How online selling has changed marketing perspective including consumer perception

How Online Selling Has Changed Marketing Perspective Including Consumer Perception

Universal Business School

10th October

2014

RESEARCH PROJECT DISSERTATION

AICTE MBA JULY 2013 BATCH

BHAVESH M. BHANSALI

MBA3/1313


1 Research Project Dissertation | Bhavesh Bhansali/MBA3/1313


FOR CARDIFF MET UK MBA STUDENTS JULY 2013 BATCH (CMBA2)

JULY 2013 BATCH (AICTE APPROVED MBA3) Universal Business School

(Cardiff Met UK & UBS MBA Program)

Kushivili Village, Vadap, Karjat

District – Raigad 410 201

CERTIFICATE

This is to certify that the Research Project Dissertation titled ___________________________

_______________________________________________________________ is a bonafide

work carried out by Mr./ Ms. ___________________________________________________

a Student of Cardiff Met UK & AICTE approved MBA Course.

His/Her area of Specialization is _________________________ Enrollment No. __________

of the year 2013.

Mentor Guide Dean (Academics)

Universal Business School Universal Business School

Date:

Place:




FOR CARDIFF MET UK MBA STUDENTS JULY 2013 BATCH (CMBA2)

JULY 2013 BATCH (AICTE approved MBA3)

Universal Business School

(Cardiff Met UK & UBS MBA Program)

Kushivili Village, Vadap, Karjat

District – Raigad 410 201

CERTIFICATE OF MENTOR GUIDE

This is to certify that the Research Project Dissertation titled ___________________________

_______________________________________________________________ is a bonafide

work carried out by Mr./ Ms. ___________________________________________________

under my guidance and direction.

Mentor Guide

Name

Designation

Date:

Place:



ACKNOWLEDGEMENT

I would like to express my profound gratitude to Prof. Sushant Nanda (Mentor and guide) and Prof. Bibhas

Basumantray for their exemplary guidance, valuable feedback and constant encouragement throughout the

duration of the project. Their valuable suggestions were of immense help throughout my project work.

I would also like to give my sincere gratitude to all my friends, colleagues and professors who kept me

motivated throughout my project work.

Last but not the least; I would like to give my sincere thanks to all the friends who filled the questionnaire

and helped me out with the survey, without which this research would be incomplete.



TABLE OF CONTENT

Sr. No Title Page No.

Chapter 1 Introduction 8

Chapter 2 Objective of the Study 11

Part 1 Title of the Project 11

Part 2 Objective of the Study 12

Part 3 Scope of the Study 12

Chapter 3 Review of Literature 14

Chapter 4 Research Methodology

19

Part 1 Research Design 19

Part 2 Data collection methods/sources 23

Part 3 Sampling plan 23

Chapter 5 Data analysis and interpretations 24

Chapter 6 Findings 36

Chapter 7 Limitations of the Study

40

Chapter 8 Recommendations and suggestions

42

Questionnaire sample 46

Bibliography 48



Executive Summary

The fast growth of e-commerce sector in India is being driven by great consumer choice

and excellent convenience. A strong business plan coupled with a top class level of

service is critical to success. Before these aspects are explored and improved, it is

important to understand the unique attributes which define e-commerce in India. India

has an internet user base of 50 million plus users. The penetration of e-commerce is

low compared to markets of developed countries, but is growing at a much faster rate

with a large number of new entrants.

(Rau, n.d.)

Online buying and selling has seen a lot of transaction in the last few years. India has

almost 130 million Internet users at present, out of which more than 12% are engaging

in online transactions. The online user base is expected to cross 300 million in the next

2 – 3 years and a larger percentage of people are expected to transact online by 2015.

(Bansal, 2012)

Title of the project

“How online selling has changed the marketing perspective including customer

perception”

Why customers buy online:

Don’t have time to go to the shop for the same stuff

Variety of choices

Fast and furious shopping

Can compare prices with other portals

Cash on delivery benefit

Online reviews

And many more…

Why customers don’t buy online:

Don’t trust privacy

Fraud and security concerns

Difficult to judge the quality of the stuff online

Want to touch and feel the stuff

No internet connection

Lack of full cost disclosure

And many more…



The main objective of the project is the need to understand people’s perception about

online shopping and seller’s perception about online selling. The need to how online

selling has changed marketing perspective including consumer perception is because

today the trend of purchasing online is booming. From flats to shoes, people prefer to

buy online, but still there are many Indians who prefer not to buy online because of

various reasons. To study their views and preferences and to study the coming trends is

the threefold objective of this project.

The threefold objectives of this research are:

To know the consumers awareness and perception about the products and

services provided on internet.

To know how it provides products and services and satisfies their customers.

