Executive Summary

2010-2012

Research Report

On

“Study of online buying behavior among youth”

Submitted By:-

Nimish Narayan

Pankaj Kumar soni

Pawan Kumar

Pradeep Sangwan

Pritam Kumar Pritam

Rahul Kumar

Raj Kewlani

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Acknowledgement

A successful research involves stages where people are involved in converting a research plan into a pragmatic report.

Hereby, we take this opportunity to express our deep gratitude to all those who have contributed to the successful completion of this research project “study of online buying behavior among youth.” Each contribution has been priceless as it has enabled to us learn and made us to get an insight on the research problem.

We would like to express our sincere gratitude to Sinhgad Institute of Management and its management to present us with an opportunity to undertake this research.

We are sincerely great full to all our professors and our Director, who made us worthy of being able to pursue such a challenging to successful completion.

Thanking You

Nimish Narayan

Pankaj Kumar soni

Pawan Kumar

Pradeep sangwan

Pritam Kumar pritam

Rahul Kumar

Raj kewlani

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Index:-

Chapter Page Number

Chapter 1Executive Theory 4-5Chapter 2 – Introduction 6-10Theoretical Foundation 6-7Online Shopping In India 8Rising Connectivity 8Few Factors That Boost Online Shopping 8-9Objective 10Scope Of The Result 11Chapter 3Literature Review 12-22Chapter 4Hypothesis 23Chapter 5Research Methodology 24-31Research Strategy 24Descriptive Research Method 24Sample Design 25Secondary Research 26Primary Research 27Sample Questionnaire 29Chapter 6Data Analysis 32-38Chapter 7Findings of the research 39-40Chapter 8Conclusion 41-42Bibliography 43

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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 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

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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‟ 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.

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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.

Theoretical Foundation:-

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

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increasing. The rapid increasing is explained by the Internet has developed an into a new distribution channel and online transaction 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 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 h 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. 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.

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Online 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. 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 15 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 India’s online buying is crossing the overall global averages.

Few Factors That Boost Online Shopping in India:-

Rapid growth of cybercafés across India

Access to Information

The increase in number of computer user’s

Reach to net services through broadband

Middle-class population with spending power is growing. There are about

20 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

Few Facts about Online Shopping:-

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.

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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.

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Objective:-

The management wants to study the effects of the individualism minus collectives and uncertainty avoidance on internet shopping. Management wants to know how this problem can be addressed and online shopping can be promoted among masses. Management wants to find out the factors that hinder the development of the online shopping in the eastern block of the world, the intensity or degree of influence on the internet shopping. The management also is interested to find out the ways and means which through these factors affect the internet shopping in the negative manner. They also desired to study the interrelation of these factors with each other and the combined effects of these factors on internet shopping. The management also intends to isolate the common factors that are not having any significant effect and to find the reasons for the deviations in people’s behavior with the same factors. The management wants gather the data and analysis the trends in the indirect shopping thus providing the base for future research.

The objective of the research is as follows:- To study the online shopping behavior of customers To study the factors influencing online shoppers and consumers To study the customer’s level of satisfaction with regard to online

shopping To examine whether customers prefer online shopping to physical stores 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.

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Scope of the Research:-

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 the online consumer. Analyzing consumer behavior is not a new phenomenon. The renowned marketing expert Philip Kotler has published several works on the topic of consumer behavior theories. These theories have been used for many years not only to understand the consumer, but also create a marketing strategy that will attract the consumer efficiently Hence, understanding and identifying the consumer is closely related to the directions a company will take with their marketing strategy. These theories can also be applied to identify the online consumer and to create certain consumer segments. However, some distinctions must still be made when considering traditional consumer behavior and online consumer behavior.

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.

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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 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:

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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

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 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 study 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

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analogous physical shopping experience. Furthermore, online retailers or e-retailers get to expose and sell their products to a global audience through their e-stores. (Also termed as online stores, internet shops, web shops etc.) 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-retailer wants his/her share of domain amidst the vast World Wide Web galaxy. Due to the intense competitor quotient involved, every e-retailer 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 product from a number of competing suppliers. Well-structured product information that 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 their study 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 Kristiansand. 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.

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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 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 would simply take their business elsewhere (to either an online or offline competitor) or abandon the transaction entirely. In 2009, $47.6 billion will potentially be impacted by online transaction problems, on U.S. shopping websites

Alone.

