading news, hobby searches, entertainment searches, shopping and buying
online, medical information searches, travel information searches, tracking credit
cards, and playing games.
Communication i.e. email, chat or instant message is the basic activity for which
Internet is used. It is the single most important reason for people to go online.
E-mail
provides the opportunity to communicate more often with a much broader circle of
people than one can reach by telephone or by mail in a convenient way. In India too
email constitutes the major activity on the Internet. It was found that more
elderly
people are increasingly using email as compared to the younger generations.
In India the top five online activities are e-mail, surfing, chatting, search and
job
search. Some of the sites, which are commonly used for these particular activities,
are:
Yahoo -Most preferred communication portal, tops for email and chat
Indiatimes –Best event and sports news provider.
Naukri-Best recruitment portal
Google-Best information domain
Shaadi-Best for matrimonial services
eBay-Best online shopping portal
Rapid growth of cybercafés across India
Access to Information
20
The increase in number of computer users
Reach to net services through broadband
Middle-class population with spending power is growing. There are about 200
million of middle-class population good spending powers. These people have
very little time to spend for shopping. Many of them have started to depend on
internet to satisfy their shopping desires.
The figures from IAMAI show that the internet users in India will grow to 200
million
by 2010. Around 25% of regular shoppers in India are in the 18-25 age groups, and
46% are in the 26-35-year range.
•
Worldwide e-commerce is only growing at the rate of 28%, since India being a
younger market, the growth of e-commerce is expected at 51% in the coming years.
•
In line with global trends finally India has also started shopping online these
days. As per the study by IAMAI online shopping in India has rose from $11million
in 1999-2000 to $522 million in 2008 and it is expected to rise above $700 million
by
end March 2010.
•
Indians are also Shopaholics like other Asians. There is a strong booming
21
movie ticket (15%), etc.
Payments
Online shoppers commonly use a credit card to make payments, however some
systems enable users to create accounts and pay by alternative means, such as:
•
Cheque/ Check
Debit card
Gift cards
Some sites will not accept international credit cards, some require both the
purchaser's
billing address and shipping address to be in the same country in which site does
its
business, and still other sites allow customers from anywhere to send gifts
anywhere.
The financial part of a transaction might be processed in real time (for example,
letting the consumer know their credit card was declined before they log off), or
might
be done later as part of the fulfillment process.
22
4.2 AIDA PRINCIPLE IN ONLINE MARKETING :
1. ATTENTION
2.INTREST
3.DESIRE
4.ACTION
23
3. Competitive Rivalry
What is important here is the number and capability of your competitors. If you
have
many competitors, and they offer equally attractive products and services, then
you'll
most likely have little power in the situation, because suppliers and buyers will
go
elsewhere if they don't get a good deal from you. On the other hand, if no-one else
can
do what you do, then you can often have tremendous strength.
4. Threat of Substitutes
This is affected by the ability of your customers to find a different way of doing
what
you do – for example, if you supply a unique software product that automates an
important process, people may substitute by doing the process manually or by
outsourcing it. If substitution is easy and substitution is viable, then this
weakens your
power
.
5. Threat of New Entry
Power is also affected by the ability of people to enter your market. If it costs
little in
time or money to enter your market and compete effectively, if there are few
economies of scale in place, or if you have little protection for your key
technologies,
then new competitors can quickly enter your market and weaken your position. If you
have strong and durable barriers to entry, then you can preserve a favorable
position
and take fair advantage of it.
24
Porter’s five forces for Online Retailer
Supplier power:
Here, suppliers are the manufacturers of finished products. For any product, there
are
many suppliers online, so they can’t show power on online retail companies. For
example, if you take computers category, there are many suppliers like Dell, Apple,
Lenovo, and Toshiba everyone wants to sell their products through online retails
like
Flipkart,Amazon,Snapdeal etc. Selling online saves a lot of money for the
manufacturers, and as many people nowadays prefer purchasing product through
online stores, Companies cannot afford to lose this channel. So, in this industry
the
supplier power is low.
Buyer power:
Buyers in this industry are customers who purchase products online. Since this
industry is flooded with so many players, buyers are having lots of options to
choose.
With many competitors like Amazon.com, eBay, Snapdeal etc. Customers get a wide
range of choices. Customer would prefer the one who would provide goods at
reasonable price, deliver it fast and provide them with other benefits like Cash on
Delivery, EMI facilities, other offers etc. Here Buyers have more power.
Competitive Rivalry:
Competition is very high in this industry with so many players like Jabong,
Snapdeal,
Amazon, Homeshop18 etc. Many competitors means more choices for the customer to
choose from. This also increases the cost incurred by the company to stay in the
customer’s mind i.e. on Promotions and Advertisements etc. Giving the customer
better deals, making customer’s experience delightful and continuous innovation can
help a company to stay at top even with tons of competitors around.
Threat of New Entrants:
Threat of new entrants is very high in this online retail industry because of
following
reasons:
Indian government has allowed 51% FDI in multi-brand online retail and 100%
FDI in single brand online retail. So, this means foreign companies can come
and start their own online retail companies.
