Abstract The Internet has 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. There are a number of factors influencing the online consumer. However, this research will try to identify the main factors influencing the online consumer and will, therefore, try to limit these to a few in order to be able to investigate the effect on the online consumer. Primary data and secondary data were collected through a survey that was conducted on students at the Sambalpur University.
Background theory of online marketing were followed. Proper research methodology and statistical methods were followed for analytical research.
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.
A comparative link between identified factors and different group of segment were established.
1
CHAPTER-I
2
INTRODUCTION Internet has changed the way of living of the people. E commerce is gaining more and more popularity day by day. E commerce simply means buying and selling of goods and services via online. In this busy life people are getting more and more engaged in activities and hence there is not much time available for Shopping and all. Now a day's people are so busy that they have no time to go to shopping malls and buy the things they want. Everyone likes to do online shopping. That's why importance of online shopping is increasing with the passage of time. There comes the importance of online shopping. Let us now take a look of some of the factors which encourages people to do shopping online. Convenience - convenience is always the main reason which forced people to choose online shopping. If you get a product at a single click then why waste time and travelling money. In online shopping we will not get the real fun of shopping but we can save a large amount of time so it is preferred now a days. Variety - there are thousands of websites that offers online shopping. Ecommerce is a business that is growing in a tremendous rate. There are lots of local business websites that sell products in a reasonable rate. We can see which website is offering the best price and can choose our desired products. Most of the online websites are offering free shipping or on home delivery so we will get our product in a few days. Better price - for sustaining in this big competition most of the companies are offering lower prices. We just have to see which website is offering the lowest price and then buy from that one. Almost anything from cars to pizza is available online you just have to find the best website to buy from. Comparison is easier- In the traditional way comparing two products or the price in two different stores was a difficult thing. We have to walk in to 3
the store and inquire the price and then walk in to the other store and ask the respective price and compare them both. In the case of online shopping , comparing the price in another store is just as easy as opening a new Browser tab. We can compare the products and the prices with more ease. In online comparison we can be more specific about our choice and we can choose the one which will be most useful for us. Trust - most of the reputed online marketing websites are offering replacement warrantee. The products are sold either by companies or by individuals. In websites like ebay and olx people sell their things online. Books, mobiles, computers and even property are sold there. But in amazon or flipchart, genuine products are available with warranty. When doing an online payment always check the browser to find out whether the webpage is secure or not .Do online transactions only in a secured webpage and enquire about the company and then buy the products. 1.1 INTRODUCTION OF ONLINE SHOPPING Online
shopping or Online
retailing is
a
form
of electronic
commerce whereby consumers directly buy goods or services from a seller over the Internet without an intermediary service. An online shop, e-shop, e-store, Internet shop, web shop, web store, online store, or virtual store evokes the physical
analogy
of
buying products or
services
at
a bricks-and-
mortar retailer or shopping centre. The process is called business-to-consumer (B2C) online shopping. When a business buys from another business it is called business-to-business (B2B) online shopping. Online shopping is the process of buying goods and services from merchants who sell on the Internet. Since the emergence of the World Wide Web, merchants have sought to sell their products to people who surf the Internet. Shoppers can visit web stores from the comfort of their homes and shop as they sit in front of the computer. Consumers buy a variety of items from online stores. In fact, people can purchase just about anything from companies that provide their products online. Books, clothing, household appliances, toys, hardware, software, and health
4
insurance are just some of the hundreds of products consumers can buy from an online store. Many people choose to conduct shopping online because of
the
convenience. For example, when a person shops at a brick-and-mortar store, she has to drive to the store, find a parking place, and walk throughout the store until she locates the products she needs. After finding the items she wants to purchase, she may often need to stand in long lines at the cash register. In contrast, online shopping helps consumers avoid these disadvantages. With online shopping, a person logs onto the Internet, visits the store's website, and chooses the items she desires. The items are held in a virtual shopping cart until she is ready to make her purchase. The shopper can remain in her pyjamas as she does her shopping, and the process can be conducted in the wee hours of the morning or late into the night. Online stores never close — they're open 24 hours a day. Despite the convenience of online shopping, not everyone chooses to purchase items and services online. Some people like the idea of physically going to a store and experiencing the shopping process. They like to touch the merchandise, try on clothing, and be around other people. Online shopping doesn't permit shoppers to touch products or have any social interaction. It also doesn't allow them to take the merchandise home the same day they buy it. Other people may worry about shopping online because they fear their credit card information will be compromised. Since it's necessary to provide credit card information when purchasing products online, people worry they may become the victims of identity theft. This discourages some consumers from participating in online shopping. Another reason some consumers avoid shopping online is the fact that they worry that the products they purchase are not accurately portrayed in the website's picture. They worry that the picture of the item may appear one way, but the actual item may look completely different — perhaps of lesser quality. It's also impossible to try on apparel when conducting online shopping.
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A consumer has to rely on body measurements in order to make sure the clothing will fit properly. If the clothing arrives in the mail and it's too small, the consumer has to return the item. This is a potential inconvenience that some shoppers may not wish to face. Some names of online websites are given bellow:-
LIST OF SOME ONLINE WEBSITE www.Jabong.com/Online-Shopping
www.SnapDeal.com www.pepperfry.com/Free_Shipping www.bagskart.com/handbags www.iqecommerce.com www.tradus.com JetAirways.com/India Offers www.HomeShop18.com www.simplesite.com www.bigraja.com/ www.infibeam.com www.flifkart.com www.indiaplaza.com www.snapdeal.com www.dealsandyou.com www.myntraa.com www.yapee.com www.onlinebooks.com
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1.1.1 BACKGROUND OF ONLINE SHOPPING The invention of the Internet has created a paradigm shift of the traditional way people shop. A consumer is no longer bound to opening times or specific locations; he can become active at virtually any time and place and purchase products or services. The Internet is a relatively new medium for communication and information exchange that has become present in our everyday life. The number of Internet users is constantly increasing which also signifies that online purchasing is increasing . The rapid increase is explained by the growth in the use of broadband technology combined with a change in consumer behaviour. The Internet is considered a mass medium that provides the consumer with
purchase characteristics as no other medium. Certain characteristics are
making it more convenient for the consumer, compared to the traditional way of shopping, such as the ability to at any time view and
purchase
products, visualize their needs with products, and discuss products with other consumers . Oppenheim and Ward (2006) explain that the current primary reason people shop over the Internet is the convenience. They also recognize that the previous primary reason for shopping online was Price which has now changed to convenience. Online shopping is the process consumers go through when they decide to shop on the Internet. The Internet has developed into a ―new‖ distribution channel (Hollensen, 2004) and the evolution of this channel, e-commerce, has been identified by Smith and Rupp (2003) to be the most significant contribution of the information revolution. Using the Internet to shop online has become one of the primary reasons to use the Internet, combined with searching for products and finding information about them (Joines et al., 2003). Smith and Rupp (2003) also state that the consumers have never had access to so many suppliers and p rod uct/service opinions. Therefore, the I nte rne t ha s developed to a highly competitive market, where the competition over the consumer is fierce. In order to have an impact on and retain consumers, in a competitive market, Constantinides (2004)
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stated that the first step is to identify certain influencing aspects when purchasing online, these can be regarded as factors.
1.1.2 ADVANTAGE OF ONLINE SHOPPING 1) Convenience: The convenience of this method of shopping is what I like best about it. Where else can you do shopping even a midnight wearing your night suit? You do not have to wait in a line or wait till the shop assistant is ready to help you with your purchases. You can do your shopping in minutes even if you are busy apart from saving time and avoiding crowds. Online shops give us the opportunity to shop 24 x 7 and also reward us with a ‗no pollution‘ shopping. There is no better place to buy information products like e-books. Immediately after the payment is made one can download the information. And downloadable items purchased online eliminate the need for any kind of material goods at all.
2) Better Prices: Another thing which fascinates me is the cheap deals and better prices I get from online stores because products come to you direct from the manufacturer or seller without middlemen involved. Many online shops offer discount coupons and rebates. Apart from this, the Online Store is only required to collect sales tax if they have a physical location in our state even if we buy from a store across the world.
3) Variety: The choices you can get for products are amazing. One can get several brands and products from different sellers at one place. You can get in on the latest international trends without spending money on airfare. When you shop online, you can shop from retailers in other parts of the country or even the world without being limited by geographic area. These stores offer a far greater selection of colours and sizes than you will find locally. Apart from that, How many times have it happened that you spend your money reaching a local shop only to find that the product you need is out of stock? Some online shops have a
8
provision to accept orders without stock and ship it across to you when the stock becomes available. You also have the option of taking your business to another online store where the product is available.
