Seminar-Paper Pioquinto Delmar B
Seminar-Paper Pioquinto Delmar B
Seminar-Paper Pioquinto Delmar B
A SEMINAR PAPER
_________________________________
Presented to:
By:
Delmar B. Pioquinto
Student
TABLE OF CONTENTS
CHAPTER 1
ABSTRACT ...………………………………………………………………………. 1
INTRODUCTION ………………………………………………………………………… 2
OBJECTIVES ………………………………………………………………………… 2
CHAPTER 2
CONCLUSION ………………………………………………………………………. 17
REFERENCES ………………………………………………………………………. 18
CHAPTER 1
ABSTRACT
The internet has now become the vastest community in today’s generation. Almost everything
you need to know is now on the internet, it’s just one click away. One of the activities in it is e-
Commerce Online Shopping or Marketing.
The e-Commerce or online marketing has become one of the most dominant activities on the
internet in today’s era. Businesses around the world use the internet to communicate to their
client or target markets, big or small. They study the behavior, their needs, and their purchasing
power or abilities. Factors affecting the purchasing habits and attitudes of the consumers will be
identified by the marketers. In that way, they know what to offer to their clients that may be used
in their daily lives.
1
INTRODUCTION
Purchasing habits and attitudes of consumers is the decision and tendencies they made in
purchasing products online or e-commerce. This will identify how will they buy products online.
Online shopping is the easiest way or solution in our busy lives today. It has the biggest change
in the way customers shop online. The convenience they feel when they shop online. Shoppers
save their time, especially during their busy hours.
The emergence of e-commerce created an entirely new experience for the consumer on
comparing products and prices and the possible activity of purchasing online. So, consumers'
purchasing habits and attitudes toward online products are important factors for marketers. It
helps to predict consumer behavior online. They will come to understand how, where and why
consumers behave online on that behavior or habit.
The study will create more understanding about why and how online consumers go through their
buying decision process. It will help draw a modified and more effective marketing policy. It
investigated the perception of customers about online shopping from the perspective of the value
of the goods to buy.
OBJECTIVES
To identify the purchasing habits and attitudes of consumers which allows them to shop online
instead of in a physical store.
To understand why and how online consumers go through their buying decision process and help
us look for the reasons or motives for doing such actions.
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CHAPTER 2
Online shopping
Online shopping indicates electronic commerce to buy products or services directly from the
seller through the Internet. Internet-based or Click and Order business model has replaced the
traditional Brick and Mortar, business model. More people than before are using the web to shop
for a wide variety of items, from house to shoes to airplane tickets. Now people have multiple
options to choose their products and services while they are shopping through an online
platform. Online shopping has unique characteristics. Huseynov and Yıldırım (2014) emphasized
that the lack of physical interaction tends to be the critical impediment in online retail sales
followed by the privacy of individual information and security of financial transactions over the
Internet. Demangeot and Broderick (2010) also revealed that perceived ease of use does not
affect the behavioral pattern in this case rather is influenced by security and privacy issues. No
relationship is built between the customer and the online shop in the presence of perceived online
risk even if a customer spent hours on the Internet (Zuroni & Goh, 2012).
Day-by-day taste, preference, and choices are varying regarding different factors such as the
Internet emergence. However, this development needs some more understanding related to the
consumer’s behavior. Consumer behavior research identifies a general model of buying behavior
that depicts the processes used by consumers in making a purchase decision (Vrender, 2016).
Those designs are paramount to the marketer as they can explain and predict consumer purchase
behavior.
Online shopping is a process of selling and buying goods and services on the World Wide Web.
As (Forsythe and Shi, 2013, cited by Qinchang Zhu,2016) explain" Internet shopping has
become the fastest-growing use of the Internet; most online consumers, however, use
information gathered online to make purchases off-line".
The Nielsen Company surveyed in March 2010 and polled more than 27,000 Internet users in 55
markets from the Asia Pacific, Europe, Middle East, North America, and South America to look
at how consumers shop online: what they intend to buy, how they use various sites, the impact of
social media and other factors that come into play when they are trying to decide how to spend
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their money. What we found was that there are some products bought online that are universal
and others that still have yet to build a significant share of trade. Further, while checking online
reviews are popular for some products—particularly consumer electronics and cars—shoppers
still trust the recommendations of friends and family most.