To know how it reduces the uncertainty in purchase decision process.

Analysis-

It is true that rapid increase in internet usage has led to an increase in the online

shopping as 80 percent 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 led 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.

Demographic Factors

Online behavior is affected by demographics i.e. by gender, education and income.

Hypothesis

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.



Conclusion

The most important motivating factor, which influenced the online shopping, was

convenience followed by price and availability. 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.



Chapter 1

Introduction

From a 14 year old teenage to a 90 year old person, everybody is online today. People

are buying and selling everything online, may be it a pin or a plane, travel packages or

tickets, phone or a laptop, bulb or a bluetooth device, secondhand car or a new house.

Everything is online for sell. People are spending money online as never before and it is

growing at a very high pace. Online presence is today a mandatory thing for every

business (Whether small or big).

Consider the following:

There are over 200 million Americans that actively use the Internet on a daily

basis.

80% of individuals aged 32-44 buy products on the Internet.

Those aged 45-54 spend on average $647 online every three month.

In 2009, online retail spending during the holiday season alone exceeded $27

billion.

By 2015, it’s projected that over 90% of people using the Internet will be online

shoppers.

(Bower, 2011)

With the excellent growth of online stores, if your organization sells product, you actually

need online social media presence for sure.

The fast growth of e-commerce sector in India is being driven by great consumer choice

and excellent convenience. A strong business plan coupled with a top class level of

service is critical to success. Before these aspects are explored and improved, it is

important to understand the unique attributes which define e-commerce in India. India

has an internet user base of 50 million plus users. The penetration of e-commerce is

low compared to markets of developed countries, but is growing at a much faster rate

with a large number of new entrants.

(Rau, n.d.)

Today, the online market is flooded with various e-commerce choices for customers to

choose from. A variety of unique, different and innovative products and services are

being offered spoiling customers for choice. Online shopping is no more a privilege

enjoyed by your friends and family living in the US or UK. Today, it is a reality in India.

In the last couple of years, the growth of Online business in India has been phenomenal

as more people have started discovering the benefits of using the online platform.



Twist in Business

Indian Online industry has improved over a period of time with new Strategies,

developments and innovations that have changed the rules of the game globally. Cash

on delivery (COD) is one the best example. In a country where credit card usage is

much lower than other developed countries and where e-commerce companies are still

working hard to build relation and trust among customers, introducing cash on delivery

has been one of the key factors for the success of the segment. At present, COD is the

preferred payment mode for close to 55-60% of all online transactions in the fashion

and lifestyle segment in India.

Delivering experiences

Besides COD, e-commerce giants need to focus on customer perception and

experience as a means to build trust and confidence. Customer experience

encompasses every interaction a customer has with your service from placing an order

to interacting with your customer service team, to the actual delivery experience.

Providing an awesome delivery experience is the most important aspects of delighting

customers. This doesn’t necessarily mean constantly pushing the frontier on faster

deliveries. Building trust, reliability and being consistent should be the motto; it’s okay if

your delivery is slow for 2-3 days. Delivery service should be also your prime objective

because the more faith in delivery service of your company, the more likely he is to

come again. Delivering an excellent experience is critical not only to ensure continuous

purchase from the customer, but also for creating a brand value and gain word-of-mouth

publicity.

Growing the base

Online buying and selling has seen a lot of transaction in the last few years. India has

almost 130 million Internet users at present, out of which more than 12% are engaging

in online transactions. The online user base is expected to cross 300 million in the next

2 – 3 years and a larger percentage of people are expected to transact online by 2015.

(Bansal, 2012)



Growing opportunities

Tier 2 and tier 3 cities are in the limelight for all the good reasons. On an average,

almost 50 – 55% of our business come from tier 2 and tier 3 cities and I believe this

ratio is similar across other ecommerce companies in the country. With metro markets

reaching maturity mark, I believe tier 2 and 3 cities are going to be the biggest drivers

for online businesses in India in the coming future. Building a powerful supply chain is

the most critical for efficiently fulfilling orders from these cities and tapping their full

potential.

The e-commerce market is growing at a fast pace and changing the dynamics of the

retail sector. In the upcoming years, this sector is expected to contribute around 8-10%

of the total retail sector in India. This growth is bound to continue if e-commerce

companies focus on innovation, building strong technology infrastructure and delivering

the best customer service. (Bansal, 2012)



Chapter 2

Objective of the Study

Online selling and buying have changed the whole business scenario. If you review 10-

20 years old business practices and today’s business practices, you will find a total new

scenario. Online selling and online traffic generation were not the ways business was

done in olden days, but now customer’s perception and ways to look at the business

have changed. Online selling is one of the most important and compulsory trend of

doing a business.