4) Send Gifts: Online Shopping makes sending gifts to relatives and friends easy, no matter where ever they stay. Now there is no need of making distance an excuse for not sending a gift on occasions like Birthday, Wedding Anniversary, Marriage, Valentine‘s Day, Mother‘s Day etc.
5) Fewer Expenses: Many times when we opt for conventional shopping we tend to spend a lot more than the required shopping expenses on things like eating out, travelling, impulsive shopping etc.
6) Comparison of Prices: Online shops make comparison and research of products and prices possible. Online stores also give you the ability to share information and reviews with other shoppers who have firsthand experience with a product or retailer.
7) Crowds: If you are like me, you would like to avoid the crowds when you do the shopping. Especially during Festivals and Special events the crowds can really give a head ache. Crowds force us to do a hurried shopping most of the time. For me grumpy or irritating people and those who smell bad are a huge turn off. Crowds also create a problem when it comes to finding a parking place nearby where you want to shop and going back to your vehicle later loaded with shopping bags.
8) Compulsive Shopping: Many times when we go out on Shopping we end up buying things which we do not require because of the shop keepers up selling skills. Sometimes we even compromise on our choices because of the lack of choices in those shops.
9) Buying Old or unused Stuff at low prices: Online Shops make it possible for us to buy old or unused stuff at rock bottom prices. If we want to buy antiques there is no better options than online stores. 9
10) Discreet Purchases: Some things are better done in privacy. Online shops are also best for discreet purchases like adult toys, sexy lingerie and so on. Online Shops enable me to purchase under garments and lingerie without the embarrassment that there are several people watching me and my choices. 1.1.3 DISADVANTAGE OF ONLINE SHOPPING
No option to read content of the books while buying books online:
While shopping and buying books online book lovers have the only option of reading the book title and the book description and viewing the front cover of the books rather flipping the pages and reading some content of the books at the physical bookstores.
Receiving Damaged books when buying books online:
While buying books online sometimes although rarely we must accept the fact that we might receive damaged books due to the poor postal services or with the unexpected conditions. Don‘t worry, with recent branded bookstores; you might expect to get replacement without needing to return the damaged copy.
Dissatisfaction in Buying Books Online: Some bibliophile‘s (Someone who loves (and usually collects) books) are likely to get the books on their hands instantly at the bookstores instead of waiting for the shipping time of books that are purchased online, the idea is getting books instantly when you pay the cash at the counter and don‘t have to wait for the delivery and at sometimes you can never know if there will be a delayed delivery by local postal system. Others :
Lack of touch and feel of merchandise, lack of personal attention from a salesman (*MWS Online Shopping Mart offers ClickCall service to talk to a sales representative which may be a necessity for online shopping), 10
Not able to try the merchandise on (especially clothing),
Lack of close quality examination (physically visiting different stores and examine the same product is assuring but costly in time),
More chances to encounter fraud (disappearance of shopping site),
More chances for mistakes in ordering the wrong item, slightly higher exposure of credit card security
Verification of credit card owner less rigorous (physically one can ask for other identifications).
1.2 SIGNIFICANCE OF THE STUDY
The purpose of this research is primarily to identify and get insight into what main
factors the online consumer takes into consideration when
purchasing books online, as books are the most commonly bought product on the Internet . Further, we will investigate if any segments can be established by identifying the consumers and how these segments relate to the identified factors. The findings of this research will be outlined as implications for online book retailers in order to enhance their consumer knowledge and increase their online marketing strategy effectiveness.
1.3 OBJECTIVES OF THE STUDY
To have an in-depth concept and study of online shopping.
To identify what main factors affect the online consumer when considering and making a purchase over the internet.
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To identify how does this factors influence the consumer when purchasing books online?
To identify what kind of segments can be found within the identified consumers when purchasing books online.
To identify the connection with the identified factors and consumer segment groups?
To find out the problem on online shopping and to suggest measures to overcome the same.
1.4 SCOPE OF THE STUDY The purpose of this research is primarily to identify and get insight into what main
factors the online consumer takes into consideration when
purchasing books online, as books are the most commonly bought product on the Internet . Further, we will investigate if any segments can be established by identifying the consumers and how these segments relate to the identified factors. The findings of this research will be outlined as implications for online book retailers in order to enhance their consumer knowledge and
increase their online marketing strategy effectiveness. This research
will also helps in obtaining up-to-date information about consumers. In order to understand the consumer the retailers need to know what influences the consumer. This research will help retailers to know the influential factor of the consumers. 1.5 LIMITATIONS
This research is limited within a single product i.e. Book.
This research is limited within a specific segment and area i.e. P.G student of Sambalpur university.
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1.6 CHAPTER OVERVIEW The dissertation will be structures according to the following: Chapter 1 – Theory This chapter will illustrate introduction part of the study with objective, scope, limitations and significance of the study. Chapter 2 – Theory This chapter presents the theories behind consumer behaviour. It will discuss online consumer behaviour in order to continue with the identification of the factors that influence consumers. The theories of consumer behaviour will also be used in order to identify consumer segments that will show whom the identified factors affect. Chapter 3 – Research Methodology This chapter will illustrate the way the research has been conducted by presenting the methodologies and theories used. Chapter 4 – Research Method used This chapter will present how we have conducted 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. Chapter 5 – Conclusion This chapter will present the conclusions that were drawn from the analysis of the research. It will also give implications for online book retailers and discuss further research possibilities.
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1.7 REFERENCES OF THE CHAPTER
www.citehr.com www.managementparadise.com www.managementstudyguide.com www.wikipedia.com www.city.blogspot.com
Kotler, P. and Armstrong, G. (2007) Principales of Marketing, (12thedition), Upper Saddle River, Prentice Hall. Ramaswamy V.S and Namakumari edition),Mcmillion India Limited
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S.(2009)Markating
Management(4th
CHAPTER-II
15
MARKETING A CONCEPTUAL FRAMEWORK This d i s s e r t a t i o n
aims
at
finding
factors
that
affect
the
online
consumer‘s buying behaviour. By reading literature concerning online marketing, online advertising,
website
design,
consumer
characteristics
and
online
consumer
characteristics we believe to find implications for certain factors that are of importance for the online consumer. 2.1 MARKETING: Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (Approved October 2007) Several definitions have been proposed for the term marketing. Each tends to emphasize different issues. Memorizing a definition is unlikely to be useful; ultimately, it makes more sense to thinking of ways to benefit from creating customer value in the most effective way, subject to ethical and other constraints that one may have. The 2006 and 2007 definitions offered by the American Marketing Association are relatively similar, with the 2007 appearing a bit more concise. Note that the definitions make several points:
A main objective of marketing is to create customer value.
Marketing usually involves an exchange between buyers and sellers or between other parties.
Marketing has an impact on the firm, its suppliers, its customers, and others affected by the firm‘s choices.
Marketing frequently involves enduring relationships between buyers, sellers, and other parties.
Processes involved include ―creating, communicating, delivering, and exchanging offerings.”
2.1.1 Delivering customer value. The central idea behind marketing is the idea that a firm or other entity will create something of value to one or more customers who, in turn, 16
are willing to pay enough (or contribute other forms of value) to make the venture worthwhile considering opportunity costs. Value can be created in a number of different ways. Some firms manufacture basic products (e.g., bricks) but provide relatively little value above that. Other firms make products whose tangible value is supplemented by services (e.g., a computer manufacturer provides a computer loaded with software and provides a warranty, technical support, and software updates). It is not necessary for a firm to physically handle a product to add value—e.g., online airline reservation systems add value by (1) compiling information about available flight connections and fares, (2) allowing the customer to buy a ticket, (3) forwarding billing information to the airline, and (4) forwarding reservation information to the customer. It should be noted that value must be examined from the point of view of the customer. Some customer segments value certain product attributes more than others. A very expensive product—relative to others in the category—may, in fact, represent great value to a particular customer segment because the benefits received are seen as even greater than the sacrifice made (usually in terms of money). Some segments have very unique and specific desires, and may value what—to some individuals—may seem a ―lower quality‖ item—very highly. 2.1.2 Some forms of customer value. The marketing process involves ways that value can be created for the customer. Form utility involves the idea that the product is made available to the consumer in some form that is more useful than any commodities that are used to create it. A customer buys a chair, for example, rather than the wood and other components used to create the chair. Thus, the customer benefits from the specialization that allows the manufacturer to more efficiently create a chair than the customer could do himself or herself. Place utility refers to the idea that a product made available to the customer at a preferred location is worth more than one at the place of manufacture. It is much more convenient for the customer to be able to buy food items in a supermarket in his or her neighbourhood than it is to pick up these from the farmer. Time utility involves the idea of having the product made available when needed by the customer. The customer may buy a turkey a few days before Thanksgiving without having to plan to have it available. Intermediaries take care of the logistics to have the turkeys—which are easily perishable and bulky to store in a freezer—available when customers demand them. Possession utility involves the idea that the consumer can go to one store and obtain a large assortment of goods from different 17
manufacturers during one shopping occasion. Supermarkets combine food and other household items from a number of different suppliers in one place. Certain ―superstores‖ such as the European hypermarkets and the Wal-Mart ―supercentres‖ combine even more items into one setting. 2.1.3The marketing vs. the selling concept. Two approaches to marketing exist. The traditional selling concept emphasizes selling existing products. The philosophy here is that if a product is not selling, more aggressive measures must be taken to sell it—e.g., cutting price, advertising more, or hiring more aggressive (and obnoxious) sales-people. When the railroads started to lose business due to the advent of more effective trucks that could deliver goods right to the customer‘s door, the railroads cut prices instead of recognizing
that
the
customers
ultimately
wanted transportation of
goods, not necessarily railroad transportation. Smith Corona, a manufacturer of typewriters, was too slow to realize that consumers wanted the ability to process documents and not typewriters per se. The marketing concept, in contrast, focuses on getting consumers what they seek, regardless of whether this entails coming up with entirely new products.