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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, 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 25 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

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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 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 pro fits, 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.

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

In their research paper they discuss 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. EShoppers are profiled using a tactile split of the CCI. Each turtle’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 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 behavior 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

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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 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.

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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 Shred dies 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 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-retailing 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

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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 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 study 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

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gets to choose from a diverse range of products and services as opposed to the analogous physical shopping experience. Furthermore, online retailers or e-retailers get to expose and sell their products to a global audience through their e-stores. (Also termed as online stores, internet shops, web shops etc.) 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-retailer wants his/her share of domain amidst the vast World Wide Web galaxy. Due to the intense competitor quotient involved, every e- retailer 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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Hypothesis:-

1. Internet shopping adoption rates are higher for countries with relatively lower uncertainty avoidance levels.

2. Internet shopping adoption rates are higher for individualists than for collectivist countries.

3. For countries with relatively high uncertainty avoidance levels, individualism-collectivism shows little impact on internet shopping rates.

4. For countries with relatively low uncertainty avoidance level s, the individualist’s countries shows higher internet shopping adoption rates than the collectivist countries.

5. Internet shopping may be more prevalent in the category of goods with low risk rates with respect to quality. People who are willing to experiment may be frequent users of the service.

6. Their likings and disliking about traditional shopping methods may define their preferences. Their individual needs define their preference.

7. Satisfaction levels can be affected by various things like security systems offered, requirements of the consumers, variety of goods etc…

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Research Methodology:-

Data for this study was collected by means of a Survey conducted in Pune. The sample size was 500.The Questionnaire 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 fourteen 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 mode of factor analysis in SPSS.

Research 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.

Descriptive Research Method:-

We will conduct our research in order to collect primary data and reach the objective of the Dissertation. We will also be discussing which different types of Methodologies that were used. Since our research is of descriptive character our primary intention was to collect secondary data and analyze it. By doing so we found the factors Price, Trust and Convenience. We then collected primary data through a survey. The main purpose of the survey was to collect data about Online Consumer Behavior and the significance of the established factors, Price, Trust, and Convenience In order to be able to find and establish Online Consumer Segments, Consumer Traits and Online Behavior had to be identified. The segments were used in order to further identify what impact the factors Price, Trust, and Convenience have on Online Consumer Segments.

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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 segments. We decided that the sample size should contain over 500 respondents and we collected answers from 500 respondents. The populations for this research were at Pune, 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. We will attempt to collect as many respondents as possible but since we will be studying students we assume that there will be little variation in the population making it more approved to generalize the response rates. The sampling method for students took also place on a Convenience basis since the students that agree to answer the questionnaire are those that were chosen.

Type of Research: -

Descriptive Research.

Sample Size -500.

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Secondary Research:-

Our secondary research includes:

Secondary Data:-

Secondary research was undertaken for the project as a summary or collection of existing data. As the problem was somewhat defined but to reach specific hypothesis secondary data analysis was also undertaken.

The secondary sources include previous research reports, newspaper, magazine and journal content, and government and NGO statistics. The secondary information and data was required in the preliminary stages of research to determine what is known already and what new data are required, or to inform research design.

Information Research:-

For the research problem at hand we had studied various secondary sources so as to define the problem more precisely. There were number of blogging sites viewed which conveyed that there is still little uncertainty among the users regarding internet shopping so we decided to test how uncertain the consumer are towards online shopping through are primary research. News, articles from variety of sources provided statistical information regarding the growth of “citizens” in India. Indians have been now logging in to the internet for several purposes; internet shopping is surely one of them. Moreover several reports conducted internationally such as Nielsen, India has emerged as the 3rd biggest nation when it com to online shopping and using a credit card online. Drawn by the facilities offered by the web and the diversity of products available on it, Indian citizens have emerged as the third biggest credit card users globally for online purchasing, next only to the turkey and Ireland. But there is also a lot of research released that suggests websites are failing to persuade people to buy, and to convert them into customers, due to the lack of information available. Persuading people to buy online is about being able to answer their questions and to remove the hurdles blocking the sale.

The statistics and research project had generated our interest to further see the scope of internet shopping in India through primary research.