As Forsythe and Shi (2003) mention internet users can be categorized into two Internet
Shoppers and Internet Browsers, Internet shoppers are the people who shop online whereas
internet browsers are the people who just browse the internet other than shopping purposes.
Though several factors influence consumers to shop online, as mentioned above researchers have
selected four factors after reading literature in the field on consumer attitudes towards online
shopping, and these factors are discussed below in the light of previous literature.
1. Convenience.
The convenience factor refers to that it is easy to browse or search the information online is
easier than traditional retail shopping. Online, consumers can easily search product catalogs but
if the consumer looks generally for the same product or item in a traditional store manually it is
difficult to visit physically and time consuming also. Convenience has always been a prime
factor for consumers to shop online. Darian mentions that online shoppers carry multiple benefits
in terms of convenience, such as less time consuming, flexibility, very less physical effort, etc.
Bhatnagar and Ghose (2014) claim convenience as one of the most important advantages of
online shopping. According to Robinson, Riley, Rettie, and Wilsonz (2007), the major
motivation for online purchasing is being convinced in terms of the shop at any time and having
bundles of items delivered at the doorstep. 12 Rohm and Swaminathan (2014) claim in "typology
of online shoppers into": Convenience shoppers, balanced buyers, variety seekers, and store-
oriented shoppers, based upon their preset shopping motivation. Rohm and Swaminathan's
(2014) findings of 'convenience and variety seeking' are major motivating factors of online
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shopping and this study is consistent with Morganosky and Cude’s (2000) research findings.
Webcheck's study shows that the convenience factor is one of the biggest advantages of online
shopping. Through online purchase, consumers can easily compare the price to the traditional
purchase. So, price comparison is also another convenience factor of online shopping.
2. Time-saving
Time savings is one of the most influencing factors of online shopping. Browse or search an
online catalog can save time and patience. People can save time and can reduce effort by
shopping online. According to Rohm and Swaminathan (2014), one possible explanation is that
online shopping saves time during the purchasing of goods and it can eliminate the traveling time
required to go to the traditional store. On the other side, some respondents think that it is also
time taken for delivery of goods or services over online shopping. Unexpectedly time-saving is
not the motivating factor for the consumers to shop online (Corbett, 2001) because it takes time
to receive goods or delivery. But time-saving factors can be seen through different dimensions
i.e., "person living in Florida can shop at Harrod's in London (through the web) in less time than
it takes to visit the local Burdines department store" (Alba et al, p. 41, emphasis added.
Morganosky and Cude (2010) have concluded that the time-saving factor was reported to be the
primary reason among those consumers who have already experienced online grocery buying.
So, the importance of the time-saving factor cannot be neglected as the motivation behind online
purchasing. Additionally, Goldsmith and Bridges (2000) emphasize that there is discrimination
between the online shopper and non-online shoppers, online shoppers are more worried about
convenience, time-saving, and selection whereas non-online shoppers are worried about security,
privacy, and on-time delivery. A study by Kamariah and Salwani (2005) shows higher website
quality can highly influence customers to shop online.
3. Website design/features
Website design and online shopping activity are some of the vital influencing factors of online
shopping. Website design, website reliability/fulfillment, website customer service, and website
security/privacy are the most attractive features which influence the perception of the consumer
of online buying Shergill & Chen (2005). Kamariah and Salwani (2005) claim the higher the
website quality, the higher consumer intends to shop from the internet. Web design quality has
important impacts on consumer choice of electronic stores, stated by Liang and Lai (2000).
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Website design is one of the important factors motivating consumers for online shopping.
Almost 100,000 online shoppers surveyed by (Reibstein, 2000) show that website design was
rated as an important factor for online shopping. Another study conducted by Zhang, Dran,
Small, and Barcellos (2000), and Zhang and Dran (2000) indicated that website design features
of the website are important and influencing factors that lead to consumer satisfaction and
dissatisfaction with a specific website. A study conducted by Yasmin and Nik (2010) shows a
significant relationship between online shopping activity and website features. Website design
features can be considered as a motivational factor that can create positive or negative feelings
with a website. A study by Li and Zhang (2002), if the website is designed with quality features
it can guide the customers for successful transactions and attract the customers to revisit the
website. However, worse quality website features can also hamper online shopping. According
to Liang and Lai (2000), web design quality or website features have a direct impact on the user
to shop online. Moreover, researchers such as Belanger, Hiller, and Smith (2002) concluded that
a large segment of internet users have serious security concerns.