2.2 INTERNET MARKETING: Internet Marketing is the art and science of selling products and/or services over digital networks, such as the Internet and cellular phone networks. The art of online marketing involves finding the right online marketing mix of strategies that appeals to your target market and will actually translate into sales. The science of online marketing is the research and analysis that goes into both choosing the online marketing strategies to use and measuring the success of those online marketing strategies. Online marketing is becoming increasingly important to small businesses of all types. In the past, marketing online was something that local bricks-and-mortar businesses could justifiably ignore. It didn't make sense to waste time and money on online marketing when all your business was local. Now with increasing local search and people's new habit of searching on the Internet first, it matters. I would go so far as to say that all businesses should include some online marketing in their marketing mix.
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The Internet is a worldwide accessible series of computer networks that transmit data by packet switching using the standard Internet Protocol. It is a "network of networks" that consists of millions of smaller domestic, and
government
networks,
academic,
business,
which together carry various information and services,
such as electronic mail, file transfer, the interlinked Web pages and other documents of the World
Wide
Web.
Originally
the
Internet
was
mainly
used
by
academics, research scientists and students; however that scenario has changed as commercial organizations have moved to incorporate the World Wide Web into their promotional campaigns, and by offering the facility of online purchasing (Jobber & Fahy, 2003). The Internet has evolved i n t o a w o r l d w i d e a c c e s s i b l e place f o r
market
information exchange and e-commerce. The strategic importance to be
available for consumers on the World Wide Web, with information and services has become particularly relevant to firms. According to Vesterby and Chabert (2001) the Internet can make it easier for companies to have information about their products or services available to their customers or potential customers. A company can satisfy the consumers‘ individual need of information at a low cost in comparison to sending out product brochures for example. As the user can choose information from websites, which implies that the information provider can achieve better understanding of the user‘s needs and wants by collecting data. On the other hand, the Internet is a place with hardly any structure or rules: therefore, large efforts are needed in order to show the consumer where a specific site is located, and what services are available on that site. Vesterby and Chabert (2001) claim that companies with no physical presence must market themselves considerably, both online and offline, for the consumer to remember their name. Whether it is the traditional market or the online market, the marketer must understand the consumer and how he makes his decisions and purchasing choices (Hollensen, 2004), because the consumer is under a constant flow of stimuli from the marketers advertisements. The marketer has the possibility to decide and to control the output that will be forwarded to the consumers, but when the advertisement reaches the consumer
that
control
ends. The
interprets
the
information that has been sent out in his own way based on specific factors
for
19
consumer
then
every consumer. Therefore marketers have developed different theories that can explain why consumers interpret information in a certain way, and thereby understand certain behaviours (Kotler & Armstrong, 2007). Several articles have set out to identify the characteristics of the online consumer. Allred, Smith and Swinyard (2006) identify the online consumer to have the following characteristics: younger, wealthier, better educated, having a higher ―computer literacy‖ and are bigger retail spenders. Donuthou and Garicia (1999) identify the online consumer as: older, make more money, convenience seeker, innovative, impulsive, variety seeker, less risk aware, less brand and price conscious, and with a more positive attitude towards advertising and direct marketing. Some of these characteristics are similar, while others are the opposite. Trying to identify the online consumer is difficult since the rapid development of e-commerce has also led to an increase of both technologies and different types of consumers. It is also known that the type of product has a significant influence on the online consumer behaviour
which
makes
it
more
difficult
to
identify
consumer characteristics (Christopher & Huarng, 2003). There are still some characteristics that can be identified to specify the online consumer and the following text will try to do so. 2.2.1TYPES OF INTERNET MARKETING Internet Marketing is also called online Marketing, Website Marketing-marketing or online marketing. It is the process of marketing of products or services through the internet. There are various ways of Internet marketing which are mentioned below: • Pay per Click In this type of marketing, advertisers pay to the search engines for click on their ads. When anyone clicks on the ad given by advertiser, then only one has to pay for his advertisement. Higher is ones bid will results the more chance of appearing ones ad on the first page.
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• Marketing with Affiliates In this kind of marketing a company hires other companies or websites which are called Affiliates. They ensure the responsibility of marketing of the product or services on behalf of the company. Affiliates are paid commission for their work. They may use banner or logos for advertising the product of the company for which they host advertisement. When the visitors click on the banner or logo, they are connected to the sponsor‘s site for which they are paid a commission. • Search Engine Optimization One of the ways to increase traffic through internet marketing is Search Engine Optimization (SEO).When visitors types keywords in search engines related to ones product, he would be shown the list of various sites related to that product.SEO maintains ones site to locate on the first page of the most search engines which can attract more traffic to ones site. More traffic means more conversion of sales which can give good Return on Investment (ROI) and lead to increase in ones profit. SEO is the best option to increase traffic of your website. It is even profitable in the long run. • Advertising through Banner In this kind of marketing, advertiser purchases banner to get displayed on his website. Banners are purchased to be displayed on the website for a certain period of time and advertiser pays money for the same. Usually, banner marketing is used to divert potential traffic to the site. Again the result of the banner marketing depends on the website where it has been displayed. It may not attract prospective customer to view it. • Auction through Internet This is a type of marketing where one can put keep his product through online auction. Auction takes place in the real world in which various types of items are kept for selling. Seller fixes minimum price of the item. Buyers that are interested can bid for the item and can raise their prices also. Bidder with the highest price will receive that product. Buyers from any part of the world can participate in Online Auction.
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• Public Relations through Internet One can maintain professional public relations through internet .One can promote his product on sites like Facebook and twitter where one can manage his account professionally with their business associates. Public Relations through internet allow one to go beyond the limit of geographical boundaries. Moreover one gets an opportunity to make its link visible internationally also. • Listing on Directories This is type on internet marketing where one can place his site on Hellometro.com or Citysearch.com which act as Yellow Pages on the internet. As it is done online, it is cheaper than the other ways of internet marketing and so small-scale enterprise can also afford for it. So Internet Marketing provides the seller with vast opportunities which they have never thought off before. Whatever one‘s Internet Marketing strategy may be but one should be sure of making enough sales which can cover costs done on Ads and generate profit too.
2.2.2 USE OF INTERNET MARKETING TO IMPROVE SALE:
Any and every business in today‘s world needs to promote itself and reach out to clients. Internet can be used as a medium for reaching clients and making them aware about your services. There are various ways of using internet for your benefit.
Starting step in making a marketing plan for the internet is to survey which type of audience visits what sites. Which are the sites where your target clients visit very frequently? Search engine, a site which provides search results in writing keywords, is normally starting point for surfers. Tying up with such search engines so that they have your link on top when someone puts keywords can be a good beginning.
22
The process of deciding on key words in such a way that your target audience reaches your site is called search engine optimization. You should decide on keywords very diligently so that only interested people are diverted to your site. It has to be noted that charges of search engines like Google can be high and hence you need to make full use of budget by designing or selecting key words properly. One more way of marketing your site/product is through networking sites. There are various sites which have huge numbers of people visiting them regularly. One fine aspect about these sites is visitors are most of them are young consumers and spent much time on the site. These sites also have very high involvement levels. Keeping these things in mind, an effective campaign can be built by targeting your clients. If you have identified your clients then reaching them is not very difficult with networking sites as age, geographic location, sex, interests and education is specified by the users.
Advertising on popular sites is also an option for businesses. Many regularly visited sites are that of news, sports and entertainment. They do have advertisements on their pages. With surfers spending much time reading articles or gathering information chances are that banners put there have good visibility. Sites to be selected for putting banner has to done based on the type of site and type of visitors. Synchronizing both your product and viewers makes a great impact.
