CONSUMER PERCEPTION TOWARDS ONLINE SHOPPING FINAL SUBHASISH PATNAIK.pdf

ACKNOWLEDGEMENT

First and foremost, I would like to thank my respectable and learned

guide, Mr. Purunendu Patra but for whos untiring, persevering and

unflinching help; this project would not have seen the light of day. It

is he who initiated the development of the project and was thus

instrumental in showing the right direction in the field of . He

provided encouragement and boost in the transformation of my

inherent internal knowledge into a real work for external audience.

Lastly, I would like to bestow my regards and gratitude to the

G.M.College, Autonomous, Sambalpur, specially Dr. S. Dash, HOD,

Department of Professional Courses, which provided me this

opportunity to undertake the Dissertation program on consumer

perception towards online shopping for allowing me to go through

this worthy dissertation programme.

(Subhasis Pattnaik)

PC13MBA005

CERTIFICATE OF THE GUIDE

This is to certify that the dissertation report entitle CONSUMER PERCEPTION TOWARDS ONLINE SHOPPING submitted by SUBHASISH PATNAIK bearing the Roll no- PC13MBA005 is his own work and has been carried out under my supervision. It is recommended that the candidate may now be evaluated for his dissertation work by the college.

DATE; 06th April 2015 (PURNENDU KUMAR PATRA)

PLACE: Sambalpur Signature:

DECLARATION

I Subhasish Patnaik, Roll No. PC13MBA005, a student of Gangadhar Meher

college(Auto), Sambalpur, hereby declare that the dissertation on CONSUMER

PERCEPTION TOWARDS ONLINE SHOPPING is done by me is an authentic

work carried out for the partial fulfilment of the requirement for the award of the

degree of MBA program in management under the guidance by Mr. PURNENDU

KUMAR PATRA

The matter embodied in the project work has not been submitted for the award of

any other degree, diploma or any other similar title or prizes to the best of my

knowledge and belief.

Subhasish Patnaik

Roll No. PC13MBA005

MBA 2nd Year

.

CONTENTS

CHAPTER I INTRODUCTION 1 - 4

1.1 Significance of the study 1.2 Objective of the study 1.3 Scope of the study 1.4 Research objective 1.5 Limitation of the study

CHAPTER II REVIEW OF LITERATURE 5 - 10

2.1 National

2.2 International

CHAPTER III OVERVIEW OF THE INDUSTRY 11 18

3.1 Online shopping in india

3.2 Recent development

3.3 Gaint players in Indian online shopping

CHAPTER IV THEORIES OF THE STUDY 19 28

4.1 Introduction to the study

4.2 AIDA Principle in online shopping

4.3 Porters 5 force model in online shopping

4.4 Marketing mix (7p) in online marketing

4.5 Models of online marketing

CHAPTER V RESEARCH METHODOLOGY 29 35

5.1 Research objective 5.2 Determination of information needs and sources

5.3 Research framework

5.4 Data collection

5.4.1 Primary data

5.4.2 Secondary data

5.5 Sample design

5.5.1 Sample unit

5.5.2 Sample media

5.5.3 Sampling method

5.5.4 Sample size

5.5.5 Sample place

5.5.6 Sample design

CHAPTER VI DATA ANALYSIS 36 53

CHAPTER VI FINDING 54 - 55

CHAPTER VI SUGGESTION & CONCLUSION 56 - 61

CHAPTER VII BIBLIOGRAPHY

CHAPTER IX ANNEXURES

A Study on Consumer Perception towards online shopping

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Chapter 1

INTRODUCTION


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1.0 INTRODUCTION

Internet is changing the way consumers shop and buys goods and services, and has rapidly evolved into a global phenomenon. Many companies have started using the Internet with the aim of cutting marketing costs, thereby reducing the price of their products and services in order to stay ahead in highly competitive markets. Companies also use the Internet to convey, communicate and disseminate information, to sell the

product, to take feedback and also to conduct satisfaction surveys with customers.

Customers use the Internet not only to buy the product online, but also to compare prices, product features and after sale service facilities they will receive if they purchase the product from a particular store. Many experts are optimistic about the

prospect of online business.

In addition to the tremendous potential of the E-commerce market, the Internet provides a unique opportunity for companies to more efficiently reach existing and potential customers. Although most of the revenue of online transactions comes from

business-to-business commerce, the practitioners of business-to-consumer commerce should not lose confidence. It has been more than a decade since business-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 behaviour from different perspectives. Many of their studies have posited new emergent factors or assumptions that are based on the traditional models of consumer behaviour, and then examine their validity in the Internet context.

Online shopping is definitely a great way to shop with everything available on the websites. From clothes, gift items, food, home needs, medicines, and many more, this mode of shopping allows one to shop conveniently without hassle on spending hours in a supermarket or shopping areas. The Internet with its wide array of information nooks, allows the customer to go through various reviews of the product or service before actually heading for purchases. These online shopping websites also have daily deals for the customer looking for discounts and store offerings.


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1.1 SIGNIFICANCE OF THE STUDY

In recent years, online shopping has become very popular. The growth of technology has made these a part and parcel of everyday lifestyle. The advent of plastic money or the debit /credit card and the smooth access to the World Wide Web has brought the shops from around the world to the desktop. We personally have seen many of our friends surfing through various online shopping sites and purchasing things. Student community has become so strong that even the parents seek the help and advice of their children before conducting big purchases. This is solely because of their exposure to web and social media. Moreover, while it comes to personal purchases, students are very particular that they get best products available in the market and seek all the possible ways to secure the best products. This is where the role of online shopping sites emerges. Students who are well versed in the use of internet and active in social media, know about online markets and have tried at least some of them.

The study is very relevant because it can give a clear picture of the future of online markets in India and the emerging trends in this particular field. The various factors that influence online shopping habits and its merits and demerits are also dealt with.The study also tries to have a comparison of online shopping habits among different age group as well as income group.

1.2 Objective of the Study

The objective of this research study is to investigate online consumer behavior, which in turn provides E-marketers with a constructional framework for fine-tuning their E-

businesses strategies. The specific objectives of this research are:

1. To know the consumers awareness and perception about the products and services provided on internet.

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

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

1.3 Scope of the Study

The theoretical scope of the study includes the popularity of online shopping, the need of virtual markets, their role in influencing the consumption pattern and habits, merits and demerits of e-markets, major players in online retailing etc. We can listed the scope as below :


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1. The Study was conducted among the Internet users.

2. The Geographical area covered was Sambalpur.

3. The Study was based on a Schedule of Questions. 4. The scope of internet shopping

1.4RESEARCH OBJECTIVE

1. To analysethe consumer interest on online marketing.

2. To determine the factors affecting online buying. 3. To evaluate the growth of online marketing. 4. To forsee the demand of online shopping in india. 5. To study the impact of traditional retailer over the online retailer. 6. To gather information regarding growing sector for online purchasing. 7. To understand the barriers of online marketing.

8. To know the consumers awareness and perception about the products and services provided on internet

9. To examine what the consumer had bought and what they want to purchase in the near future.

1.5 LIMITATIONS OF THE STUDY

Utmost care has been taken with regard to the collection, classification and analysis of data. However, the study is subjected to the following limitations: There were hardly any previous studies on the topic and it was a great challenge to deal with a fresh topic.

1. Lack of environmental support for the study on the topic. 2. Less sample size, as it is just survey with 100 respondent 3. Basically based on primary data , hence we can not argue that the research is

applicable in each condition,time& place. 4. Short time duration, with in such short span of time it is too much difficult to

analyse the topic.