The birth and growth of online selling and buying has been the greatest event of the

century. Computers and Internet have completely changed the way business handles all

transactions, online selling is one of them.

Title of the project

“How online selling has changed the marketing perspective including customer

perception”

Online selling is a need for today. People don’t have time to go to the shop and

purchase staff. The changed customer behavior and customer perception have

changed the trend of doing business. Social presence has resulted into a way to attract

suspects and drag them to the online portal. Facebook and Twitter are the most

important platforms for digital and social media marketing and these platforms

generates the most of the leads and generate revenue.

Why customers buy online:

Don’t have time to go to the shop for the same stuff

Variety of choices

Fast and furious shopping

Can compare prices with other portals

Cash on delivery benefit

Online reviews

And many more…



Why customers don’t buy online:

Don’t trust privacy

Fraud and security concerns

Difficult to judge the quality of the stuff online

Want to touch and feel the stuff

No internet connection

Lack of full cost disclosure

And many more…

Objective of the project

The main objective of the project is the need to understand people’s perception about

online shopping and seller’s perception about online selling. The need to how online

selling has changed marketing perspective including consumer perception is because

today the trend of purchasing online is booming. From flats to shoes, people prefer to

buy online, but still there are many Indians who prefer not to buy online because of

various reasons. To study their views and preferences and to study the coming trends is

the threefold objective of this project.

The threefold objectives of this research are:

To know the consumers awareness and perception about the products and

services provided on internet.

To know how it provides products and services and satisfies their customers.

To know how it reduces the uncertainty in purchase decision process.

Scope of the project

Purchasing and selling products and services over the internet without going physically

to the market is what online purchasing is all about. Online shopping is just like a retail

store shopping experience that we do by going to the market, but it is done only through

the internet. Online selling has made shopping easy, painless and added more

entertainment. Internet stores offer product description, product images, price

comparisons, best prices, offers and much more. Few examples of these are

Amazon.com, ebay.com, and the benefits of online selling is that by having direct

access to consumer ,the Internet stores can offer products that cater to the needs of

consumer ,cookies can be used for tracking the customer selection over the internet or

what is of their interest when they visit the site again. Online shopping focuses on digital

technology for managing the flow of information, products, and payment between



consumer, site owners and suppliers. Online shopping can be either B2B (business to

business) or B2C (business to consumer).

(Kalpana, 2009)

Due to inception of online marketing, the entire E-commerce Industry in India is hoped-

for climbing in near future. In India, everybody has shown their interest and concern

both to make online shopping and is actively participating in online market. This

confirms the attainment and bright future of E-commerce industry of this country.

The future prospect of E-commerce in India certainly depends on these factors:

Enhancing domain registrations

Rising internet users

Easy access to internet

Awareness about internet even in rural areas

Rising number of cyber cafes

Growing need for E-commerce

(Anon., 2012)



Chapter 3

Review of Literature

(Jeanson, n.d.)

The recent literature on customer online buying decisions has mainly concentrated on

the factors which affect the customers to buy on internet. . In the area of customer

behavior research, there are general models of purchasing behavior that depict the

process which customers use in making a buying decision. These models are very

important to marketing expects as they have the ability to explain and predict

customers’ buying behavior.

The classic consumer purchasing decision-making theory can be characterized as a

continuum extending from routine problem-solving behaviors, through to limited

problem-solving behaviors and then towards extensive problem-solving behaviors.

(Bray, n.d.)

Benedict et al (2001) in his study on perceptions towards online shopping reveals that

perceptions toward online shopping and intention to shop online are not only affected by

ease of use, usefulness, and enjoyment, but also by exogenous factors like consumer

traits, situational factors, product characteristics, previous online shopping experiences,

and trust in online shopping.



GfK Group (2002) shows that the number of online shoppers in six key European

markets has raised to 31.4 percent from 27.7 percent last year. This means that 59

million Europeans use the Internet regularly for shopping purposes. However, not only

does the number of online shoppers grow, the volume of their purchases also increases

over-proportionally.

Reinhardt and Passariello, (2002) In the US, says that online sales are forecasted to

exceed $36 billion in 2002, and grow annually by 20.9 percent to reach $81 billion in

2006. Europeans are spending more money online as well. Whereas combined

revenues for Amazon.com’s European operations grew at more than 70 percent

annually in each of the past three quarters, topping $218 million. While these figures

show that a large number of consumers in the US and Europe frequently use the

Internet for shopping purposes, it is not clear what drives them to shop online and

whether these numbers could be even.

(Haq, n.d.)

