Article

A Study of Intrinsic and Extrinsic Asia-Pacific Journal of Management

Research and Innovation

Factors Influencing Consumer 9(1) 77–90

© 2013 Asia-Pacific
Institute of Management
Buying Behaviour Online SAGE Publications
Los Angeles, London,
New Delhi, Singapore,
Washington DC
DOI: 10.1177/2319510X13483515
http://apjmri.sagepub.com
Teena Bagga
Manas Bhatt

Abstract
The purpose of this article is to identify the various intrinsic and extrinsic factors which effect the consumer’s buying behaviour
online. The intrinsic factors are the inner motivations or drives of the consumers and the extrinsic factors are the marketer generated
Internet marketing activities. The article aims at identifying these factors and their relative importance on the consumer’s purchase
behaviour. The theoretical framework of this article is based on a vast Internet marketing literature. The hypothesised model was
created that took into account the dependent and independent variables which were extracted using an exploratory factor analy-
sis and these variables were used to construct hypotheses which were empirically tested through techniques such as independent
t-tests and ANOVA. A structured questionnaire was used for this purpose and a survey was conducted on a sample of 200 through
judgemental sampling. Questionnaires were filled by respondents in person as well as a pre-defined list of respondents based on their
demographic profile was selected and questionnaires were mailed and posted online. The Exploratory Factor Analysis identified seven
major intrinsic and extrinsic factors which govern the consumer’s buying behaviour. These seven factors were: Need for Recreation,
Convenience, Website Attributes, Online Advertising, Social Communication, Information Search and Security and privacy concerns.
The importance of these seven factors differ across different demographic variables such as age, income group of consumers and
gender. The article presents a simple approach towards identifying the most effective Internet marketing tools that companies should
employ and also helps in better understanding the online consumer behaviour which differs from the traditional consumer behaviour
across various dimensions.

Keywords
Internet marketing, buying behaviour, online advertising, brick and click, consumer decision making, social networking

Introduction Companies have different options to reach the prospec-

tive customers but Internet has become the main medium
Today it is not sufficient for any large enterprise to main-
for reaching potential clients anywhere across the globe.
tain a stronghold in the market by just sticking to the
Internet has changed the way people used to do things. It
traditional medium of marketing, that is the Brick and brings the global audience closer and introduces a new
Mortar system. Organisations need to have an online medium of advertising which is quite unique compared to
presence to keep with the fast paced growth of technology other advertising media (Spilker, 2010). Similarly search
and changing consumer preferences. engines like Google, Yahoo, make the searching of prod-
The consumer is changing as well as the market place. ucts and services very easy and have become an excellent
Marketing is taking a new shape and a shift from the tradi- source of obtaining new clients as well as a medium of
tional 4P’s is inevitable. A McKinsey survey of marketing Brand Building.
executives from around the world shows that in marketing, The online behaviours of consumers are subtlety
things are starting to change and companies are moving different in nature from traditional consumer behaviour
online across the spectrum of marketing activities, from due to the unique characteristics and interplay of techno-
building awareness to after-sales service and they see logy and culture (Chau.M, Cole.C et al., 2009). Although
online tools as an important and effective component of commercial use of the Web has been increasing at an
their marketing strategies. exponential rate, how the multidimensional aspects

Teena Bagga, Assistant Professor, Department of Information Technology, Amity Business School, Noida, India.
E-mail: tbagga@amity.edu
Manas Bhatt, MBA (Marketing and IT), Amity Business School, Noida, India.
E-mail: manas.bhatt@absolutdata.com
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78 Teena Bagga and Manas Bhatt

inherent in traditional consumer behaviour change in the on Delivery’ due to the convenience and safety asso-
context of e-commerce is sparsely researched, despite its ciated with it, but as all websites do not provide this
importance. option it becomes a major influence on consumer’s
buying intentions online which makes wide availa-
bility of payment options and secure browsing a vital
Internet Marketing Redefined component of the Internet marketing strategy of any
Shifting from the traditional 4P’s, marketers are now using company.
the Internet as a new medium of reaching to the customer
and this is evident from the increased share of revenues Understanding the Internet
being invested in developing the Internet as a marketing
tool. Consumer
Internet marketing encompasses a whole spectrum of The consumer psyche is dynamic in nature so is the mar-
activities which generally include: ketplace in today’s scenario. Companies before developing
any strategies for its prospective consumers have to under-
• Communication Strategy: Online advertising, sales stand the consumer decision making process. Fishbein and
promotions online and spreading consumer aware- Ajzen (1975) proposed the theory of reasoned action
ness through different online channels including according to which consumers rely on intrinsic cues more
social media, viral information etc. Liu and Xiao as compared to external stimuli. An individual’s inner
(2008) stated that people opt for online shopping due drives which arise due to his needs propel him to take
to a variety of utilitarian and hedonic needs out purchase decisions.
of which discounts and special deals is one of the
The commercial evolution of the World Wide Web has
most important which makes advertising and sales
resulted in an environment where consumers engage
promotions online an integral part of any company’s
directly with businesses in a variety of ways right from the
Internet marketing strategy.
regular Brick and Mortar establishments to social network-
• Distribution Strategy: According to many research-
ing websites and micro-blogging (Reppel and Szmigin,
ers one of the main purposes of online shopping for
2010). This calls for a holistic marketing effort on part of
consumers is the convenience associated with order-
the marketer to engage the consumers in the best possible
ing and receiving products at the door step.
manner and develop a favourable image about the company
Companies are looking to strengthen their distribu-
and its offerings in the minds of the consumers.
tion channels by eliminating the middlemen thereby
Behind the visible act of making a purchase lies a deci-
creating a win-win situation by cutting down middle-
men margins and a speedy doorstep delivery to its sion process that must be investigated.
consumers (Darrel, 2011). According to J. Scott Armstrong (1991) the purchase
• Website Designing: Another key attribute which decision process is the stages a buyer passes through in
has to be taken into account when developing a making choices about which products and services to buy.
full-fledged Internet marketing strategy is to design The stages are:
your website in such a way that it is user friendly,
informative, attractive and becomes a tool for differ- 1. Problem Recognition
entiation from its competitors (Thomas, 2008). 2. Information Search
  An average customer has to be considered as a 3. Evaluation of alternatives
non-technical and non-computer friendly individual 4. Purchase Decision
and the website should be designed accordingly also 5. Post purchase Behaviour
keeping in mind the type of audience or the demo-
graphic profile of the prospective website visitors. Marketing stimuli act at each stage of the decision making
For example, A company dealing with toys or baby process and become a major factor in consumer buying
products will be targeting the age group 0–15 which behaviour and satisfaction. The initial problem recognition
will require a website which is user friendly as well stage of the decision making process is a result of
as colourful and vibrant. consumer’s black box (Loudon, 1988) which includes the
• Payment Options and Security: For an orthodox individuals Attitudes, Motivation, Perceptions, Personality,
consumer the Internet itself poses a threat to his Lifestyle and Knowledge. Once the consumer recognises
purchase intentions due to a variety of security and his needs he looks for information from various resources
privacy concerns. Consumers generally prefer ‘Cash a concept named as the Zero moment of truth.