5. Lack of customer support, while asking the consumer they were behaving rudely and not responding to the questions.


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CHAPTER -2 LITRETURE REVIEW


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CHAPTER-2

REVIEW OF LITRETURE

A literature review is a select analysis of existing research which is relevant to your topic,

showing how it relates to your investigation. It explains and justifies how your investigation may help answer some of the questions or gaps in this area of research.

A literature review is not a straightforward summary of everything you have read on the topic and it is not a chronological description of what was discovered in your field.

2.1 NATIONAL REVIEW OF LITREATURE

Rajeev Kamineni (2004) in his study finds that World Wide Web can change humanbehaviour and human interactions to a very large extent. Web based shopping behaviour 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 behaviour have been explored. A cross cultural data set has been collected and an illustrative description of the shoppers has been provided. As a final step the cross cultural differences between several shoppers explored.

ArchanaShrivastava, UjwalLanjewar, (2011) in online buying, the rate of diffusion andadoption of the online buying amongst consumers is still relatively low in India. In view of above problem an empirical study of online buying behavior was undertaken. Based on literature review, four predominant psychographic parameters namely attitude, motivation, personality and trust were studied with respect to online buying. The online buying decision process models based on all the four parameters were designed after statistical analysis. These models were integrated with business intelligence, knowledge management and data mining to design Behavioral Business Intelligence framework with a cohesive view of online buyer behavior.

For better understanding the factors of internet and consumer shopping behaviours towards internet shopping, this chapter would provide academic research reviews and


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relative ideas expressed in the literature that associated with this subject. Furthermore, a number of hypotheses will be tested to answer the research questions that mentioned already in the introduction. Due to the recent research shows that internet shopping becomes a full and effective business model (Black, 2005), therefore there are several studies that already investigated more or less related on internet shopping and consumer behaviour. In the following chapter, some point of view will be taken from literatures, and needs careful review to achieve them as the basis of the subsequent research investigation. J.SINHA 2010The number of people engaged in various online activities is increasing every day. While the number of online shoppers is increasing, it is not proportional to that of brick-and-mortar shoppers. Research has tried to explain the dismal performance of online shopping as compared to the physical shopping format. Reasons for the lower level of Internet sales have been cited as being perceived risk in carrying out an online transaction, socio-psychological factors (Like - influence of friends and relatives) and infrastructural limitations (Availability of Internet, computers, credit-cards, cyber laws etc.). Under the purview of aforementioned factors this study tried understanding the online shopping behavior of Indian consumers. Socio-psychological factors and infrastructure have been found influential factors while the perceived risk surprisingly is not significant as a whole but at gender level there was significant difference between the online behavior of male and female

due to risk perception.

Lal studied the determinants of adoption of Information Technology (IT) in India. The study was based on 59 electrical and electronic goods manufacturing firmssituated in NOIDA. Semi-structured questionnaire were used to collect the data. The study examined the factors influencing the degree of IT adoption by firms. The factors included are entrepreneur characteristics measured by entrepreneurs qualification, importance given to market share, R&D and quality consciousness, firms international orientation factors measured by import and export intensity, work force skill and firm size. The sample firms were divided into four categories

depending on their intensity of IT.


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2.2 INTERNATIONAL REVIEW OF LITREATURE

E-Business probably began with electronic data interchange in the 1960s (Zwass, 1996). However, (Melao, 2008) suggests that it was only in the 1990s, primarily via the Internet, that e-Business has emerged as a core feature of many organizations. In his opinion, the hope was that e-Business would revolutionize the ways in which organizations interact with customers, employees, suppliers and partners. Some saw e- Business as part of a recipe to stay competitive in the global economy.

Christy M. K. Cheung, Lei Zhu, Timothy Kwong, Gloria W.W. Chan, MoezLimayem,(2002) The topic of online consumer behavior has been examined under variouscontexts over the years. Although researchers from a variety of business disciplines have made significant progress over the past few years, the scope of these studies is rather broad, the studies appear relatively fragmented and no unifying theoretical model is found in this research area. In view of this, provide an exhaustive review of the literature and propose a research framework with three key building blocks (intention, adoption, and continuance) so as to analyze the online consumer behavior in a systematic way. This proposed framework not only provides us with a cohesive view of online consumer behavior, but also serves as a salient guideline for researchers in this area.

Burke, R.R. (2002), Trust is a key factor that determines the success of Business toConsumer (B2C) e-commerce transactions. Previous researchers have identified several critical factors that influence trust in the context of online shopping. This research focuses on available security measures which assure online shopper_s safety and great sales promotions and online deals which stimulate customers to shop online.

Abel Stephen (2003) in his paper represents the findings of research studies that address e-commerce design and associated consumer behavior. The innovation of e-commerce has affected not only the

marketplace through the facilitation of the exchange of goods and services, but also human behavior

in response to the mechanisms of online services. Researchers have identified and hypothesized on

relevant subject matters ranging from Web usability, marketing channels and other factors influencing online buying behavior. Though researchers have focused on what appear different aspects of online

buying behavior, their studies may be shown to be interrelated and interdependent, even to the extent

of revealing constructs upon which e-commerce, in terms of future design and research, could be

built.

Balasubramanian, S., Konana, P. and Menon, N.M. (2003), In this environment, sometraditional service quality dimensions that determine customer satisfaction, such as thephysical appearance of facilities, employees, and equipment, and employees_ responsiveness and


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empathy are unobservable. In contrast, trust may play a central role here in enhancing customer satisfaction. Model trust as an endogenously formed entity that ultimately impacts customer satisfaction, and we elucidate the linkages between trust and other factors related to the performance of the online service provider and to the service environment.

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 [Schiff man et al., 2001].

The traditional framework for analysis of the buyer decision process is a five-step model. Given the model, the consumer progresses firstly from a state of felt deprivation (problem recognition), to the search for information on problem solutions. The information gathered provides the basis for the evaluation of alternatives. Finally, post-purchase behavior is critical in the marketing perspective, as it eventually affects consumers perception of

satisfaction/dissatisfaction with the product/service.

This classic five stage model comprises the essence of consumer behavior under most contexts. Nevertheless, the management of marketing issues at each stage in the virtual

environment has to be resolved by individual E-marketers. Peterson et al. [1997] commented that it is an early stage in Internet development in terms of building an appropriate dedicated model of consumer buying behavior. Decision sequences will be influenced by the starting point of the consumer, the relevant market structures and the characteristics of the product in question. Consumers' attitude towards online shopping is a prominent factor affecting actual buying behavior. (Source: Jarvenpaa Journal of Electronic Commerce Research, VOL. 6, and NO.2, 2005)

Todd [1997] proposed a model of attitudes and shopping intention towards Internet shopping in general. The model included several indicators, belonging to four major categories; the value of the product, the shopping experience, the quality of service offered by the website and the risk perceptions of Internet retail shopping. In the research conducted by Vellido et al. [2000], nine factors associated with users' perception of online shopping were extracted. Among those factors the risk perception of users was demonstrated to be the main discriminator between people buying online and people not buying online.

Other discriminating factors were; control over, and convenience of, the shopping process,


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affordability of merchandise, customer service and ease of use of the shopping site. In another study, Jarvenpaa et al. [2000] tested a model of consumer attitude towards specific webbase stores, in which perceptions of the store's reputation and size were assumed to affect consumer trust of the retailer. The level of trust was positively related to the attitude toward the store, and inversely related to the perception of the risks involved in buying from that store. Jarvenpaa et al. [2000] concluded that the attitude and the risk perception affected the consumer's intention to buy from the store.