Bulk e-mailers are also used by marketing firms. This is one of the cheapest forms of reaching clients, but response and target audience cannot be predicted in this way. A link guiding the reader to your home page is mailed to as many people one can. Subject line and body has to be catchy so that the mails are being read. Subject mentioned needs to be changes from time to time and has to be unique so that mail gets dropped in the main box rather than spam box.
The final and most important step in strategy is designing your site. With all above methods we are getting prospects to our site, hence site development becomes vital. 23
Information and product details have to be there on display; navigation from one section to other has to be smooth. Making site crisp and to the requirement of the client is always welcome. For businesses having only online model site has to have very sound gateway.
With all these steps more and more clients can be tapped for our business. It is necessary to hire an efficient team of internet marketing, Seo professionals and PPC professionals, which can help you to promote your website in a right way. Seo Experts are those who promote your website on organic listings and generate traffic. While PPC experts are those who manage the paid advertising campaign on your behalf and generate quick sales. 2.3 ONLINE ADVERTISING: Online advertising is a form of promotion that uses the Internet and World Wide Web to deliver marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, online
ads, blogs, rich
classified
media
Ads, social
advertising, advertising
network
advertising, interstitial
networks and e-mail
marketing,
including e-mail spam. Many of these types of ads are delivered by an ad server.
The internet has become an ongoing emerging source that tends to expand more and more. The growth of this particular medium attracts the attention of advertisers as a more productive source to bring in consumers. A clear advantage consumers have with online advertisement is the control they have over the product, choosing whether to check it out or not. Online advertisements may also offer various forms of animation. In its most common use, the term "online advertising" comprises all sorts of banner, e-mail, in-game, and keyword advertising, including on platforms such as Facebook, Twitter, and MySpace. Web-related advertising has a variety of ways to publicize and reach a niche audience to focus its attention to a specific group. Research has proven that online advertising has given results and is a growing business revenue 24
2.3.1 Types: Though, as seen above, the large majority of online advertising has a cost that is brought about by usage or interaction of an ad, there are a few other methods of advertising online that only require a onetime payment. The Million Dollar Homepage is a very successful example of this. Visitors were able to pay $1 per pixel of advertising space and their advert would remain on the homepage for as long as the website exists with no extra costs.
Floating ad: An ad which moves across the user's screen or floats above the content.
Expanding ad: An ad which changes size and which may alter the contents of the webpage.
Polite ad: A method by which a large ad will be downloaded in smaller pieces to minimize the disruption of the content being viewed
Wallpaper ad: An ad which changes the background of the page being viewed.
Trick banner: A banner ad that looks like a dialog box with buttons. It simulates an error message or an alert.
Pop-up: A new window which opens in front of the current one, displaying an advertisement, or entire webpage.
Pop-under: Similar to a Pop-Up except that the window is loaded or sent behind the current window so that the user does not see it until they close one or more active windows.
Video ad: similar to a banner ad, except that instead of a static or animated image, actual moving video clips are displayed. This is the kind of advertising most prominent in television, and many advertisers will use the same clips for both television and online advertising.
Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such as on Google Maps.
Mobile ad: an SMS text or multi-media message sent to a cell phone.
Superstitial: An animated adv on a Web page from Enliven Marketing Technologies. It uses video, 3D content or Flash to provide a TV-like advertisement. Used to be known as Unicast Transitional ads as they were originally made by Unicast
25
Communications but the company was acquired by Viewpoint Corporation in 2004, which then changed its name to Enliven in 2008.
Interstitial ad: a full-page ad that appears before a user reaches their original destination.
In addition, ads containing streaming video or streaming audio are becoming very popular with advertisers. E-mail advertising Legitimate Email advertising or E-mail marketing is often known as "opt-in e-mail advertising" or permission marketing to distinguish it from spam.
Display advertising
Display advertising appears on web pages in many forms, including web banners. These banners can consist of static or animated images, as well as interactive media that may include audio and video elements. Display advertising on the Internet is widely used for branding. This is why metrics like interaction time are becoming more relevant. This may change in the future as display advertising is becoming much more targeted to users, much like how search engine ads can be extremely relevant to users based on what they are searching for. Display advertisers use cookie and browser history to determine demographics and interests of users and target appropriate ads to those browsers. Banner ad standards have changed over the years to larger sizes, in part due to increased resolution of standard monitors and browsers, in part to provide advertisers with more impact for their investment. The standards continue to evolve. Banner ads can be targeted to internet users in many different ways in order to reach the advertiser's most relevant audience. Behavioural retargeting, demographic targeting, geographic targeting, and site based targeting are all common ways in which advertisers choose to target their banner ads.
26
Affiliate marketing Affiliate marketing is a form of online advertising where advertisers place campaigns with a potentially large number of small (and large) publishers, who are only paid media fees when traffic to the advertiser is garnered, and usually upon a specific measurable campaign result (a form, a sale, a sign-up, etc.). Today, this is usually accomplished through contracting with an affiliate network. Affiliate marketing was an invention by CDNow.com in 1994 and was excelled by Amazon.com when it launched its Affiliate Program, called Associate Program in 1996. The online retailer used its program to generate low cost brand exposure and provided at the same time small websites a way to earn some supplemental income.
Behavioural targeting In addition to contextual targeting, online advertising can be targeted based on a user's online behaviour. This practice is known as behavioural targeting. For example, if a user is known to have recently visited a number of automotive shopping / comparison sites based on click stream analysis enabled by cookies stored on the user's computer, that user can then be served auto-related ads when they visit other, non-automotive sites.
2.4 CHALLENGES IN RUNNING WEB SITES There are a number of problems in running and developing web sites. First of all, the desired domain name may not be available—e.g., American Airlines could not get ―American.com‖ and had to settle for ―AmericanAir.com.‖ There is also a question having your site identified to potential users. Research has found that most search engines have a great deal of ―false hits‖ (sites irrelevant that are identified in a search— e.g., information about computer languages when the user searches for foreign language instruction) and ―misses‖ (sites that would have been relevant but are not identified). It is crucial for a firm to have its site indexed favourably in major search engines such as Yahoo, AOLFind, and Google. However, there is often a constant struggle between web site operators and the search engines to outguess each other, with the web promoters trying to ―spam‖ the search engines with repeated usage of terms and ―meta tags.‖ The fact that many computer users employ different web 27
browsers raises questions about compatibility. A major problem is that many of the more recent, fancier web sites rely on ―java script‖ to provide animation and various other impressive features. These animations have proven very unreliable. Sites may ―crash‖ on the user or prove unreliable, and many consumers have found themselves unable to complete their transactions. ISSUES IN WEB SITE DESIGN Web site design: The web designer must make various issues into consideration: Speed vs. aesthetics: As we saw, some of the fancier sites have serious problems functioning practically. Consumers may be impressed by a fancy site, or may lack confidence in a firm that offers a simple one. Yet, fancier sites with extensive graphics take time to download—particularly for users dialling in with a modem as opposed to being ―hard‖ wired—and may result in site crashes. Keeping users on the site: A large number of ―baskets‖ are abandoned online as consumers fail to complete the ―check-out‖ process for the products they have selected. One problem here is that many consumers are drawn away from a site and then are unlikely to come back. A large number of links may be desirable to consumers, but they tend to draw people away. Taking banner advertisers on your site from other sites may be profitable, but it may result in customers lost. Information collection: An increasing number of consumers resist collection of information about them, and a number of consumers have set up their browsers to disallow ―cookies,‖ files that contain information about their computers and shopping habits. Cyber-consumer behaviour: In principle, it is fairly easy to search and compare online, and it was feared that this might wipe out all margins online. More recent research suggests that consumers in fact do not tend to search very intently and that large price differences between sites persist. We saw above the problem of keeping consumers from prematurely departing from one‘s site. Site content. The content of a site should generally be based on the purposes of operating a site. For most sites, however, having a clear purpose be evident is essential. The site should generally provide some evidence for this position. For 28
example, if the site claims a large selection, the vast choices offered should be evident. Sites that claim convenience should make this evident. A main purpose of the Internet is to make information readily available, and the site should be designed so that finding the needed information among all the content of the site is as easy as possible. Since it is easy for consumers to move to other sites, the site should be made interesting. To provide the information and options desired by customers, two-way interaction capabilities are essential. 2.5 CONSUMER BEHAVIOUR- AN OVERVIEW Donal Rogan (2007) explains the relationship between consumer behaviour and marketing strategy. He states that ―strategy is about increasing the probability and frequency of buyer behaviour. Requirements for succeeding in doing this are to know the customer and understand the consumer‘s needs and wants.‖ Chisnall
(1995)
points
out
that
human
needs
and
motives
are
inextricably linked and that the relationship between them is so very close that it becomes difficult to identify the precise difference which may characterize them. People may buy new coats because it protects them against the weather, but their real underlying dominant need may be to follow the latest fashion trend. Buyers‘ characteristics are important theories from Kotler and Armstrong (2007) and it explains the way that the consumer interprets and receives stimuli from advertisements. The decisions of consumers are influenced by a number of individual characteristics that are linked to the consumer‘s specific needs (Kotler & Armstrong, 2007). 2.6 CONSUMER CHARECTERISTICS Consumer characteristics are explained by: Cultural characteristics, Social characteristics, Personal characteristics, and Psychological Characteristics. These characteristics are identified, by the marketer, in order to identify the consumer and to be able to decide on the strategy to what kind of consumer to target. Hence, these characteristics are used in order to segment the market and target specific consumer groups.
