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A SUMMER TRAINING PROJECT REPORT

ON

A Study on Consumer Behavior Towards Online


Shopping

SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE AWARD OF


DEGREE OF MASTER IN BUSINESS ADMINISTRATION 2013-15

UNDER THE GUIDANCE OF:


Ms. SURBHI MALHOTRA
ASSISTANT PROFESSOR, RDIAS

SUBMITTED BY:
TARUN GIANCHANDANI
ROLL NO. 02680303913_BATCH NO. 2013-15

RUKMINI DEVI INSTITUTE OF ADVANCED STUDIES


An ISO 9001:2008 Certified Institute
NAAC Accredited Grade A
(Approved by AICTE, HRD Ministry, Govt. of India)
Affiliated to Guru Gobind Singh Indraprastha University, Delhi
2A & 2B, Madhuban Chowk, Outer Ring Road, Phase-1, Delhi-110085.
TABLE OF CONTENTS

Student Declaration i
Certificate from Guide ii
Acknowledgement iii
Executive Summary iv
List of Tables vi
List of Charts vii

CHAPTER-1: INTRODUCTION
1.1 About the Industry 2

CHAPTER-2: LITERATURE REVIEW


2.1 About the Topic 14
2.2 Literature Review 33

CHAPTER-3: RESEARCH METHODOLOGY


3.1 Purpose of the Study 42
3.2 Research Objectives of the Study 42
3.3 Research Methodology 42
3.3.1 Research Design 43
3.3.2 Sources of Data 43
3.4 Limitations of the Study 44

CHAPTER-4: DATA ANALYSIS AND INTERPRETATION


4.1 Data Analysis 46

CHAPTER-5: FINDINGS & SUGGESTIONS


5.1 Findings 53
5.2 Suggestions 54
CHAPTER-6: CONCLUSIONS
6.1 Conclusion 56

Bibliography
Annexure
STUDENT DECLARATION

This to certify that I have completed the project titled A Study on Consumer Behavior
Towards Online Shopping under the guidance of Ms. Surbhi Malhotra in the partial
fulfillment of the requirement for the award of the degree of Master in Business
Administration from Rukmini Devi Institute of Advanced Studies, New Delhi. This
is an original work and I have not submitted it earlier elsewhere.

Name: TARUN GIANCHANDANI


Enrollment No: 02680303913

i
CERTIFICATE

This is to certify that the project titled A Study on Consumer Behavior Towards Online
Shopping is an academic work done by Tarun Gianchandani submitted in the partial
fulfillment of the requirement for the award of the degree of Masters in Business
Administration from Rukmini Devi Institute of Advanced Studies, New Delhi. under
my guidance and direction. To the best of my knowledge and belief the data and
information presented by him in the project has not been submitted earlier elsewhere.

Ms. Surbhi Malhotra


(Project Guide)
RDIAS

ii
ACKNOWLEDGEMENT

Experience is the utmost wealth a person can gain. Experience gives us the depth,
stability and composure to withstand any wave of uncertainty. The experience I have
gained during the project gave me a great learning.

Completing a task is never a solo effort. There are invaluable contributions by a number
of individuals directly or indirectly. It is for the same that I take immense pleasure in
expressing my gratitude to the people who helped me in my project.

I would like to thank my faculty guide Ms. Surbhi Malhotra, Assistant Professor,
Rukmini Devi Institute of Advanced Studies, Rohini, for her constant support and
invaluable guidance at each step of this summer internship project.

It has been a memorable experience and I have gained tremendously in terms of


knowledge and experience.

iii
EXECUTIVE SUMMARY

The growing use of Internet in India provides a developing prospect for online shopping. If
E-marketers know the factors affecting online Indian behavior, and the relationships
between these factors and the type of online buyers, then they can further develop their
marketing strategies to convert potential customers into active ones, while retaining
existing online customers.

This project is a part of study, and focuses on factors which online Indian buyers keep in
mind while shopping online. This research found that information, perceived usefulness,
ease of use; perceived enjoyment and security/privacy are the five dominant factors which
influence consumer perceptions of Online purchasing.

Consumer behavior is said to be an applied discipline as some decisions are significantly


affected by their behavior or expected actions. The two perspectives that seek application
of its knowledge are micro and societal perspectives.

The online purchasing behavior of online shoppers and factor influencing online shopping
behavior and its future perspective. Internet is changing the way consumers shop and buy
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 product and service 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 the
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 customer. Although most of the revenue of online transactions comes from B2B
commerce, the practitioners of B2C commerce should not lose confidence. It has been more
than a decade since business-to-consumer E-commerce first evolved. Scholars and
iv
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 behavior from different perspectives. Many of their
studies have factors or assumptions which are based on the traditional models of
consumer behavior, and then examine their validity in the Internet context.