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Factors Influencing Consumer Buying Behaviour Online 79

According to L.G. Schiffman (1993) apart from the satisfaction of online consumers. Liu and Xiao (2008)
internal factors consumer behaviour can also be affected developed a hypothesised relation model between con-
by external influences, such as culture, sub-culture, local- sumer satisfaction and the consumer behaviour of online
ity, royalty, ethnicity, family, social class, past experience consumers. They created this model based on the theory of
reference groups, lifestyle, market mix factors. Some of reasoned action (Fishbein & Ajzen, 1975). Technology
these factors can be controlled by the marketers such as the acceptance model (David, 1988) and the Innovation diffu-
marketing mix and some of the online reference groups. sion model to formulate their hypothesis and test them
empirically using techniques such as factor analysis, rela-
tion analysis and hypothesis testing. The study indicated
Literature Review that all the hypothesised variables were positively related
Smith and Chaffey (2005) give a short and basic definition with consumer satisfaction apart from convenience to shop
of Internet marketing as ‘Achieving marketing objectives and customer service quality does greatest effect on the
through use of electronic communication technology’. consumer satisfaction among all the nine factors which
According to Hoge (1993), Internet marketing—is the they had identified.
transfer of goods or services from seller to buyer that Several well-known models such as the AIDA model
involves one or more electronic methods or media. Reppel (Strong, 1925) or the frequently cited hierarchy-of-effects
and Szmigin (2010) focused on the commercial evolution model (Lavidge & Steiner, 1961) have been developed that
of the World Wide Web which has resulted in an environ- try to explain the consumers’ persuasion process (Grabam
ment where consumers engage directly with businesses in & Havlena, 2007; Vakratsas & Ambler, 1999). The AIDA
a variety of ways. The Internet has become an indispensa- model is one of the first formal advertising models,
ble tool for today’s businesses. Every business organisa- attributed to E. St. Elmo Lewis in 1898 (Strong, 1925).
tion is using it in some way or another these days. Marketing AIDA is an acronym for Attention, Interest, Desire and
managers who fail to use the Internet in formulating their Action. Lewis theorised in his model that salespeople
companies’ marketing strategy will be at a disadvantage. have to attract attention, maintain interest and create desire
Yannopoulos (2011) discusses how the Internet is impact- and the resulting action in order to be successful. Some
ing the conduct of a firm’s marketing strategy. The discus- studies show the way in which advertising messages
sion includes the impact of the Internet on product and have an effect on consumers’ perception (for example,
brand strategy, pricing strategy, distribution and promotion Baumgartner & Sujan, 1997) or the brand. Numerous
strategy. studies focus on which advertising effort works when, for
Hoge’s (1993) idea of Internet marketing is simple but it which consumer and under what circumstances (Ansari &
does not touch the important aspect of customer relation- Mela, 2003; van Heerde, Helsen, & Dekimpe, 2007).
ship. Strauss and Ansary (2006) defined Internet marketing According to Schiffman, L.G. (1993) apart from the
in their latest book as the use of information technology in internal factors consumer behaviour can also be affected
the process of creating, communicating and delivering by external influences. ( A c a r & P o l o n s k y, 2 0 0 7 )
value to customers and for managing customer relation- examined the impact of personality factors such as extra-
ships in ways that benefit the organisation and its stake version, self-esteem, opinion seeking and opinion leader-
holders. This explanation tells that e-marketing is not only ship on brand communication and online social behaviours.
about selling products or providing services through IT but The results show that gender and extroversion predict
it is lot more than that. It is not just traditional marketing online social network size and time spent online; that
using the information technology tools but it’s a strategic opinion seekers spend more time online and have larger
model to achieve brand value and provide customer networks relative to opinion leaders; and that opinion
satisfaction. leaders are more likely to communicate their brand use
Thomas (2008) identified the different approaches to online (Chen, Fay & Wang, 2011).
B2B and B2C Internet marketing across cultures. Most of To understand need for recreation as an important
the studies included determined that the use of Internet dimension of online shopping. Filo, K, Funk (2005) advo-
marketing has a positive impact on the firm’s marketing cates a more consumer-oriented approach to Internet mar-
performance. The findings also suggest that the Internet keting. The main focus is given to sports organisation.
experience and perceived risk play an important role in Internet marketing allows sport organisations to coordinate
consumer’s purchase likelihood. venue-based consumer experience with virtual content
To understand the consumer behaviour of online con- provided on Internet websites. It also allows them to capi-
sumers it is important to first understand the relation- talise on features of the product that consumers find
ship between the consumer behaviour and consumer attractive.