29
Cultural Characteristics The Cultural Characteristics are recognized as the main influencer of consumer behaviour. These characteristics are developed by three features underpinning consumer behaviour: Culture, Subculture, and Social Class. Culture is mentioned as the most basic cause of a person‘s wants and needs. Kotler and Armstrong (2007) argues that human behaviour is mostly learned and that we are exposed to different sets of values and beliefs from a young age, and that these values influence our behaviour and
decision
making.
Hence,
these
characteristics are interesting for marketers and important indicators of certain consumer behaviour and taste. Subcultures are small group formations with a certain number of people that share values and beliefs such as nationalities, religions or geographic regions. An identified subculture can serve as an important and effective market segment which can be targeted. Social class is recognized by Kotler and Armstrong (2007) as a class structure, consisting of a combination of factors which gather different types of members. Some identified factors are income, age, education, and wealth. Social characteristics The Social Characteristics are divided into three different categories, namely Reference Groups, Family and Social Role and Status.
Reference Groups – According to Kotler and Armstrong (2007) the effects of the Reference Groups is mainly based on the belief that a person‘s behaviour is influenced by many small groups. When a group has a direct influence it is called a Membership Group, for example: family, neighbours and co-workers. Reference Groups are the groups to which the person often wants to belong to and to be a part of 30
but is not. These groups indirectly and directly form a person‘s behaviour and attitudes. There are three different ways by which these groups influence a person‘s behaviour; they may expose a person to new behaviours and lifestyles, influence a person‘s attitudes and self- concepts and also create a pressure of confirmation by Reference Groups. Another influence of importance is the opinion leader. An opinion leader is a person that influences others to follow his believes and attitudes towards certain issues, products or areas (Kotler & Armstrong, 2007). Family
–
Family
members
have
a
great
influence
on
the
buying
behaviour. The involvement and influence by different family members varies, both to which degree but also in what way. Therefore, it is important for marketers to understand which role is played by whom in the family and direct the advertisement towards the main influencing part of the family. Roles and Status – Each person belongs to different types of groups and also plays different roles whilst having different positions in the various groups. Roles are identified by Kotler and Armstrong (2007) as what activities people are expected to perform from other members of the group. Personal characteristics These personal characteristics are categorized into: Age and Life-Cycle Stage, Occupation, Economic Situation, Lifestyle, Personality and Self- Concept. The Age and Life-Cycle Stage – These stages explain different periods in life that the consumer experiences as he goes through life. These different stages also represent different changes that the consumer may experience when reaching a new stage. According t o Kotler and Armstrong (2007) marketers, therefore, define their target markets in terms of the different stages in order to develop appropriate marketing plans. Occupation – The occupation tends to have an effect on the products and services bought by the consumers. This leads to the possibility of developing different types of products or services that suits interests identified to be above average within an occupation. 31
The Economic Situation – Wealth will affect a consumer‘s product choice. A consumer may be price-sensitive or not depending on the level of income, level of savings, level of interest rates, and also the product or service itself. Lifestyle – This is identified to be a person‘s way of living which is recognized by the activities, interest, or opinions he or she has and it also explains the way a consumer interacts in the world. Personality – dominance,
This is mainly explained by the terms self-confidence,
sociability,
autonomy,
defensiveness,
adaptability
and
aggressiveness. These psychological factors are a result of one‘s environment. Personality can be defined as a dynamic and organized set of characteristics possessed by a person that uniquely influences his or her cognitions, motivations, and behaviours in various situations (Ryckman, 2004). Self-concept or Self Image – Is the conceptual understanding that people‘s possessions reflect their personalities. This concept does bring some conflict since people may have an image that satisfies who they are but does not agree with who they want to be (the ideal self concept), the question then arises which one we would want to satisfy. Psychological Characteristics The psychological characteristics are divided into the
following concepts:
Motivation, Perception, Learning, and Beliefs and Attitudes. Motivation – Motivation refers to a person needs that must be satisfied. These needs are of different kind; some are biological, such as hunger, thirst and discomfort, and some are psychological such as the need for recognition, esteem and belonging. Needs are not satisfied until they reach a certain point of intensity and become a motive for the consumer to satisfy them. Kotler and Armstrong (2007) discusses several motivation theories, among them are Freud‘s and Maslow‘s theories of motivation. Freud argued that a person does not really and fully understand his or her motivations. Maslow on the other hand wanted to understand why some people set out to satisfy some needs before others. 32
He then came to the conclusion that human needs are arranged in a hierarchy from
the most pressing to the least pressing, as Kotler and Armstrong (2007)
explains it. These needs are listed as psychological needs, safety needs, social needs,
esteem needs, and self-actualization needs. When one need has been
satisfied, a person moves on to satisfy the next. Perception – This characteristic is based on the understanding of how differently we perceive the same situation or the same stimuli. Kotler and Armstrong (2007) explains perception as the process by which people select, organize, and interpret
information.
interpret
certain
There are th ree different processes that decide how we
information. These a r e
Selective
Attention,
Selective
Distortion, and Selective Retention. Learning – Learning is, according to Kotler and Armstrong (2007), an act that changes people‘s behaviour because of their experience. It occurs through drives: strong internal wants that call for action, stimuli: object that drives for certain action, cues: small stimuli that determinate when, where and how the person will respond and reinforcement: when the response and stimuli towards an object is experienced more than once. Beliefs and Attitudes – These are acquired by people through learning and experiencing. They influence the buying behaviour by making up brands
and
product images in the consumer‘s heads. A belief is explained by Kotler and Armstrong (2007) as a descriptive thought about something and is based on real knowledge, opinions or faith. Beliefs can also be emotionally charged. Attitudes are described as a person‘s evaluations, feelings, and tendencies towards something, but also determinations of people such as like and dislikes. Online Consumer Characteristics More specific identifications of the online consumer need to be made in order to understand the online purchase behaviour. The identified characteristics are some key characteristics in regard to the online consumer. These key
characteristics were made in order to identify online
consumers and to be able to segment them.
33
Cultural Online Characteristics Smith and Rupp (2003) identify that the difference in social class creates a difference in purchasing Online Behaviour. Consumers from a higher social class generally purchase more and have a higher intention to purchase online because there is a higher probability that they possess a computer and also have greater access to the Internet. Consumers from lower social classes would not have
the
same properties. The authors also point out that consumers with lower
social class, and thereby not having the same properties, would not have the needed computer literacy to be able to leverage a computer. Social Online characteristics The social influence on the online consumer comes from new Reference Groups compared to the traditional way. For the online consumer new Reference Groups were identified as virtual communities, consisting of discussion groups on a web site. The consumer can read about other people‘s experiences and opinions which have shown to have the effect of Reference Groups (Christopher & Huarng, 2003). Other Reference Groups, which are identified by Christopher and Huarng (2003), are links to product related web sites, which encourages product selection and contact information. Personal Online characteristics Monsuwé, Dellaert and Ruyter (2004) explored the personal online consumer characteristics and concluded that income has a vital role for online purchasing behaviour. The authors discussed Lohse et al. (2000) who pointed out that consumers with higher household income would have a more positive attitude towards online shopping. This conclusion was explained by the fact that households with higher income would have a positive correlation with the possession of a computer, Internet access, and higher education. Smith and Rupp (2003) also identified the age factor as a determinant for online purchase intentions. They argued that older people who had no frequent interactions with the Internet and the computer would not use the Internet as a medium for 34
purchases, while young adults would. This was concluded by that the young adults used the Internet and computers more frequently. Younger people were also identified to have more technical knowledge. Monsuwé et al. (2004) also supported this judgement by concluding that younger adults usually have greater interest in using new technologies to browse for information and evaluate alternatives. Psychological Online Characteristics Smith and Rupp (2003) identified the psychological characteristics of consumer behaviour as questions the online consumer would ask himself before making a purchase online. Motivation – The consumers is reasoning for incentives to engage in a particular behaviour. He may ask himself questions like: should I look around for better price? If online shopping saves me time, should I shop online more often? How much do I really need this product? Perception – The consumer is interpreting acquired information by classing it. Questions such as the following may come about: I feel that this site seems pretty secure. It seems that this site has a good product but how can I be sure? Personality – The consumer is adapting to influences of his cognitions. He may ask
himself, what types of Web sites are best suited for his personal buying
preferences. Attitude – The consumer is working out what his likes and dislikes are in respect to a particular situation. He may ask himself: I am pretty unsure about extra costs, should I really be buying items from the Internet? If I do not buy the item online, how else can I get it? Emotions – The consumer is without conscious effort detecting how he is being affected by his cognitive choice. He may ask himself: The last time I ordered from the Internet I had a really bad experience. Should I try buying online again? What is the future of buying online? If Web sites get better should I invest more time in buying online?
