MBA THESIS Kuwait-Maastricht Business School (KMBS) Master of Business Administration (Intake 4)

Online Buying Behavior

The impact of Demographics, Shopping Orientations, and Risk Perception on Kuwaiti Consumers

By: Anwaar Husain Marafie (Kuwait)

A thesis submitted in partial fulfillment of the requirements for the degree of Masters of Business Administration (MBA) of the Maastricht School of Management (MSM), Maastricht, the Netherlands, (April 27, 2008)

ACKNOWLEDGMENT

Before anything, I would like to deeply thank almighty God who grants me the power and patience to complete this thesis.

I would like to express my sincere and utmost appreciation to my thesis advisor: Dr. Huub Ruel, for all the support in giving valuable guidance, insightful comments, patience, and generosity. Im very grateful for his cooperation by introducing me to his colleague: Dr. Mohamed Omar Mohamud to support me throughout the course of this thesis development. Dr.Muhamed has made an incredible contribution by devoting time and efforts for the continuous follow up of my thesis My special acknowledgement is also extended to all faculty members of KMBS, and all my colleagues in intake 4 for their assistance, valuable contributions and companionship. Heartily thanks must be passed to my family, friends who have given me tender support and encouragement during this long journey.

There are many more special people in my life, which I also want to extend my thanks to each of them for giving me strength and determination to complete this study despite my busy schedule. Lastly, I hope that this thesis will contribute and accelerate the successful development of ecommerce and online shopping in Kuwait

Anwaar Hussain Marafie Kuwait Maastricht Business School Kuwait April, 2008

ABSTRACT

This study aims at evaluating Kuwaiti consumers online buying behavior. The focus of the study was on three major factors that affect consumer online buying behavior i.e. demographics, shopping orientations and perceived risk. Consumer buying behavior theories were taken into account to decide the strategy and approach of study. The data were collected using questionnaire and personal interview targeting the Kuwaiti internet users only. The data were analyzed using MS Excel features. Findings of the study indicated that gender, education, income, convenience orientation, and economic orientation proved to be the main predictors of online buying status. The implications of the findings and directions for future research were discussed. The relevance of the research findings to Kuwait economy were discussed with a view of the future of online buying in Kuwait.

KEY WORDS: Consumer Behavior, Online Buying Behavior, Demographic, Shopping orientation, Risk Perception

II

TABLE OF CONTENTS

AKNOWLEDGMENT I ABSTRACT II TABLE OF CONTENTS III LIST OF FIGURES..... VI LIST OF TABLES... VII CHAPTER ONE INTRODUCTION

1.1 1.2 1.3 1.4 1.5

Introduction... Background and Overview ... Problem Definition....

1 1 2

Research Objectives.... 3 Research Question.. 4 1.5.1 Major Research Question 4 1.5.2 Minor Research Questions.. 4 Research Methodology . Thesis Structure ....

1.6 1.7

4 5

CHAPTER TWO LITRITURE REVIEW

2.1 2.2

Introduction The State of E-commerce: Online Shopping Trends ............. 2.2.1 Internet Usage and Growth in the World 2.2.2 Global Consumer attitudes towards Online Shopping 2.2.3 Popular Online stores in global market ..

7 7 7 8 11

2.2.4 Online Shopping Trends in Kuwait.. 12 2.3 Overview of Consumer Buying Behavior 15 2.3.1 What is Consumer Buying Behavior 15 2.3.2 Stages of the Consumer Buying Decision Process 15 2.3.3 Characteristics that Affect the Consumer Buying Decision Process III 17

2.4 Literature Review of Consumers Online Buying Behavior Research Studies and Approaches . 19 2.4.1 What is online buying behavior 19 2.4.2 Research Studies on Online Buying Behavior . 19 2.4.3 Approaches to Online Buying Behavior Studies.. 21 2.4.4 Common Factors affecting Online Buying Behavior/Decision. 22 2.4.5 Study Model..... 23 2.4.6 Study Framework: Factors affecting Consumers Online Buying Behavior..24 2.5 Conclusion 27

CHAPTER THREE RESEARCH DESIGN AND METHODOLOGY

3.1 3.2 3.3 3.4

Introduction Problem Statement .. Research Objective Methodological Framework.... 3.4.1 Research Question... 3.4.2 Research Approach: Quantitative and Qualitative 3.4.3 Research Strategy: Exploratory, Explanatory, and Descriptive...... 3.4.4 Limitations......................................................................................