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80 Teena Bagga and Manas Bhatt

Hairong Li, Cheng Kuo, Maratha G. Rusell (2006) have opinion leaders and experts who give expert advice regard-
found out in their study that recreational buyers are those ing different products and services online. The research
who are frequent and occasional Web buyers. They are concluded that e-WOM reinforces the consumer decision
indeed not more price-sensitive than non-Web buyers. making process and e-WOM in consumer generated web-
They have also emphasised that recent advances in the sites deal with the more positive aspects of products and
shopping environment includes use of surround video, 3-D services rather than the negative ones, this result was
images and VR technology, which are likely to be the main however contrary to the one hypothesised.
characteristics of the second generation of online stores. To understand social networks which is another dimen-
These ‘experience-oriented’ features give the consumers a sion of Internet marketing. Doyle (2007) presented a social
shopping experience in which they can take full advantage network analyses which focused on identifying the most
of rich information, easy access and convenience of the important factors which makes consumers confident to
Internet. make a purchase decision. The results of the study were
Convenience is another important dimension in online based on case studies from fashion retail and online
shopping. Kuan-Pin Chiang, Ruby Roy Dholakia (2003) surveys. The study indicates that companies should focus
examine three essential variables of consumer’s intention on identifying opinion leaders in social networks and
to shop online (a) convenience characteristic of shopping these opinion leaders will act as advocates of companies’
channels, (b) product type characteristics and (c) perceived product offerings and reinforce positive word of mouth
price of the product. Results indicate that convenience and in the future.
product type influences consumer intention to engage in Another external dimension in consumer decision
online shopping. When consumers perceive offline shop- making process is information search Rutz & Bucklin
ping as inconvenient, their intention to shop online is (2011) emphasised that in Internet paid search advertising,
greater. Also, online shopping intention is higher when marketers pay for search engines to serve text advertise-
consumers perceive the product to be search goods than ments in response to keyword searches that are generic (for
experience goods. example, ‘hotels’) or branded (for example, ‘Hilton
Andrew J. Rohm and Vanitha Swaminathan (2004) Hotels’). The authors propose a dynamic linear model to
developed a typology based upon motivations for shopping capture the potential spillover from generic to branded paid
online. An analysis of these motives, including online search. The results show that generic search activity posi-
convenience, physical store orientation (for example, tively affects future branded search activity through aware-
immediate possession and social contact), information use ness of relevance. However, branded search does not affect
in planning and shopping and variety seeking in the online generic search, demonstrating that the spillover is asym-
shopping context suggests the existence of four shopping metric. The findings have implications for understanding
types. These four types are labelled as convenience shop- search behaviour on the Internet and the management of
pers, variety seekers, balanced buyers and store-oriented paid search advertising. Taylor et al. (2011) presents
shoppers. The convenience shopper is more motivated by research on Internet advertising, which examines consumer
convenience. The variety seeker is substantially more attitudes towards advertising presented on social media by
motivated by variety seeking across retail alternatives and users of those media. It was found that consumers reacted
product types and brands than any other shopping type. most favourably to advertising which was perceived as
Balanced buyers are moderately motivated by convenience offering entertainment or information value. According to
and variety seeking. The store-oriented shoppers are more Edelman, (2010) Digital marketers think of themselves as
motivated by physical store orientation. publishers of online content, recognise digital marketing as
To study the role of website attributes in online shop- a means to acquire advocates for their brands and invest in
ping, Ming Hui Huang (2003) identifies Web attributes, ways such as monitoring consumers to gain knowledge
their direct impacts on experiential flow and their direct about them in order to provide them with a satisfying sales
and indirect impacts on the utilitarian and hedonic aspects experience.
of Web performance. The results presented supported the To study security and privacy concerns is another
proposal that, as an information-laden medium, a success- dimension of Internet marketing. Anthony D. Miyazaki
ful website must be able to use its attributes to satisfy both and Ana Fernandez (2001) identify risk perceptions regard-
the information and entertainment needs of users. ing Internet privacy and security for both new and experi-
Online advertising helps in creating Word of Mouth. enced users of Internet technology. They explored risk
Bronner and De Hoog (2010) analysed the impact of perceptions among consumers of varying levels of Internet
e-WOM (electronic word of mouth) in consumer decision experience and how these perceptions relate to online
making process. They coined a term e-fluentials for the shopping activity.

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Factors Influencing Consumer Buying Behaviour Online 81