Motivations of consumers to engage in online shopping include both utilitarian and

hedonic dimensions. Whereas some Internet shoppers can be described as “problem

solvers”, others can be termed seeking for “fun, fantasy, arousal, sensory stimulation,

and enjoyment” (Hirschman and Holbrook, 1982).

The problem solvers merely shop online in order to acquire a specific product or

service, in which case shopping is considered to be “an errand” or “work” (Babin et al.,

1994). Their main concern is to purchase products in an efficient and timely manner to

achieve their goals with a minimum of irritation. In contrast, the second category sees

online shopping as “enjoyment” and seeks for the potential entertainment resulting from

the fun and play arising from the Internet shopping experience. They appreciate the

online shopping experience for its own sake, apart from any other consequence like, for

example, an online purchase that may result (Holbrook, 1994).

(Dellaert, 2004)

The ability to measure the level of customer delight with online buying is essential in

way to the success and failure of e-commerce industry. To do so, online businesses

must be effectively and efficiently able to determine and understand the core behavior

and values of their existing and potential customers. Online buying factors focus on

customers’ values, feelings and perceptions during and after the shopping experience.



Factors that determine this are as:

Convenience

Trust

Trustworthiness of Web merchants

Delivery time

Privacy of Identity

Security of accounts

The typical online user leads a wired lifestyle and is time starved, suggesting that online

shoppers may do so to save time. This indicates that the overall convenience of the

shopping experience is very much important as well as the amount of time it takes for

the product to be received. Trust is of importance during the actual shopping experience

because if the consumer does not trust the merchant to make good on their purchase a

transaction will not take place.

(Schaupp, 2005)

The three most commonly cited reasons for online purchasing have been price and

convenience. The ability to buy online without leaving the home and to have the

products and/or services delivered to the door is of great interest to many shoppers.

The number of users of Internet who are buying online goods and services is

increasingly at a very high pace. In order to be able to identify what factors affect

consumers to shop online, a framework is needed to structure the complex system of

effects of these different factors, and develop an in-depth understanding of consumers’

attitudes toward Internet and their intentions to shop online.

According to Davis (1993) consumers’ attitudes regarding online shopping are

depending on the direct effects of relevant online shopping features. Online shopping

features can be classified into consumer’s perceptions of functional and utilitarian

dimensions such as “ease of use” and “usefulness”, or into their perceptions of

emotional and hedonic dimensions like “enjoyment”. Also exogenous factors like

“consumer traits”, “situational factors”, “product characteristics”, “previous online

shopping experiences” and “trust in online shopping” are considered that moderate the

relationships between the core constructs of the framework.

(HIRST, 2007)



The most important thing to engage people for online shopping is to develop rust among

the users.

There are various factors that influence the effect of driving online trust. Although online

trust has several possible antecedents and consequence, we focus on Web site and

consumer characteristics as the antecedents, and on behavioral intent as the key

consequence because of the potential managerial implications outlined earlier. Based

on pilot studies, we chose privacy, security, navigation and presentation, brand

strength, advice, order fulfillment, community features, and absence of errors as the

Web site characteristics and familiarity with the Web site, online savvy/expertise,

Internet shopping experience, and entertainment or chat experience as the consumer

characteristics. We propose a conceptual framework in which the effects of Web site

and consumer characteristics on Web site trust, and of trust on behavioral intent, are

positive. We argue that the strength of the positive relationships between Web site

characteristics and online varies across Web site categories, depending on the following

underlying Web site factors:

Financial risk

This refers to the uncertainty of incurring monetary losses while interacting at a

Web site.

Information risk

This refers to the uncertainty associated with providing information at the Web

site. It refers to the risk of personal information being exposed.

Involvement toward or ticket price of the product or service at the Web site

This refers to the level of the consumer’s engagement at the Web site.

Knowledge/Information at the Web site

This refers to the depth of information content at a Web site.

Search for the product or service at the Web site

This refers to the degree of information search typically required for the product

or service at the Web site.

(Bart, 2005)



Consumers’ concerns towards online shopping

The most important concern of users towards online purchasing is protection from the

threat of their personal security regarding the marketers use the personal information

such as account details, telephone number and other details. Thus, people hesitate to

buy staff online. Issues regarding customer’s individual specific information collection

such as address, mobile number, demographic characteristic, and lifestyle and

spending patterns are also of concern when online.

(Schrank, n.d.)

Online shoppers versus non-shoppers

In 2000, the proportion of Internet users was approximately 80% of the total US

population, but only 18 per cent of Internet users had made purchases online. By 2002,

more than one-third of US households had made purchases over the internet. The

rapidly growing number of online purchases urges the study of difficulties that online

users encounter when they make purchases. Privacy and security problems, the

invisible transaction with marketers, and the visual-only product display are common

reasons for online users to hesitate to make purchases. A Donthu (1999) suggests that

internet buyers seek more convenience and innovation and are less brand conscious

and risk averse than non-shoppers. Such individuals are somewhat similar to innovators

who grab the way to adopt a new product (Rogers, 1995). Therefore, online shoppers

are likely to have different risk perceptions from their non-shopping counterparts.