28 28 28 29 29 30 31 32 32 32 33 33 34 34 35 37 37 37

3.5

Research Design......................................................................................... 3.5.1 3.5.2 3.5.3 Sample Selection............................................................................. Sampling Techniques.. Sample size .

3.6 3.7 3.8 3.9 3.10

Data source.................................................................................................. Data Collection Instruments .... Questionnaire Interview Data Analysis Method 3.10.1 Quantitative Data Analysis

IV

3.10.2 3.10.3

Data types . Qualitative Data Analysis

38 39

CHAPTER FOUR DATA ANALYSIS

4.1 4.2 4.3 4.4 4.5

Introduction................................................................................................ Data Tabulation .......................................................................................... Assumptions................................................................................................ Statistical Analysis...................................................................................... Quantitative Data Analysis: Questionnaire Responses............................... 4.5.1 Online Buyers vs. Non Buyers... 4.5.2 Demographic Factors.... . 4.5.3 Shopping Orientation Factors............................................................. 4.5.4 Risk Perception .. 4.5.5 Non Online-Buyers Perception

40 40 41 41 41 42 42 44 47 47 48 50

4.6 4.7

Qualitative Data Analysis: Interview Responses .. CONCLUSION.

CHAPTER FIVE CONCLUSION, RECOMMENDATIONS, FURTHER RESEARCH

5.1 5.2 5.3 5.4

Introduction............................................................................................... Conclusion . Recommendations ....................................................................................... Further Researches

51 51 54 54

CHAPTER SIX RELEVANCE TO THE KUWAIT ECONOMY

6.1 6.2

Introduction............................................................................................... Background 6.2.1 Overview of Kuwaiti Economy .. 6.2.2 Kuwaiti Business & Culture

55 55 55 56

6.3 6.4

Research Findings and Conclusions Relevant to Kuwaiti Economy .... Future of online buying..

57 58 59 61 65

REFERENCES....................................................................................................... APPENDIX A: QUESTIONAIRE . APPENDIX B: INTERVIEW QUESTIONS..

LIST OF FIGURES
Figure Figure 1 Figure 2 Figure 3 Figure 4 Figure 5 Figure 6 Figure 7 Figure 8 Figure 9 Figure 10 Figure 11 Figure 12 Figure 13 Figure 14 Figure 15 Figure 16 Title Purchases over the Internet Top Twenty Countries Internet Purchases Page 9 9

Items Purchased over the Internet 10 Comparison of Top Four Items Purchased 10 Consumer Buying Decision Process... 16 Characteristics that affect the Consumer Buying Decision Process... 18

Consumers Online Buying Behavior Study Model 24 Population Sampling . 32 Types of Questionnaire .. 35 Types of data and levels of numerical measurement .. 38 Online Buyers vs. Non Buyers. 42 Overall Respondents- Gender wise 42 Online Buyers Gender wise...42 Online Buyers - Age wise 43 Online Buyers Income wise 43 Online Buyers- Educational Background .44

VI

Figure 17 Figure 18 Figure 19 Figure 20 Figure 21 Figure 22 Figure 23 Figure 24 Figure 25 Figure 26 Figure 27

Online Buyers - Shopping Orientation Factors 44 Online Buyers- Age wise 45 Online Buyers -Gender wise 45

Online Buyers -Age wise45 Online Buyers -Gender wise 46 Online Buyers -Age wise.46 Online Buyers -Age wise46 Online Buyers -Gender wise 46 Online Buyers- Age wise....47 Online Buyers- Gender wise47 Non online Buyers Perception. 47

LIST OF TABLES
Table Title Page

Table 1 Table 2 Table 3 Table 4 Table 5

World Internet Usage and Population Statistic ..