Patrick & Massey et al. (2002) analysed the impact of the Indian context is not very intense which opens a huge
different cultures and ethnic origins of people on the online opportunity to further do research on this subject from the
buying behaviour. They conducted a survey in Hong Kong context of Indian consumers.
and U.S and identified four major factors (Social commu- From the reviewed literature a model was developed to
nication, E-commerce, Hobby, Information search) related better understand the independent and dependent variables
to the use of Internet among people of Hong Kong and the and how they interact. The figure below was derived after
US. The results showed that people in Hong Kong are more a detailed literature review and will be used as a basis for
inclined towards Social communication and the US popu- the exploratory study. The model identifies Internet mar-
lation was more inclined towards information search as the keting as the independent variable and consumer buying
main purpose of Internet usage. Hence this study showed behaviour as the dependent variable.
that different cultures have different attitudes towards the According to the figure the buying behaviour of con-
Internet and these implications can be used by marketers to sumers depend upon various intrinsic factors and extrinsic
design websites according to different ethnic groups and cues. The intrinsic factors include the different motivations
countries as the different purposes of use may lead to dif- consumers have to shop online which also depends upon
ferent impressions of the same websites. the type of product or service they want to purchase, the
varying demographic profiles of consumers also impact
the purchase pattern of different products and services in
Research Methodology the web environment. An individual’s need, motivations,
From the literature supporting Internet as a tool for market- personality, lifestyle and attitude also influences his buy-
ing for companies worldwide and the impact on consum- ing behaviour and decision making.
er’s decision making and buying behaviour it was evident Apart from the intrinsic factors the buying behaviour is
that further research is required in this field to better often governed by many extrinsic cues which are usually
analyse the effect of Internet marketing which is a growing marketer generated and include the various marketing
phenomenon in both B2B and B2C businesses. Although strategies and tools which they employ. The research aims
the users of Internet are growing day by day and companies at identifying these intrinsic and extrinsic factors which
are turning to the non-traditional medium of marketing influence a consumer’s purchase behaviour online and
through the Internet rather than completely relying on the sometimes also reciprocated while shopping at brick and
‘Brick and Mortar’ business model, the impact of Internet mortar establishments.
marketing varies from industry to industry and there is a
lack of proper research in terms of consumers belonging to
different demographics. The research work especially in
Sampling Design
Keeping in mind the time and resource constraints the
Figure 1. Hypothesized Research Model sample size estimated taking into account the samples used
in various researches of small (similar) magnitude, the
/'#574'/'06/1&'. sample size is estimated to be 200 respondents. A struc-
tured questionnaire was prepared and validated by various
professors and academicians. A pilot survey was conducted
':64+05+%(#%6145 on a small sample of 20 respondents to ensure the feasibil-
ity of the questionnaire. After making certain adjustments
+06'40'6/#4-'6+0) the final research instrument was formed.
611.5 The questionnaire consists of 19 statements on a 5-point
%1057/'4$7;+0) Likert scale and also a set of dichotomous and multiple
$'*#8+174 choice questions. The data was collected using judgmental
+064+05+%(#%6145 sampling approach wherein 220 questionnaires were
mailed to a pre decided list of respondents based on differ-
ent demographic variables such as age, income and gender
1PNKPGUJQRRKPIOQVKXCVKQP
to get a better representation from each group. The ques-
&GOQITCRJKERTQHKNG
tionnaires were validated for redundancies and an effective
#IG)GPFGT5RGPFKPIRQYGT
sample of 200 respondents was selected after rejecting 20
2GTUQPCNKV[.KHGUV[NG#VVKVWFG
questionnaires.
The demographic profile of respondents is summarised
Source: Collected and compiled by the authors. in the above table. 40 per cent of the respondents belong

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82 Teena Bagga and Manas Bhatt

Table 1. Demographic Profile of the Respondents H13: There is a significant difference in importance assig-
ned to various dimensions influencing consumer buying
Cumulative
Percent Percent behaviour between different income groups.
Profile Frequency % % H01: H02 and H03 are the null hypotheses whereas H11, H12
AGE PROFILE and H13 are the corresponding alternate hypotheses.
Less than 20 Yrs 28 14 14
The first hypotheses was tested using an Independent
20–25 Years 80 40 54
samples t-test whereas the other two hypotheses were
25–30 Years 76 38 92
tested using a one–way ANOVA test for comparison of
Above 30 Years 16 8 100 means.
Total 200 100
GENDER
Data Analysis
Males 104 52 52
Females 96 48 100 The primary research focused on certain factors which
Total 200 100 were derived after an in-depth review of literature. A factor
analysis was performed for the purpose of dimension
FAMILY INCOME reduction which reduces the number of factors by clubbing
Less than 2 Lac 12 6 6 them together to further refine the results and give us a
2–5 Lac 36 18 24 better understanding of the most important factors in the
5–8 Lac 60 30 54 research.
More than 8 Lac 92 46 100
Total 200 100
Reliability
Source: Collected and compiled by the authors.
The Cronbach’s Alpha model was applied to know the
to the age group of 20–25 years, 52 per cent of the respond- reliability of the data collected through the Likert scale. A
ents were males and 46 per cent of the respondents belong score of 0.6 and above is considered to be reliable. A score
to the highest income group of above 8 lac. of 0.702 shows that the data collected through the Likert
scale is reliable, that is, data is consistent and worthy of
reliance or trust. A reliability of .0702 means that about
Hypothesis of the Study more than half of the variance of the observed score is
After reviewing the literature on the subject matter certain attributable to truth and less than half is attributable to
hypothesis were formulated to compare the mean differ- error. It can also be said that a reliability of .702 means the
ences according to Gender, Age and Income groups for variability is about 70 per cent true ability and 30 per cent
various dimensions to be extracted after the factor analysis. error. Hence the research can be carried out on this data set.

H01: There is no significant difference in importance assig-

ned to various dimensions influencing consumer buying Table 2. Cronbach’s Alpha Reliability Test
behaviour between males and females.
Reliability Statistics
H11: There is a significant difference in importance assig- Cronbach’s Alpha Cronbach’s Alpha Based No. of Items
ned to various dimensions influencing consumer buying on Standardised Items
behaviour between males and females. .702 .702 19
H02: There is no significant difference in importance assig-
ned to various dimensions influencing consumer buying
behaviour between different age groups. Table 3. KMO and Bartlett’s Test for Sphericity

H12: There is a significant difference in importance assig- KMO and Bartlett’s Test
ned to various dimensions influencing consumer buying Kaiser-Meyer-Olkin Measure of Sampling Adequacy 0.741
behaviour between different age groups. Bartlett’s Test of Approx. Chi-Square 1244.606
H03: There is no significant difference in importance assig- Sphericity Df 171
ned to various dimensions influencing consumer buying Sig. 0.000
behaviour between different income groups. Source: Collected and compiled by the authors.

