Online or Direct Buying: The Most Preferred choice of

a Common

Rabino, Vina A.

Serrano Alexandra Maxin C.

In partial fulfillment
Of the requirements in Business Research
 CHAPTER 1

INTRODUCTION

At the turn of a new millennium, the business environment has undergone a

rapid transformation with the Internet, making it possible for a large number of

users to access vast amounts of information through a diverse array of

technical tools and services. Never before have consumers been able to shop

from anywhere at anytime with a few clicks of their mouse. As a result, online

shopping, an unforeseen event only a few years ago, has continued to grow.

The study of consumer decision making processes is important because of

the complex global development in all fields and marketing have forced

marketers to make their works purposeful (Jones Christensen et al., 2015).

Nowadays, online shopping has been rapidly expanding as a new

communication channel and has been competing with traditional channels

(Kim & Peterson, 2017). In addition, any company, which invests in online

shopping, will see a large number of rivals shortly (Clemons et al., 2016).

Observed growth in online sales can be considered as a part of the Internet

benefits due to provision of a high volume of quick and inexpensive

information (Lee & Dion, 2012). According to Singh & Sirdeshmukh (2000),

highly technical competence can be a factor to influence the trustworthiness.

The online trustworthiness (trust) is the basic and essential element for

building a relationship with consumers (Kumar & Dange, 2012).

Due to the COVID-19 pandemic, the world is facing historical challenges

without prior preparation. Because of the unavoidable economic crisis for the

shutdown of numerous trade and industrial activities the COVID-19 pandemic

has triggered substantial modifications in the habits of consumers all over the

world. The pandemic has led to key changes in consumers purchasing and

consumption behavior as the result of lockdown, social distancing, and

uncertainty about the future due to its infectious nature. Therefor Online

shopping has become a popular way of shopping for consumers. This new

innovation for shopping not only brings a great number and variety of

merchandise to potential consumers, but also offers a numerous business

activities and huge market. Social media is no longer known only as a media

that facilitates its users to present themselves on the internet but also as

media to sell some products to consumers known as an online shop. Because

of the numerous advantages and benefits, more people say that they prefer

online shopping over conventional shopping these days (Singh & Kashyap,

2007). Online shopping or marketing via internet is the use of technology for

better marketing production. Often, online shopping tends to be more

convenient than traditional shopping. This is because customers can shop

anywhere, anytime as there are no geographical boundaries. Online shopping

allows customers to compare prices and find the cheapest products, but direct

buying doesn’t allow customers this chance to compare prices easily. Unlike

a physical store, all the goods in online stores described through text, with

photos, and with multimedia files. Many online stores will provide links for

much extra information about their product. On the other hand, some online

consumers are an adventurous explorer, fun seeker, shopping lover, and

some are technology muddler, hate waiting for the product to ship.

Consequently, online consumer behavior became a contemporary research

area for an increasing number of researchers to understand this unique

nature of online shopping. A marketplace is a daunting place for people that

hate crowds. Especially, during the holiday season, when you head up to your

local mall only to be greeted by a frenzy of people. Apart from expecting a

delayed delivery, online shopping sites don’t have any inconvenience of

dealing with a large crowd of people. Their websites are updated to handle a

horde of shoppers with minimal downtime. Another aspect that makes online

shopping accessible is avoiding pesky salesmen that pressure you to buy a

product. Socially anxious individuals often fall prey to sales pressure and

make a purchase that they later wish they didn’t.

Traditional buying is a method of buying a product by going to a store.

It is a way like we go to our favorite store in a nearby mall. In Direct buying

person go to a mall and choose a store where he wants to buy a stuff by

walking from one rack to another, by checking out different displays and trying

products. In traditional shopping we can choose a product physically and

check out what product is like, how look like, and features it have. Therefore,

some consumers still prefer the traditional type of shopping over online

shopping because for one, it allows customers to check out an item. Some

customers always choose traditional shopping due to their body size as some

time they get big stuff which looks large and some stuff which seems too

small due to which they go in store and firstly try products and then purchase.

Some people say that online shopping have just few benefits and some says
a lot of benefits. In the traditional shopping, one has to leave home, either

walk or take a ride to the store or shopping center in order to buy what one

wants. Traditional shopping enables one to see the actual product before

paying the money. One could get the actual product that he or she likes with

the money. It is a very important virtue for people buying the fashion stuff like

fashion clothes and shoes as people need to make sure the clothes or shoes

are in the right color or in the right size. This virtue of traditional shopping

makes sure the deal is a safe one. Traditional shopping also makes sure one

could get the product immediately the money is paid.

According to the consumer psychologist Phillip Graves, people tend to

feel safer buying products that are predictable and familiar online (Braff,

2014). When customers first try out a brand, many opt to visit retail stores.

Shop employees help a lot in explaining items to them. This provides the

assurance most people need before purchasing. In addition, older people are

known to stick with the traditional mode of shopping. This is also the case

when buyers are not comfortable with gadgets or prefer human interaction.

Shopping, after all, is a social activity for many people.