World Internet Usage Growth Rate 2000- 2007.. 8 Demographics scale . 40 Online Buyers Responses.... 52 Kuwait Economy Statistics.56

VII

CHAPTER ONE: INTRODUCTION

1.1 Introduction
This research aims at studying the online buying behavior of Kuwaiti internet users. It further looks into the various factors which contribute in making online buying decisions. In addition it looked into the current status of online stores of companies in Kuwait and range of products and services offered by them for online buying. An insight into the status of e- commerce revolution in the region is also included to assess its growth in countries with similar cultural background.

1.2 Background and Overview

The idea of studying this particular subject was derived from my own experience, when I came back to Kuwait after completing my bachelor in U.S. I found that I had to go to store for every small thing which I could do from the comfort of my home over there in U.S. I began thinking why same thing could not happen here in Kuwait. I tried to find out the status of online stores in Kuwait which was very little to deal with. When I got the opportunity to work on thesis I decided to study this particular topic. Online shopping is relatively a new phenomenon but expanding very rapidly worldwide. In comparison to in-store shopping, online shopping is far too much efficient in reaching the targeted customers that can provide substantial time and cost saving. However, online shopping is not well developed as for as Kuwait is concerned, yet it is gaining ground. Youths in Kuwait are considering it as part of adventure and life style which also proves to be a convenient option. Truly speaking this is increasingly very popular approach which is more like an obsession in USA and the countries of the European Union. Majority of products in USA & EU markets are routed through internet for sale. The main reason for success in America and Europe is the difficulty in access to the point of sale. It might take a lot of time to reach to the stores to buy a particular product due to distance, traffic jams, tight working hours and other social commitments. Various researches show a tremendous number of American people shop on the Internet, and many have established their own exclusive business web sites to sell their products, provide product information, book orders and receive payments as well.

Reitsma (2007) found that "Global E-commerce spending was $132 billion in 2000, and its expected to be more than 8 trillion by year 2007. Online shopping is growing far too rapidly in USA and European Union. There have been numerous stories about the sudden rise of e-organizations, and the huge wealth created by many companies such as eBay, Cisco systems, Amazon.com, and Wal-Mart. The Internet created thousands of new businesses that changed the way organizations operated (Reitsma, 2007). According to Field (2008) analysis "The value of business-to-consumer e-commerce exceeded $4.87 billion in Kuwait, Lebanon, Saudi Arabia and the UAE in 2007". The analysis, which was based on face-to-face surveys in Kuwait and Lebanon, and online surveys in Saudi Arabia and the UAE, found that more than 5.1 million people in the four countries are engaged in some form of e-commerce in 2007. Field (2008) concludes that UAE's e-commerce user penetration was the highest among the countries studied. He found "the UAE's e-commerce users penetration stood at 25.1%, Saudi Arabia 14.3%, and Kuwait followed 10.7%, while Lebanon had the lowest penetration of e-commerce users with 1.6% of the total population (Field, 2008). The situation is absolutely different when we compare the usage of online shopping among American cities, European and GCC capitals with Kuwait. Unfortunately in Kuwait, the concept of online shopping is very much in infancy stage as of today, but certainly it is not going to remain same in the coming years. The days are not too far when Kuwait too can be a heaven for internet shoppers due to high level of online penetration in neighboring countries such as UAE and Saudi Arabia.

1.3 Problem Definition

The growth of shopping culture has been phenomenal in the recent years; however the online shopping is still not progressed at same pace because it is still not well organized in Kuwait. The Kuwaiti consumers have yet to realize the advantages of online shopping as they are habitual to visit physical shops to meet their demands. The geographical factors are very crucial in Kuwait as most of places and stores are easily accessible and not too far away from the residential areas. Also due to cultural constraints, the young generation male and female find in-store visits more fun and entertainment as there are no country sides in Kuwait for other activities. The outdoor eating habits are also driving force behind in store buying especially among young generation.