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Primary research:-

Focus groups:-

Design to focus group interviews were conducted among consumers with different degrees of experience with internet shopping. This diversification of respondents was chosen to capture a broad range of the consumer believes that predict intentions to buy goods online or not. One group was conducted as a respondent moderator group and second as a telesession group.

Research limitations/amplifications:-

An important potential limitation of theses research is the choice of focus groups as research methodology, which can prevent the elicitation of certain types of beliefs. If important beliefs concern issues of a more sensitive, personal character they are not likely to be maintain in a focus group. Another limitation is the explorative nature of the research, which makes it impossible to attach weights to the importance of the elicited beliefs in predicting internet shopping behavior.

Practical implications:-

The findings could be used to direct attention to consumer beliefs about internet shopping which have the potential of acting as barriers to this line of e-commerce.

Experience surveys (through questionnaires)

We designed a questionnaire to know about the experiences of the consumers to get a better insight into their mindset about internet shopping. It covered some of the basic points which come across hour mind when we think of internet shopping. We had a sample size of 500 and we got them administered into waved:-

Personal Contact:-We personally contacted individuals and got the questionnaires filled up.

Through mail:-We mailed it to our know contacts and got their replies through mail itself.

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The questionnaires which were incomplete where ignored. We got around 520 replies in all which were cut down to 500 on basic on completeness.

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Sample questionnaire:-

Objective: - To evaluate the scope of internet shopping websites and determine the perceptions of consumer about it. Also determine how much popular it is in India.

Instructions: - You can select multiple options if not specified.

1. Age:-

[ ] 15-20 yrs. [ ] 20-25 yrs. [ ] 25-30 yrs.[ ] 30-40 yrs. [ ] more than 40

2. Gender:- [ ] Male [ ] Female

3. You are living in:- [ ] Rural [ ] Urban [ ] Semi Urban [ ] Metro city

4. Occupation:-

[ ] Agriculture [ ] Student [ ] Government Employee

[ ] Private company employee [ ] Business

[ ] other

5. Monthly Income:-

[ ] 5,000 to 10,000 [ ] 10,000 to 20,000

[ ] 20,000 to 30,000 [ ] More than 30,000

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6. Do you have your own Internet Connection?

[ ] Yes [ ] No

7. Have you purchased anything online ever?

[ ] Yes [ ] No

8. What motivates you to buy online?

[ ] easy payment [ ] no hidden cost

[ ] wide range of product [ ] no traveling cost

[ ] if other please specify………………………

9. Since how many years are you buying online?

[ ] 0-1 years [ ] 1-3 years [ ] 3-5 years

[ ] more than 5 years

10. Have you purchased product/service for :- [ ] Own use [ ] for family members

[ ] if other please specify …………………

11. How much time per week, do you spend in surfing the web?

[ ] 0-5 hours [ ] 5-10 hours [ ] 10-15 hours

[ ] 15-20 hours [ ] more than 20 hours

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12. Did you face any problem while making an online purchase?

[ ] yes [ ] no

If yes please specify……………………

13. Are you satisfied with your online shopping experience?

[ ] Highly satisfied [ ] Satisfied [ ] neutral

[ ] Dissatisfied [ ] Highly Dissatisfied

14. What type of goods you are purchasing online?

[ ] Books

[ ] Computer Hardware

[ ] Computer Software

[ ] Events Tickets

[ ] CDs/DVDs

[ ] Toys

[ ] Clothing

[ ] Electronics

[ ] Jewelry

[ ] Sporting Goods

[ ] Others

If other please specify………………………

Analysis:-

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Q1. What is your Age:-

AGE

15-20 YRS20-25 YRS25-30 YRS30-40 YRS

Q2. What is your gender:-

GENDER

MALEFEMALE

Q3. You are living in:-

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LIVING AREA

RURALURBANSEMIURBANMETRO CITY

Q4. What is your occupation:-

OCCUPATION

AGRICULTURESTUDENTGOVT EMOLOYEEPRIVATE EMPLOYEEBUSINESSMANOTHER

Q5. What is your monthly income:-

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MONTHLY INCOME

5OOO-10,00010000-2000020000-30000MORE THAN 30000

Q6. Do you have your own internet connection:-

PERCENTAGE OF INTERNET CONNECTIONS

YESNO

Q7. Have you purchased online ever:-

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ONLINE PURCHASE

YesNo

Q8. What motivates you to buy online:-

MOTIVATION TO BUY ONLINE

EASY PAYMENTSNO HIDDEN COSTSWDE RANGE OF PRODUCTSNO TRAVELLING COSTSOTHER

Q9. Since how many years are you buying online:-

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TIME PERIOD OF BUYING ONLINE