35
2.7 REFERENCES OF THE CHAPTER
www.citehr.com www.managementparadise.com www.managementstudyguide.com www.wikipedia.com www.Googlebooks.com www.ezinearticles.com
Kotler, P. and Armstrong, G. (2007) Principales of Marketing, (12thedition), Upper Saddle River, Prentice Hall. Kotler, P. and Keller, L. K. (2006), Markating Management, (12th edition), Upper Saddle River, Prentice Hall.
36
CHAPTER-III
37
RESEARCH METHODOLOGY In simple words, research means a search for knowledge. Research means a critical inquiry or examination in seeking facts of principle, diligent investigation in order to ascertain something. But research methodology is a way to systematically solve the research problem. It may be understood as a science of studying how research is done scientifically. Methodology is very important for investigation and without it, we can‘t draw a true picture of the study we designed for. Hence, for the imperial study of methodology has gained its important and adoption of proper methods which leads towards the success of
investigation. The proper methodology leads towards drawing valid and logical
inference. If methodology is wrong, whole system will get failure. Therefore, the researcher intends to present a brief picture of methodology, which is adopted for the purpose of the study of ―Behaviour of P.G students towards online Book shopping‖ 3.1 RESEARCH APPROACH There are two most commonly used research approaches, the inductive and the deductive method. The inductive research method attempts to set up a theory by using collected data, while the deductive research approach attempts to find the theory first and then test it to the observed data. The researcher has chosen a deductive research approach for study as the researcher would move from the more general to the specific.
3.2 RESEARCH PHYLOSOPHY When starting a study there must be an understanding of in which way the study will be approached.
The established research philosophy explains this
approach when collecting and analyzing data. The research process has three main focuses: positivism, realism, and interpretivism .
Positivism is the approach where the researcher does not want to be affected by nor affect the subject of the research. The researcher believes that the 38
collected and analyzed data can be simplified to a law- like generalization using existing theories to develop hypotheses from these. In the realistic approach, there is a reality existing independent of the mind. Like the positivistic approach it assumes a scientific approach to the development of knowledge. The interpretive way of approaching the subject of the research does not agree with the fact that law-like generalizations can be made. Instead it stress that the human mind and the social world are too complex in order to be generalized. This research will be conducted with a positivistic approach, since we will try to affect and interfere with the collected data as little as possible.
3.3 CHOICE OF METHEDOLOGY Researcher will attempt to find the main factors that influence the online consumer
when making an online purchase. In order to broaden his own
understanding of the subject the researcher conducted his initial research in literature on consumer behaviour and e-commerce. The researcher reviewed studies that had similar aims and paid particular attention to their results. For research work researcher decided that the most appropriate approach would be a questionnaire that would be filled out by students at Sambalpur University. To encourage the students not to reject the questionnaire outright, and to increase the response rate, the questionnaire should be limited to maximum of three sheet of A4 paper. This study started out as an exploratory study but developed into an explanatory study since researcher start out with first gaining knowledge about consumer behaviour consumer
behaviour.
to
further
Having
being
this
able
knowledge
specific factors that are of importance
to
gain
knowledge
researcher
about online
continue
to identify
when the online consumer is making
online purchases. This information is then used in order to find relationships and correlations between these variables.
39
3.4 RESEARCH DESIGN The present study represents an explanatory cum descriptive research design. a humble been made here to go in deep into the topic under research proper precautions have been taken during the fieldwork for collection of actual and authentic information relevant to the study. With a close observation helped in collecting the authentic data during the field work in Sambalpur University. 3.5 DATA COLLECTION 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 researcher 3.6 RESEARCH TOOLS AND TECHNIQUES The quantitative data were collected with the help of structured questionnaire. Data were collected through direct observation under natural settings. The questionnaires contains the questions like demographic information, use of internet, time spent online ,Book purchasing behaviour , past experience, future experience, use of online websites etc. 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 researcher.
40
3.6.1 PRIMARY DATA Primary data for our research was collected through questionnaires. When collecting p r i m a r y data
one
can
choose
to
do
interviews, observations,
experiments, and questionnaires. Due to the purpose of our research, only the questionnaire method would be able to approach the topic and be able to collect the answers in a satisfactory manner. In our research the primary data is mainly concerned with analyzing the respondent in order to later on classify the respondent. Further on, the primary data will be used to analyze the factors and how these are related to the respondent. The primary data is conducted in a manner to be able to approach our research and solve our research questions. 3.6.2 SECONDARY DATA Secondary data can be classified into three different subgroups: documentary, multiple source, and survey. Documentary second hand data comes in both written and non written form. It is the data that can be collected from sources such as journals, databases, i n t e rn e t etc. This form of data is dependent on the a ccess the researcher has to it. Survey based secondary data is the data that is collected through the survey and is available as data table forms. Multiple source secondary data is data that has been compiled into documentary or survey form; the main characteristics of this type of data is that it has been changed into a different form before the researcher is assessing the data . Researcher have mainly used documentary secondary data combined with multiple source data. Documentary secondary data has been
collected through
different types of research conducted within the topic, articles, and books that are written
on
consumer
behaviour
and
e- commerce. The secondary data that
researcher used for research is data that has also lead to the conclusion of which factors that will be examined. The multiple source data that researcher have used has been in order to choose which product researcher would use for our research in order to be able to find the product that is most widely bought over the Internet.
41
3.7 REFERENCES OF THE CHAPTER
www.citehr.com www.managementparadise.com www.managementstudyguide.com www.larsperner.com
Kothari C.R(2009) Research Methodology : Methods and Techniques, edition),New age International limited
42
(2nd
CHAPTER-IV
43
RESEARCH METHODS USED In this chapter we will present how we will conduct our research in order to collect primary
data
and
reach
the
objective
of
the dissertation. We wi l l
also be
discussing which different types of methodologies that were used.
Since this study is of deductive character our primary intention was to collect secondary data and analyse 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
Behaviour
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 Behaviour 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.
4.1 SEGMENT
A segment
is
a
subgroup
of
people
that
share
the
one
or
more
characteristics and these segments have similarities such as that they share behavioural features or have similar needs. These similarities make a specific segment homogenous in their needs and attitudes. Different types of variables can be used in order to segment a market and one of the requirements was that it needed to be measurable. We will be using the identified Consumer Traits and Online Behaviour variables to segment the online consumers at the Sambalpur University .
The three segments that were found show a significant difference in the primary factor of concern. The general distribution showed that the factor Price was the 44
primary factor for the entire population sample, and that the second factor was Trust which was closely followed by Convenience. 4.2 SAMPLE
The
factors
that
we
intended
to
examine
can
be
applied
to
and
investigated at any population that uses the Internet and buys books online. Since there are time and resource restraints, a specific population had to be identified in order to generalize and create relevant segments. For this study 100 numbers of students of different department of the Sambalpur university were chosen. The whole population of this university could have been used, but due to time limit for the research, it would not have been possible to survey a larger research population.
4.3 NON PROBABILITY, CONVIENIENCE SAMPLING The population for this research are university students at the Sambalpur University The university was chosen on a convenience basis.
Convenience sampling involves using samples that are the easiest to obtain and is continued until the sampling size that is need is reached. The bias with the convenience sampling is that it is hard to generalize to the wanted population. 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 students took also place on a convenience
basis
since
the
method students
for that
agree to answer the questionnaire are those that were chosen.