There are very less barriers to entry like less capital required to start a
business,
less amount of infrastructure required to start business. All you need is to tie up
with suppliers of products and you need to develop a website to display
products so that customers can order products, and a tie up with online payment
gateway provider like bill desk.
Industry is also going to grow at a rapid rate. It is going to touch 76 billion $
by
2021. Industry is going to experience an exponential growth rate. So, obviously
no one wants to miss this big opportunity.
With the new entrants like Jabong, Snapdeal etc. rapidly racing towards the top
Position.
A Study on Consumer Perception towards online shopping
25
Threat of substitutes:
Substitute for this industry as of now is physical stores. Their threat is very low
for this industry because customers are going for online purchases instead of
going to physical stores as it will save time, effort, and money. With the advent
and penetration of internet and smart phones, future in retail belongs to online
retail.
When we compare relative quality, relative price of product a person buys
online with physical store, both are almost same and in some cases, online
retail store offers more discounts and this attracts the customer to purchase
products online.
4.4 MARKETING MIX OF ONLINE SHOPPING :
The elements of marketing mix are also being applied for online marketing.
Marketing
mix is essential for analysing the business. Marketer analyses the parameters then
select appropriate strategy in order to face the market complexion effectively. The
7Ps
of marketing is being applied in the online marketing industry. The effect of
marketing mix is being explained below diagram :
26
4.5 MODELS OF ONLINE SHOPING
27
FRAMEWORK FOR CONSUMERS’
CONSUM
INTENTIONS TO SHOP
HOP ONLINE
Source: research by Emerald
28
CHAPTER - 5
RESEARCH METHODOLOGY
29
5.0 RESEARCH METHODOLOGY
5.1 Research Objective
To know and understand the consumer’s perception and awareness about internet
marketing/
shopping. This will help to know the attitude and perception of consumers towards
online
shopping and what are the factors which shape the consumer’s perception towards
online
shopping. Also what are key concerns from the point of view of consumer while
online
shopping.
5.2 Determination of information needs and sources
The following was the information required:
•
What are the key concern areas for consumers while online shopping?
30
shopping, security and privacy, quality of internet connection )are found to be
ordinarily
independent and five (attitude toward online shopping, intention to shop online,
decision
making, online purchasing, and consumer satisfaction) are ordinarily dependent
variables.
Consumer satisfaction is considered to be a separate factor in this study. It can
occur at all
possible stages depending on consumer’s involvement during the online shopping
process.
The relationships between satisfaction, attitude, intention, decision making and
online
purchasing are proposed to be two-way relationships due to the reciprocal
influences of each
on the other. In addition, three of the antecedents, perceived usefulness,
perceived ease of
use, perceived enjoyment , have been found to have direct impact on consumer
satisfaction.
Perceived Usefulness
Perceived usefulness is defined as the degree to which a person believes that using
a
particular system would increase his or her job performance. It is an important
factor
affecting acceptance of an information system, because the ultimate aim of any
person is the
superior job performance.
Perceived Ease of Use
This is an important factor that affects the acceptance of a particular information
system. It is
defined as the degree to which a person believes that using a particular
information system
would be free of effort. Hence an application perceived to be easier to use would
more likely
be accepted by the user.
Perceived Enjoyment
Enjoyment refers to the extent to which the activity of using a computer is
perceived to be
enjoyable in its own rights. This is seen as an intrinsic source of motivation to
use a particular
application.
Amount of Information
Amount of information is defined as the information which is available for the
product which
a person wants to buy through online shopping. This factor eases the decision of
the user to
actually buy the product or not, or which product to buy. This factor becomes even
more
important in case of High Involvement product.
31
Security and Privacy
Security and privacy are the main factors which hinder the growth of online
shopping. The
user is concerned about his ID and Password which can be stolen by persons with
wrong
intentions and then misuse it. At the same time they are concerned that their
personal
information may be sold to the third party which poses a serious threat to their
privacy.
Quality of Internet Connection
Not only is the presence of internet connection necessary but also its Quality is
important to
shop online. This is an important factor which determines whether the user would
shop online
or not because presence of internet is a basic necessity for this mode of shopping
Attitude and perception towards online shopping
Consumer’s attitude and perception toward online shopping have gained a great deal
of
attention in the empirical literature. It is believed that consumer attitudes will
affect intention
to shop online and eventually whether a transaction is made. It refers to:1) The
consumer’s acceptance of the Internet as a shopping channel
2) Consumer attitudes toward a specific Internet store (i.e., to what extent
consumers think
that shopping at this store is appealing).
Intention to shop online
Consumer’s intention to shop online refers to their willingness to make purchases
in an
Internet store. Commonly, this factor is measured by consumer’s willingness to buy
and to
return for additional purchases. The latter also contributes to customer loyalty.
Consumer’s
intention to shop online is positively associated with attitude towards Internet
buying, and
influences their decision-making and purchasing behavior. In addition, there is
evidence of
reciprocal influence between intention to shop online and customer satisfaction.
Online shopping decision making
Online shopping decision-making includes information seeking, comparison of
alternatives,
and choice making. The results bearing on this factor directly influence consumer’s
purchasing behavior. In addition, there appears to be an impact on user’s
satisfaction. Though
32
it is important, there are only five studies that include it.