Rigorous efforts need to be made to enlighten and educate the consumers. The retailers must reach to the potential customers in an effective way to enable them to realize the value of it. The local businessmen not have done enough to attract the consumers to accept online shopping as additional dimension to modern shopping. The limited numbers of active online stores do not provide enough information and motivation to the customers to get attracted to online shopping. Although the penetration of e-commerce in neighboring countries have affected the thinking pattern of the local businessmen, but they need to keep pace with the growth in order to get maximum benefits out of it, which also in turn adds to the improvement in the Kuwaiti economy. As the penetration of e-commerce in Kuwait is low hence adoption of online shopping is slow as well. This paper attempts to explore the key factors that influence online buying behavior of Kuwaiti internet users. Although there are various factors which contribute in making online buying decisions but this study focuses on three main factors i.e. demographics, shopping orientations, and risk perception more specifically.

1.4 Research Objectives

The main objective of this study is to gain a deeper understanding of online buying behavior of Kuwaiti consumers and the factors influencing their buying decisions. The study focuses on following variables considered as main variables in online buying decisions in most of the researches done in various countries. The selection of these variables further takes into account the local culture and life style. The research takes into account Kuwaiti internet users purchase goods or services sold online from companies based in Kuwait. In order to achieve the main objective, this study investigates:

The impact of consumer demographics i.e. age, gender, income, social status, and education level on Kuwaiti consumers online buying behavior. The impact of shopping orientations i.e. entertainment-orientation, experiential orientation, convenience-orientation, and economic-orientation on Kuwaiti consumers online buying decision.

The impact of risk perception on Kuwaiti consumers online buying decision.

And,

Evaluate the scope of online shopping in Kuwait and recommend the ways to improve it.

From commercial point of view, the research is expected to make some managerial and executive recommendations related to online buying in Kuwait as many of existing researches are made out of Kuwait. The benefits of this research are expected to attract the attention of companies looking to promote their sales through online sales.

1.5 Research Questions

1.5.1 Major Research Question: a. What are the factors influencing Kuwaiti consumers buying behavior toward online shopping? 1.5.2 Minor Research Questions: a. What is the impact of demographics on Kuwaiti consumers online buying behavior? b. What is the impact of shopping orientations on Kuwaiti consumers online buying decision? c. What is the impact of risk perception on Kuwaiti consumers online buying decision?

1.6 Research Methodology

Since the main objective of this study is to gain a deeper understanding of online buying behavior of Kuwaiti consumers and the factors influencing their buying decision, we decided to adopt the descriptive strategy to portray Kuwaiti consumer behavior and perception toward online shopping. The research approach is mainly well of quantitative nature and some qualitative data is also used to help interpret quantitative results in a deeper insight. Under the quantitative approach the data was collected using a standard questionnaire with close ended question. The questionnaires were distributed to Kuwaiti internet users belonging to all classes of the society and expected to respond to certain question in a given scale. The questionnaires were given to the target population in person as well as through email. The respondents who receive the questionnaire were requested to

send back it through email while the responded who received the questionnaire in person were assured that the same will be collected at their convenience in person. In order to strengthen the research responses some qualitative data was also collected through interview in which respondents were asked questions on same subject but were free to give their own opinion. This approach also helped in validating the research questions. The research aims at targeting only the Kuwaiti internet users selected randomly from the population Simple statistical analysis method is used to evaluate the data collected from primary source using Microsoft Excel. The analysis focuses on the comparative evaluation of three main factors under study. The analysis further evaluates important variables under each factor influencing online buying behavior and how do the demographic factors affect the shopping orientations, and risk factor in making online buying decisions.

1.7 Thesis Structure

This thesis consists of six chapters: Introduction: In this chapter, we introduced an overview of the e-commerce in general and the online buying behavior patterns of internet users in particular. We also introduced the purpose of our study through defining our research objectives and research questions. Then, we introduced the reader with the methodology we are going to follow in our research study and the structure of our study.

Literature Review: In this chapter, we discuss some of the theories related to our study. We explain the meaning and definition of consumer buying behavior, the theories and identified the factors affecting online buying behavior on consumers in general

Methodology: This chapter is about the methodology adopted in our study. We present the type of our research and the steps we have followed to get the data.

Data Analysis: In this chapter, we analyzed our data. We discussed the techniques used in our analysis and presented the findings that were drawn from the analysis of our data.