v
LIST OF TABLES

Serial Number Details Table Number Page Number


1. Age of respondents 1.1 35
2. Gender of respondents 2.2 36
3. Demography 3.3 37
4. Occupation 4.4 38
5. Monthly income 5.5 39
6. Own internet connection 6.6 40
7. Motivators for online 7.7 41
shopping
8. Competitive price 8.8 42
9. Products people buy 9.9 43
online
10. Online shopping vs at 10.10 44
physical store
11. Store respondents visit 11.11 45
12. Factors for online 12.12 46
shopping
13. Modes of payment 13.13 47
14. Problems while online 14.14 48
shopping

vi
LIST OF CHARTS

Serial Number Details Figure Page Number


Number
1. Age of respondents 1.1 35
2. Gender of respondents 2.2 36
3. Demography 3.3 37
4. Occupation 4.4 38
5. Monthly income 5.5 39
6. Own internet connection 6.6 40
7. Motivators for online 7.7 41
shopping
8. Competitive price 8.8 42
9. Products people buy 9.9 43
online
10. Online shopping vs at 10.10 44
physical store
11. Store respondents visit 11.11 45
12. Factors for online 12.12 46
shopping
13. Modes of payment 13.13 47
14. Problems while online 14.14 48
shopping

vii
CHAPTER- 1
INTRODUCTION
1.1 Introduction

Internet is changing the way consumers shop and buy 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
communicates 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 the
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-to-consumer 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 behavior from different perspectives. Many of their studies
have posited new emergent factors or assumptions which are based on the traditional models
of consumer behavior, and then examine their validity in the Internet context.

2
1.2 Theoretical Foundation

The Internet has developed into a new distribution channel and online transaction that are
rapidly increasing. This has created a need to under how the consumers perceive online
purchasing.

Price, Trust and Convenience were identified as important factors. Price was considered as to
be a most important factor for a majority of the students. The internet has created a paradigm
shift of the traditional way people shop. A consumer is no longer bound to opening a times or
specific location. So he can become active at virtually any time any place and purchase the
products or services.

The internet is relatively a new medium for communication and the information exchange that
has present in everyday life. The number of internet user is constantly increasing which is also
signifies that online purchasing is increasing. The rapid increasing is explained by the
consumer behavior. The internet is considered a mass medium that provides the consumers
with purchase characteristics as no other medium. Certain characteristics are making it more
convenient for the consumer compared to the traditional way of shopping, such as the ability
to any time view and purchase products visualize the needs with products and discuss
products with other consumers. Online shopping is the process of consumer go through the
when they decide the shop on the internet.

The internet has developed into a new distribution channel and the evaluation of this
channel. E-commerce has now identified. Using the internet to shop online has become
one of the primary reasons to use the internet combined with searching for products
and finding the information about them. Therefore internet develop the 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.

3
Due to the rapid development of the technologies surrounding the Internet, a company that is
interested in selling products from its web site will constantly has to search for an edge in the
fierce competition. Since there are so many potential consumers, it is of the out most
importance to be able to understand what the consumer wants and needs.

1.2.1Online Shopping In India

It is a fact that a great online shopping revolution is expected in India in the coming years.
There is a huge purchasing power of a youth population aged 18-40 in the urban area.

1.2.2 Rising Connectivity

If we observe the growth of Internet Subscribers from the above graph, it is getting
doubled year by year. The usage of internet in India is only 4% of the total
population. This is also getting increased day by day as the costs of computers are decreasing
and net penetration is increasing. The cost of internet usage is also getting lower, with
good competition among the providers. Wi-Fi & Wimax system has also started in India. This
will increase the usage as it goes more on wireless internet. Indians are proving every time
that they can beat the world when it comes to figures of online shopping. More and more
Indians are going to online shopping and the frequency of Indias online buying is crossing
the overall global averages.

1.2.3 Few Factors That Boost Online Shopping in India

Rapid growth of cybercafs across India


Access to Information
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.

4
1.2.4 Few Facts about Online Shopping

The figures from IAMAI show that the internet users in India will grow to 200 million
by 2011. Around 25% of regular shoppers in India are in the 18-25 age groups, and 46% are
in the 26-35 year range.

Indian online matrimonial sector is worth around $230 million


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 2007 and it is expected to rise above $700 million by end March 2010.

1.2.5 Changing Attitude towards Online Shopping:

Awareness, Future Demand Focus for Emerging Markets & Current Issues Malls springing
up everywhere and yet people are E-shopping! And not in small numbers either. Consumers
are more rational nowadays and have ability to get the choices from the market. Awareness
among the consumers is spread through internet. The number of internet users is increasing
day by day which attracts people who have an option to buy online. It was never thought that
Indians would go in for e-shopping in such a big way. Ticketing, travel bookings and even
books and movies seem fine to buy online. Knowing that in India sizes vary from brand to
brand and quality is inconsistent, even of some electronic items, how is it that there are people
buying these items online? In India there are some segments of people who have not yet tried
purchasing over internet.

5
CHAPTER-2
Review of Literature

6
2.1 About the Topic
Consumer Behaviour is the study of individuals, groups, or organizations and the processes
they use to select, secure, use, and dispose of products, services, experiences, or ideas to
satisfy needs and the impacts that these processes have on the consumer and society. It blends
elements from psychology, sociology, social anthropology, marketing and economics. It
attempts to understand the decision-making processes of buyers, both individually and in
groups such as how emotions affect buying behavior. It studies characteristics of individual
consumers such as demographics and behavioral variables in an attempt to understand
people's wants. It also tries to assess influences on the consumer from groups such as family,
friends, sports, reference groups, and society in general.
Customer behavior study is based on consumer buying behavior, with the customer playing
the three distinct roles of user, payer and buyer. Research has shown that consumer behavior
is difficult to predict, even for experts in the field. Relationship marketing is an influential
asset for customer behavior analysis as it has a keen interest in the re-discovery of the true
meaning of marketing through the re-affirmation of the importance of the customer or buyer.
A greater importance is also placed on consumer retention, customer relationship
management, personalization, customization and one-to-one marketing.