(Schrank, n.d.)



Chapter 4

Research Methodology

(Anon., n.d.)

Research Objective

To learn and understand the customer’s perception, behavior, attitude and awareness

about online selling and internet marketing. To understand the motivation factors that

excites or refuses consumer to buy online. This research will help to understand the

attitude and perception of internet users towards online shopping and what are the

factors that shape the consumer’s perception towards online shopping.

Understanding of information sources and needs

The below mentions are the questions to be answered:

What is consumer’s perception towards online shopping?

What are the main concern areas for consumers while online shopping?

Which are the factors that shape the consumer’s behavior towards online

shopping?

Research Design

Five different factors were identified by studying the existing models of consumer

attitudes that play an important role in online purchase, then a model was proposed

leading to online shopping.

The data was collected only through Questionnaires. The sample size was 45. And

random sampling was done among the internet users.



Research Design proposed to be followed would be as follows:

Selective use of Secondary Source of Data

Careful designing of Primary Source of Data – using Questionnaires

Blending of Primary Source of Data and Secondary Source of Data

Questionnaire was designed on a research portal (www.surveymonkey .com) and

responses were collected online only through the help of various sharing platforms such

as Facebook, Twitter, Google plus, LinkedIn and also through emails. I have tried to

make the questionnaire short and simple so as to motivate people to take up the survey.



Questionnaire

1. Are you an internet user?

Yes

No

2. Are you an online shopper?

Yes

No

Will start now

3. If yes, which categories (ies) of Stuff have you bought or prefer to buy online?

Books / E-books

Tickets (Air, Rail, Event, Movies, etc...)

Electronic Gadgets

Apparels & Accessories

Hotel Rooms/Car Rental

Food / Groceries

Other (Please Specify)

4. How often do you purchase online?

Once a month

2-5 times in a month

Once in 2-3 months

I don’t buy online



5. Overall, were you satisfied with your experience of online shopping?

Highly Satisfied

Satisfied

Neither Satisfied nor dissatisfied

Dissatisfied

Highly Dissatisfied

6. From which place you often sit and shop online?

Home

Office

Cyber cafes

Other (please specify)

7. What is your main motivation for buying for buying through Internet? Rank it (1-5)

Convenience (ease of purchase, home delivery ability to shop 24/7)

Price

Superior selection/ Availability

Product comparison

Saves time

8. What, according to you, is the most important barrier to purchase online?

I am worried about giving out my credit/ debit card number

I don’t like providing personal information

I don’t want to purchase from someone with whom I am not familiar

I like to see/touch the product in person, before I buy it

I am worried about the cost/hassle of returning the product

Both A and B

I don’t find any barriers

9. Few details, I am sure you won’t mind.

Name of the Respondent

Email Id of the Respondent



Data Collection methods/Sources

Primary Data

My research is based on original primary data, for certain purpose of research project.

For this research project, I have to use some common research instrument or tool-

Questionnaire-

Questionnaire is the most common and critical way of primary data collection method.

For this I will prepare a questionnaire in such a way that it will be able to collect all

relevant information regarding the research project. The questionnaire was designed

using various scaling techniques. The questionnaire was used mainly to test the model

proposed for “How Online Selling Had Changed Marketing Perspective Including

Consumer Perception”. The data collection was done over a period of 1 week. This was

done through an online survey portal and through mails.

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, newspapers and articles etc.

Sampling plan

Sample Unit

The samples on this research project were collected online and covered Mumbai area.

Sample Media

The respondents in the samples are reached through social media such as Facebook,

Twitter, LinkedIn, and Google plus and through mails.

Sample size

The sample size was 45 respondents

Research place- Mumbai Region

Sample Design I have prepared this research project as descriptive type, as the objective of the study.



Chapter 5

Data analysis and interpretations The research was carried though online survey and responses were collected on surveymonkey.com. Analysis of consumer’s perception

Data Analysis of Question 1 of the Questionnaire (Table 1) (Bhansali, n.d.)

From the above table 1, we can analyses that more than 95% of the people living in Mumbai use internet. Only 4.5 percent people are not regular internet users.




From the above table 2, Out of 45 people who answered this question, 36 people says that they shop online (80%), 7 people says that they do not shop online and only 2 people said that they are thinking to start and shop online now.