Consumer risk perceptions and concerns regarding online shopping are mainly related to aspects involving the privacy and security of personal information, the security of online transaction systems and the uncertainty of product quality. Trust is interwoven with risk [McAllister, 1995]. One of the consequences of trust is that it reduces the consumers perception of risk associated with opportunistic behavior by the seller [Ganesan, 1994]. Lack of trust is frequently reported as the reason for consumers not purchasing from Internet shops, as trust is regarded as an important factor under conditions of uncertainty and risk in traditional theories.

Mayer et al. [1995] developed a model which combines traditional marketing philosophy on consumer motivation to buy and the trust model. In this model, trust propensity; which is a personality trait possessed by buyers; is an important antecedent of trust. In Internet shopping, there is not much information available to the buyer regarding the seller, prior to purchase. A buyer with a high propensity to trust will more likely be a potential customer than a buyer with a lower propensity.

Purchase decisions are ultimately guided by consumers' perceptions of the product or service. Of

course, the critical nature of perceptions as they relate to purchase behaviour has been repeatedly

demonstrated in advertising and marketing research. Negative perceptions of the product, service,

brand, or company almost always translate to a lost sale or, at a minimum, expressed lower intentions

to purchase the advertised product or service. If the goal is to increase online spending among

consumers, particularly female consumers, then consumers' perceptions of online shopping are

ultimately matters the most. Presumably, the more positive consumers perceive the online buying

experience the more likely they will make online purchases. The primary construct that we believe

will have a bearing on perceptual differences between male and female internet shoppers is emotion.

Related to emotion are two additional constructs, trust and convenience. (Robertson , Zielinski and Ward, 1984)


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CHAPTER - 3

OVERVIEW OF THE INDUSTRY


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OVERVIEW OF THE INDUSTRY

3.1 ONLINE SHOPPING IN INDIA

The birth and growth of Internet has been the biggest event of the century. E-commerce in

India has come a long way from a timid beginning in the 1999-2000 to a period where one

can sell and find all sorts of stuff from a high end product to a meager peanut online. Most

corporations are using Internet to represent their product range and services so that it is

accessible to the global market and to reach out to a larger range of their audience.

Computers and the Internet have completely changed the way one handles day-to-day

transactions; online shopping is one of them. The Internet has brought about sweeping

changes in the purchasing habits of the people. In the comfort of one's home, office or cyber

cafe or anywhere across the globe, one can log on and buy just about anything from apparel,

books, music and diamond jewellery to digital cameras, mobile phones, MP3 players, video

games, movie tickets, rail and air tickets. Ease, simplicity, convenience and security are the

key factors turning the users to buy online.

E-commerce revenues in the country are projected to reach Rs 2,300 crore in the year 2006-

07, growing at 95 per cent over 2004-05(Source: Internet and Mobile Association of India,

IAMAI). This pertains to the business-to-consumer (B2C) segment. It may be too early to do

a comparison with the e-commerce scenes in countries such as the US where billions of

dollars are spent online but the business in India is growing exponentially every year, albeit

from a smaller base, the total revenues have reached a respectful size.


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3.2 Recent Developments

The number of users logging on to the Internet is growing by leaps and bounds. The number

of Indians who are online is expected to touch to 100 million by 2007-08, from the present

38.5 million according to the research conducted by IAMAI. The numbers indicate a growing

sense of comfort with the use of Internet for shopping. Accompanying this growth, there is an

increasing maturity in the way people use the Internet. It's a classical curve. Online users

typically start by using e-mail, gradually move on to browsing for news, information and

entertainment, and finally graduate to shopping and conducting business online. Online sales

have registered a huge jump and what was a concept five years ago is now beginning to hit

the mainstream levels. Roughly 10 percent of the world's population more than 627 million

people have shopped online at least once, in India it is just sprouted and beginning to perish.

Internet is now going beyond the simple exchange of information to a shopping paradise.

This medium is far bigger than expected, but many retailers and marketers are not using it to

its full potential.

Indian customers are increasingly getting comfortable with online shopping, and there is a

higher acceptability for the concept. India has 25 million Internet users and more is now

turning to online shopping. There has been an influx of online shopping sites in India with

many companies hitching onto the Internet bandwagon. The revenues from online shopping

are expected to more than double by 2006-07. According to IAMAI, the average number of

transactions per month in India has gone up from 2 lakh in 2003-04 to 4.4 lakh in 2004-05

and has doubled to 7.95 lakh transactions per month in the year 2005-06. The online sales

during the festival season had increased rapidly especially during Diwali and Ramzan which

recorded a sales of Rs115 crore, a 117 per cent increase from the Rs53 crore in the year 2004-

05(source IAMAI). These figures clearly show that online shopping has truly come of age


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and consumers are keen to shop on the net. Effective customer communication on products

plus reduced shipping costs and timely delivery has helped online marketers to seize a slice

of the Rs 115 crore sales.

Online shopping has become the latest trend among shoppers. Indians are becoming more

comfortable with e-commerce. The consumers attitude has been evolving towards online

purchases. It has become increasingly positive over the years. The attitudes that drive people

to shop online, such as

convenience, price comparison and choice are improving tremendously in India.

Though a miniscule amount in the global context, the Indian online shoppers population

would make its presence felt quite remarkably. The potential of the Indian e-market can be

gauged from the fact that 16 percent of Indian consumers want to buy online in the next six

months, making it the third most online-potential country after Korea (28 percent) and

Australia (26 percent) (Source:IMRB). This is an indication of a growing breed of Indian

consumers who are not only better equipped but also more confident of the online

transactions. Indian businesses have also grown mature enough to move up the IT curve and

they are considering Business to consumer (B2C) e-commerce a viable revenue model. Some

of the companies that have benefited are baazee.com, indiatimes.com, rediff.com,

indiamart.com, fabmart.com, traveljini.com and sifymall.com.

Indiamart.com has witnessed a growth of more than ten times in just two years in its online

gifts domain. In the online travel domain, the company was able to generate an average

$8,000 worth of room bookings/month for its premium client. It is expected to touch $15-

20,000/month/client by the year-end, which is over 100 percent growth (Source:Indiamart).

Brick-and-mortar businesses are also building up e-commerce revenues. In the year 2005-06


Samsung India recorded a 120 percent jump in online buying from its site over the year 2004

05 (Source: Samsung). Nirulas

revenues in the year 2005-06 and is positive for the next one to two years (Source: Nirulas).

Companies like eBay India have seen a large increase in the number of sellers and buyers

from B and C cities and in a year the eBay community (buyers and sellers) base has increased

to 1.7 million users, which shows that more Indians are shopping online (Source: eBay).

Online sales are currently marked by a single digit growth, but the leading garment retail

like Pantaloon, Shoppers Stop and Globus have already made business strategies to enter

into the world of e-retailing. Famous apparel brand Zodiac has already started online stores.

The main motive of these retailers through online sales is to reach t

small towns where they do not have the outlets. Thus the India's Internet shopping sector is

preparing for a massive growth, which is fuelled by increasing broadband usage and growing

e-commerce.

3.3 GAINT PLAYERS IN INDIAN ONLINE

FlipKart.com


Samsung India recorded a 120 percent jump in online buying from its site over the year 2004

05 (Source: Samsung). Nirulas witnessed more than double growth in its B2C e

06 and is positive for the next one to two years (Source: Nirulas).


ties and in a year the eBay community (buyers and sellers) base has increased


Online sales are currently marked by a single digit growth, but the leading garment retail


retailing. Famous apparel brand Zodiac has already started online stores.