According to Haubl and Trifts (2000), potential consumers appear to use a two-stage
process
in reaching purchase decisions.
Initially, consumers typically screen a large set of products in order to identify
a subset of
promising alternatives that appears to meet their needs. They then evaluate the
subset in
greater depth, performing relative comparisons across products based on some
desirable
attributes and make a purchase decision.
Online purchasing
This is the most substantial step in online shopping activities, with most
empirical research
using measures of frequency (or number) of purchases and value of online purchases
as
measures of online purchasing; other less commonly used measures are unplanned
purchases
Online purchasing is reported to be strongly associated with the factors of
personal
characteristics, vendor/service/product characteristics, website quality, attitudes
toward
online shopping, intention to shop online, and decision making (Andrade 2000;
Bellman et al.
1999)
Consumer satisfaction
It can be defined as the extent to which consumer’s perceptions of the online
shopping
experience confirm their expectations. Most consumers form expectations of the
product,
vendor, service, and quality of the website that they patronize before engaging in
online
shopping activities.
These expectations influence their attitudes and intentions to shop at a certain
Internet store,
and consequently their decision-making processes and purchasing behavior. If
expectations
are met, customers achieve a high degree of satisfaction, which influences their
online
shopping attitudes, intentions, decisions, and purchasing activity positively. In
contrast,
dissatisfaction is negatively associated with these four variables (Ho and Wu 1999;
Jahng et
al. 2001; Kim et al. 2001).
33
Information on
online shopping
Security & Privacy
Attitude
towards
online
shopping
Intention
to shop
online
Decision
Making
Online
Purchase
Perceived Usefulness
Perceived Enjoyment
34
5.4.2 Secondary Data
It will be collected to add the value to the primary data. This may be used to
collect necessary
data and records by different websites, magazines, annual reports, journals,
reference books,
and newspapers, etc.
5.5 Sample Design
5.5.1 Sample Unit
For studying consumer perception on online shopping, samples were selected from
Sambalpur,Odisha.
5.5.2 Sample Media
The respondents in the samples are reached through personal interviews.
5.5.3 Sampling Methods
Sampling methods fall under two broad categoriesa) Non-probability sampling
methods.
b) Probability sampling methods.
5.5.4 Sample size- 100
5.5.5 Research place-Sambalpur
5.5.6 Sample Design
I have prepared this project as descriptive type, as the objective of the study.
35
CHAPTER - 6
DATA ANALYSIS
36
6.0 DATA ANALYSIS
6.1 THE INTERNET USAGE
The objectives of the research were studied with respect to a regular online
shopper who
shopped more than once because they would be the right respondent to give an
insight about
the online shopping. Therefore it is firstly important to understand who is a
regular online
shopper. In the survey the respondents where asked the following questions which
helped to
know about a regular shopper.
1.
Yes 98%
No 02%
yes
no
INTERPRETATION
The above pie -chart represent that 98% consumers had used the internet. The
uses of internet is a vital thing in todays competitive era. The rapid uses of
computer
has make the internet well known to others. While as the influence of social media
and mobile internet makes the uses of internet more popular. The 02 % people were
never uses the internet from the study of 100 individual respondent.
3 – 5 years
37
1 – 3 years
90%
78%
80%
70%
60%
50%
40%
30%
14%
20%
10%
2%
6%
0%
Les s
than1year
1–3years
3–5years
More than
5years
INTERPRETATION
The diagram shows that shopping has increased with the usage of Internet over the
years. Regular shoppers who have been using Internet for more than one year had
shopped to 98% and regular shoppers who have been using Internet for more than five
years have shopped to 78%. Internet is not a new concept for these regular online
shoppers and they have been using it for more than 5 years now. The increased usage
over the years has lead to an increase in shopping, as these regular shoppers are
able
to make use of the various e-commerce activities.
Q.3 On the average, how much time (per week) do you spend in surfing the Web?
0 – 5 hours
6 – 10 hours
16 – 20 hours
More than 20 hours
11 – 15 hours
38
40%
36%
35%
28%
30%
25%
20%
20%
12%
15%
10%
5%
4%
0%
0 -5
h o u rs a
week
6 - 10
h o u rs a
week
11 - 15
h o u rs a
week
16 - 20
h o u rs a
week
Mo re
th a n 2 0
h o u rs a
week
INTERPRETATION
The research shows that 36% of the online shopping had been done who use Internet
for more
than 20 hours a week and 96% of the shopping has been done by regular shoppers who
have
been using Internet for more than 5 hours a week. As more the regular online
shopper are
using the Internet it is seen that they end up buying more also. This shows that
Internet is
becoming an integral part of the daily activity of the regular online shopper. The
regular
online shoppers who have been using Internet for more than 20 hours are more
comfortable
and confident as a result they purchase more online as compared to who use Internet
for less
number of hours.The study shows that the growing usage of Internet has lead to
increase in
online shopping as seen above. There is a positive relation between increase usage
of Internet
and online purchase. The marketers should capture this enormous growth, which can
be
brought by the penetration of broadband and lowering the prices of computers. Thus
increase
in usage of Internet over the years and the more time spent has lead to an increase
in
shopping. But one needs to know whether online shopping is an integral part of
regular
shoppers or not this understood as follows.