Online shopping (sometimes known as e-tail from "electronic retail" or e-shopping) is a form
of electronic commerce which allows consumers to directly buy goods or services from a
seller over the Internet using a web browser. Alternative names are: e-web-store, e-shop, e-
store, Internet shop, web-shop, web-store, online store, online storefront and virtual store.
Mobile commerce (or m-commerce) describes purchasing from an online retailer's mobile
optimized online site or app.

An online shop evokes the physical analogy of buying products or services at a bricks-and-
mortar retailer or shopping center; the process is called business-to-consumer (B2C) online
shopping. In the case where a business buys from another business, the process is called
business-to-business (B2B) online shopping. The largest of these online retailing corporations
are Alibaba, Amazon.com, and eBay.

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The invention of the Internet has created a paradigm shift of the traditional way people shop.
A consumer is no longer bound to opening times or specific locations; he can become active
at virtually any time and place and purchase products or services. The Internet is a relatively
new medium for communication and information exchange that has become present in our
everyday life. The number of Internet users is constantly increasing which also signifies that
online purchasing is increasing (Joines, Scherer & Scheufele, 2003). The rapid increase is
explained by the growth in the use of broadband technology combined with a change in
consumer behavior (Oppenheim & Ward, 2006). The Internet is considered a mass medium
that provides the consumer with purchase characteristics as no other medium. Certain
characteristics are making it more convenient for the consumer, compared to the traditional
way of shopping, such as the ability to at any time view and purchase products, visualize
their needs with products, and discuss products with other consumers (Joines et al. 2003).
Oppenheim and Ward (2006) explain that the current primary reason people shop over the
Internet is the convenience. They also recognize that the previous primary reason for
shopping online was price, which has now changed to convenience.
Online shopping is the process consumers go through when they decide to shop on the
Internet. The Internet has developed into a new distribution channel (Hollensen, 2004) and
the evolution of this channel, e-commerce, has been identified by Smith and Rupp (2003) to
be the most significant contribution of the information revolution.
Using the Internet to shop online has become one of the primary reasons to use the Internet,
combined with searching for products and finding information about them (Joines et al. ,
2003). Smith and Rupp (2003) also state that the consumers have never had access to so
many suppliers and product/service opinions. Therefore, the Internet has developed to a
highly competitive market, where the competition over the consumer is fierce. In order to
have an impact on and retain consumers, in a competitive market, Constant insides (2004)
stated that he first step is to identify certain influencing aspects when purchasing online, these
can be regarded as factors.

2.2 Review of literature


Petrovic Dejan (2006) in his study on Analysis of consumer behavior online explained that
the most relevant behavioral characteristics of online consumers and examine the ways they

8
find, compare and evaluate product information. Comparison of the newly collected survey
data with the existing consumer behavior theory resulted in detection of a number of issues
related to a specific consumer group. The purpose of this report is to translate these findings
into a set of implementation activities on strategic and technological level. Execution of these
recommendations will result in better conversion of visitors into customers and encourage
customer loyalty and referrals. The focus group of this study will be young adults aged
between eighteen and thirty-four interested in buying a mobile phone or a related product

Shun &Yunjie (2006) in their study showed that there are product types, which are more
likely to be sold online such as software, books, electronics and music. Reason for this is that
when purchasing these types of products, one does not require personal inspection and most,
if not all features, can be outlined in the product description and images. Most products in the
mobile phone family belong to this category. According to the recent research on consumer
behavior on the Internet users (Cotte, Chowdhury, Ratenshwar& Ricci, 2006), there are four
distinct consumer groups with different intentions and motivations:

Exploration
Entertainment
Shopping
Information

Music Videos, Lyrics - Daily updated collection of music videos and lyrics. Majority of
young adults interviewed for purpose of this research tend to be active information seekers. A
high level of technological confidence within this group tends to be an encouraging factor
when it comes to product information research online. The following analysis presents both,
focus group results and behavioral theory in a parallel fashion divided into two main research
topics:

Information Retrieval and Search Patterns

Perception of Product Information Online These two areas is mutually dependent and
particularly important in a market where consumers have the power to choose the right
product from a number of competing suppliers. Well-structured product information that

9
cannot be found easily online is as much of a problem as is having easily accessible
information that does not meet the consumer's expectations

Anders Hasslinger; Selma Hodzic; Claudio Opazo (2008-02-01) in theirstudy


they showed that developed into a new distribution channel and online transactions are rapidly
increasing. This has created a need to understand how the consumer perceives online
purchases. The purpose of this dissertation was to examine if there are any particular factors
that influence the online consumer. Primary data was collected through a survey that was
conducted on students at the University of Kristianstad. Price, Trust and Convenience were
identified as important factors. Price was considered to be the most important factor for a
majority of the students. Furthermore, three segments were identified, High Spenders, Price
Easers and Bargain Seekers. Through these segments we found a variation of the different
factors importance and established implications for online book stores.

Harris Interactive (2009) in their study of online customer experience. The survey
found that online customer experience reached an inflection point in 2009. The percent of
consumers who have experienced problems when conducting transactions online showed its
first substantial decrease in five years -- from approximately 87% in all previous Tealeaf
surveys to 80% in 2009. While the percent of consumers experiencing online transaction
problems, at 80%, remains high (the potential online shopping dollars impacted by transaction
problems rings up at $47.6 billion), this improvement points to a growing business focus on
delivering better customer experiences. The survey sheds light on forces driving this
accelerated online customer experience focus, including the down economy and increased
consumer power due to experience-sharing via social media. It also examines consumer
behavior when transacting online, call center behavior related to online issues and mobile
commerce. Verticals represented in the findings include retail, insurance, travel and financial
services.