The main motive of these retailers through online sales is to reach the global markets and the



GAINT PLAYERS IN INDIAN ONLINE SHOPPING

Flipkart.com is an e-commerce website founded

by SachinBansal and BinnyBansal in 2007. Both

are from IIT Delhi Alumni and also worked in

Amazon.com.

Flipkart.com ranks #502 in world according to

Alexa traffic rankings. In Google

It forms advertising revenue of $4.8 million. It

receives 2.2 million page views in a day and

generates $6,574 in advertising revenue every

day. Moreover it has certain losses 0.60% in

traffic ranking. Loading time of an average page is

2.1 sec as it is much faster than 29% of sites

around the world. The mode of payments include

Credit card, Debit card, Net banking, e

vouchers, cash on delivery.

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Samsung India recorded a 120 percent jump in online buying from its site over the year 2004-

witnessed more than double growth in its B2C e-commerce

06 and is positive for the next one to two years (Source: Nirulas).


ties and in a year the eBay community (buyers and sellers) base has increased


Online sales are currently marked by a single digit growth, but the leading garment retailers


retailing. Famous apparel brand Zodiac has already started online stores.

he global markets and the



SHOPPING

commerce website founded

by SachinBansal and BinnyBansal in 2007. Both

are from IIT Delhi Alumni and also worked in

Flipkart.com ranks #502 in world according to

Alexa traffic rankings. In Google page it ranks #6.

It forms advertising revenue of $4.8 million. It


generates $6,574 in advertising revenue every

day. Moreover it has certain losses 0.60% in

traffic ranking. Loading time of an average page is

.1 sec as it is much faster than 29% of sites

around the world. The mode of payments include

Credit card, Debit card, Net banking, e-gift


Ebay.in

Snapdeal.com


eBay is an online shopping website a consumer

to consumer corporation which helps the people

and businessman to buy and sell products

worldwide. It is operated to almost 30 countries.

eBay ranks #544 among Alexa traffic ranking. In

Google it has pagerank #6.

revenue inculcated was about $4.4 Million.

Moreover it receives 2 million pageviews per day

which generates $6,066 in the advertisement

revenue. Recently it has shown 15.13% growth in

traffic rank. The pageloading time is upto 2 sec

which is likely faster than 24% sites across the

world.

Snapdeal deals with online marketing of

products including Mobiles, Electronics, Fashion

accessories, Apparel, Footwear, Kids, Home and

Kitchen, Sports, Books; and services like

Restaurants, Spas & Entertainment. It was

launched by KunalBahl, a Wharton graduate

and RohitBansal, alumnus of IIT Delhi, in

February 2010.

It ranks #576 in the world as per Alexa traffic

ranking.It ranks # 5 in Google PageRank. The

advertising revenue is about $4.2


generates $5,729 in advertising revenue. It has

suffered loss of 4.16 % in traffic ranking. The

loading time of an average page is 1.6 sec which

is faster than 46% of sites across the world.

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is an online shopping website a consumer

to consumer corporation which helps the people

and businessman to buy and sell products

worldwide. It is operated to almost 30 countries.

eBay ranks #544 among Alexa traffic ranking. In

Google it has pagerank #6. The advertising

revenue inculcated was about $4.4 Million.

Moreover it receives 2 million pageviews per day

which generates $6,066 in the advertisement

revenue. Recently it has shown 15.13% growth in

traffic rank. The pageloading time is upto 2 sec

s likely faster than 24% sites across the

Snapdeal deals with online marketing of

products including Mobiles, Electronics, Fashion

accessories, Apparel, Footwear, Kids, Home and

Kitchen, Sports, Books; and services like

Spas & Entertainment. It was

launched by KunalBahl, a Wharton graduate

and RohitBansal, alumnus of IIT Delhi, in

It ranks #576 in the world as per Alexa traffic

ranking.It ranks # 5 in Google PageRank. The

advertising revenue is about $4.2 million. It


generates $5,729 in advertising revenue. It has

suffered loss of 4.16 % in traffic ranking. The

loading time of an average page is 1.6 sec which

is faster than 46% of sites across the world.



It is an online shopping commerce for Home;

Lifestyle & Fashion e-retailer founded in 2009

BigShoeBazaar.com has a user base of about 1.5

million people. Yebhi.com offers lifestyle &

Home products and products

some 250 brands to its customers dealing in

Shoes, Apparels, Bags, Mobiles, Cameras,

Sunglasses, Watches, Home furnishing, Home

decor, Home ware, Lingerie and Fragrances.

It ranks #1,782 among Alexa traffic ranking. It

ranks #4 in Google page ranking. Advertising

revenue is about $1.4 million. It receives 617,284

page views per day generating $1,852 in

advertising revenue. It has recently shown 6.70

Growth among traffic ranking. The page loading is

about 2 sec which is faster than 39% of s

around the world.

The International giant eCommerce retailer recently stepped into India with a Indian version site www.amazon.in, since the launch, amazon.in has seen a nice growth in the number of customers. Amazon.com too had a huge number of Indian customers even before it launched store in India. The store hosts wide range of products like Electronics, Mobiles, Laptops, Books, Fashion, Jewellery, Kitchenware and more

A reputed online shopping retail website having headquarter in Gurgaon,Shopcluesmore than 12,000 merchants who are registered with the company. It is one of the top ecommerce websites in India, which deals in more than 2 million products. They guarantee authenticity of products, warranty and even ensure lowest price. They even have a record of catering to more than 42 million online visitors. The company has even more thanemployees across the country. They offer wide range of branded products to consumers from every corner of the country.

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It is an online shopping commerce for Home;

retailer founded in 2009

BigShoeBazaar.com has a user base of about 1.5

million people. Yebhi.com offers lifestyle &

Home products and products from a range of

some 250 brands to its customers dealing in

Shoes, Apparels, Bags, Mobiles, Cameras,

Sunglasses, Watches, Home furnishing, Home

decor, Home ware, Lingerie and Fragrances.

It ranks #1,782 among Alexa traffic ranking. It

page ranking. Advertising

revenue is about $1.4 million. It receives 617,284

page views per day generating $1,852 in

advertising revenue. It has recently shown 6.70

Growth among traffic ranking. The page loading is

about 2 sec which is faster than 39% of sites

The International giant eCommerce retailer recently stepped into India with a Indian version site www.amazon.in, since the launch, amazon.in has seen a nice growth in the number of customers. Amazon.com

e number of Indian customers even before it launched store in India. The store hosts wide range of products like Electronics, Mobiles, Laptops, Books, Fashion, Jewellery, Kitchenware and more

A reputed online shopping retail website having Shopclues.com maintains

more than 12,000 merchants who are registered with the company. It is one of the top ecommerce websites

than 2 million products. They guarantee authenticity of products, warranty and even ensure lowest price. They even have a record of catering to more than 42 million online visitors. The company has even more than 350 registered employees across the country. They offer wide range of branded products to consumers from every corner



Shopclues.com initiate free delivery services at the doorsteps of customers through reputed courier services to nearly 10,000 cities across the country. They even initiate a 30-day return guarantee if unable to meet customer satisfaction. One of the leading online shopping companiesShopclues.com accepts online payment through major credit and debit cards, including net banking services. The online shopping website service employs more than 400 personnel for effective handling of the business and is even funded by national institutional investors.