0-1 YRS1-3 YRS3-5 YRSMORE THAN 5 YRS

Q10. Have you purchased/service for:-

PRODUCT PURCHASED FOR

OWN USEFOR FAMILY MEMBERSOTHERS

Q11. How many times per week do you spend in surfing the web:-

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TIME SPENT IN SURFING (PER WEEK)

0-5 HRS5-10 HRS10-15 HRS15-20MORE THAN 20

Q12. Do you face any problem while making an online purchase:-

Problems faced while making online purchase

YesNo

Q13. Are you satisfied with your online shopping experience:-

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Online shopping experience

Highly satisfiedSatisfiedNeutralDissatisfiedHighly dissatisfied

Q14. What type of goods you purchase online:-

Online Goods Purchased

BooksComputer HardwaresComputer softwaresEvents TicketsCD/DVD'SToysClothingElectronicsJewelrySporting goodsOthers

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Findings:-

Experience surveys:-

E-selling has immense scope as its potential has not yet been tapped. Initial curiosity is there as people are willing to experiment an initiative

have to be taken to convert visitors into buyers. Perceptions are very rigid, 60% of those who don’t do online shopping

discard the future prospect also. Risk and possibility of forgery are the main concept of customers. The customers are attracted most by discounts, value for money. Various aspects regarding security affect the customer perception the

most.

Expert survey:-

The major factors remain the lack of user friendly shopping portals in India.

Most of the times the business giants tend to forget that the psychology of Indian shoppers differs from rest of the world. It is not always that the shopper decides to buy something and log on to the shopping portals.

Indian shoppers like to roam around and if anything particular of interest catch their attention they think of buying it.

Then there should be option for comparative and group shopping as we youth like to discuss and talk to friend and relatives about the product before buying it.

Then there is a “touch and feel factor” which never seems to stop playing at back of mind of the shoppers. These is where the trust factor comes in as in ‘what if you don’t get what I see online?’, ‘what if the product is defective….’,’can it be exchanged for the good one’ one cannot rule out these factors while taking success of E-commerce in India.

Then there is shipping process….. Most of the sites tend to charge a lot for shipping the product to your place.

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Focus group:-

an unexpected result of the explorative study was the view of the 2 groups consisting of more less experienced internet shoppers varied only a little in there pool of beliefs (outcome and control beliefs).

Beliefs about internet shopping positive as well as negative were remarkably congruent across groups. In the minds of consumers, internet shopping is an advantage compared with conventional shopping in terms of continence, product range and price.

Disadvantages, which could act as mental barrier, are, for instance, the risk of receiving inferior quality groceries and the loss of the recreational aspect of traditional shopping. Internet shoppers are buying from the internet because it’s a fast and convenient way to buy.

Internet experience was positively related to the amount of time spent on line. User with more experience used internet more frequently and had longer sessions.

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Conclusion:-

Consumers are not averse to online shopping but have certain security issues which have to be tackled.

It is a popular as a medium of buying but customers need greater level of assurance to become habitual to it.

Almost everyone is aware of the benefit of online shopping and most do visit also but it’s now time to take steps to convert visitors into buyers.

Satisfaction level varies with the amount of guarantee offered and features of a particular sites. Satisfactions levels are surely affected by many things such as security system offered, requirement of the consumer, variety, authenticity, speed of delivery etc. traditional shopping methods preferences is dictated by individual needs as well. What consumer look for in traditional shopping methods has to be there in internet shopping methods also? Therefore internet shopping methods is dictated by individual needs as well. Only few goods were seen upon with trust by those who had already had the experience of the service.

Therefore the hypothesis is proved up to a small degree.

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(International Journal of Electronic Marketing and Retailing 2007 - Vol. 1, No.4 pp. 322 - 338) http://www.cyberpsychology.eu/view.php?cisloclanku=2009111002&article=6#authors[22 may 2010] http://www.innovationsreport.com/html/reports/social_sciences/report54694.html 22april 2010]

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Executive Summary

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