39
Q.4 Have you purchased anything online ever?
NO
35%
YES
65%
INTERPRETATION
The research showed that 65% of the Internet users had shopped online while 35% had
not
bought anything. This is mainly because of the changing lifestyle and taste
patterns. As the
life is getting more and more fast paced more people are moving on to shop online
mainly
because of convenience. This shows that a more Internet users are using it as a
shopping
medium and there is a huge potential in this sector but one should not be carried
away by this
figures. There could be a possibility that only a small section of the online
shoppers are
shopping or only a particular category of good had brought about this huge number.
As a
resultthe entire analysis was done incase of a regular online shopper to understand
the
shopping behavior of the online shoppers.
The following question helped to understand who is a regular online shopper among
the 65%
who had indulged into online shopping.
40
The web online activity
The following classifications are done to study the online activities in case of a
regular
online shopper.
Fig. 5 Online Activities
10%
32%
Shopping
20%
Communication
Finance
24%
14%
Inf ormation
Entertainment
Gathering
The Internet offers four basic services communication (socializing service with
peer
group or core group (email) or with new groups of people (chat), information
services,
entertainment services and commerce services and shopping. The research shows 32%
of the regular online shoppers use Internet for communication while only 10% uses
it
for shopping which shows that communication still forms the major activity among
the regular online shoppers.
Fig. 6 Online Activities by Age
70%
60%
18-30 years
50%
31-40 years
40%
41-50 years
30%
20%
above 50
years
10%
0%
communication
Inf ormation
gathering
Finance
Shopping
41
This classification further provides an insight that Internet is mainly used as a
means
of communication in respect all the age groups of the regular online shoppers. It
contributes to 60% of the major activity among the regular online shoppers who lie
between the age group 18-30 years. It could be seen that shopping as a basic
activity
on the Internet contributes to the minimum. Internet as a medium of shopping is
maximum used by regular online shoppers between the age group18-30 years, which
is 18% while above 50 years it is used just to 2%. The increase in usage among the
18-30 years is basically due to high awareness. The marketers should focus mainly
on
the age group between 18-30, as they are the main drivers for growth. Thus the
research shows that though the regular shoppers are using the Internet for quiet
some
time now but shopping still remains a small part of the major activity
Fig. 7 Online Activities by Time
90%
80%
70%
60%
Communication
50%
Information
40%
Entertainment
30%
Finance
20%
Shopping
10%
0%
0-5 hours
6-10 hours
11-15
hours
16-20
hours
more than
20 hours
It is evident that regular online shoppers also spend a major part of their time in
communication unlike the occasional online buyers. In 0-5 hours a week they spend
77% of their time in communication, which includes email, and chat as the major
activity with shopping which does not seem to exist at all. Information search
constitute 20% of the time. The information search increases as the regular online
shoppers tries to figure out ways to surf the Internet and access the information
they
require. It is true that more regular online shoppers use Internet shopping sites
to
42
gather information about products rather than to make a direct purchase.
But it is to be noticed that as the time spend increases communication falls and
other
activity picks up like entertainment and finance. One could see from the graph that
between 16-20 hours a week communication falls further but information search also
falls as the regular online shoppers becomes more focused in their information
search
rather than wandering aimlessly in the Internet space. They continuously use search
engines for routine information needs. The time spent on entertainment increases
marginally to 18%. As the people spend more time it has been seen that activities
like
shopping and finance related needs increases. The regular online shoppers who use
the
Internet for more than 20 hours a week has shown that they have indulged into more
shopping i.e.10%. It is true that as the regular online shoppers spends more time
on
the Internet there is a possibility that they would end up buying more as they are
ease
with the use of internet. Increased usage of Internet is positively related to the
buying
behavior on the Internet.
AnalysisIt is true that increase in internet has lead to an increase in the online
shopping as 78%
of the online shopping has been done by the regular online shopper who have been
using internet for more than five years and 36% of the online shopping have been
done among the regular shopper who uses the Internet for more than 20 hours a week.
Thus increase in usage of Internet has lead to an increase in online shopping. But
shopping still constitute a small amount of the major activity on the internet as
32% of
the regular online shoppers uses Internet for communication while only 10% uses it
for shopping. Communication still constitutes the major activity on the Internet.
43
6.2 Demographic Factors
Online behavior is affected by demographics i.e. by gender, education and income.
6.2.1 Hypotesis
1. More male Internet users are frequent online buyers than female Internet users.
2. Regular online buyers are better educated than occasional online buyers.
3. Income is higher in case of a regular online shopper than occasional online
buyer.
28%
Female
72%
Male
Among the 65% of the online shopping, males (72%)had purchased more as compared
to women (28%). This shows that it is true that more males are shopping online as
compared to women. This is mainly because women still like to feel, see and touch
the
product before buying. It was noticed that some of them felt shopping as a reason
to
go out with the family and spend time together, which was not possible in case of
online shopping. As more and more Indian women are flocking to Internet there is a
possibility that they might end up in a purchase. Also an increase in the spending
power in the hands of the women might lead to an increase in the online shopping.