Myntra is an Indian ecommerce site. It is regarded as Indias top 3rd online site to shop products. Myntra allows its users to chose varieties of dress. One can choose any type of dress of any brand from Myntra. Thabout Myntra is its product quality and service. Now, Myntra is merged into Flipkart to compete Amazon, but myntra.com is still running as a separate website and entity. Buying clothes and gifts online can be best done via Myntra.

HomeShop18 is the online & onmarketing and distribution venture of Network18 Group that was launched as Indias first 24 hour Home Shopping TV channel on April 9, 2008. HomeShop18 offers innovative, differentiated and demonstrative retail experiences on TV and internet and has emerged as the largest multimedia retailer in India with a user base of 2.5 million users and some prestigious awards. HomeShop18 is a venture of theGroup, Indias fastest growing media and entertainment group that operaleading business news television channels like CNN-IBN, CNBC TV18Awaaz .

18

initiate free delivery services at the doorsteps of customers through reputed courier services to nearly 10,000 cities across the country.

day return guarantee if unable to meet customer satisfaction. One of the

companies in India, Shopclues.com accepts online payment through major credit and debit cards, including net banking services. The online shopping website service employs more than 400 personnel for effective handling of the

d by national institutional

an Indian ecommerce site. It is regarded as Indias top 3rd online site to shop products. Myntra allows its users to chose

choose any type of dress of any brand from Myntra. The best thing about Myntra is its product quality and service. Now, Myntra is merged into Flipkart to compete Amazon, but myntra.com is still running as a separate website and entity. Buying clothes and gifts online can be best done via Myntra.

is the online & on-air retail marketing and distribution venture of Network18 Group that was launched as Indias first 24 hour Home Shopping TV channel on April 9, 2008. HomeShop18 offers innovative, differentiated and demonstrative

TV and internet and has emerged as the largest multimedia retailer in India with a user base of 2.5 million users and

is a venture of the Network18 Group, Indias fastest growing media and entertainment group that operates Indias leading business news television channels

CNBC TV18 and CNBC


19

CHAPTER - 4 THEORIES OF THE STUDY


20

4.1 INTRODUCTION TO THE STUDY

The Internet has entered the mainstream consciousness over the past decade. This has happened primarily because the web has got a graphical interface and Internet has moved from governmental control to private hands. The activities which are happening on the Internet are email and instant messaging, general web surfing or browsing, reading news, hobby searches, entertainment searches, shopping and buying online, medical information searches, travel information searches, tracking credit

cards, and playing games.

Communication i.e. email, chat or instant message is the basic activity for which Internet is used. It is the single most important reason for people to go online. E-mail provides the opportunity to communicate more often with a much broader circle of people than one can reach by telephone or by mail in a convenient way. In India too email constitutes the major activity on the Internet. It was found that more elderly people are increasingly using email as compared to the younger generations.

In India the top five online activities are e-mail, surfing, chatting, search and job search. Some of the sites, which are commonly used for these particular activities, are:

Yahoo -Most preferred communication portal, tops for email and chat

Indiatimes Best event and sports news provider.

Naukri-Best recruitment portal

Google-Best information domain

Shaadi-Best for matrimonial services

eBay-Best online shopping portal

Rapid growth of cybercafs across India

Access to Information


21

The increase in number of computer users

Reach to net services through broadband

Middle-class population with spending power is growing. There are about 200 million of middle-class population good spending powers. These people have very little time to spend for shopping. Many of them have started to depend on

internet to satisfy their shopping desires.

The figures from IAMAI show that the internet users in India will grow to 200 million by 2010. Around 25% of regular shoppers in India are in the 18-25 age groups, and 46% are in the 26-35-year range.

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 2008 and it is expected to rise above $700 million by end March 2010.

Indians are also Shopaholics like other Asians. There is a strong booming

young adult population in India with good levels of disposable income.

In India

Over $50 Billion and growing rapidly - Most popular online shopping products

include: books (45%), electronic gadgets (42%), railway tickets (38%), accessories

apparel (35%), apparel (35%), gifts (34%), computer and peripherals (32%), airline

tickets (28%), music downloads (21%), movie downloads (21%), hotel rooms (22%),

magazines (18%), tools (16%), home appliances (16%), toys (16%), jewelry (17%),


22

movie ticket (15%), etc.

Payments

Online shoppers commonly use a credit card to make payments, however some

systems enable users to create accounts and pay by alternative means, such as:

Billing to mobile phones and landlines

Cash on delivery (C.O.D., offered by very few online stores)

Cheque/ Check

Debit card

Direct debit in some countries

Electronic money of various types

Gift cards

Postal money order

Wire transfer/delivery on payment

Some sites will not accept international credit cards, some require both the purchaser's

billing address and shipping address to be in the same country in which site does its

business, and still other sites allow customers from anywhere to send gifts anywhere.

The financial part of a transaction might be processed in real time (for example,

letting the consumer know their credit card was declined before they log off), or might

be done later as part of the fulfillment process.


4.2 AIDA PRINCIPLE IN ONLINE 1. ATTENTION

2.INTREST 3.DESIRE

4.ACTION

4.3 PORTER 5 FORCE ANALYSISPorters Five Forces is a framework for describing factors that affect the profitability and attractiveness of industries. Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses and strengths. 1. Supplier Power 2. Buyer Power 3.Competitive Rivalry 4.Threat of Substitutes 5. Threat of New Entry

1. Supplier Power Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over us, on. The fewer the supplier choices we have, and the more we need suppliers' help, the more powerful the suppliers are.

2. Buyer Power This is driven by the number of buyers, the importance of each iones business, the cost to them of switching from ones products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you.


PRINCIPLE IN ONLINE MARKETING :

PORTER 5 FORCE ANALYSIS IN ONLINE SHOPPING Porters Five Forces is a framework for describing factors that affect the profitability and

industries. Named after Michael E. Porter, this model identifies and analyzes 5 competitive forces that shape every industry, and helps determine an industry's weaknesses

Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their strength and control over us, the cost of switching from one supplier to another, and so on. The fewer the supplier choices we have, and the more we need suppliers' help, the more powerful the suppliers are.

his is driven by the number of buyers, the importance of each individual buyer to ones business, the cost to them of switching from ones products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often able to dictate terms to you.

23

Porters Five Forces is a framework for describing factors that affect the profitability and industries. Named after Michael E. Porter, this model identifies and analyzes

5 competitive forces that shape every industry, and helps determine an industry's weaknesses

Here we assess how easy it is for suppliers to drive up prices. This is driven by the number of suppliers of each key input, the uniqueness of their product or service, their

the cost of switching from one supplier to another, and so on. The fewer the supplier choices we have, and the more we need suppliers' help, the

ndividual buyer to ones business, the cost to them of switching from ones products and services to those of someone else, and so on. If you deal with few, powerful buyers, then they are often


24

3. Competitive Rivalry What is important here is the number and capability of your competitors. If you have many competitors, and they offer equally attractive products and services, then you'll most likely have little power in the situation, because suppliers and buyers will go elsewhere if they don't get a good deal from you. On the other hand, if no-one else can do what you do, then you can often have tremendous strength.

4. Threat of Substitutes This is affected by the ability of your customers to find a different way of doing what you do for example, if you supply a unique software product that automates an important process, people may substitute by doing the process manually or by outsourcing it. If substitution is easy and substitution is viable, then this weakens your power .

5. Threat of New Entry Power is also affected by the ability of people to enter your market. If it costs little in time or money to enter your market and compete effectively, if there are few economies of scale in place, or if you have little protection for your key technologies, then new competitors can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.