From the above table number 4, we can analyze that more than 30 percent of people in Mumbai who shops online, buys tickets online more. More than 25 percent but less than 30 percent people purchase electronic gadgets online. Apparels and accessories goes to around 22% and 10 percent people buy books online.


Table 4 shows the exact percentage of the categories of the staff people buy online.




This question was very important for the better research. It’s mandatory to know that how often people go and shop online. From the table 5, we can interpret that 40 percent of the people buys stuff once in 2-3 months. Around 28- 29 percent of people buys once in a month. Almost 12- 13 percent of the mumbaikers buys 2-5 times in a month and that a good sign for the ecommerce industry. The bad thing is that almost 17- 18 percent of the people do not buy stuff online.




The above table number 6 will give you an exact summary and analyses of the data in terms of percentage of the buying habit of the people on Mumbai in terms of frequency.




Are you satisfied or not with the online shopping experience is the most common and important question to be asked when somebody make an online purchase. I added this question because I myself believe it is an important question to be asked. From the above table 7, we can interpret that almost 50 percent of online shoppers are satisfied with their shopping experience. Out of other 50 percent, 22-23 percent of people are highly satisfied with their online shopping experience. Again 22-23 percent people are neither satisfied nor dissatisfied and around 3- 4 percent of the people living in Mumbai are highly dissatisfied with the online shopping experience and are looking to go offline for shopping.




From the above question no. 6 and table 8, we can analyze that almost 71 percent of the people who are regular online shoppers shop from their home and at their leisure. Around 22 percent of the people find time in the office for online shopping. Almost 2 percent people buys stuff online neither from home nor from office but from cyber cafes. 5 percent of the people said they like to shop from anyplace including cafes, trains, gardens, when on vacations, etc….





Why you go online and buy stuff rather than going to the retail store/outlet? If I ask you a question that what factor motivates you to buy online? What will be your answer? I asked this increasing question to the respondents and total them to rank the 5 most important factors that motivate the individual to go and shop online. For better understanding of the ranking that people gave, let’s see one more table.


From the above table 11, we can analyze that people prefer to go online to shop for the first reason is “Convenience (ease of purchase, home delivery ability to shop 24/7)” Price is the second most motivational factor to purchase online. Availability and selection is on third position. Comparison of the products is also a motivational factor for the people to purchase online and is on fourth position. Saving time, according to me, should be in 2-3 position, but after the analyses, we came to know that it is on fifth position according to the respondents.







In question 8, we asked the respondents about the barriers which stop them to go and purchase stuff online. According to me and for the betterment of the research project, this question is the one of the most important question which has to be asked and analyze the reviews. From the above table 12 and 13, We found that, almost 24-25 percent people said that they don’t purchase stuff online because they are worried about giving their credit/debit card number. Another 24-25 percent people said that they don’t buy stuff online because they like to see and touch the products before buying. So they prefer to go at retail stores. Around 15 -16 percent of the people says that they don’t find any barriers while buying online and they don’t find any reasons to not to buy online. Around 13-14 percent of the people says that they have a bad experience and says that they are worried about the cost/hassle of returning the product. 11 percent of the people say that they don’t buy stuff online because they are worried abound giving their credit/debit card number as well as they like to touch and see the product before buying. 6- 7 percent of the people say that they don’t like to buy stuff from somewhere or someone they are not familiar with. 4-5 percent of the people say that they don’t want to give their individual specific

information collection such as address, mobile number, demographic characteristic,

lifestyle and spending patterns are also of concern when online.



Analysis-

It is true that rapid increase in internet usage has led to an increase in the online

shopping as 80 percent 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 led 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.

Demographic Factors

Online behavior is affected by demographics i.e. by gender, education and income.

Hypothesis

4. More male Internet users are frequent online buyers than female Internet users.

5. Regular online buyers are better educated than occasional online buyers.

6. Income is higher in case of a regular online shopper than occasional online

buyer.

Figure 1

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

28%

Female

72%

Male



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 population as they still

continue to be an important decision maker when shopping for the family.

Figure 2

Educational difference is a significant demographic variable, which shows that regular

shoppers who were better educated made more purchases online. 89% of the shopping

has been done by the regular shopper whose is educated with a graduate or

postgraduate degree. This shows that frequency of purchase is more in case of a higher

educated regular shopper as compared to an online shopping done by a regular online

shopper with matriculate (8%) and Non-matriculate (3%).

(Anon., n.d.)

3%

Non

Matriculate

8%

Matriculate

54%

Postgraduate

35%

Graduate



Chapter 6

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

behavior.

The most important motivating factor, which influenced the online shopping, was

convenience followed by price and availability. 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.