4. Security
Security is another dominant factor that affects consumers to shop online. However, many
internet users avoid online shopping because of credit card fraud, privacy factors, non-delivery
risks, post-purchase service, and so on. But transaction security on online shopping has received
attention. Safe and secured transaction of money and credit card information increases trust and
decreases transaction risk. In 1995, the UK has introduced Fraud free electronic shopping, and
later on, Europe and Singapore introduced secured electronic transactions (SET). According to
Bhatnagar and Ghose (2014), Security is one of the attributes 14 which limits buying on the web
as they claim that there is a large segment of internet shoppers who don't like to buy online
because they think about the security of their sensitive information. Cuneyt and Gautam (2014)
claim trust in internet shopping with advanced technology, and frequent online shopping to the
internet being secured as a trustworthy shopping channel.
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There are other few considerable, significantly, habits and behavior of consumers towards online
products
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scrolling social media platforms and they’ve come to expect that their favorite brands are
on the same channels where they spend the majority of their time.
4. Effortless payment
When retailers are considering tips to keep up with consumer expectations and behaviors,
it’s essential to focus on every aspect of the customer experience. Consumers seek
convenience throughout the entire buying journey. As a part of that end-to-end buying
convenience, they look to discover eCommerce online shops that have easy-to-setup
payment gateways that also accept popular payment methods such as buy now, pay later.
5. Fast and reliable delivery
High numbers of consumers feel that fast delivery options are a must-have factor when
shopping online. Good logistics centers help reduce shipping costs, speed up delivery
times, and meet customer expectations. Shipping transparency is also highly expected of
online retailers.
Also, for retailers, to meet the consumer's expectations on their purchasing habits and attitudes
towards the online product they must consider the following:
1. Selling items in multiple flatforms – will lead them to more profit and opportunities.
2. Provide faster shipping – the ability to move or deliver items quickly make the consumers
more convenient thus making them a priority in their next purchase
3. Offer a simple return process to keep customers loyal after they check out, post-purchase
services and interactions need to be as smooth as possible
4. Include easy to locate product reviews – this can be the reference of a consumer in
buying products online
5. Offer flexible payment options – in buying online, one factor also in looking for a
product is how the payment is available before their wants.
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REVIEW OF RELATED LITERATURE
Personal Characteristics
Personal characteristics have drawn the attention of fourteen studies. It can be defined as a group
of specific customer features that may influence their online shopping attitudes and behavior,
such as their Internet knowledge, need specificity, and cultural environment.
In another study, Bellman and colleagues (1999) propose that people living a wired lifestyle
patronize e-stores spontaneously. These consumers use the Internet as a routine tool to receive
and send emails, to do their work, to read news, to search for information, or recreational
purposes. Their routine use of the Internet for other purposes leads them to naturally use it as a
shopping channel as well. Other factors found to impact consumers in online shopping attitudes
and behavior include cultural environment, need specificity, product involvement, disposition to
trust, the extent to which they would like to share values and information with others, the extent
to which they like being first to use new technologies, and tendency to spend money on
shopping. (Borchers 2001; Koufariset al.2002; Lee et al.2000; Kimery and McCord 2002;
Bellman et al 1999. Cited by Preeti Singh, 2013)
Vender/Service/Product Characteristics
Among product features that impact customers online shopping behavior are (1) variety of
goods, (2) product quality/performance/product uncertainty, (3) product availability, (4) price,
(5) social presence requirement, (6) product presence requirement, (7) dependability of product,
(8) possibility of customized products, and (9) brand. (Jahng et al. 2001; Liang and Huang
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1998; Kim et al. 2001; Cho et al. 2001; Lowengart and Tractinskky 2001; Muthitacharoen 1999
cited by Na Li and Ping Zhang, 2010).
Website Quality
The measures employed to value website quality by the researchers include the websitesí
information content, information presentation, interaction between customers and vendors,
navigation, searching mechanism, security, site technical feature, media richness, and so forth. In
summary, a variety of factors related to website quality have been demonstrated to significantly
influence consumers' online shopping attitudes and behavior. Better website quality can guide
the consumer's complete transactions smoothly and attract them to revisit this Internet store. In
contrast, worse quality would hinder their online shopping moves.
(Prateek Kalia, Navdeep Kaur, Tejinderpal Singh (2014)_Citation: Kalia, P., Kaur, N. and
Singh, T. (2014), “Importance of Website Quality in Online Shopping”, in Bansal, M. and
Singla, B. (Eds.), Proceedings of the Ist International Conference on Issues and Perspectives in
Brand Management, Baba Farid College of Management and Technology, Bathinda, India, pp.