San Francisco, CA 6th October 2009 - the leader in online Customer


Experience Management software (CEM), today announced the results of the 5th annual
survey of online consumer behavior, commissioned by Tealeaf and conducted by Harris

10
Interactive [results available at www.tealeaf.com/Harris]. The survey found that 48% of
U.S. online adults say that they are now conducting more online transactions than they did in
the past given the current economic climate. However, 80% of adults who have conducted an
online transaction in the past year experience problems when doing so in 2009. Previous
Tealeaf surveys have consistently shown that approximately 87% were affected. This
improvement over prior years may be attributed to a growing business focus on delivering
better online customer experiences. While this reported decline in online transaction issues is
good news, online customer experience is still very much a work in progress. The percentage
of consumers affected by issues such as error messages (38%), endless loops (19%) and login
problems (28%) is still extremely high. 1 Further; the resulting business impact is significant,
as 32% of those who experience issues when conducting transactions online.

Bikramjit Rishi (2010) in their study on online shopping is an innovative option of


distribution available in the hands of marketers. It is innovative and creative because
marketers can experiment with it in form, content, visibility and availability. In India online
shopping is considered as a relevant alternative channel for retailing and it is now an
important part of the retail experience. This research study is an empirical study to find out
the motivators and decisional influencers of online shopping. The sample has been selected
from the youth population as this group of people actually use internet to buy online. The
study highlights that reliability; accessibility and convenience are the major motivator factors
which motivate the Indian consumer to buy online. Similarly, reluctance and preference are
the two decisional factors which influence the decision.

Kamali and Loker (2002), in their study Internet retail sales represent a new and increasingly
vital commercial milieu. E-commerce or electronic commerce saw sales revenues grow 12.1
percent in 2001 to $31.4 billion a figure expected to reach $81.1 billion by 2006 (Kamali &
Loker, 2002). While it is clear that many more consumers are electing to shop online than in
the past a shift in behavior that may be due to the sense that online shopping is safer and more
secure than it was initially and to the adoption of alternative shopping avenues. This essay
will examine these issues, arguing that browsers become buyers in cyberspace as perception
of safety, product quality, and retailer reliability increase an idea also advanced by Li, Luo,

11
Lepkowaska-White and Russell .

Atanasov (2001) in their study it is anticipated that the worldwide market for business-to-
business and business-to-consumer e-commerce will total $3.1 trillion in 2004 as compared to
$350.4 billion in fiscal 2000-2001. Among the most profitable products and services sold online
are consumer goods such as books, videos, music, computers and other tech products, and travel
(Schmerken, 2001). Other profitable sectors include investment transactions, which Schmerken
(2001) considers to have generated a wave of corporate spending on e-commerce. The Internet
and its myriad e-commerce or marketing sites, represents what researchers believe to be the
security concerns of online shoppers and potential shoppers. These researchers and others
reported that online buyers are also concerned about security issues when making online
purchases. Though many consumer concerns regarding the inherent safety of financial
transactions online have been resolved through the development of sophisticated encryption
programs, many consumers require additional assurance that their financial data will be held in
confidence. Other security issues that were identified by Mauldin and Arunachalam (2002)
focus on retailer disclosures, information risk, product risk, and familiarity with the retailer
and the product. Generally, Mauldin and Arunachalam (2002) found that intent to purchase
rather than merely browsing online increases in direct association with a sense of security and
comfort. Retailers who offer their products online are therefore advised to emphasize product
disclosure and retailer disclosure and reduced information risk in their e-commerce sites.
Though most online retailers do provide clear descriptions of security procedures, some
Internet shoppers still avoid using credit cards online. Overcoming resistance to this fear is
one of the key tasks that must be under taken.

Ogenyi Ejye Omar, Alan Hirst (2006) in their study they evaluates women's attitude
as an overall inclination towards apparel shopping online via e-mail questionnaire. Its findings
suggest that women generally show positive attitudes towards shopping online for apparel.
Women who shop for apparel online are aware of some of the discouraging features of online
shopping, but these features do not deter them from buying online. The implication for online
retailers is that they should focus on making the experience of online shopping more
accommodating and more user -friendly. This is important because the positive features of online
shopping ('convenience', 'usefulness', 'ease of use', and 'efficiency') appear to be more important

12
than the negative features ('lack of security', 'privacy of information' and 'online fraud').

Ruiliang Yan, John Wang (2009) in their research it provides a useful framework to
help business marketers identify the effect of consumer online purchase costs on firm
performances in online and traditional channel competition. A game theory model is developed to
determine the optimal strategies for online and traditional retailers. We demonstrate that consumer
online purchase costs always have a valuable impact on firm profits, and further show that
consumer online purchase costs always have a much more valuable impact on firm profits
whenever the traditional retail transaction costs and the product web-fit change. We also find that
consumer online purchase costs have a greater impact on the retailer's profits in a Stackel berg
competitive system than in a Bertrand competitive system. Based on our results, managerial
implications are discussed and probable paths of future research are identified.