25

Porters five forces for Online Retailer

Supplier power: Here, suppliers are the manufacturers of finished products. For any product, there are many suppliers online, so they cant show power on online retail companies. For example, if you take computers category, there are many suppliers like Dell, Apple, Lenovo, and Toshiba everyone wants to sell their products through online retails like Flipkart,Amazon,Snapdeal etc. Selling online saves a lot of money for the manufacturers, and as many people nowadays prefer purchasing product through online stores, Companies cannot afford to lose this channel. So, in this industry the supplier power is low.

Buyer power: Buyers in this industry are customers who purchase products online. Since this industry is flooded with so many players, buyers are having lots of options to choose. With many competitors like Amazon.com, eBay, Snapdeal etc. Customers get a wide range of choices. Customer would prefer the one who would provide goods at reasonable price, deliver it fast and provide them with other benefits like Cash on Delivery, EMI facilities, other offers etc. Here Buyers have more power.

Competitive Rivalry: Competition is very high in this industry with so many players like Jabong, Snapdeal, Amazon, Homeshop18 etc. Many competitors means more choices for the customer to choose from. This also increases the cost incurred by the company to stay in the customers mind i.e. on Promotions and Advertisements etc. Giving the customer better deals, making customers experience delightful and continuous innovation can help a company to stay at top even with tons of competitors around.

Threat of New Entrants: Threat of new entrants is very high in this online retail industry because of following

reasons: Indian government has allowed 51% FDI in multi-brand online retail and 100%

FDI in single brand online retail. So, this means foreign companies can come and start their own online retail companies.

There are very less barriers to entry like less capital required to start a business, less amount of infrastructure required to start business. All you need is to tie up with suppliers of products and you need to develop a website to display products so that customers can order products, and a tie up with online payment gateway provider like bill desk.

Industry is also going to grow at a rapid rate. It is going to touch 76 billion $ by 2021. Industry is going to experience an exponential growth rate. So, obviously no one wants to miss this big opportunity.

With the new entrants like Jabong, Snapdeal etc. rapidly racing towards the top Position.


26

Threat of substitutes: Substitute for this industry as of now is physical stores. Their threat is very low

for this industry because customers are going for online purchases instead of going to physical stores as it will save time, effort, and money. With the advent and penetration of internet and smart phones, future in retail belongs to online retail.

When we compare relative quality, relative price of product a person buys online with physical store, both are almost same and in some cases, online retail store offers more discounts and this attracts the customer to purchase products online.

4.4 MARKETING MIX OF ONLINE SHOPPING : The elements of marketing mix are also being applied for online marketing. Marketing mix is essential for analysing the business. Marketer analyses the parameters then select appropriate strategy in order to face the market complexion effectively. The 7Ps of marketing is being applied in the online marketing industry. The effect of marketing mix is being explained below diagram :


27

4.5 MODELS OF ONLINE SHOPING

By:Mary Ann Eastlick

This chart shows how consumer attitude toward online shopping can lead either to approach

coping (wanting to shop online) or to avoidance coping (deciding not to search or shop

online). Someone who is optimistic toward the benefits of online shopping will develop

approach coping. A person who is pessimistic toward online shopping will think of the

drawbacks to it and decide to purchase in physical stores instead, which is avoidance coping.


FRAMEWORK FOR CONSUM

Source: research by Emerald


FRAMEWORK FOR CONSUMERS INTENTIONS TO SHOP ONLINE

Source: research by Emerald

28

HOP ONLINE


29

CHAPTER - 5 RESEARCH METHODOLOGY


30

5.0 RESEARCH METHODOLOGY

5.1 Research Objective

To know and understand the consumers perception and awareness about internet marketing/ shopping. This will help to know the attitude and perception of consumers towards online shopping and what are the factors which shape the consumers perception towards online shopping. Also what are key concerns from the point of view of consumer while online

shopping.

5.2 Determination of information needs and sources

The following was the information required:

What is consumers attitude towards online shopping?

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

Which factors shape the consumers attitude towards online shopping?

How has been recent shift taking place in online shopping?

5.3 Research Framework

Eleven different factors were identified by studying the existing models of consumer attitudes(Refer Annexure 1, 2) 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 100. And random sampling was done among the internet users.

5.3.1 Proposed Model

After examining the 10 empirical studies, we identify a total of eleven interrelated factors for which the empirical evidences show significant relationships. These ten factors are perceived usefulness, perceived ease of use, perceived enjoyment, information on online shopping, security and privacy, quality of internet connection, attitude towards online shopping, intention to shop online, online shopping decision making, online purchasing, and consumer satisfaction.

Six (perceived usefulness, perceived ease of use, perceived enjoyment, information on online


31

shopping, security and privacy, quality of internet connection )are found to be ordinarily independent and five (attitude toward online shopping, intention to shop online, decision making, online purchasing, and consumer satisfaction) are ordinarily dependent variables.

Consumer satisfaction is considered to be a separate factor in this study. It can occur at all possible stages depending on consumers involvement during the online shopping process. The relationships between satisfaction, attitude, intention, decision making and online purchasing are proposed to be two-way relationships due to the reciprocal influences of each on the other. In addition, three of the antecedents, perceived usefulness, perceived ease of use, perceived enjoyment , have been found to have direct impact on consumer satisfaction.

Perceived Usefulness

Perceived usefulness is defined as the degree to which a person believes that using a particular system would increase his or her job performance. It is an important factor affecting acceptance of an information system, because the ultimate aim of any person is the superior job performance.

Perceived Ease of Use

This is an important factor that affects the acceptance of a particular information system. It is

defined as the degree to which a person believes that using a particular information system would be free of effort. Hence an application perceived to be easier to use would more likely be accepted by the user.

Perceived Enjoyment

Enjoyment refers to the extent to which the activity of using a computer is perceived to be enjoyable in its own rights. This is seen as an intrinsic source of motivation to use a particular application.

Amount of Information

Amount of information is defined as the information which is available for the product which a person wants to buy through online shopping. This factor eases the decision of the user to actually buy the product or not, or which product to buy. This factor becomes even more important in case of High Involvement product.


32

Security and Privacy

Security and privacy are the main factors which hinder the growth of online shopping. The user is concerned about his ID and Password which can be stolen by persons with wrong intentions and then misuse it. At the same time they are concerned that their personal information may be sold to the third party which poses a serious threat to their privacy.

Quality of Internet Connection

Not only is the presence of internet connection necessary but also its Quality is important to shop online. This is an important factor which determines whether the user would shop online or not because presence of internet is a basic necessity for this mode of shopping

Attitude and perception towards online shopping

Consumers attitude and perception toward online shopping have gained a great deal of attention in the empirical literature. It is believed that consumer attitudes will affect intention to shop online and eventually whether a transaction is made. It refers to:-

1) The consumers acceptance of the Internet as a shopping channel

2) Consumer attitudes toward a specific Internet store (i.e., to what extent consumers think that shopping at this store is appealing).

Intention to shop online

Consumers intention to shop online refers to their willingness to make purchases in an

Internet store. Commonly, this factor is measured by consumers willingness to buy and to return for additional purchases. The latter also contributes to customer loyalty. Consumers intention to shop online is positively associated with attitude towards Internet buying, and influences their decision-making and purchasing behavior. In addition, there is evidence of reciprocal influence between intention to shop online and customer satisfaction.

Online shopping decision making

Online shopping decision-making includes information seeking, comparison of alternatives, and choice making. The results bearing on this factor directly influence consumers purchasing behavior. In addition, there appears to be an impact on users satisfaction. Though


33

it is important, there are only five studies that include it.