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Factors Influencing Consumer Buying Behaviour Online 83

Sample Adequacy These were subjected to principal component analysis

using Varimax rotation method with Kaiser normalisation
The Kaiser-Meyer-Olkin (KMO) measure of sampling in order to reduce the multiplicity of variables into selected
adequacy is an index used to examine the appropriateness factors. But before the factor analysis it is important to
of factor analysis. High values (between 0.5 and 1.0) indi- consider the values of KMO measure of sample adequacy.
cate factor analysis is appropriate. Values below 0.5 imply The research sample showed a score of 0.741, which is
that factor analysis may not be appropriate. A set of 19 greater than 0.5 which suggests that the data is adequate for
statements describe various factors which were considered factor analysis.
to be important in influencing consumer buying behaviour.

Table 4. Total Variance Explained and Eigen Values of the Extracted Factors

Total Variance Explained

Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings
Component Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %
1 3.071 16.162 16.162 3.071 16.162 16.162 2.339 12.312 12.312
2 2.593 13.646 29.808 2.593 13.646 29.808 2.232 11.748 24.060
3 2.278 11.989 41.798 2.278 11.989 41.798 2.069 10.889 34.949
4 1.759 9.257 51.054 1.759 9.257 51.054 1.964 10.334 45.283
5 1.461 7.689 58.743 1.461 7.689 58.743 1.786 9.398 54.681
6 1.324 6.970 65.713 1.324 6.970 65.713 1.583 8.329 63.010
7 1.022 5.377 71.091 1.022 5.377 71.091 1.535 8.080 71.091
8 .936 4.927 76.018
9 .864 4.549 80.567
10 .798 4.202 84.769
11 .605 3.182 87.951
12 .544 2.862 90.813
13 .433 2.278 93.091
14 .358 1.885 94.976
15 .318 1.675 96.651
16 .241 1.270 97.921
17 .168 .883 98.804
18 .128 .672 99.477
19 .099 .523 100.000
Extraction Method: Principal Component Analysis.
Source: Collected and compiled by the authors.

Table 5. Rotated Component Matrix

Rotated Component Matrixa

Component
1 2 3 4 5 6 7
Online shopping saves time and effort –0.130 0.215 0.056 0.255 –0.647 –0.117 0.326
Internet makes comparison of similar products 0.031 0.021 0.147 0.039 0.862 0.155 0.028
of different brands easier
Shopping at stores gives me more satisfaction and 0.699 0.120 –0.127 0.241 0.117 0.168 0.142
enjoyment than shopping online
(Table 5 continued)

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84 Teena Bagga and Manas Bhatt

(Table 5 continued)
Rotated Component Matrixa
Component
1 2 3 4 5 6 7
Personal contact and communication with sales 0.588 –0.305 0.174 –0.204 0.206 0.432 0.072
person are important while shopping
Touching or seeing the products in person is an i 0.772 0.259 0.083 0.135 0.020 0.056 0.067
mportant part of the shopping experience
Online banner ads and pop-up ads grab my attention 0.074 0.148 –0.144 0.8480. –0.015 0.053 0.197
and are a good source of information
Blogs are an important source of information regarding –0.340 0.032 0.501 0.293 0.186 0.254 –0.191
products and services
Viral information (videos/articles etc.) influences my 0.096 –0.319 0.186 0.042 –0.015 0.095 0.804
perception towards the products, people, organization etc.
I usually read online reviews of products before making a –0.257 –0.002 0.789 0.295 –0.136 –0.014 0.569
purchase decision
Company webpages (Fan-pages) on social networking 0.194 0.459 0.320 0.252 0.236 –0.125 0.517
websites are useful in spreading awareness about the
brand and its product offerings
I usually visit the company’s website before making a 0.023 0.268 –0.137 0.023 0.048 0.698 0.028
purchase of a product offered by the company
A user friendly and attractive interface of a website 0.262 0.129 –0.312 0.098 –0.082 0.715 –0.112
influences me to visit the website again
I feel hesitant in making payments online 0.076 0.641 0.050 0.101 0.365 0.067 0.072
I don’t mind sharing personal information on trusted websites 0.152 0.752 0.138 0.063 –0.607 0.378 –0.145
I don’t mind receiving e-mails regarding new products –0.069 0.284 –0.296 567 0.205 0.161 0.2380.
in the markets
I generally consult family and friends before making a purchase 0.034 –0.013 0.045 0.377 0.735 –0.333 –0.054
I usually seek expert opinion online before purchasing –0.065 –0.183 0.846 0.070 –0.001 0.132 –0.021
a high involvement (expensive) product.
Opinions of family and friends are more influential as 0.209 0.276 0.432 0.358 0.716 –0.328 –0.070
compared to industry experts
I usually share/tweet/post information regarding new 0.158 0.066 0.112 –0.167 –0.081 0.065 0.752
products in the market
Extraction Method: Principal Component Analysis.
Rotation Method: Varimax with Kaiser Normalization.
Source: Collected and compiled by the authors.
Note: a. Rotation converged in 9 iterations.