Conclusion: In the conclusion chapter, we draw our conclusions based on our findings and assumptions discussed through out the study. We answered the outcome of the research questions, presented an overview of its scope and implications.

The Country Relevance: In this chapter we tried to establish a link between the study and its relevance to the Kuwaiti economy and the scope of the online shopping and resulting impact on the growth of economy in general.

CHAPTER TWO: LITERATURE REVIEW 2.1 Introduction

Absence of any reliable study on Kuwait consumers' online buying behavior makes this research more valuable and timely step. This chapter starts with status of key factor of online buying that is, internet usage, in Kuwait in particular and the Middle East region and worldwide in general. It further discusses growth of online shopping worldwide and in Kuwait as well with references to some of the popular online stores. It further tries to understand the fundamentals of consumer behavior in general, buying decision making process and more specifically online buying behavior along with various factors influencing their buying decisions. This study discusses the three main factors i.e. demographics, shopping orientation and risk perception in detail which are main factors of the study.

2.2 The State of E-commerce: Online Shopping Trends

Online shopping is greatly increasing in popularity because of the speed and the efficiency with which it can be done. It is convenient, and allows consumers to shop for just about anything with out going to stores, however it must be noted that the growth of online shopping is directly linked to the growth of internet use. The use of internet has been on increase world wide and in Kuwait as well. 2.2.1 Internet Usage and Growth in the World
Population ( 2007 Est.)
941,249,130 3,733,783,474 801,821,187 192,755,045 334,659,631 569,133,474 33,569,718 6,606,971,659

World Regions
Africa Asia Europe Middle East N. America Latin America Oceana/Australia WORLD TOTAL

Internet Usage, Latest Data

44,361,940 510,478,743 348,125,847 33,510,500 238,015,529 126,203,714 19,175,836 1,319,872,109

% Population ( Penetration )
4.7 % 13.7 % 43.4 % 17.4 % 71.1 % 22.2 % 57.1 % 20.0 %

Usage % of World
3.4 % 38.7 % 26.4 % 2.5 % 18.0 % 9.6 % 1.5 % 100.0 %

Usage Growth 2000-2007

882.7 % 346.6 % 231.2 % 920.2 % 120.2 % 598.5 % 151.6 % 265.6 %

Kuwait

2,505,559

816,700

32.6 %

2.4 %

544.5 %

Table 1: World Internet Usage and Population Statistic

Source: Adapted from Internet World Stats (2007)

The internet usage penetration in relation to population in Kuwait stands at 32.6 % which is well above the over all average of Middle East which is 17.4% however it is far less than North America and Australia. The cultural and educational differences could be the reason behind the slow growth in the past but it is clear that it is moving at good pace which could have positive effect on the growth of online shopping as well. As illustrated below is the world internet usage growth rate from Year 2000-2007 Country Middle East Africa Latin America Asia Europe Oceana/Australia North America World Average
Kuwait

Growth rate from Year 2000- 2007 920.2 % 882.7% 598.5% 346.6% 231.2% 151.6% 120.2% 265.6%
544.5%

Table 2: World Internet Usage Growth Rate 2000- 2007

Source: Adapted from Internet World Stats (2007)

The growth of internet usage has been phenomenal in last seven years, especially in the Middle East which stands at the top of the table with a growth rate of 920.2%. Besides it worth noting that, the growth in Kuwait is higher than the average growth of Asian countries and close to Latin America growth rate. 2.2.2 Global Consumer attitudes towards Online Shopping Jaques (2005) in a global online Survey on internet shopping habits found that over 875 million consumers worldwide have shopped online in the past two years, increasing the online shopping market by 40% and more than half of internet users worldwide have made at least one purchase online in the past month. The survey asked Internet users from Europe, Asia Pacific, North America, Latin America, and South Africa about their online shopping experiences, including what items were last purchased, the method of payment used, and what payment card was used the most for online purchases. The findings show that among internet users, the highest online shopping percentage is found in Europe and North America, with Germany, Austria and the UK

topping the list, with at least 95 % of Internet users having purchased online (Jaques, 2005). See Figure 1 and Figure 2