Scott M. Smith, Chad R. Allred, William R. Swinyard (2008) in their


research paper they discusses online shopping in context of diffusion of innovation theory. It
proposes that online shopping is a discontinuous innovation whose adoption rate is influenced
by several of Rogers' (2004) diffusion deterrents. A new 12 -item 'Computer Competence
Index' (CCI) is proposed and tested using data from an internet - administered US probability
study of 1800 online users. E-Shoppers are profiled using a tertile split of the CCI. Each
tertile's demographics, computer activities, computer - oriented lifestyles, and online purchase
activities are reported. Evidence is presented that concepts related to the diffusion of
innovation may explain resistance in the growth of online shopping.

A.M. Sakkthivel (2009) in their research paper aims to identify the impact of
demographics on consumer buying behavior towards online purchase of different products based
on the involvement and investment (High, Medium and Low). It attempts to unearth the impact of
the demographics on online purchase which is at present relatively limited. It would help the
marketers to identify the demographic profile of consumers which is otherwise not known due to
the intangible nature of internet. The findings would help the marketers to design their offerings
based on the demographic profile of online consumers and would help the online marketers to

13
identify and segment the online consumers which will enhance their focus and eventually leads to
financial growth.

Jianwei Hou, Cesar Rego (2007) in their study in traditional auctions, it is often
assumed that bidders are a homogenous group. However, since most online bidders are average
consumers instead of professional bidders, we suspect that online bidders are a heterogeneous
group. The purpose of this paper is to explore the types of online bidders based on their real
bidding behaviour in the context of consumer-to-consumer online auction market. A cluster
analysis is employed and four types of online bidders are finally identified in a private value
auction, namely, goal-driven bidders, experiential bidders, focused bidders, and opportunistic
bidders. The profile and performance of each group are also discussed.

Tomomi Hanai, Takashi Oguchi (2009) in their study to investigate what kind of
information contributes to trust formation in online shopping. Twenty-seven female
undergraduate students were recruited and asked to evaluate the trustworthiness of 20 online
shopping websites. All the online shopping websites dealt with branded products where there is
greater emphasis on the trustworthiness of online shops or products. The results show that
information described on the websites was classified into two categories, firstly, information
about the shop and its procedures and services. Secondly, the concrete information necessary for
the consumption process, such as payment information and return information, which heightens
the reliability of these shops. The term brand originally refers to a description or trademark
which indicates a type of product made by a particular company. However, in modern Japanese
society it refers to those branded products that are perceived to have a higher quality than other
similar products. Thus, the term brand authenticates that its products belong to a high-class, and
the people who possess these branded products are regarded as exclusive people
through the basking-in-reflected glory process (Cialdini, Borden, Thorne, Walker, Freeman, &
Sloan, 1976). The branded products interest female young people and recently they have been
more inclined to purchase them via online shopping. However, they tend to refrain from
purchasing these products via online shopping due to their distrust of it. Consequently, it becomes
more and more important to analyze what kind of information contributes to trust formation in
online shopping. Female Undergraduate Students Attitudes toward Branded Products First, we

14
introduce several surveys for determining the attitude towards, and ownership of, branded
products among female young people, especially female undergraduate students in Japan, who
are the target group of this study. Info plant (2007) showed that nearly half of all people are
interested in some branded products. Although branded products generally attract the
attention of various kinds of people, young females are especially interested in branded
products. Info plant (2007) revealed that more than 60% of females fewer than 20 years of age
and nearly 80% of females in their twenties have purchased some branded products.
Furthermore, the percentage of people who usually buy new branded products is about 20%
among females under 20 years of age and more than 10% in females in their twenties.

David Anderson (02 .02 .2006) in their research carried out by a consumer behavior
researcher at Henley Management College has investigated what drives people to search online.
The findings reveal that convenience, time-efficiency and personal control are the key drivers for
consumers to search online, rather than cost. It also shows that the relationship between traditional
and online retailing outlets needs to be more unified E-shopping has changed the face of retail,
and surfers are now looking for spring sale bargains. This is following a bumper e-Christmas,
where Internet shopping soared almost 50% during the 10- week run-up to Christmas 2005
(IMRG). However, the new findings reveal that convenience and personal control are the key
drivers for consumers to search online. Dr Susan Rose, from Henley Management College,
said: What motivates online shoppers is the ability to shop, where, when and how
they like. Nowadays people can shop over their Shreddies in the morning. The research, that
analyses data from 304 electrical goods Internet shoppers, provides businesses with a guide to
getting the information highway buzzing with potential customers. Big-ticket items such as
digital TVs, cameras, or iPods now feature on our e-shopping list. The Internet provides a rich
source of information about brands and retail channels that enable us to search and find
information to help us with our final purchase decision. For businesses there are some steps to
help them embrace the Internet revolution with success. A key factor driving Internet use for
online window shopping is its usefulness in our personal lives. The Internet frees time and
makes the information search process, Research suggests that people search online for some
goods, yet buy from a traditional high street retailer, or look around for goods in shops, then
take their search online. In turn, it is essential for retailers who operate both on and off line to

15
ensure that they embrace a joined up process that appears seamless to the customer. Some
retailers have still to successfully unite the two retailing methods - this is key to contemporary
customer service. Factors such as how much the medium challenges us mentally and our
confidence to navigate and understand the technology can turn us on or off the idea of
browsing online for products. A clear divide is appearing between the occasional online
shopper and the regular experienced user. Concerns about how easy the system is to use have
almost disappeared for online shopping enthusiasts, but for occasional users e-tailing sites
need to be easy to navigate. Websites must be accessible and operate efficiently. The research
found that the expectation of getting a good financial deal is still a strong motivator to seek
out products online, but this is secondary to the importance but, many people steer clear of
electronic buying because of security worries. Only once online retailers can reassure
customers about fraud and privacy will the online shopping curve really take off. Worries
about the risk involved, in terms of financial transaction and privacy remain. A move
from big brands to bargains may only take place once.