The research showed that 28% of the women who shopped online fall mostly in the
service and executive class with an income above Rs10,000. The marketers should
make sure that they produce the item keeping in mind the needs of the women
44
population as they still continue to be an important decision maker when shopping
for
the family.
Fig. 9 Online Shopping & Educational Qualification
3%
8%
Non
Matriculate
Matriculate
54%
35%
Postgraduate
Graduate
40
35
30
25
less5000
21
5000-10000
20
15
10000-25000
15
14
above25000
11
8
10
5
5
5
1 1
1 1
0
Student
Service/Executive
Business
Others
45
Income and buying behavior are positively related. It was seen that a regular
online
shopper with a higher income had purchased more online as compared to lower
income online shopper. This trend was seen in all segment of the population. It is
true
that more the income in the hands of the population they would indulge in shopping.
The service class had done the major purchase in all the various levels of income.
It
can be seen that hardly any purchase is done among the regular online shopper whose
income lies below Rs5000.
AnalysisThus three hypotheses stated were true in case of the regular online
shopper and it can
interpreted that online shopping is effected by demographics like gender, education
and income levels. Among the 65% of the online shopping, males (72%)had
purchased as compared to women (28%). There is a positive relation between
education and income of the online shoppers. 89% of the online shopping was done
among the regular shoppers who were educated with a graduate or postgraduate
degree compared to 11% shopping who were matriculate and non-matriculate. A 60%
of the shopping was done by the regular shopper who had income more than Rs
25,000 than 40% who had income less than Rs.25,000.
6.3 Motivating & Satisfaction Factors
To identify the factors which Internet users choose to buy or not buy online and
how
frequently they make such purchases. Analyzing the importance of satisfaction level
in the online purchasing environment.
6.3.1 Hypothesis
Consumers who make frequent online purchases are higher in convenience orientation
than those who purchase occasionally.
46
Fig. 11 Online Shopping & Motivating Factors
7%
Product
32%
Comparison
Convenience
26%
Saves Time
12%
Superior
selection
23%
Price
47
Fig. 12 Barriers to Shopping Online
9%
7%
33%
Others
Privacy &
Unfamiliar
Security
14%
Hassle of
returning
16%
21%
Lack of
Customer
Service
Inability to
touch & feel
The main areas for concern in respect of the regular online shoppers while shopping
were privacy and security (33%). Most of them still preferred the conventional
method of shopping like the touch and the feel factor (21%). They felt that it is
possible to see, feel, touch and try the products before buying in a shopping store
as
compared to Internet shopping. Other reasons that concern the regular online
shoppers
were inability to reach the customer service (16%), hassle of returning the product
(14%), technical foul –ups, hesitant in purchasing from an unfamiliar source and
person and delivery costs. The marketers should formulate such strategies so that
the
privacy and security concern can be taken care off.
48
Fig. 13 Convenience- The Motivating Factor
80%
74%
70%
60%
50%
48%
purchase
40%
convenience
30%
27%
20%
20%
12%
5%
10%
9%
5%
0%
Only once
2-4 times
More than
5 times
More than
6 times
It has been seen that there is a positive correlation between the frequency of
purchase
and the convenience factor for buying in the Internet arena. The regular online
shopper who had purchased more than 6 times (9%) for them convenience is the most
important motivating factor (48%)for shopping on the Internet. Convenience has been
characterized as ease of purchase, home delivery and ability to shop 24x7. The
online
shopper believes that large amount of information about the product and the ability
to
compare prices is available at a click of a mouse thus making the entire shopping
experience very convenient. Thus the marketers to should keep the convenience
factor
in mind while providing the goods and services.
6.3.2 Satisfaction Index
It is important to understand the satisfaction level among the regular online
shoppers,
which had lead to online shopping. This could be understood by the satisfaction
index
and the frequency of purchase among the shoppers.
49
Fig. 14 Satisfaction Index
12%
Dissatisfied
2%
Highly
Satisfied
31%
Neither
Satified nor
Dissatisfied
55%
Satisfied
A 55% of the regular online shoppers were satisfied with 12% dissatisfied. An
important thing to be noted is that only 2% of the regular online shoppers were
highly
satisfied while 31% of the regular online shoppers were neither satisfied nor
dissatisfied. This shows satisfaction level plays an important role in online
shopping
with more regular shoppers falling under the category of satisfied. This shows that
they were overall satisfied by the experience of shopping online. But the companies
should take measures so that the dissatisfied and the neither satisfied nor
dissatisfied
category of regular online shoppers could be moved to satisfied or highly
satisfied. A
note should be taken that only 2% of the regular online shoppers are highly
satisfied
which shows that there are still concerns, which poise the regular shoppers from
using
the Internet frequently as a shopping medium.
Satisfaction level can also be measured by the frequency with which the online
shoppers purchase online. According to human psychology it is true that frequency
of
purchase depends upon the satisfaction level received. According to the figure 2
(already explained), a 74% of the regular online shopper has purchased 2-4 times
and
9% had purchased more than 6 times indicating that an increase in the confidence
level and accepting the Internet as a shopping medium. The increase in the
frequency
of shopping was mainly because they were overall satisfied by the entire shopping
experience.