107–109. )
Consumer’s intention to shop online refers to their willingness to make purchases in an Internet
store. Commonly, this factor is measured by consumers’ willingness to buy and to return for
additional purchases. The latter also contributes to customer loyalty. Assess consumers intention
to shop online by asking a series of questions assessing the likelihood of returning to a store’s
website, the likelihood of purchasing from the store within the next three months, the likelihood
of purchasing within the next year, and generally the likelihood of ever purchasing from a
particular store again. (Shahzia Khan, Aftab Haider Rizvi_Skyline Business Journal, Volume VII
- Issue 1 - 2011 – 12 Factors Inuencing The Consumers’ Intention to Shop Online_)
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there are only five studies that include it. According to them, the potential consumers appear to
use a two-stage process in reaching purchase decisions. Initially, consumers typically screen a
large set of products to identify a subset of promising alternatives that appear to meet their needs.
They then evaluate the subset in greater depth, performing relative comparisons across products
based on some desirable attributes, and make a purchase decision. Using a controlled
experiment, these authors discovered that the interactive tools designed to assist consumers in the
initial screening of available alternatives and to facilitate in-depth comparisons among selected
alternatives in an online shopping environment may have strong favorable effects on both the
quality and the efficiency of purchase decisions. (Haubl and Trifts 2000, p. 4 cited by Sahar
Karimi, A purchase decision-making process model of online consumers and its influential
factor a cross-sector analysis 2013)
Online Purchasing
Fourteen studies discuss online purchasing, which refers to consumers' actions of placing orders
and paying. This is the most substantial step in online shopping activities, with most empirical
research using measures of frequency (or number) of purchases and value of online purchases as
measures of online purchasing; other less commonly used measures are unplanned purchases
examination of the relationship between online purchasing behavior, perceived ease of use,
perceived usefulness, perceived risk of the product/service, and perceived risk in the context of
the transaction, the measures used are total amount spent and frequency in last 6 months.
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Consumer Satisfaction
From the study, customer satisfaction is the customer’s fulfillment response means when a
customer is happy with the service and the product quality then the customer shows their loyalty
towards the company and used to buy the products from that company again which enables more
financial benefit in the organizational context. From the concept of customer satisfaction point, it
can be concluded that companies are showing their motivation for providing best quality service
to their old customers as well as the companies are providing new offers and discounts on their
products as it will help the organization to attract more new customers which will enable more
satisfactory performance 89 of the employees in the organizational context. Additionally,
customer satisfaction will help the organization to enhance their brand name in the market as
well as it will impact the efficiency level of the organization. That section also refers that if any
organization will fail to felicitate customer satisfaction, then it can negatively impact the
business opportunity of the organization which will lead the company towards absolute loss.
Hasemark and Albinsoon (2004) stated that customer satisfaction refers to the relationship
between the expectations of the customers and what the customer gets, and customer satisfaction
becomes conceptualized by progressing the time, processing the results, effective evaluation,
cognitive evaluation, and basic sentiment of fulfilling. When an organization wants to properly
felicitate customer satisfaction then the company needs to keep its focus on good targeting and
segmentation strategies. (Joswin Binoj Mascarenhas, 2018)
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Online Shopping and Online Stores
Compared to physical stores, online stores have many advantages: They are convenient and time-
saving, and no more traveling and waiting in lines are needed. They are open at all times and
they are accessible anytime and anywhere. These stores provide consumers with free and rich
information about products and services. They also have some online tools to help consumers
compare and make purchase decisions among various products and services. Hoffman and
Novak (2006) indicated that interactivity is the key distinguishing feature between marketing
communication on the Internet and traditional mass media. Today online consumers have more
control and bargaining power than consumers of physical stores because the Internet offers more
interactivities between consumers and product/service providers as well as greater availability of
information about products and services. Geissler and Zinkhan (20088) claimed that the Internet
shifted the balance of power in favor of consumers as it became very easy for them to make
shopping comparisons and evaluate alternatives without being pressured by salespeople. Online
stores reduce transaction costs and have advantages for both consumers and vendors.