Rajeev Kamineni (JAN 1999) in their study The World Wide Web can change
human behavior and human interactions to a very large extent. Web based shopping behavior
is one major example to point out the trends in this direction. This study is of a very
exploratory nature and it intends to establish the differences between several web - based
shoppers from different parts of the world. Several critical factors associated with online
shopping behavior will be explored. A cross cultural data set will be collected and an
illustrative description of the shoppers will be provided. As a final step the cross cultural
differences between several shoppers will be explored. One question which will run as a
theme throughout the course of this paper is, Will the traditional consumer behavior theory
and research be altered by the advent of web based shopping?

There is a huge difference between a physical store and its electronic counterpart. A help
button on the home page of the web-shopping site replaces the sales clerks friendly advice
and service. The familiar layout of the physical store becomes a maze of pull down menus,
product indices and search features. Now more than ever, the promise of electronic commerce
and online shopping will depend to a great extent upon the interface and how people interact
with the computer. At the same time, there are some inherent difficulties in maintaining an

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online inventory. In a regular store, the managers can pull out a product from the shelf if they
feel that it is not fast moving or has no demand. This is a privilege that cannot be extended to
the online retail store.

Anita desai (2003) in her sudy E-tailing is the practice of selling retail goods on the internet.
It is the abbreviated version of electronic retailing which essentially constitutes business to
consumer transaction. While the concept of online retailing or e-tailing is no longer in its nascent
stage; it continues to evolve, as advanced e-commerce applications act as a potent catalyst in the
development of e-tailing.
The idea of online retailing or e-tailing which almost every net-savvy individual is familiar
with; offers a convenient mode of shopping online and the consumer gets to choose from a
diverse range of products and services as opposed to the analogous physical shopping
experience. Furthermore, online retailers or e-tailers get to expose and sell their products to a
global audience through their e-stores.
The E-commerce industry plays a vital role in its growth and development. The consumer or
buyer is usually provided with detailed information and description of the product which
helps them make a judicious choice before making an online purchase. For consumers who
face a paucity of time or want a diverse range of products to choose from, e-tailing proves to
be an ideal option. Every e-tailer wants his/her share of domain amidst the vast World Wide
Web galaxy. Due to the intense competitory quotient involved, every e-tailer out there wants
to offer their customer/buyer a smooth and pleasant shopping experience. Therefore, e-tailing
is just not restricted to putting up products for sale for consumers to buy. As consumers today
are well-informed, it is understood that they would make a well informed decision as well.
This involves a fair amount of product research, price comparison and checking the credibility
of the e-store.

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CHAPTER-3
NEED, OBJECTIVES, SCOPE &
METHODOLOGY

18
3.1 Need
The need of this research is to identify and get insight into what main factors the online
consumer takes into consideration when most he buy products on internet what affects their
shopping behavior, basic need of this research is to find out what are the main factors affect
the online consumer when considering and making a purchase over Internet.

3.2 Objective of the study

To study the online shopping behavior of customers


To study the factors influencing online shoppers and consumers
To study the customers level of satisfaction with regard to online shopping
To examine whether customers prefer online shopping to physical stores.

3.3 Scope of the Study and Methodology

3.3.1 Scope of the study

At any given time there are millions of people online and each of them is a potential
customer for a company providing online sales. Due to the rapid development of the
technologies surrounding the Internet, a company that is interested in selling products
from its web site will constantly has to search for an edge in the fierce competition. Since
there are so many potential consumers, it is of the out most importance to be able to
understand what the consumer wants and needs. The importance of analyzing
and identifying factors that influence the consumer when he or she decides to purchase on the
Internet is vital. Since the Internet is a new medium for there have been new demands set by
the consumer. That is why it is crucial for the online retailers to know what influences.

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Since online retailing is a new retailing medium and online consumer behavior is diverse from
traditional consumer behavior, one must identify what influences the online consumer.
Analyzing the process that the online consumer goes through when deciding and making a
purchase over the Internet, shows some factors that consumers consider these factors need to
be identified and taken into account by online retailers in order to satisfy consumer demands
and compete in the online market.

3.3.2Research Methodology

Data for this study was collected by means of a Survey conducted in Delhi city. The sample
size was 200.The Questionnaire (shown in Annexure) was used Mainly to test the model
proposed for Attitude towards online shopping. The type of research was both exploratory
as well as Descriptive. . We took around eleven different factors by studying the existing
models of consumer attitudes that play an important role in online purchase, and then
proposed a model leading to online shopping. This model was then tested in our research
by the percentage analysis in ms- excel.

3.3.3Research Strategy

When collecting data to approach the purpose of a research there are two ways in which the
data can be collected. In order to acquire a General knowledge about the topic, secondary data
is primarily used and is one of the ways by which data can be collected. The second way to
collect data is the primary data collection. Usually when a study is conducted, secondary data
is not sufficient enough and needs to be completed with primary data which is collected by
the research.