50
AnalysisIt is seen that the main orientation for buying among the regular online
shoppers were
convenience (32%), saves time (26%), price (23%), product availability and superior
selection (12%), and product comparison (7%). The hypothesis stated that
convenience is major factor motivating the regular shopper was true as 75% of the
regular online shoppers who have shopped more than 5 times felt it was necessary as
compared to 25% who shopped less than 5 times.
The barriers to online shopping as stated by the regular online shopper were
privacy
and security (33%), inability to touch and feel the product (21%), customer service
problems (16%), hassle of returning the product (14%), purchasing from unfamiliar
source and person (9%) and other problems (7%).
Satisfaction level plays an important role in online shopping, as 55% of the
regular
online shoppers that are satisfied tend to purchase more. It can also be seen that
74%
have shopped more 2-4 times and 11% had shopped more than 5 times showing that
satisfaction level plays an important role in online shopping.
6.4 Future and growth of Online Shopping
This can be understood by the categories of good bought by the regular online
shoppers presently and the future of the various categories.
Fig. 15 Present & future categories of Goods
120%
100%
80%
60%
40%
20%
0%
Books
R a ilw a y
t ic k e t s
A ir lin e
t ic k e t s
P re s e nt
E le c t r o n ic
G a d g e ts
G if t s
M o v ie s
t ic k e t s
F u tu r e
51
It is seen that railway tickets 70% and airline tickets 93% are the most popular
categories among the online shoppers followed by books and electronic gadgets. This
is the main category, which is bringing about online shopping culture among the
regular online shoppers. The companies should bring out innovative ways so that
there
is a growth in other categories of goods also. The entire shopping culture among
the
regular shoppers is brought mainly by the travel categories followed by electronic
gadgets. The graph shows that online shopping is tend to grow in the coming years
as
consumers want to buy more in the future.
Table 1 Future Categories of Goods
Railway tickets
83%
Airline tickets
80%
Electronic Gadgets
50%
Books
43%
Gifts
33%
Movies tickets
30%
Jewellery
23%
Computer Software
20%
20%
Event Tickets
13%
Toys
13%
10%
Food / Groceries
7%
Accessories apparel
3%
52
CD/Videos
3%
Magazines
3%
3%
Sporting goods
3%
The table I shows that shows that there is a future growth in the electronic gadget
and
book categories also apart from railway and airline tickets, which continues to be
on
the priority list. There is a growth in these categories because traditionally
products
like audio-video, apparel, and computer accessories were purchased through catalogs
and other forms of direct mail but toady online shopping serves a convenient means
of
distribution channel. Another reason for the growth in these categories is because
of
well-established sites for travel, audio-video (e.g., CD-Now), and computers
(e.g.www.dell.com, www.sonyvaio.com), which lure the consumers to buy these
products. These goods do well because consumers are not bothered much about the
touch and feel factors, which generally drive the shopping in India unlike
categories
like apparels and groceries where it still remain an important factor while
purchasing.
It is difficult to change the set mindset of consumers for certain categories of
goods
but still companies should keep innovating and find means and ways to attract more
online shopping.
AnalysisThere is a future growth in online shopping which can be especially seen in
the travel
arena with railway 83% and airlines 80%, electronic gadgets (50%)and books (43%).
Gifts also seem to show a growth in the coming years. Thus the marketers should
mainly focus on these growing categories of goods, which would drive the online
shopping in the future.
53
CHAPTER – 7
FINDINGS
54
7.0 FINDINGS
The findings show that Internet usage has increased over the years and it is
leading to an
increase in online shopping and also shows the consumers attitude and perception
towards
online shopping. Communication still forms the major activity among the large
number of
online shoppers as 32% of regular online shopper use Internet for communication as
compared to shopping (10%).
Online shopping is affected by demographics as it has been seen that more males are
shopping online as compared women online shoppers and there is a positive relation
between
education and income levels with respect to the increased online shopping
behaviour.
The most important motivating factor, which influenced the online shopping, was
convenience followed by time saving and price. Regular online shoppers considered
convenience as the main motivating factor while buying and were less price
sensitive. But the
online marketers should attempt to differentiate their products or services making
the
comparison easier. The marketers should bring out innovative ways so that the
consumers can
do more online shopping while taking the full advantage of rich information, easy
access and
convenience of the Internet.
One of the main concerns among the online shoppers was privacy and security.
Another
reason that hindered online shopping was the touch factor. Consumers still
preferred the
experience they get from traditional stores like feeling the store’s atmosphere,
interacting
with a salesperson, and seeking sensory stimulation. This might hinder the use of
certain
goods like grocery and apparel, as the touch factor is the main factor, which
drives the
shopping for these goods. The future of online shopping is bright especially in the
categories
of travel, books, electronic gadgets and gifts.
55
CHAPTER-8
SUGGESTION & CONCLUSION
56
8.1 SUGGESTION
Online shopping in India is poised for greater acceleration as PC and Internet
penetration grows. It is becoming one of the top Internet activities and there is a
huge
growth in this business as more manufacturers and providers are integrating the
Internet into their sales model. But there are many things that need to occur in
online
shopping to generate higher revenues and the key to it lies in the hands of the
marketers. To make online shopping a boom following methods can be followed.