The above table indicates that 19 statements were The second factor has Eigen value of 2.232 and it explains
reduced to 7 factors which explained 71.091 per cent of 11.748 per cent of variance. The third factor has an Eigen
cumulative variance. The variance reflects considerable value of 2.069 and it explains 10.889 per cent of the vari-
contribution of these factors on influencing consumer ance. The fourth factor has Eigen value of 1.964 and it
buying behaviour online. In other words 71.091 per cent of explains 10.339 per cent of variance. The fifth factor has
the behaviour of consumers in choosing products online is Eigen value of 1.786 and it explains 9.398 per cent of vari-
due to these 7 intrinsic and extrinsic factors. The first factor ance. The sixth factor has Eigen value of 1.538 and it
has an Eigen value of 2.339 and since it is greater than 1.0 explains 8.329 per cent of variance. The seventh factor has
it explains more variance than a single factor. The percent- Eigen value of 1.535 and it explains 8.080 per cent of
age of variance explained by this factor is 12.312 per cent. variance.

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Factors Influencing Consumer Buying Behaviour Online 85

1. FACTOR C1: Need for Recreation 3. FACTOR C3: Information Search

Items Statements Factor Loadings Items Statements Factor Loadings

3 Shopping at stores gives me more 0.699 7 Blogs are an important source 0.501
satisfaction and enjoyment than of information regarding products
shopping online. and services
4 Personal contact and 0.585 9 I usually read online reviews 0.789
communication with sales person of products before making a
are important while shopping. purchase decision
5 Touching or seeing the products in 0.772 17 I usually seek expert opinion 0.846
person is an important part of the online before purchasing a high
shopping experience. involvement (expensive) product.
Source: Collected and compiled by the authors. Source: Collected and compiled by the authors.

4. FACTOR C4: Advertising and Promotions

The above table shows the factor loadings of different Items Statements Factor Loadings
factors according to which they were clubbed together. A 6 Online banner ads and pop-up ads 0.848
total of 19 statements were reduced into 7 factors: grab my attention and are a good
The above table shows the loading of factor C1. Three source of information
factors with positive loadings were chosen which indicate 15 I don’t mind receiving e-mails 0.567
that these variables share most of their variances between regarding new products in the
them and thereby co-vary with each other. The factor iden- markets
tified is ‘Need for Stimulation’ which means that respond- Source: Collected and compiled by the authors.
ents feel that shopping outside caters to their recreational
needs and online shopping is not a means to satisfy their
recreational needs. This means that consumer buying online shopping motivations. Identity theft is still a concern
behaviour online is also influenced by inner motivation of for consumers when hackers break into a merchant’s web
individuals. An individual whose recreational needs are site and steal names, addresses and credit card numbers.
higher will not enjoy shopping online as convenience takes Phishing is another danger, where consumers are fooled
a back seat in their case whereas if a person feels that con- into thinking they are dealing with a reputable retailer,
venience and time is more important for him then they will when they have actually been manipulated into feeding
be more inclined towards online shopping. For these indi- private information to a system operated by a malicious
viduals, the sales personnel play a driving force to shop. party. People with an orthodox mindset may hesitate while
They tend to communicate more with these sales personnel online shopping due to their privacy and security concerns
to clear their doubts before purchasing. They are highly whereas more techno-savvy people may find it a routine
dependent on feeling the product by touching it or seeing it thing to shop online without any hesitations.
before buying. Since these elements are missing in online The above factor signifies that people usually search for
shopping, so these shopper depend on outside shopping to a lot of information before making any purchase online if a
meet their recreational needs. product is high involvement. The relevant internal psycho-
The second factor combines two statements which can logical process that is associated with information search is
together be put into the category of ‘Security Concerns’ perception. Perception is defined as ‘the process by which
which is another intrinsic variable. According to this factor an individual receives, selects, organizes, and interprets
online payments and personal information are the prime information to create a meaningful picture of the world’.
security concerns of the customers which dictate their Consumers’ tendency to search for information on goods
and services makes it possible for researchers to forecast
2. FACTOR C2: Security Concerns the purchasing plans of consumers using brief descriptions
of the products of interest. After information search the
Items Statements Factor Loadings consumer compares the brands and products that are in
13 I feel hesitant in making payments 0.641 their evoked set. They read online reviews and seek expert
online opinion before making a purchase. Once the alternatives
14 I don’t mind sharing personal 0.752 have been evaluated, the consumer is ready to make a pur-
information on trusted websites chase decision. This can be predicated to the fact that
Source: Collected and compiled by the authors. during online shopping people cannot actually see the

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86 Teena Bagga and Manas Bhatt