However, online stores also have disadvantages compared to brick-and-mortar stores. In online
stores, customers can’t have any sense about the product they see on the internet (seeing,
touching, tasting, smelling, and hearing) as they search for and purchase products. Consumers
may develop low trust in online stores and perceive elevated risk highly because of the lack of
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face-to-face communication. Although this difficulty can be reduced by using certain software
tools such as the online recommendation agent (Häubl and Murray, 2003; Xiao and Benbasat,
2007) and the online negotiation agent (Huang and Sycara, 2002; Huang and Lin, 2007).
Perceived Risks
Perceived risk refers to the nature and amount of risk a consumer perceives when contemplating
a particular purchase decision. Before purchasing a product, a consumer considers the various
risks associated with the purchase. The different types of risks are referred to as perceived or
anticipated risks. Research suggests that consumers generally prefer to use electronic commerce
for purchasing products that do not require physical inspection. The higher the perceived
experience risk, the consumer may shift to brick-and-mortar retailers to purchase the product.
Whereas, the lower the perceived risk, the higher the propensity for online shopping. Risks
perceived or real, exist due to technology failure (e.g., breaches in the system) or human error
(e.g., data entry mistakes). The most frequently cited risks associated with online shopping
include financial risk (e.g., is my credit card information safe?), product risk (e.g., is the product
the same quality as viewed on the screen?), convenience (e.g., Will I understand how to order
and return the merchandise?), and non-delivery risk (e.g., What if the product is not delivered?)
The level of uncertainty surrounding the online purchasing process influences consumers’
perceptions regarding the perceived risks (Bhatnagar et al., 2000).
Attitude
Since the mid-1970s, the study of consumer attitudes has been associated with consumer
purchasing behavior research. According to the model of attitude change and behavior, consumer
attitudes are affected by intention. When this intention is applied to online shopping behavior,
the research can examine the outcome of the purchase transaction. Attitude is a multi-
dimensional construct. One such dimension is the acceptance of the Internet as a shopping
channel (Jahng, Jain, and Ramamurthy, 2001). Previous research has revealed attitude towards
online shopping is a significant predictor of making online purchases (Yang et al., 2007) and
purchasing behavior (George, 2004; Yang et al., 2007).
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Perceived Behavioral Control
Ajzen and Madden extended the TRA into the Theory of Planned Behavior (TPB) by adding a
new construct "perceived behavioral control" as a determinant of both intention and behavior.
Perceived behavioral control refers to consumers’ perceptions of their ability to perform a given
behavior. TPB allows the prediction of behaviors over which people do not have complete
volitional control. Perceived behavioral control reflects perceptions of internal constraints (self-
efficacy) as well as external constraints on behavior, like the availability of resources. It has been
found that the Planned Behavioral Control (PBC) directly affects online shopping behavior
(George, 2004) and has a strong relationship with actual Internet purchasing (Khalifa and
Limayem, 2003).
Domain-Specific Innovativeness
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According to Ms.N. Jemila Dani in its journal – A study on Consumers Attitude towards
online shopping, 2011
Online shopping is becoming more popular day by day with the increase in the usage of the
World Wide Web. Understanding customers' need for online selling has become a challenge for
marketers. Especially understanding the consumer's attitudes towards online shopping,
improving the factors that influence consumers to shop online, and working on factors that affect
consumers to shop online will help marketers to gain a competitive edge over others. Therefore,
our study has focused mainly on two research questions,
i) what are factors that influence consumers to shop online and to see what factors are
most attractive for Kanyakumari District online shoppers?
ii) Who are online shoppers in terms of demography?
We foresee that our findings will give a clear and wide picture to online retailers and will help
them understand the specific factors that influence consumers to shop online, so they can build
up their strategies to cater to online shoppers in Kanyakumari District.
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CHAPTER 3
CONCLUSION
Consumers are very conscious about the price and quality of the product in online shopping.
Customers prefer goods that have less than the worth of the price. If the price of the product is
more than customers feel touch and see the product before they buy or book online. Customers
feel that online marketing strategies provoke them to buy products by giving different offers like
sales and discounts. From the later year of marketing activities changing rapidly and every day,
new concepts shown to the public. Internet is the latest technology that brings the world market
in the hands of every consumer through digital marketing. Social media and search engines
create new things like virtual marketing. But most customers are very rational in buying
decisions because if the goods value higher then they must feel to touch and feel about the
product before they decide about whether to buy or not. But from 2006 online shopping habits
drastically increased globally, competitors are increasing the distribution of goods as consumers
preferred.
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