India has a strong research and development (R&D) capability so companies
should innovate rapidly to take care of the security issues. Technology like text
to
speech softwares should be innovated to take care of the security concern.
In India the total ownership of credit cards is small as compared to its
population and there are also hesitant in using it as a mode of online payment
therefore alternative methods of payment like cash on delivery (COD) where the end
user pays cash after the product is delivered and debit cards where the bank
accounts
are directly debited should be used. Other technologies like encryption
technologies
trusted third-party certifications; digital ID systems and prepaid cards should be
used.
The consumers should be made aware that one of the safety aspect of using
credit cards online is that in case of disputed credit card payments for online
transactions the onus is on the merchants to prove that the transaction actually
took
place, as online users don't physically sign a credit slip. As a result online
users are
protected from fraudulent use of credit cards.
There is a growth in the cellular phone market in India, more merchants should
make use of this device allowing the customers to access the Internet and use it as
mode of payment thereby obviating the need for PCs and credit cards.
It is not only important to pay strong attention to the security issue and create
new, innovative safeguards that protect consumers but the merchants should promote
these safeguards to the marketplace and make the prospective consumers aware that
the communications, personal data, credit card accounts, and transaction
information
A Study on Consumer Perception towards online shopping
57
can be protected.
One of the factors that hinder Internet penetration in India is access. More
companies should adopt click and mortar model with the real world operations to
complement its online presence for e.g. customers can walk to the office to access
its
services.
Merchants should provide goods and services that offer the right value for
money. There should be transparency in policies (returns, privacy, shipping, etc),
insurance against fraud and a good after sales services should be provided to
consumers making it an enjoyable experience.
Consumers today demand a better, more efficient and less cumbersome way to
compare and buy products online. Innovative service should be provided to consumers
so that they can compare products, which are available online using their mobile
phones.
Online shopping today is an incomplete, fragmented, and sometimes frustrating
process. Therefore merchants should set themselves apart from their competitors by
factors other than price, constantly innovate and move towards creating customer
confidence to trade online. They should provide massive selection at lower prices,
offer a personalized customer experience and their web sites should deliver a
shopping
experience that addresses all of the consumer needs like recommendation about the
products, feedback from other customers, etc.
Vendors should educate the customers about e-commerce like educating them
on safety tips like reading the item description, looking for a seller’s feedback
score
and asking questions, detecting spoof mails and informing them about the new online
crimes which happen regularly.
In India still the penetration of Internet has not happened the way it should
have been which hampers online shopping. Ecommerce revolution can be brought
about by providing more broadband connections at affordable prices.
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There is a huge market for business in the rural India therefore efforts should
be such that to bring these people also into experiencing online shopping.
Companies
should create more Indian language software or content as Internet still is a
primarily
English language world and language could be a barrier in rural India. Only few
language portals like webduniya.com exist today.
Most of the Indians still like to see the product before buying; efforts should be
made to change this mindset of the people by making them aware of the benefits of
online shopping.
To make online shopping big the shopping web sites should give the customers
the convenience to shop anything on a single site like ordering pizzas, movie
tickets,
groceries, etc rather than in scattered places. The site should not only provide
information content but also tools to navigate and evaluate this information. The
information on the site should be just sufficient for the consumers to make a
decision
and not to overload them with information, which results in confusion.
Convenience and time saving are the main reason to shop online. Therefore
Business to Consumers (B2C) sites should be designed in such a way that consumers
spend less time in finding information they are looking for as delays in searching
or
loading a web page might turn the consumers to other sites which have faster
download and display times.
Since consumers control the experience they receive from shopping over the
Internet, there is a need to find ways of managing the amount of information
available
over the Internet. Sites that are able to offer this information and present it in
a simple
way to understand will become the preferred destination for online shopping.
The key to selling to a customer which cannot be seen is to get the customer to
trust the website with which they have electronic transactions.
Active participation from consumer marketing companies to manufacturing
industries is required to make online shopping a booming sector.
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Some of the things, which the consumers should take into considerations while
online
shopping, are:
Use a secure browser. The browser should comply with industry security
standards, such as Secure Sockets Layer (SSL).
Consumers should shop with the known companies, as it is easy to set up a
shop online under any name. If they are not familiar with a merchant they should
ask
for paper catalogue or brochure to get a better idea about the merchandise and
services
and should find about the company’s refund and return policies. Consumers should
also search for the reviews of the company.
Read the privacy policy on the site of the companies before shopping as this
helps to know what information is being collected and how it would be used.
Keep a print record of the transactions this would come handy in case of any
fraud.
One should find out how the company secures the financial and personal
information before paying the bills.
The personal information should be kept private like address, telephone
numbers, email, etc. One should avoid using telephone numbers or date of birth for
establishing a password instead should use a combination of numbers, letters and
symbols.
Proper research should be done about countries shopping laws and merchant
when shopping from other countries.
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8.2 CONCLUSION
This research shows that online shopping is having very bright future in India.
Perception towards online shopping is getting better in India. With the use of
internet,
consumers can shop anywhere, anything and anytime with easy and safe payment
options. Consumers can do comparison shopping between products, as well as, online
stores.