According to Haubl and Trifts (2000), potential consumers appear to use a two-stage process in reaching purchase decisions.

Initially, consumers typically screen a large set of products in order to identify a subset of promising alternatives that appears to meet their needs. They then evaluate the subset in greater depth, performing relative comparisons across products based on some desirable attributes and make a purchase decision.

Online purchasing

This is the most substantial step in online shopping activities, with most empirical research using measures of frequency (or number) of purchases and value of online purchases as measures of online purchasing; other less commonly used measures are unplanned purchases

Online purchasing is reported to be strongly associated with the factors of personal characteristics, vendor/service/product characteristics, website quality, attitudes toward online shopping, intention to shop online, and decision making (Andrade 2000; Bellman et al. 1999)

Consumer satisfaction

It can be defined as the extent to which consumers perceptions of the online shopping experience confirm their expectations. Most consumers form expectations of the product, vendor, service, and quality of the website that they patronize before engaging in online shopping activities.

These expectations influence their attitudes and intentions to shop at a certain Internet store, and consequently their decision-making processes and purchasing behavior. If expectations are met, customers achieve a high degree of satisfaction, which influences their online shopping attitudes, intentions, decisions, and purchasing activity positively. In contrast, dissatisfaction is negatively associated with these four variables (Ho and Wu 1999; Jahng et al. 2001; Kim et al. 2001).


34

5.4 Data Collection Method-

5.4.1 Primary Data

It is original primary data, for specific purpose of research project. For this project, I have to use following common research instrument or tool-

Questionnaire- Questionnaire development is the critical part 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 project. The questionnaire was designed using various scaling techniques. The questionnaire was used mainly to test the model proposed for consumer perception towards online shopping. Likert five point scales ranging from Strongly Agree to strongly disagree was used as a basis of Questions. The data collection was done over a period of 8 weeks This was done by going directly to the respondents or through mails.

Information on

online shopping

Security & Privacy

Perceived Usefulness

Perceived Ease of use

Attitude

towards

online

shopping

Intention

to shop

online

Decision

Making

Online

Purchase

CONSUMER SATISFACTION

Perceived Enjoyment


35

5.4.2 Secondary Data It will be collected to add the value to the primary data. This may be used to collect necessary data and records by different websites, magazines, annual reports, journals, reference books, and newspapers, etc.

5.5 Sample Design 5.5.1 Sample Unit For studying consumer perception on online shopping, samples were selected from Sambalpur,Odisha.

5.5.2 Sample Media The respondents in the samples are reached through personal interviews.

5.5.3 Sampling Methods Sampling methods fall under two broad categories-

a) Non-probability sampling methods. b) Probability sampling methods.

5.5.4 Sample size- 100 5.5.5 Research place-Sambalpur

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


36

CHAPTER - 6 DATA ANALYSIS


37

6.0 DATA ANALYSIS

6.1 THE INTERNET USAGE

The objectives of the research were studied with respect to a regular online shopper who shopped more than once because they would be the right respondent to give an insight about the online shopping. Therefore it is firstly important to understand who is a regular online shopper. In the survey the respondents where asked the following questions which helped to know about a regular shopper.

1. Q.1 Do you use Internet?

Yes 98% No 02%

INTERPRETATION

The above pie -chart represent that 98% consumers had used the internet. The

uses of internet is a vital thing in todays competitive era. The rapid uses of computer

has make the internet well known to others. While as the influence of social media

and mobile internet makes the uses of internet more popular. The 02 % people were

never uses the internet from the study of 100 individual respondent.

Q.02 How long have you been using Internet?

Less than 1 year 3 5 years

yes

no


38

1 3 years More than 5 years

INTERPRETATION

The diagram shows that shopping has increased with the usage of Internet over the years. Regular shoppers who have been using Internet for more than one year had shopped to 98% and regular shoppers who have been using Internet for more than five years have shopped to 78%. Internet is not a new concept for these regular online shoppers and they have been using it for more than 5 years now. The increased usage over the years has lead to an increase in shopping, as these regular shoppers are able

to make use of the various e-commerce activities.

Q.3 On the average, how much time (per week) do you spend in surfing the Web?

0 5 hours 16 20 hours

6 10 hours More than 20 hours

11 15 hours

2% 6%14%

78%

0%10%20%30%40%50%60%70%80%90%

Lessthan1year

13years 35years More than5years


39

INTERPRETATION

The research shows that 36% of the online shopping had been done who use Internet for more

than 20 hours a week and 96% of the shopping has been done by regular shoppers who have

been using Internet for more than 5 hours a week. As more the regular online shopper are

using the Internet it is seen that they end up buying more also. This shows that Internet is

becoming an integral part of the daily activity of the regular online shopper. The regular

online shoppers who have been using Internet for more than 20 hours are more comfortable

and confident as a result they purchase more online as compared to who use Internet for less

number of hours.The study shows that the growing usage of Internet has lead to increase in

online shopping as seen above. There is a positive relation between increase usage of Internet

and online purchase. The marketers should capture this enormous growth, which can be

brought by the penetration of broadband and lowering the prices of computers. Thus increase

in usage of Internet over the years and the more time spent has lead to an increase in

shopping. But one needs to know whether online shopping is an integral part of regular

shoppers or not this understood as follows.

4%

12%

20%

28%

36%

0%5%

10%15%20%25%30%35%40%

0 - 5hours a

w eek

6 - 10hours a

w eek

11 - 15hours a

w eek

16 - 20hours a

w eek

Morethan 20hours aw eek


40

Q.4 Have you purchased anything online ever?

INTERPRETATION

The research showed that 65% of the Internet users had shopped online while 35% had not

bought anything. This is mainly because of the changing lifestyle and taste patterns. As the

life is getting more and more fast paced more people are moving on to shop online mainly

because of convenience. This shows that a more Internet users are using it as a shopping

medium and there is a huge potential in this sector but one should not be carried away by this

figures. There could be a possibility that only a small section of the online shoppers are

shopping or only a particular category of good had brought about this huge number. As a

resultthe entire analysis was done incase of a regular online shopper to understand the

shopping behavior of the online shoppers.

The following question helped to understand who is a regular online shopper among the 65%

who had indulged into online shopping.

NO35%

YES 65%


41

The web online activity

The following classifications are done to study the online activities in case of a regular

online shopper.

Fig. 5 Online Activities

The Internet offers four basic services communication (socializing service with peer group or core group (email) or with new groups of people (chat), information services, entertainment services and commerce services and shopping. The research shows 32% of the regular online shoppers use Internet for communication while only 10% uses it

for shopping which shows that communication still forms the major activity among the regular online shoppers.

Fig. 6 Online Activities by Age

10%

Shopping20%

Finance

14%

Entertainment

24%

Inf ormation

Gathering

32%

Communication

0%

10%

20%

30%

40%

50%

60%

70%

communication Informationgathering

Finance Shopping

18-30 years

31-40 years

41-50 years

above 50years


42

This classification further provides an insight that Internet is mainly used as a means of communication in respect all the age groups of the regular online shoppers. It

contributes to 60% of the major activity among the regular online shoppers who lie between the age group 18-30 years. It could be seen that shopping as a basic activity on the Internet contributes to the minimum. Internet as a medium of shopping is maximum used by regular online shoppers between the age group18-30 years, which is 18% while above 50 years it is used just to 2%. The increase in usage among the 18-30 years is basically due to high awareness. The marketers should focus mainly on the age group between 18-30, as they are the main drivers for growth. Thus the research shows that though the regular shoppers are using the Internet for quiet some

time now but shopping still remains a small part of the major activity

Fig. 7 Online Activities by Time

It is evident that regular online shoppers also spend a major part of their time in communication unlike the occasional online buyers. In 0-5 hours a week they spend 77% of their time in communication, which includes email, and chat as the major activity with shopping which does not seem to exist at all. Information search constitute 20% of the time. The information search increases as the regular online shoppers tries to figure out ways to surf the Internet and access the information they require. It is true that more regular online shoppers use Internet shopping sites to

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

0-5 hours 6-10 hours 11-15hours

16-20hours

more than20 hours

Communication

Information

Entertainment

Finance

Shopping


43

gather information about products rather than to make a direct purchase.