3.4 Sample Design

The factors that we intended to examine can be applied to and investigated at any population
that uses the Internet and buys online products Online. Since there are time and resource
restraints, a specific Population had to be identified in order to generalize and create relevant

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segments. We decided that the sample size should contain over 200 respondents and we
collected answers from 200 respondents. The populations for this research are professionals &
students at Delhi city. The city was chosen on a convenience basis. Convenience sampling
involves using samples that are the easiest to obtain and is continued until the sampling size
that is need is reached.

TYPE OF RESEARCH

Descriptive Research Sample Size:-200.

LIMITATION OF THE STUDY


The result of the study are specific to the sample selected and dimensions used. Hence, they may not
be generalized for overall population. Actually this study is limited in sample size.

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CHAPTER- 4
DATA ANALYSIS

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1. Examining the age of the respondents

Figure 1.1

Age No. of Respondents Percentage

15-20 62 31

20-25 96 48

25-30 28 14

30& Above 14 7

Table 1.1

INTERPRETATION

The above diagram shows us the percentage in the age of respondents. As it shows that from
age 15-20 the number of respondents are31 % and from age of 20 -25 it is 48 % and from 25-
30 it is 14% this is the above data which is shown by the this pie chart.

23
2. Examining the gender of the respondent

Figure 2.2

Gender No. of respondents Percentage

Male 172 86

Female 28 14

Table 2.2

INTERPRETATION

As our respondents are mostly from the students and professional in chennai city who uses
cards. I use to get more data from males as they were ready to give their experiences, it this
graph itself is showing more percentage of males rather than females, the percentage of male
respondents is 86% and percentage of female respondents is only 14%.

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3. INTERPRETING THE DEMOGRAPHY WHETHER RESPONDENT LIVE IN
RURAL OR URBAN AREA

Figure 3.3

Demography No. of respondents Percentage

Rural 152 76

Urban 48 24

Table 3.3

INTERPRETATION

The above diagram is showing the percentage of demography of respondents and what is the
percentage of respondents who lives in rural or urban region, the above diagram is showing
that 76% of the respondents are from urban areas and 24% of the respondents are from rural
area.

25
4. INTERPRETING OCCUPATION OF THE RESPONDENTS

Figure 4.4

Occupation No. of respondents Percentage

Student 180 90

Professional 8 4

Govt. Employee 0 0

Self Employed 10 5

Others 2 1

Table 4.4

INTERPRETATION

This graph help us to know the occupation of the respondents, this is to know that which
segment of people are buying more products on the internet whether they are the segment of
students government employees or professional, the above graph shows that the segment of
the students i.e. 90% of the students are using internet and use to buy online products.

26
5. INTERPRETING THE MONTHLY INCOME OF THE REPONDENTS?

Figure 5.5

Monthly Income No. of respondents Percentage

Less than 10000 120 60

10000-20000 44 22

30000-40000 30 15

30000-40000 6 3

40000 & above 0 0

Table 5.5

INTERPRETATION

This above graph shows the percentage of monthly income of the different respondents, and it
show that less than 10000 income respondents have buyed more online products because most
of them are students and they use to buy music Cds, gadgets, laptops.

27
6. TO KNOW WHETHER RESPONDENTS HAVE THEIR OWN
INTERNET CONNECTION

Figure 6.6

Own internet No. of respondents Percentage


connection

Yes 130 65

No 70 35

Table 6.6

INTERPRETATION

This graph shows us the percentage of respondents who have their own internet connections,
its shows that 65% of respondents have their own internet connections and 35% people dont
have their own internet connection.

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7. TO KNOW WHAT MOTIVATES PEOPLE TO DO ONLINE SHOPPING

Figure 7.7

Motivation No. of respondents Percentage

Easy payment 74 37

No hidden cost 10 5

Wide range cost 20 10

No travel to shop 96 48

Table 7.7

INTERPRETATION

This graph shows us what motivates the people to buy internet, as from above result we found
out that no travel to shop is the main thing which motivates the people to buy products online.

29
8. TO KNOW WHETHER CONSUMERS ARE GETTING COMPETITIVE PRICE

Figure8.8

Whether consumers No. of respondents Percentage


get competitive price

Yes 134 67

No 54 27

Cant say 12 6

Table 8.8

INTERPRETATION

This diagram shows us that whether online marketers are giving competitive price or not and
result which is came is that most of the people thought that online marketers are providing
competitive prices than physical stores. And result shows 67% of people says that it provides
competitive prices and only 27% people says no.

30
9. PRODUCTS THAT PEOPLE BUY ONLINE

Figure 9.9

Products people buy No. of respondents Percentage


online

Books 46 23

Music 48 24

t-shits 24 12

Mobile 44 22

Laptop 38 19

Table 9.9

INTERPRETATION

The above graphs gives result that most of time people use to buy books25% but the margin
with other things is very less as music Cds have percentage of 20 and mobile 23%So this
graph shows us this useful data .

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10. COMPARISON OF ONLINE SHOPPING WITH SHOPPING
AT PHYSICAL STORE

Figure 10.10

Online shopping vs No. of respondents Percentage


at physical store

Yes 47 94

No 40 80

Cant say 13 26

Table 10.10

INTERPRETATION

After analyzing the above graph shows that the people are in favour of that online shopping is
better than physical store, The percentage of people who says online shopping is better is 45%
and the people who says it not good is 38 %. Still the percentage of people who says yes is
more than other who says no.