With this surge in online sales and business activity, the government

looks to remind online sellers of their tax obligations, with the Bureau of

Internal Revenue’s (BIR) issuance of Revenue Memorandum Circular (RMC)

No. 60-2020 entitled “Obligations of Persons Conducting Business

Transactions Through any Forms of Electronic Media and Notice to

Unregistered Businesses.” The Circular basically mandates all business

owners who are engaged in an online business platform in any form, whether
digital or electronic, to register their businesses with the BIR and pay taxes on

their sales.

Background of the Study

This paper analyze the most prefered choice of a common in using online

shopping or direct buying. The context of direct buying is defined as a

physical buying and sellers meet in order to make exchanges (Kotler, Wong,

Saunders & Armstrong, 2005).However the online shopping using the Internet

which is a rather new type of digital interactive media, an electronic channel of

communication where actors can take part actively and instantly (Arens,

2004), has given rise to a new marketplace, and a new form of commerce

called e-commerce. To conduct e-commerce on the Internet is to buy, sell,

transfer, or exchange products, services, or information (Turban, Leidner,

McLean & Wetherbe, 2006b). Online shopping is emerging very fast in recent

years. Now a day the internet holds the attention of retail market. Millions and

millions of people shop online or direct. On the other hand the purchasing of

product from traditional market is continuing since years. In this contemporary

world customer’s loyalty depends upon the quality and consistent ability to

online or direct buying, value and satisfaction.The focus of the study is on the

most prefered choice for a common to shop in online or direct. While making

any purchase decision consumer should know the medium to purchase

whether online shopping or in direct buying. Consumer should decide the

channel for them which can best suit to their need and wants and which can

satisfy them. In this competitive world how consumer can decide the particular

medium for their purchase of goods is very important to understand in a

managerial point of view. (Laing and Lai, 2000) said that the internet shopping

is the third best and most popular activity over internet after online shopping

next comes the e-mail using,instant messaging and web browsing. But in a

few years online shopping and direct buying is the s because of pandemic.

Online are even more important than watching or getting entertain by the

internet or getting any information or news, this are the two very common

thought which comes to the people’s mind when considering the internet

users do when they are online. The behavior of online shopping is also known

as online buying behaviour and internet shopping. Buying behaviour means

the purchase of good over internet using web browser or Direct buying

through physical interaction. Online shopping also consist the same five steps

which is related to traditional shopping behaviour. (Chiang and Dholskia,

2003; Lynch, Kent, and Srinivasan 2001) they said that in the typical way of

online shopping when the consumer need some product or service they go

through the internet and browse or search the things they need and their

information.But rather than searching actively, many a times potential

consumers are attracted by the information about the product they want. They

see many products online and choose the best one which suits him/her. Then

they purchase that product and finally the transaction takes place and post

sales service provided by the online sites. Online shopping or Direct buying

attitude and behaviour are related to the consumer. Previous studied have

focused on why the products of the online shopping or traditional buying is

different from other products.

 THEORETICAL FRAMEWORK

Shanthi & Kannaiah (2015) found that although many consumers have begun

switching to online stores, most of consumers still choose to shop directly to

traditional markets that have a clear physical presence. A person's preference

for buying a product, both online and traditional, is influenced by the

personality factor possessed by that person. Hence, consumer shopping

preferences are defined as the tastes of the consumers measured by the

perceptions of the usefulness and benefits of the products offered (Guleria et

al., 2015). Shopping preferences are related to someone likes or dislikes

shopping methods and are not influenced by consumers' purchasing power.

This generally affects purchasing decisions.

To examine this distinctive change, several studies have adopted the

economic perspective in analyzing the efficiency of the electronic market

(Bailey, 1998; Bakos, 1997; Brynjolfsson and Smith, 2000) and implications

for consumer information search with the focus on search costs (Degeratu et

al., 1998; Hoque and Lohse, 1999; Lynch and Ariely, 2000). These studies,

using conventional economic theories, have simply assumed that consumers

search the same way in an online environment and physical environment.

Furthermore, these studies presume a total separation of the physical and

electronic marketplaces and often limit their investigation to a particular Web

site and its design.

Several reasons suggest that conventional economic theories do not

adequately explain consumer behavior in this new marketspace. First, the

fundamental premise of economic theory is that information search will

increase when search costs are reduced (Stigler, 1961). Empirical evidence,

however, has shown otherwise. By examining the shopping patterns of a large

panel of online users over time, Johnson et al. (2000)

Second, convenience is often cited as the major reason for consumers to

shop online (Burke, 1998; Jarvenpaa and Todd, 1997). When consumers

perceive greater search costs in the physical marketplace, it is likely they

search for information online where search costs are relatively lower. If

consumers’ motivation to shop online is to reduce effort and save time, why

should one expect that consumers will search for more information online

even if the search cost is relatively reduced?

A framework that compares online consumer decision with offline decision

making was developed by Laudon and Traver (2009), who suggest that a

general consumer behavior framework requires some modification to take into

account new factors. When consumers want to buy product, they will look at

the brand and the characteristics of 68 product or service. Some products can

be purchased and shipped easily online such as, software, books. On the

other hand, some products are hard to decide through online channel.