4.4 THE QUESTIONNAIRE In order to create the questionnaire we started out by deciding on the main variables that needed to be investigated. These were: Demographics, Online Book Shopping Patterns, Attitude towards Online Shopping, Social Characteristics, Reference Groups, and the identified factors Price, Trust, and 45
Convenience. Delivery and collection questionnaire method were used. This method was mainly used because of the limitations in time and available resources. The delivery and collection questionnaire was handed out to classes at the Sambalpur university This was done in order to ensure that a valid number of respondents were collected so that analysis could be made and conclusions drawn. This method was conducted at the Sambalpur University
because
it
is
the
University
we
are
attending and the convenience factor had a great implication towards this choice. Different types of questions were set in order to be able to collect the information that was needed concerning the different topics. The examined variables were of different types. They we re opinions, behaviour, and attributes. Opinions are used to understand how a respondent feels about something, behaviour attributes are used to record what the respondent does, and attributes shows what the respondent possesses . In order to collect the correct data, we needed to ask questions with suited alternatives that were adjusted to the type of the variable that needed to be examined. 4.5 RESEARCH ANALYSIS 4.5.1 Gender Distribution according to variable:-gender Sex
Frequency
Male 45 Female 55 Total 100
Percent 45 55 100.0
CumulativePercent 45 100.0
The distribution of male and female respondents shows a majority of female respondents (55%), compared to the male respondents (45%). An explanation for this distribution might be that there is a majority of female students at Sambalpur University, and also that the female respondents might have been more willing to answer the questionnaire.
46
Distribution of students according to gender in different department (are using online book shopping) Department
number of boys
number of girls
total
1.MBA
9
7
16
2.MCA
7
8
15
3.CHEMESTRY
7
6
13
4.ENGLISH
6
7
13
5.METHEMATICS
4
6
10
6.L.L.M
5
7
12
7.ECONOMICS
2
4
6
8.EARTH SCIENCE
1
3
4
9.PHYSICS
1
1
2
10. LIFE-SCIENCE
1
2
3
11.ENVIRONTAL
1
1
2
12.OTHERS
2
3
5
TOTAL
45
55
100
The distribution shows that major students of MBA(boys-9,girls-7) & MCA (boys-7,girls8)department are using online book shopping (31%). The second major groups are in chemistry
and
English
department
(26%).The
third
major
group
Include
mathematics(boys-4,girls-6) & L.L.M(boys-5,girls-7). 4.5.2Age Age was included to find out if there is a significant relationship to what impact the factors price, trust, and convenience have on different age groups. Age is a demographic value that can also be used in order to further explain and elaborate on some of the other questions that were used to find segments among the respondents.
The respondents were asked to write how old they were, instead of
47
setting up different age groups to choose form. In this way we were able to get the exact age and thereby set up different age groups according to the distribution.
Distribution according to the variable:-Age Years
Frequency
21 - 24 25 - 28 29 - 32 33 - 36 37 - 40 41 ≤ Total
52 23 8 9 5 3 100
Percentage
52 23 8 9 5 3 100.0
Cumulative Percentage
52 75 83 92 97 100.0
Since we conducted our research on students the first two age groups,20 - 24 and 25 – 28, held the majority of the respondents, 52% and respectively 23%. This can also be explained by that the classes that we had investigated had a majority number of younger students. If there would have had been a person that had completed the questionnaire at some other time, he/she would then be asked not to fill it out again, however, this scenario never occurred.
4.5.3 Website popularity This question is used in order to know which web sites are most popular among the respondent and why.
Name of website
No. Of respondents using
% cumulative frequency
www.HomeShop18.com
30
30
30
www.flifkart.com
18
18
48
www.snapdeal.com
12
12
60
48
www.infibeam.com
10
10
70
www.onlinebooks.com
8
8
78
www.myntraa.com
8
8
86
www.indiaplaza.com
6
6
92
Others
8
8
100
Total
100
100
Here researcher found that most of the students are using www.HomeShop18.com (30%), www.flifkart.com (18%) ,www.snapdeal.com (12%) about 60% of the total respondents. Because these website better service like free shipping, less price, special offers, quick delivery time , availability of books stocks. www.infibeam.com is also a popular website. About respondents
are
10% of total respondents are using this website.30% of
using
other
website
including
www.onlinebooks.com
,www.myntraa.com ,and www.indiaplaza.com .
4.5.4 Types of books Distribution according to types of book purchase online Type of Books
frequency
percentage
cumulative percentage
1.Text book
25
25
25
2.Reference book
30
30
55
3.Novel
10
10
65
4.Magazine
10
10
75
49
5.Article
10
10
85
6.Others
15
15
100
100
100
Total
This distribution shows that about 55% of the respondent are purchasing text book and Reference group.10% of the respondent are purchasing novel.35% of the respondent are purchasing other books. 4.5.5 Prior experience This question was used in order to see what attitude the respondent had about shopping online. The measured attitude was mainly derived through questions about the respondent‘s prior experiences. This usually also affects the attitude
towards
performing an action, in this case the action was to shop books online. The question was, therefore, designed to let the respondent rate their prior experience for shopping books online. Further
on, we made sure by asking the respondents beforehand
whether they had been shopping for books online before. If they had not they were excluded from the survey.
Distribution according to the variable” Previous experience with online book purchases‖ Experience Frequency Percentage Cumulative percentage 1(very bad )
3
3
3
2
2
2
5
3
4
4
9
4(Neither)
16
16
25
5
15
15
40
6
28
28
68
7(Very good )
32
32
100
Total
100
100 50
Overall the respondents showed a good to very good prior experience with purchasing books online.
The number of respondents with a very good
attitude
towards online shopping is high and the distributed attitude declines as less respondents think of it as a bad experience. Rating number four on the scale is considered as neither a good nor bad experience. A the majority of respondents, overall 91% do consider their prior experience with online book purchasing as good.
4.5.6 Future expectation This question is a part of analyzing the respondents‘ attitude towards online book purchases.
Future
expectations
are
highly
dependent
on respondents‘ prior
experiences j j of online book purchases; this will be further discussed in the analysis of the results. Distribution according to the variable “Future expectations of online book purchases” Experience
Frequency
Percentage
Cumulative percentage
1(very bad)
4
4
4
2
5
5
9
3
9
9
18
4(neither)
8
8
26
5
14
14
40
6
25
25
65
7 (very good)
35
35
100
100
100
Total
As with
prior
experiences
the
respondents
have
a
highly
positive attitude
towards future online book purchases. The majority (82%), of the respondents have 51
rated future expectations with online book purchases to be positive or neither good nor bad. Not considering the neutral respondents, an overall 74% of the respondents had positive expectations.
4.5.7 Time spent online This question is used in order to investigate how much time the respondent spends online. The respondent that spends more time online has
a
higher
experience with the Internet which according to the literature is a reason to buy more online. Hence, this question is closely related to the
respondents
shopping
patterns.
Distribution according to the variable “Time spent online”
Time spend online frequency
percentage cumulative frequency
<30 min
10
10
10
1-2hr
46
46
56
2-3hr
28
28
84
3-4hr
9
9
93
>4hr
7
7
Total
100
100
100
The distribution shows that the majority of the respondents spend somewhere between 1 to 2 hours online each day. The two second major groups are respondents that spend less than 30 min. and respondents that spend 3 to 4hr online each day, 10% and 9% respectively. These results will be used in order to find what differs between these respondents and which of the factors price, trust and convenience has the largest amount of impact. 52
4.5.8 Price “Distribution according to The overall attitude towards price”
Price
Frequency Percentage Cumulative percentage
1(Negative)
0
0
0
2
0
0
0
3
2
2
2
4 (Neither)
12
12
14
5
13
13
27
6
42
42
69
7 (Po si t ve)
31
31
100
100
100
To tal
The overall results show that the general attitude is positive and that the respondents are somewhat price sensitive and make their book purchase online as they believe that they will be saving money by doing so. The results are presented on a seven-point scale where 1 to 2 were left completely blank by all respondents and 2% had a slightly negative attitude and are not considered to being price sensitive. Almost 12%, responded they had neither a positive or negative attitude. This can be considered as having a neutral attitude towards price. The majority of the respondents (86%) can be found between 5 and 7 and as a consequence having a positive attitude towards price, therefore, are being considered as price sensitive.
53
4.5.9Trust
“Distribution according to The overall attitude towards trust”
Trust
Frequency Percentage Cumulative percentage
1(Negative)
0
0
0
2
0
0
0
3
2
2
2
4 (Neither)
10
10
12
5
15
15
27
6
29
29
56
7 (Po si t ve)
44
44
100
To tal
100
100
The overall results show that the general attitude is positive and that the respondents trust the Internet as a distribution channel and a specific retailer as well as that they consider it safe to buy books online. The results are presented on a seven-point scale where 1 to 2 were left completely blank by all respondents and 2% had a slightly negative attitude and do not
completely trust the Internet. Whilst 10% of the
respondents had a neutral trust attitude and responded neither positive nor negative, the majority of the respondents (88%) can be found between 5 and 7 and have a positive trust attitude towards online book shopping and trust the Internet as a distribution channel and a specific retailer.