General Discussion

A Survey by Indian research organization Juxtconsult found that more and more Indian

Internet users are opening their wallets online. While such hurdles as limited broadband

access and security concerns remain, the report finds there are currently more than 10

million shoppers online in India. While current trends point to increased e-commerce

growth in India, the online marketplace in the country of more than 1 billion people is still

relatively small.



Juxtconsult's survey found that 40 percent of all urban Internet users buy online, while

42 percent of the sales originate through just five percent of consumers. The survey

was conducted in April 2008and sampled more than 30,000 users.

"This section of buyers spends 5,000 rupees or more per month on the net," states the

report. "It is interesting to note that two out of every three heavy spenders are also

'netholics,' those who are on the net for more than three hours per day...Of all those

who buy online, only 25 percent are spending more than 1,000 rupees per month while

the (remaining) 75 percent bill less than 1,000 rupees per month." (1,000 Indian rupees

is currently equal to approximately $23 US.)

The report also found that buying and search patterns among Indians differ between

genders.

"While 43 percent of male users buy online, only 31 percent of urban female users are

consumers as well. Women tend to search more. Defying their more common attitude

towards shopping, women are more guarded when it comes to the online market," says

Juxtconsult.

"Depending on the product type, nine percent to 25 percent are buying online, whereas

33 to 47 percent are searching the net for product information," it says.

Security Fears Persist

Juxtconsult says the motivation for Indian users to make purchases online varies, but

users fear compromised personal information is still a great risk when it comes to e-

commerce.

"The single biggest motivation for buying online for net users is saving time. Thirty-two

percent of them look to shop online with this purpose. Convenience of shopping '24x7'

and home delivery are other major incentives," says the report. "However, the concern

of possible misuse of credit card or personal information is extremely significant among

online buyers, with almost 55 percent of them voicing their concern. Clearly, tackling

and countering the issue of online safety figures as an imminent challenge for net

marketers."



Books, CDs Top the List

The products that are purchased most online in India, according to Juxtconsult, are

books and CDs - making up 25 percent of all online purchases.

"Ironically, computer hardware and software, despite having the home advantage are

among one of the least bought products online, with only 13 percent buying them," says

the report.

"In sum, the online market in India is blossoming but is yet to take off in a considerable

way. The Internet is still being used more for searching than buying products and

services. Though a noticeable proportion of net users are also net consumers,

essentially, at present only a small tribe among them is driving online shopping

momentum," says Juxtconsult.

(Comiskey, 2005)

People shop online for convenience, not for price

Who’s shopping online these days?

Everybody.The internet has now become the mall of America, where people shop for

everything from cameras to caviar to clothes to computers. An overwhelming 76 percent

of online users have purchased at least one product or service. Online shoppers are like

a snapshot of a crowded suburban mall on a Saturday afternoon. They are your

husband, your wife, your girlfriend, your brother, your children, even your grandparents.

They are more or less half men, half women—51 percent to 49 percent. Sixty-seven

percent are married and 43 percent have kids. Their median household income has

declined sharply. It is now $59,100, compared to what we had four years when it was

$66,000. Forty-three percent of people who shop online have online access at work.

Seventy-two percent have at least one wireless device, and 40 percent have already

paid or are willing to pay $39.95 a month for broadband. These are the prime prospects

the advertisers spend a fortune to reach.

It looks like we’re getting over our worries about using credit cards online, huh?

Oh yes. The number of online shoppers who pay for their purchases with credit

cards has almost tripled since 1997. It’s up to 70 percent now, compared to 59 percent

in 1999 and 34 percent back in 1997. Looking to the future, while 49 percent of the

newbies paid with a credit card, 66 percent of the integrators did so, and 79 percent of

the trendsetters. Remember that newbies have been online for less than a year,



integrators from one to two years, an trendsetters three or more years. This tells me

clearly that online shopping is becoming a way of life.

Looking beyond strict numbers, what’s the motivation at work here? What’s driving people to buy things online?

First of all it’s important to note that convenience is the primary motivation for online

shoppers. Price is secondary. Fully 97 percent of online shoppers are motivated

primarily by saving time and simplifying their lives. And of this 97 percent, only 36

percent are additionally motivated by saving money. Money is not an issue for the rest

of them. Even among the more price-conscious shoppers it’s worth reiterating that price

is not their primary motivation. They tend to shop for prices only after they have decided

on a particular product or service. Online shoppers place a much higher value on time

than money. This is great news for e-trailers because the online users are still the early

adopters and opinion leaders that they spend a fortune to reach. So it’s a golden

opportunity for new product introductions.

Okay, so people are looking for convenience when they shop online. Does anything further distinguish online shoppers from one another?