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11. STORES RESPONDANT GENERALLY VISIT

Figure 11.11

Stores respondents No. of respondents Percentage


visit

Ebay 66 33

Yahoo shopping 30 15

Amazon 76 38

Best buy 20 10

Others 8 4

Table 11.11

INTERPRETATION

This graph shows that 35% people use to visit e-bay for online shopping,40% use to go at
amazon.com because % of people who buys books is more than any other products so people
mostly visits amazon.com, 16 % people do at yahoo shopping and for other people use to visit
at BestBuy and others.

33
12. WHAT FACTORS HELP YOU TO DECIDE WHICH SITE TO USE FOR
ONLINE SHOPPING

Figure 12.12

Factors for online shopping No. of respondents Percentage

Search engine 36 18

Personal recommendations 20 10

Special offer on sites 40 20

Online advertising 64 32

Tv advertising 34 17

Others 6 3

Table 12.12

INTERPRETATION

This diagram shows us what affects people to buy products on internet and it shows that 32%
people came to know about shopping sites through online advertisements. And they attracted
towards it and start getting products from there. And 20% people decision is affected by
special offers by the offers and the discounts given by the sites.

34
13. HOW YOU MAKE YOUR PAYMETS ON THE INTERNET

Figure 13.13

Modes of payment No. of respondents Percentage

Credit/debit card 156 78

Bank transfer 10 5

Paypal 30 15

Others 4 2

Table 13.13

INTERPRETATION

This diagram shows that mostly people uses credit card to pay their payments 78% people use
to pay by credit/debit card and 5% through bank transfer and 15% through pay pal and 2 from
paypal.

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14. HAVE YOU FACE ANY PROBLEMS WHILE SHOPPING ONLINE

Figure 14.14

Problems while No. of respondents Percentage


shopping online

Yes 106 53

No 62 31

Cant say 32 16

Table 14.14

INTERPRETATION

This graph shows that whether people faces any problem while doing online shopping or not
and the result shows that 48% people says that they have faced problem while buying online
and 28% people says that they dont face any problem and 14 says that we cant say.

36
CHAPTER 5
Findings

37
Findings

Researcher found that most of the time youngster who are from the age of 20-25 shops
a lot on the net rather than other age limits. People used to do online shopping because of its
convenience.

The three factors that were found show a significant in influencing online shoppers and
consumers. The general distribution showed that the price was the primary factor for the
entire sample population, and that second factor was trust was closely followed by
convenience.

Researcher segments the respondents through different variables found that a segment were
mainly trust oriented and the respondents had a high positive attitude towards purchasing
books online.

Other was mainly price and convenience oriented therefore took the most consideration to the
opinions and experiences of the Reference groups. As they low disposable income and were
somewhat convenience oriented when acquiring information about low prices, chose to label
them price easers.

The main thing which is very common in the most of the people about online shopping is its
risk of privacy i.e. hacking of account number getting passwords and all.

38
CHAPTER 6
Suggestions & Conclusion

39
Suggestions

As came to know after researching on this topic researcher recommend that, the online sellers
have to make their payment transparent, and as people are coming on their sites and they are
buying their products.

Retailers have to give more discounts to their customers so that they can visit again and again
to their site and it also helps to make people more aware about the low rick shopping of the
net.

Transaction of money is very slow they have to make it fast so that customer dont have to
face much problem to pay for the product, if customer is going to face some problem he is not
going to visit our site and buy products.

The online advertisement must made for products in other website must have direct link for
purchasing site.

The retailers must make sure that their website is out of malwares and virus attacks.

40
CONCLUSION

Increased Internet penetration, a hassle free shopping environment and high levels of Net
savings see more and more Indians shopping online. But at the same time the companies need
to reduce the risks related to consumer incompetence by tactics such as making purchase
websites easier to navigate, and introducing Internet kiosk, computers and other aids in stores.
The goal is not to convert all shoppers to online purchasing, but to show them its an option. In
addition to above, efforts need to be taken to educate the online buyers on the steps that need
to be undertaken while making an online purchase. Moreover, the feedback of an online buyer
should be captured to identify flaws in service delivery. This can be done through online
communities and blogs that serve as advertising and marketing tools and a source of feedback
for enterprises. I found that it is a challenge for E-marketers to convert low frequency online
buyers into regular buyers through successful website design and by addressing concerns
about reliable performance. Thus, the online retailing raises more issues than the benefits it
currently offers. The quality of products offered online and procedures for service delivery are
yet to be standardized. Till the same is done, the buyer is at a higher risk of frauds.

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ONLINE SHOPPING HABITS AMONG STUDENTS AND PROFESSIONALS
SURVEY FORM

1. Name:
2. Gender:
Male Female
3. Age:
4. Demography:
Rural Urban
5. Occupation:
Student Professional Govt. Employee Self Employed
Others
6. Income:
Less Than 10000 10000-20000 20000-30000 30000-
40000
40000 & Above
7. Do you have an Internet Connection: Yes No
8. What motivates you to do Online Shopping:
Easy Payment No hidden Cost Wide Range No Travelling
Required
9. Do you get competitive price like physical stores: Yes No
10. What products do you buy Online:
Books Music Clothing Mobile Laptop
11. Do you feel Online Shopping is better than Shopping at Physical Store:
Yes No Cant Say
12. Which of the following sites you have visited:
E-bay Yahoo shopping Amazon Best buy Others
13. What factors help you decide what site to visit:
Search Engine Personal Recommendation
Online Advertising Special Offers Others
14. How do you make payments while Online Shopping:
Credit Card Debit Card Bank Transfer Pay Pal
Others
15. Do you face any problems while Online Shopping: Yes No Cant Say

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