54
4.5.10 Convenience “Distribution according to The overall attitude towards convenience”
Convenience
Frequency Percentage Cumulative percentage
1(Negative)
1
1
1
2
2
2
3
3
1
1
4
4 (Neither)
10
10
14
5
17
17
31
6
32
32
63
7 (Po si t ve)
37
37
100
To tal
100
100
The overall results show that the general attitude is positive and that the respondents are somewhat convenience orientated. The re su l t s a re presented on a seven-point scale where 4% had a slightly negative attitude and are not considered to shopping due to convenience. Slightly more than a fourth (10%), responded they had neither a positive nor negative attitude and can be considered as having a neutral attitude towards convenience. The majority of the respondents (86%) can be found between 5 and 7 and as a consequence having a positive attitude towards convenience and do their book shopping due to convenience reasons.
55
4.6 FINDINGS OF THE STUDY In this step we will present analysis and conclusions of the conducted research and the collected data that has been presented in the above. We will identify certain segments and analyze how the factors Price, Trust, and Convenience affect different segments. Here we divide our respondents into different segments like high spender, price easers, bargain seeker. 4.6.1 High spender: The consumers in this segment mainly spent each between Rs 500-1000 on books each month during a semester. Hence, they are the segment that can be considered to spend most on books each month.
The entire segment (100%) has had very good previous experiences with purchasing books online and very high expectations for the next time they will purchase a book online.
The experience and opinions of their family and friends as Reference Groups did not matter to them when they purchased a book online, neither were the experiences and opinions discussed in online forums taken into consideration.
As a conclusion this segment is the smallest of the three and consisted of consumers that had spent the most money on books. They had very high confidence in purchasing books online, mainly due to very good previous experiences. They did not regard the experience and opinions of any of the named Reference Groups.
4.6.2 Price easers: The average expenditure of respondent of segment two on books per month was between Rs 200-599. 56
The consumers in this segment had a slightly less positive than very good when it came to their online books purchasing experience. Their future expectations were similar to the previous experiences, and the consumer expected any future online book purchase to be slightly less positive than very good. Most of the consumers had a good to very good attitude towards purchasing books online.
Generally, the consumers in this segment did not consider the experiences and opinions of their families, but on the other hand, they did consider it more compared than any of the other two segments. Their friend‘s experiences and opinions would, however, affect their purchase to some degree. Minor considerations were also taken to the experiences and opinions discussed in online forums by this segment. Generally, the respondents took the experience and opinions of the different Reference Groups into most consideration compared to the other segments, and they were especially affected by the Reference Group friends.
4.6.3 Bargain seeker: These
consumers
spent
about
as
much
as
the consumers in
Segment Two, between 200 to 599Rs on books each month. They had either slightly good or neither good nor bad previous experiences. Future expectations for purchasing books online were within a similar same range. Overall the consumers in this segment had the least positive attitude towards purchasing books online compared to the other two segments. Within this segment majority of respondents did not consider the experiences and opinions of their family at all, while they showed a more positive attitude towards the experience and opinions of their friends. The impact of the Reference Group online forums, was in line with the Reference Group family . To summarize the variable of Reference Group one can find that the experience and opinions of family and online forms were 57
not affecting the consumer at all while the experience and opinions of their friends were taken into some minor consideration. Other variables such as Demographics and Time Spent Online were very similar to the other segments and particularly to Segment Two. Almost no difference could be found. What might separate them in these variables was that this segment spent slightly more time online. The respondents in this segment list that they mainly used the Internet for fun and thereafter for information as both secondary and tertiary use. Because of the identified characteristics of this segment, we chose to label them Bargain Seekers.
4.6.4 Departmental survey:Departmental survey shows that, highest number of MBA & MCA students are using online book shopping as compare to other department in this university.
4.6.5 Website popularity:www.Homeshop18.com, www.flifkart.com, www.snapdeal.com, are more popular than others, because of different strategy like attractive advertising, pricing method, cash on delivery, online promo-code, online gift, discount, postal/courier tracking facility, gift voucher, and many others. 4.7 SUMMARY The three segments that were found show a significant difference in the primary factor of concern. The general distribution showed that the factor Price was the primary factor for the entire population sample, and that the second factor was Trust which was closely followed by Convenience. When segmenting the respondents through the different variables we found that Segment One was mainly trust oriented and the respondents had a high positive attitude towards purchasing books online. As they did spend the most money, in comparison to the other segments we chose to label them High Spenders.
58
Segment Two were mainly Price and Convenience oriented and therefore took the most consideration to the opinions and experiences of the Reference Groups. As they low disposable incomes and were somewhat convenience orientated when acquiring information about low prices, we chose to label them Price Easers. Segment Three were highly Price oriented and therefore actively involved in searches for the lowest prices online. They considered the experiences
and
opinions of their friends to some extent before purchasing books online while, and were actively searching for the lowest prices. Hence, we chose to label them Bargain Seekers.
4.8 SUGGESTIONS 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 have 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. Since online retailing is a new retailing medium and online consumer behaviour is diverse from traditional consumer behaviour, 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.
59
4.9 REFERENCES OF THE CHAPTER www.wikipedia.com www.Googlebooks.com Gupta S.P (1982) Statistics Methods(16th edition) ,Sultan Chand & Sons Shah N.M (1994) Statistics Theory and Practice(3rd edition), Arya Book Depot
60
CHAPTER-V
61
5.1 CONCLUSION This chapter will present the conclusions that were drawn from the analysis of the research. It will also give implications for online book retailers and discuss further research possibilities. When a consumer purchases a book online, he or she is affected by various factors. The main influencing factors have been identified as Price, Trust, and Convenience. The Price factor exists because prices are often lower on Internet stores compared to physical stores due to lower costs. Purchasing a book online can greatly benefit the consumer in terms of convenience and saving money. It is also convenient to shop on various book sites with different assortments, from the home. Trust is evidently needed since the consumer must share detailed personal and financial information when purchasing a book online. These types of data include the full name, delivery address and credit card number for example, which makes Trust an important factor. To be able to see how these factors affect consumers, we conducted a survey at the Sambalpur university . We the found that the factor Price is of the highest concern to the students and that the factors Trust and Convenience had lower impact on the students. The decision was made to investigate if any segments could be found within the population sample. We identified three segments, High Spenders, Price Easers, and Bargain Seekers. We further investigated these segments and their overall attitude towards the factors Price, Trust, and Convenience. We found that there was a difference in the consumers‘ attitude towards the different factors which resulted in the following implications that will be presented below. So far we have answered the four first research questions and the last two questions will be answered in the following conclusion.
5.2 SELF CRITICISM The collection of our primary data was conducted through a survey. When we had decided upon a population to research, we were affected by a lack of time in our decision making process, and consequently focused on visiting large classes for receiving answers from as many respondents as possible. This then resulted in a large number of respondents being in similar age groups.
5 . 3 F UT UR E RE S E AR C H After having conducted our research and considering the limitations in time and resources that we had been facing, it would be of interest to examine our research 62
topic further as well as more profoundly. Below, we have listed a few deductions for possible future research: It would be interesting to conduct a survey at another university. If this would be done and similar results were discovered, one could apply generalisability to the results Conduct a survey on a larger sample, also including people that are not students and segmenting according to that. This could find new segments, with new analytical possibilities. This research was conducted from the consumers point of view, and if could also be conducted with greater focus towards the online retailer. We found that Price, Trust and Convenience were factors that are important when a consumer decides to purchase online, but it would be interesting to see whether the concepts of these factors are perceived equally between all consumers or if there were any discrepancies. Furthermore, it would be of interesting to see if the factors were the same for other good that are traded online. In general, this research could be conducted with a greater range of goods and with greater detail towards the specific factors.
63
BIBLIOGRAPHY Gupta S.P (1982) Statistics Methods(16th edition) ,Sultan Chand & Sons Kotler, P. and Armstrong, G. (2007) Principales of Marketing, (12thedition), Upper Saddle River, Prentice Hall. Kotler, P. and Keller, L. K. (2006), Markating Management, (12th edition), Upper Saddle River, Prentice Hall. Kothari C.R(2009) Research Methodology : Methods and Techniques, edition),New age International limited Ramaswamy V.S and Namakumari edition),Mcmillion India Limited
S.(2009)Markating
Management(4th
Shah N.M (1994) Statistics Theory and Practice(3rd edition), Arya Book Depot Web Site like:- www.wikipedia.com www.city.blogspot.com www.mbalectures.com www.ezinearticles.com www.citehr.com www.larsperner.com www.scribed.com www.Googlebooks.com
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