products in person so they have to rely on opinions and 6. FACTOR C6: Website Attributes
information available from various sources such as online
Items Statements Factor Loadings
reviews and blogs written by experts.
The abovementioned factors can be clubbed into the 11 I usually visit the company’s website 0.696
before making a purchase of a
factor ‘Online Advertising’ which primarily include online product offered by the company
banner ads, pop-up ads and marketing through e-mail.
12 A user friendly and attractive 0.715
These factors also impact the consumers buying behaviour.
interface of a website influences me
The online consumer’s attention is grabbed with the help to visit the website again
of these online advertising tools. It is considered as a
Source: Collected and compiled by the authors.
good source of information and helps them in their pur-
chasing decision. E-mail marketing also includes sales
promotion schemes such as discounts and coupons which 7. FACTOR C7: Social Networking
are also an important aspect which influences the consum- Items Statements Factor Loadings
ers to use the online medium for shopping. Most of
8 Viral information (videos/articles etc.) 0.804
the companies are doing direct marketing via emails. influences my perception towards the
Personalised emails are sent by companies to its online products, people, organisation etc.
consumer in order to coax them to shop online. The results 10 Company webpages (Fan-pages) on 0.517
however showed that people are not very open to receiving social networking websites are useful
emails which can be seen through the low factor loading in spreading awareness about the
score in case of e-mail marketing. brand and its product offerings
The below factors can be clubbed into a factor ‘conven- 19 I usually share/tweet/post information 0.752
ience’ which implies that Internet makes comparisons regarding new products in the market
easier of different brands and also it saves time and effort. Source: Collected and compiled by the authors.
‘Click and Shop’ provides the online shoppers a wide
variety merchandise of different brands which help them to
compare. Also the door to door delivery saves time and prospective customers. Consumers while shopping online
efforts of these shoppers. Peer pressure plays a significant usually visit the company’s website if they want to pur-
role for online shoppers. A positive word of mouth spread chase a product offered by their company and it becomes
by the peer helps in buying decision. Consumers also find very important to have an informative website with price
it more convenient to depend on family and friends’ opin- comparisons and specifications of the products which
ions and consider them more important than industry makes it easier for consumers to decide whether to pur-
experts and family judgments are given more priority than chase that particular product or not. Also the website must
others. be interactive enough so that the consumer is persuaded to
The factor C6 talks about the company’s website and its make the purchase.
interface which also has an impact on consumers buying The last factor extracted can be termed as ‘Social
behaviour. A website which does not have ease of naviga- Networking’. It helps in spreading the information about
tion and is not informative or attractive will result in lower the product by creating awareness about the brand.
traffic on the website thereby reducing the number of Consumers are heavily influenced by social networking
websites and the information posted on them. Company
fan-pages and information shared by people on these web-
5. FACTOR C5: Convenience sites also influence consumer perception about the
company and its products and also the people associated
Items Statements Factor Loadings
with the company. E-wom (Electronic word of mouth) is
1 Online shopping saves time and –0.647 also a very important factor which means that people get
effort highly influenced by the opinions posted by people online
2 Internet makes comparison of similar 0.862 which in-turn influences their buying behaviour.
products of different brands easier The below table shows a one-way ANOVA to test the
16 I generally consult family and friends 0.735 hypothesis, ‘There is no significant difference in the impor-
before making a purchase tance assigned to various dimensions influencing con-
18 Opinions of family and friends are 0.716 sumer buying behaviour between people belonging
more influential as compared to to different income groups’. A mean score tending towards
industry experts 1 implies that the dimension holds high importance in
Source: Collected and compiled by the authors. consumer’s buying behaviour or purchase decisions. For

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Factors Influencing Consumer Buying Behaviour Online 87

Table 6. Income-wise Summary of Means and ANOVA of Dimensions Influencing Consumer Buying Behaviour
COMPARISION OF MEAN: ANOVA and T-TEST
Income wise importance of dimensions

ANOVA (Income Groups)

Less than 2 Lac 2–5 Lac 5–8 Lac More than 8 Lac F Sig.
Need for Recreation 1.777 1.963 2.1333 2.3467 118.935 0.000
Security Concerns 2.8333 3.27778 2.96667 2.91304 6.112 0.000
Information Search 2.6667 2.88867 2.64460 2.67336 1.309 0.001
Advertising and Promotions 2.5 2.833 3.1333 2.891 3.721 0.273
Convenience 2.22 2.08333 2.01667 2.00738 1.449 0.012
Website Attributes 2.0 2.7222 2.40 2.26087 6.052 0.230
Social Networking 2.778 2.777 2.6447 2.5797 1.108 0.347
Source: Collected and compiled by the authors.

people with annual income below 4 Lac per annum, need difference in the importance of these factors in the buying
for recreation is the most influential factor in governing behaviour of people belonging to different income groups.
their buying behaviour. This implies that people with The below table shows a one-way ANOVA to test the
income less than 4 Lac consider shopping as a means of hypothesis ‘There is no significant difference in the impor-
recreation and they prefer shopping at stores rather than tance assigned to various dimensions influencing con-
online. For the respondents with income more than 4 Lac sumer buying behaviour between people belonging to
per annum, Convenience is the most influential factor in different age groups’. For people below the age of 20, need
shaping their buying behaviour. for recreation is the most influential factor in governing
At a significance level of 95 per cent (.05) a sig score of their buying behaviour. This age group comprises mainly
greater than .05 implies that we cannot reject the null of the school going students or teenagers who consider
hypothesis. The above table shows that for the dimensions shopping to be a recreational activity and hence prefer
(need for recreation, security concerns, information search shopping at stores rather than online. For the respondents
and convenience) the significance value is less than 0.05 between the age of 20 to 25, information search is the most
which implies that we cannot accept the null hypothesis influential factors in shaping their buying behaviour. This
and there is a significant different in the importance implies that for these consumers information available
assigned to these 4 dimensions in the buying behaviour of from various sources such as blogs and websites is the
people belonging to different income groups. For all the most important factor while deciding upon purchasing a
remaining factors (Advertising and promotions, website product. They search for a lot of information and the avail-
attributes and social networking) the significance value is ability of information influences their buying behaviour
greater than 0.05 which means that there is no significant online. The information on blogs, company webpages and

Table 7. Age-wise Summary of Means and ANOVA of Dimensions Influencing Consumer Buying Behaviour
Age wise importance of dimensions

ANOVA
Less than 20 Years 20–25 Years 25–30 Years More than 30 Years F Sig.
Need for Recreation 1.78571 2.3167 3.2860 3.0 28.646 0.000
Security Concerns 3.21429 2.9250 3.05263 2.6250 6.687 0.000
Information Search 2.5240 1.8833 2.52626 2.58350 3.827 0.011
Advertising and Promotions 3.42857 2.8 2.8158 3.25 8.402 0.000
Convenience 1.95243 1.9375 2.34211 2.25 18.476 0.000
Website Attributes 2.7143 2.3 2.5421 2.25 3.202 0.024
Social Networking 2.6686 2.5167 2.80695 2.49975 3.393 0.019
Source: Collected and compiled by the authors.