This study is mainly focus on the factors from the Internet and examines those
factors
that affect the consumer’s online shopping behaviours. The research focus on the
Internet shopping (include the nature of Internet shopping, E-commerce website, and
online security, privacy, trust and trustworthiness) and online consumer behaviours
(include background, shopping motivation and decision making process). Those
factors were looked at, and examined to reveal the influence at online consumer
behaviours. In addition, the previous researches were used to help researchers
understanding more comprehensively. Moreover, the customer’s purchase decision
making process was also examined to identify the potential factors. The information
search is the most important factor that helps the customers find the suitable
products
or services for their needs. Therefore, the online retailers have to enhance and
improve
the information supporting such as provide much detailed product information and
use
internal search engine in order to increase the efficient of information search.
For the
evaluation stage, customers more think a lot of the reputation from the E-commerce
website, and the payment security for the purchase stage. At the post-purchase
stage,
the factor of after services which is the most concerned about. Overall, the
factors
from the Internet that influenced or prevented online consumer behaviours need to
be
carefully concerned by the online retailers, who can utilize the appropriate
marketing
communications to support the customer’s purchase decision making process and
improve their performance.
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BIBLOGRAPHY
1)Ramaswami&Namakumari, Marketing Management-Planning, Implementation and Control,
MacMillan India Ltd, New Delhi
2)Bhatnagar, A, Misra, S., and Rao, H. R., ‘Online risk, convenience, and Internet
shopping
behavior,’ Communications of the ACM 2000
3)Alexandru M. Degeratu, ArvindRangaswamy and Jianan Wu (2000) Consumer
ChoiceBehaviour in Online and Traditional Supermarkets: The Effects of Brand Name,
Price, and other Search Attributes, International Journal of Research in Marketing,
Vol. 17,
No.1, p. 55-78. Available at:
http://www.smeal.psu.edu/ebrc/publications/res_papers/1999_03.pdf
4)Aron M. Levin, Irwin P. Levin, and C. Edward Heath (2003) PRODUCT
CATEGORYDEPENDENT CONSUMER PREFERENCES FOR ONLINE AND OFFLINE
SHOPPING FEATURES AND THEIR INFLUENCE ON MULTI-CHANNEL RETAIL
ALLIANCES, Journal of Electronic Commerce Research, VOL. 4, No. 3. Available
at:http://www.csulb.edu/web/journals/jecr/issues/20033/paper1.pdf
5)Ali S S, Models in Consumer Buying Behaviour, Deep & Deep Publications.
6)Kothari C. R., Research Methodology Methods and Techniques, WishwaPrakashan, New
Delhi.
7)www.wikipedia.com
8) www.amzon.com
9)www.flipkart.com
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QUESTIONAIRE
Kindly highlight/bold your answers.
1. Do you use Internet?
Yes
2.
3.
No
3 – 5 years
More than 5 years
On the average, how much time (per week) do you spend in surfing the Web?
0 – 5 hours
16 – 20 hours
6 – 10 hours
11 – 15 hours
4.
5.
No
Railway tickets
Electronic Gadgets
Airline tickets
CD/Videos
Computer Hardware
Accessories apparel
Computer Software
Gifts
Magazines
Event Tickets
Hotel Rooms/Car Rental
Jewellery
Infant / Child items
Movies tickets
Office Supplies
Food / Groceries
Home tools and products
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Sporting goods
Toys
6.
7.
8.
9.
Cyber-cafes
Office / College
10.
What are the activities that you use Internet for? (Kindly rank them between 1 to
5,with 1=most used, 2=used to a large extent, 3=used to a good extent, 4=used
sometimes,
5=rarely used)
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Communication (E-mail, Instant Messaging, Bulletin Boards, News Groups, Chat, etc.)
Information Gathering (Research, News, Sports scores, Search for employment, etc.)
Airline tickets
CD/Videos
Computer Hardware
Accessories apparel
Computer Software
Gifts
Magazines
Event Tickets
Beauty products
Movies tickets
Office Supplies
Food / Groceries
Pharmaceuticals
Sporting goods
Toys
12.
Railway tickets
Home appliances
Any other, specify………………
Price
Saves time
Superior selection/Availability
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Product comparison
Any other, specify………………
13.
What, according to you, are the most important barriers to purchase online?
I am worried about giving out my credit card number
I don’t have a credit card
I don’t like providing personal information
I don’t want to purchase from someone with whom I am not familiar
I enjoy going out to do my shopping
I like to see/touch the product in person, before I buy it
Internet is too slow / Pages take too long to load
I am worried about the cost/hassle of returning the product
Delivery costs are too high
Prices are too high
Technical foul-ups prevent transactions from going through
I can’t find anything that I want to purchase on the Internet
I don’t know how but I am uncomfortable about purchasing through Internet
The process is expensive due to cost of access
Any other, specify…………
PERSONAL DETAILS
14.
Age:
Below 18 yrs
18 - 30 yrs
31 - 40 yrs
41 – 50 yrs
Above 50 yrs
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15.
Educational Background:
Non-Matriculate
Matriculate
Graduate
Postgraduate
16.
Occupation:
Business/Self Employed
Service/Executive
Student
Any other, specify………………
17.
Gender:
Male
Female
18.
Name:
_____________________________
______________________________
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