We’ve found that there are five core mindsets or need-states of online shoppers. These

can be seen as differentiating motivations driving people to shop online and sending

them to particular types of places. The first mindset is something I call "Need Ideas." In

this state, the shopper is typically looking at gifts and toys. Second is "Need Simplified

Information"; this is the state in which people tend to go online to shop for electronics,

computers, software, small appliances. Shoppers who "Need Personalized

Recommendations" are those who are looking for books, CDs, games, software. And

then there’s the state I call "Need Newest Products." This is the state of mind that

characterizes people online shopping for cosmetics, clothes, cars and computers.

(Schlosberg, n.d.)



Chapter 7

Limitations of the Study

Every study will have its problems and limitations at some point during the project. This

study is no different. The use of a non-probalistic sample in the research was a major

limitation because there was no way to make sure that the sample taken represented

the total population of the Internet users. A non-probability sample lacks the accuracy

and precision that a probability sample might offer. Though this samples provided a

better insight about the online shoppers but there could be a possibility that a

respondent may have done online shopping but is not a regular Internet user. It was

seen that some respondents were biased towards some questions. Another major

limitation encountered doing the research assignment was the issue regarding the time.

Limitation of the study is the selection of the existing studies. Owing to time limitation,

only a few number of journals were searched. This may leave some other prominent

empirical studies out. In addition, owing to the multidisciplinary nature of online

shopping, it would be very interesting to compare IS literature to other disciplines that

study online shopping attitudes and behavior.

Limitations, Perils and Dangers of Online Shopping

Scams and internet fraud is no more news in the internet world. Scammers have gone

deep online. Millions of dollars are reported every day of the year to be lost by innocent

souls. Men and women are duped online every day without any form of comfort in their

lives. Since the internet is for all and sundry, excessive exposure to it could be

dangerous and risky. The problem with online shopping ranges from A to Z. They are

avoidable if they are known. It should be clear that not everybody online is there to buy

or sell real products. Some are there for fraud and online scams. I am a victim of such

disaster before I learnt my lesson in the hard way. Internet fraud is all over my dear

reader.

As earlier quipped, internet fraud is very common on the internet market. Online

shopping is characterized with internet catastrophes. Since online shopping in the most

popular means of shopping, it is important to note that everybody is now online.

Exposure of the internet is now the avenue for some weaklings and indolent people to

fraud innocent shopping seekers. One need to be on the watch out against internet

fraud when one is sincerely going for online shopping.



Poor network server.

Sometimes in developing countries of the world has poor network provider. It could in

such a way limit one’s online shopping in any form. News has made it clear that internet

connections are faster than each other; some are very slow while some are time

wasters to say.

Goods in transit

Goods might be declared in transit when been tracked on the internet. This is a great

limitation. This hinders the buyer to receive the good at the stipulated time. He receives

such goods very late at the eleventh hour. It is very common to almost all shops. Steps

are on to set everything in the right order.

Currency barrier

Not every country in the world has the same currency. Dollars are popularly used but

some countries have no access to dollars. This has limited online shopping in the recent

years.

There are limitations. There are dangerous strives. There are perils. Language could

also limit online shopping. Before you pay for anything online.

(Anon., n.d.)



Chapter 8

Recommendations and Suggestions

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 software 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 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.

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.

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.

(Anon., n.d.)



Sample Questionnaire

1. Are you an internet user?

Yes

No

2. Are you an online shopper?

Yes

No

Will start now

3. If yes, which categories (ies) of Stuff have you bought or prefer to buy online?

Books / E-books

Tickets (Air, Rail, Event, Movies, etc...)

Electronic Gadgets

Apparels & Accessories

Hotel Rooms/Car Rental

Food / Groceries

Other (Please Specify)

4. How often do you purchase online?

Once a month

2-5 times in a month

Once in 2-3 months

I don’t buy online

5. Overall, were you satisfied with your experience of online shopping?

Highly Satisfied

Satisfied

Neither Satisfied nor dissatisfied

Dissatisfied

Highly Dissatisfied



6. From which place you often sit and shop online?

Home

Office

Cyber cafes

Other (please specify)

7. What is your main motivation for buying for buying through Internet? Rank it (1-5)

Convenience (ease of purchase, home delivery ability to shop 24/7)

Price

Superior selection/ Availability

Product comparison

Saves time

8. What, according to you, is the most important barrier to purchase online?

I am worried about giving out my credit/ debit card number

I don’t like providing personal information

I don’t want to purchase from someone with whom I am not familiar

I like to see/touch the product in person, before I buy it

I am worried about the cost/hassle of returning the product

Both A and B

I don’t find any barriers

9. Few details, I am sure you won’t mind.

Name of the Respondent

Email Id of the Respondent



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Data & Analytics

How online selling has changed marketing perspective including consumer perception