But it is to be noticed that as the time spend increases communication falls and other activity picks up like entertainment and finance. One could see from the graph that between 16-20 hours a week communication falls further but information search also falls as the regular online shoppers becomes more focused in their information search rather than wandering aimlessly in the Internet space. They continuously use search engines for routine information needs. The time spent on entertainment increases marginally to 18%. As the people spend more time it has been seen that activities like shopping and finance related needs increases. The regular online shoppers who use the Internet for more than 20 hours a week has shown that they have indulged into more shopping i.e.10%. It is true that as the regular online shoppers spends more time on the Internet there is a possibility that they would end up buying more as they are ease with the use of internet. Increased usage of Internet is positively related to the buying

behavior on the Internet.

Analysis-

It is true that increase in internet has lead to an increase in the online shopping as 78% of the online shopping has been done by the regular online shopper who have been using internet for more than five years and 36% of the online shopping have been done among the regular shopper who uses the Internet for more than 20 hours a week. Thus increase in usage of Internet has lead to an increase in online shopping. But shopping still constitute a small amount of the major activity on the internet as 32% of the regular online shoppers uses Internet for communication while only 10% uses it

for shopping. Communication still constitutes the major activity on the Internet.


44

6.2 Demographic Factors

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

6.2.1 Hypotesis

1. More male Internet users are frequent online buyers than female Internet users. 2. Regular online buyers are better educated than occasional online buyers. 3. Income is higher in case of a regular online shopper than occasional online

buyer.

Fig. 8 Online Shopping & Gender

Among the 65% of the online shopping, males (72%)had purchased more as compared to women (28%). This shows that it is true that more males are shopping online as compared to women. This is mainly because women still like to feel, see and touch the product before buying. It was noticed that some of them felt shopping as a reason to go out with the family and spend time together, which was not possible in case of online shopping. As more and more Indian women are flocking to Internet there is a possibility that they might end up in a purchase. Also an increase in the spending power in the hands of the women might lead to an increase in the online shopping. The research showed that 28% of the women who shopped online fall mostly in the service and executive class with an income above Rs10,000. The marketers should make sure that they produce the item keeping in mind the needs of the women

28%Female

72%Male


45

population as they still continue to be an important decision maker when shopping for

the family.

Fig. 9 Online Shopping & Educational Qualification

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 a online shopping done by a regular online shopper with matriculate (8%) and non matriculate (3%).

Fig. 10 Online Shopping & Income

3%

Non

Matriculate

8%

Matriculate

54%

Postgraduate

35%

Graduate

1 2 1 13

5

1 1

8

21

53

14

38

15

11

0

5

10

15

20

25

30

35

40

Student Service/Executive Business Others

less50005000-1000010000-25000above25000


46

Income and buying behavior are positively related. It was seen that a regular online shopper with a higher income had purchased more online as compared to lower income online shopper. This trend was seen in all segment of the population. It is true that more the income in the hands of the population they would indulge in shopping. The service class had done the major purchase in all the various levels of income. It can be seen that hardly any purchase is done among the regular online shopper whose

income lies below Rs5000.

Analysis-

Thus three hypotheses stated were true in case of the regular online shopper and it can interpreted that online shopping is effected by demographics like gender, education and income levels. Among the 65% of the online shopping, males (72%)had purchased as compared to women (28%). There is a positive relation between education and income of the online shoppers. 89% of the online shopping was done among the regular shoppers who were educated with a graduate or postgraduate degree compared to 11% shopping who were matriculate and non-matriculate. A 60% of the shopping was done by the regular shopper who had income more than Rs 25,000 than 40% who had income less than Rs.25,000.

6.3 Motivating & Satisfaction Factors

To identify the factors which Internet users choose to buy or not buy online and how frequently they make such purchases. Analyzing the importance of satisfaction level

in the online purchasing environment.

6.3.1 Hypothesis

Consumers who make frequent online purchases are higher in convenience orientation

than those who purchase occasionally.


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Fig. 11 Online Shopping & Motivating Factors

It is believed that consumers whether online shoppers or non-online shoppers value price to convenience but the study contrast this popular belief. The study showed that 32% of the shopping had been done by the regular shopper who think convenience is the main driving force while 23% of the shopping had been done for whom price was the main orientation for shopping online. Other motivating forces, which had lead to online shopping, were saves time (26%), product availability and superior selection (12%), and product comparison (7%). Convenience here is characterized as ease of purchase, home delivery and ability to shop 24x7. These factors motivate the regular online shopper to buy over the Internet and regular online shoppers who value convenience are more likely to buy on the web, as compared to occasional online shoppers. Every connection is a potential for net shopping. Therefore the companies

should attract and retain its regular online shoppers, as the Internet is a tangled jungle of web sites, which is possible at a click of a mouse. They should design strategies and

develop products keeping in mind the convenience factors.

32%

Convenience

23%

Price

12%

Superior

selection

26%

Saves Time

7%

Product

Comparison


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Fig. 12 Barriers to Shopping Online

The main areas for concern in respect of the regular online shoppers while shopping

were privacy and security (33%). Most of them still preferred the conventional method of shopping like the touch and the feel factor (21%). They felt that it is possible to see, feel, touch and try the products before buying in a shopping store as compared to Internet shopping. Other reasons that concern the regular online shoppers were inability to reach the customer service (16%), hassle of returning the product (14%), technical foul ups, hesitant in purchasing from an unfamiliar source and person and delivery costs. The marketers should formulate such strategies so that the

privacy and security concern can be taken care off.

7%

Others9%

Unfamiliar

14%

Hassle of

returning

16%

Lack of

Customer

Service

21%

Inability to

touch & feel

33%

Privacy &

Security


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Fig. 13 Convenience- The Motivating Factor

It has been seen that there is a positive correlation between the frequency of purchase and the convenience factor for buying in the Internet arena. The regular online shopper who had purchased more than 6 times (9%) for them convenience is the most important motivating factor (48%)for shopping on the Internet. Convenience has been characterized as ease of purchase, home delivery and ability to shop 24x7. The online shopper believes that large amount of information about the product and the ability to compare prices is available at a click of a mouse thus making the entire shopping experience very convenient. Thus the marketers to should keep the convenience factor

in mind while providing the goods and services.

6.3.2 Satisfaction Index

It is important to understand the satisfaction level among the regular online shoppers, which had lead to online shopping. This could be understood by the satisfaction index

and the frequency of purchase among the shoppers.

12%

74%

5%9%

5%

20%27%

48%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Only once 2-4 times More than5 times

More than6 times

purchase

convenience


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Fig. 14 Satisfaction Index

A 55% of the regular online shoppers were satisfied with 12% dissatisfied. An important thing to be noted is that only 2% of the regular online shoppers were highly satisfied while 31% of the

CONSUMER PERCEPTION TOWARDS ONLINE SHOPPING FINAL SUBHASISH PATNAIK.pdf

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