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88 Teena Bagga and Manas Bhatt

online reviews are the most influential in their purchase From the above table we can conclude that in case of
decisions. For the age group 25–30 years, convenience is ‘need for recreation, convenience, social networking and
the most important dimension and the possible reason online advertising and promotions’ there is a significant
behind this could be the initial work pressure when the difference among the mean scores of these factors which
individual has started off his professional career. The lack influence the buying behaviour of males and females,
of time makes convenience a very important factor for this whereas for all other dimensions ‘security concerns, infor-
age group. People belonging to this age group are most mation searching and website attributes’(sig <0.5) there is
likely to shop online on a regular basis. no significant difference among the mean scores of males
At a significance level of 95 per cent (.05) a sig score of and females for these factors.
greater than .05 implies that we cannot reject the null
hypothesis. The above table shows apart from the dimen-
sion (Website attributes) the significance value is less than Results and Discussion
0.05 which implies that we cannot accept the null hypoth- The above analysis shows that a total of seven factors were
esis and there is a significant difference in the importance extracted after conducting a factor analysis and each of
assigned to these six dimensions in the buying behaviour these seven factors impact the consumer’s buying behav-
of people belonging to different age groups. For the factors iour to a different extent.
(Website Attributes) the significance value is greater than The factors identified were: Need for Recreation,
0.05 which means that there is no significant difference in Information Search, Security and Privacy concerns,
the importance of these factors in the buying behaviour of Convenience, Online Advertising, Website attributes and
people belonging to different age groups. Social Media.
The below table shows independent samples T-Test to The new refined model was developed based on the
test the first hypothesis that there is no significant differ-
analysis to understand the factors which influence consum-
ence in the mean of the seven factors in influencing the
er’s buying behaviour.
buying behaviour of males and females. If the significance
value is greater than .05 (95 per cent confidence level) we
• The refined model shows that consumer’s buying
cannot reject the null hypothesis which implies that there is
behaviour is more internally driven and extrinsic fac-
no significant difference among the mean scores of the
tors have lesser impact than the intrinsic factors.
factors influencing buying behaviour of males and females.
• Intrinsic factors like convenience influences con-
According to the mean values convenience is the most
sumers to purchase online.
important factor for males and need for recreation is the
• Need for recreation is another factor which signifies
most influential with respect to the female consumer
the hedonic needs of the consumers. If a consumer
buying behaviour.
has high level of hedonic needs and likes going out
Table 8. Gender-wise Summary of Means and T-Test of for shopping will most likely avoid shopping online.
Dimensions Influencing Consumer Buying Behaviour • Security concerns also have an impact on consum-
Gender wise importance of dimensions er’s purchase behaviour but from the analysis it was
shown that from the mean value scores which was
Males Females Sig t Sig (2-tailed) closer to 3 which correspond to a neutral value on the
Need for 2.25962 1.91667 0.148 5.640 0.000 Likert scale. This implies that even-though security
Recreation concerns impact consumer’s behaviour online but it
Security 3.000 2.97917 0.032 0.309 0.758 does not become a predominant reason of not pur-
Concerns chasing products online.
Information 2.64112 2.70829 0.039 0.646 0.519 • Convenience is one of the major factors which gov-
Search ern the consumer’s behaviour in purchasing online.
Advertising 3.09615 2.75000 0.845 3.627 0.000 The age group of above 25 years showed a greater
and affinity toward convenience which may be due to the
Promotions fact that working people get very less time to their
Convenience 2.19235 2.51396 0.203 5.526 0.000 disposal as compared to college going students
Website 2.44231 2.29167 0.036 1.629 0.105 which had a greater need for recreation.
Attributes • Social Networking and information searching also
Social 2.76927 2.51383 0.403 3.016 0.003 plays an important role in buying behaviour. Social
Networking networking leads to electronic word of mouth and
Source: Collected and compiled by the authors. dissemination of information which influences the

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Factors Influencing Consumer Buying Behaviour Online 89

Figure 2. Refined Model Sepicting Factors Influencing Consumer Buying Behaviour Online

REFINED MODEL

INDEPENDENT CONSUMER BUYING BEHAVIOUR

VARIABLE INTERNET MARKETING

DEPENDENT
INTRINSIC FACTORS VARIABLE

Need for Recreation (FACTOR C4)

Information searching (FACTOR C5)
SOCIAL MEDIA
Security and Privacy concerns (FACTOR C6)
MARKETING
WEBSITE Convenience (FACTOR C7)
ONLINE ATTRIBUTES FACTOR C3
ADVERTISING
FACTOR C2
FACTOR C1 EXTRINSIC FACTORS

Source: Collected and compiled by the authors.

purchase intentions of consumers who look for such Convenience was a major factor in consumer’s buying
information. Males show more information search- behaviour so companies should aim at making Internet
ing behaviour and females are more prone to be shopping more convenient by allowing facilities like COD
influenced by electronic word of mouth on social (Cash on delivery) and product customisation and video
networking websites. demos online so that consumers can judge the product
• Online advertising and promotions have higher attributes better without seeing them in person. The need
impact on females as compared to males and also the for recreation also influences consumers to shop via brick
age group below 25 years is more influenced by and mortar channel. Companies can design their websites
online banner ads and promotional offers than people in such a way that it becomes a shopping experience rather
above 25 years of age. than merely a business transaction. For example, Design
the website like an actual store with shelves of products
It can be concluded that these seven factors are the major and animated sales personnel to guide the consumers.
influencers of consumer’s buying behaviour online but the Taking these insights from the research companies can
impact of each varies from one another and also people look at marketing from a different perspective and realise
having different demographic profiles are influenced dif- that the consumer is more informed and educated and a
ferently by these seven factors. Companies should focus relationship with the consumers does not end at a mere
more on social network marketing and improving their business transaction.
website attributes as compared to online banner ads and
pop-ups which grab attention of consumers but do influ-
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