Website features, firm capabilities, marketing communication stimuli, and

consumer skills are also important, in terms of the proposed framework

(Laudon and Traver, 2009). When consumers want to buy product, they will

look at the brand and the characteristics of product or service. Some products

can be purchased and shipped easily online such as, software, books. On the

other hand, some products are hard to decide through online channel. Web

Site feature is one of the important things that can influence consumers to buy

product online. For example, online retailers can use high technology to

improve their websites in order to influence consumer perceptions of the web

environment (Prasad and Aryasri, 2009). If the web site is too slow, not

navigability, or not safe enough, will have negatively impact consumer

willingness to try or buy products from the website. Consumer experience with

online shopping (Broekhuizen and Huizingh, 2009) or consumer skills, which

refer to the knowledge that consumers have about product, and how online

shopping works (Laudon and Traver, 2009) also influences online shopping

behaviors. Clickstream behavior is another aspect that becomes more

important in the online world. It refers to the behavior that consumers search

for information through web sites many sites in the same time, then to a single

site, then to a single page, and finally to a decision to purchase (Laudon and

Traver, 2009). All these factors lead to specific attitudes and behaviors about

online purchasing and a sense that they can control their purchasing

environment thru the online world.

 Conceptual Framework

The previous articles on Hawkins Stern’s theory, Maslow’s theory and Kim,

Ferrin and Rao’s (2008) model of online decision making shed light on critical

factors that affect the buying of consumers towards online or direct shopping.

Moreover, the marketing strategies of e-commerce and commerce companies

also play a role in influencing online and direct buying for consumer

preferable. Age of the consumer specifically determines their buying decisions

and perceive the experience differently. These factors should be considered

factors while making online and direct marketing decisions.

In order to summarise the findings in the study of online or direct buying the

most prefered choice of a common the conceptual framework is presented

below.
 IV DV

Buying (online or direct) • Internal/external

preferred choice of a influences
common
• Convenience
• Customer support
• Quality of product • Information
• Price availability

• Marital status • Perceived risk

• Trust
• Benefit

Figure 1: Conceptual Framework online or direct buying the most prefered

choice of a common

Product characteristics- Includes the product from competitors, such as

quality, personality, availability, information availability, and cost.

Demographic characteristics- Include the demographic details of the

customers such as age, gender, income and marital status.

Statement of the Problem

The proposed study aims to offer a review of existing literature concerning the

most preferred choice of a consumers.

Specifically, it seeks to provide the customers preferences whether is it online

buying or traditional buying. To study the consumer behavior towards each

these modes. To do comparative study between online buying and traditional

buying.

Specifically, it aims to answer the following question:

1. What is the demographic profile of the respondents in terms of:

 Gender
 Age
 Marital Status
 Occupation
 Preference between online buying or traditional buying

2. What is the reason of the customers of why do they shop:

 Work demands
 Family needs
 Budget pressures
 Social or emotional needs
  Brand preferences

3. To find out what they think of you

 Products

 Customer service

Hypothesis

Consumers' online shopping and/or purchasing experience will be significantly

related to their intentions to purchase products/items from their favorite

websites.

Many researchers (Shim & Drake, 1990, Klein 1998 and Shim et aI., 2001)

also indicate that consumers' past experience with Internet shopping is a

significant predictor of search behavior on the Internet. It has also been found

that consumers' past online purchasing experience had a direct impact on

their online repurchase intentions (Eastlick, 1996). Thus, consumers' online

products/items purchasing experience may influence their intentions to

purchase products/items through the Internet. For this reason, hypothesis 11

posits that consumer’s past online products/items shopping and/or purchasing

experience positively influences their intentions to purchase products/items

over the Internet.

Significance of the Study

The result of this research can be used as the reference to the one who do

the similar study research or continual study especially about the most

preferred choice of a common is it online buying or Direct Buying. The

research would be beneficial to costumer and business owner to know the

effectiveness and accurate in terms of online shopping or direct buying.

Business owner: This study will teach business owners on how to handle the

business even if the customers preferred either it is online selling or traditional

buying.

Customer: This study will be guide to their preferences in terms of online

buying or traditional buying. This will enlightened them to support local

businesses

Future Researcher: This study will benefit the future researcher who will

conduct research of similar nature to this study.

Scope and Limitation

This study aims to define a significant measurement and most preferable

choice of a common for Online or Direct buying. This study focuses the

existing and relevant for the customer wants.

Definition of Terms

For the readers to grasp the meaning readily, the following words were

defined:
Online Shopping- This refers to a process whereby consumers directly buy

goods, services etc. from a seller without an intermediary service over the

Internet.

Traditional Shopping- This refers to a person go to a mall and choose a

store where he wants to buy a stuff by walking from one rack to another, by

checking out different displays and trying products.

Covid-19- Corona Virus 2019 is a disease that causes virus infection and

spreads it to people, particularly those who are vulnerable, such as those over

60 years old or those who already have a severe disease. It has the ability to

take a person's life, whether they are alive or dead.

Social Media- Are internet service that let you interact with others. You can

use social media to promote the name of your business.