. Figure 1: Purchases over the Internet

Source: Adapted from ACNielsen (2005)

Figure 2: Top Twenty Countries Internet Purchases

Source: Adapted from AC Nielsen (2005)

Across the globe, the most popular items purchased on the Internet are books (34%), followed by videos/DVDs/games (22%), airline tickets/reservations (21%) and clothing/accessories/shoes (20%) as shown in Figure 3. What people buy varies widely by market. This trend would encourage international book sellers to include Korean and Chinese language books on their websites as books top the list of items purchased by the Chinese (56%) and South Koreans (50%)((Jaques, 2005). See Figure 4

Figure 3: Items Purchased over the Internet

Source: Adapted from AC Nielsen (2005)

Figure 4: Comparison of Top Four Items Purchased

Source: Adapted from AC Nielsen (2005)

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2.2.3 Popular Online stores in global market The diversity of the online shopping marketplace is amazing because of its global reach. For the convenience of online shoppers, the number of discounts on internet stores has also been growing continuously. As the industry of online stores continues to boom, the level of competition among the retailers also keeps getting higher. This competition makes the online shops to be very alert and updated on what the other stores are selling to make sure that it would be their prices that would be most appealing for online consumers. There are literally thousands and thousands of online stores that continue to thrive and they all provide businesses and individuals with an electronic method of buying services and products. They provide the access to the widest variety of merchandise in the comfort of their offices or homes. Here are some of the most popular online stores or marketplaces that truly provide great products offering and service. a) eBay eBay is probably the most famous online auction. Consumers are able to find all kinds of items from books to gardening tools to appliances to clothing to baby products to electronic gadgets and even cars and real estate. b) Amazon This would be perhaps the second largest online store, which hosts both online stores and auctions. Although Amazon also offers the same products that eBay sells, their reputation mainly lies on the category of books and video entertainment. c) Wal-Mart Wal-Mart is an online store, which offers a wide range of merchandise as well. However, they also offer internet services, as well as questions regarding taxes at the start of the year. This makes Wal-Mart a great place to shop and get information.

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2.2.4 Online Shopping Trends in Kuwait Many have created business and done quite well. Some took the initiative but could not survive and vanished, however some continue to exist like Q8 car. Q8car.com a website faced a strong competition to stay in business 5 years ago with companies in same business; though it stood the competition and kept covering its expenses. Since the Kuwaiti market is very small, therefore the companies need to be highly competitive to remain in business. Those companies whether selling online flowers, PCs, cars or provide services like real estate. Whoever could afford to survive for two to three years stand better chance to do well in future. Following are examples on websites that sell products or services online in Kuwait: Q8car.com a website that is becoming the market place for cars in Kuwait is a prime example of a "success story". This site, even if you have nothing to sell or buy just helps you in understanding the market prices. However this site needs better searching criteria for the product to give wider choice for customers. For example: additional criteria of finding cars with certain mileage or cars that have been tested with certain car examiners and their percentages are posted on the website, so one can pick a car by its engine performance and deprecation. The possibilities are endless but it requires more professional attitude of web site owners who need to study the consumer needs and provide the necessary facilities to serve them better. For instance Amazon.com, consumer can search movies on the basis of producers or the directors not just by movie name. A lot of websites have not been updated since a long and do have limited information for the consumers. Taw9eel.com is a grocery delivery service. In the beginning people guessed, it would fail, over the time the Kuwaiti society accepted the services and offers which lead to the service flourishing day by day. It delivers goods in most of Kuwaiti suburbs and has a fleet of 50 trucks which is a huge commitment to the delivery services. They operate from a residential house which is used as storage place. The sales are increasing fast with a very little advertisement or any other type of publicity. It is very important that these types of businesses are legalized and made more transparent. Click N Buy, an IT company which takes a team of 9 people to keep up with the orders at Kuwaits online IT store. They sell different brands of desktop computers, laptops, printers, scanners, iPods and accessories. They have additional items that are not IT based which include contact lenses, mobile phones and water purifier systems. In an attempt to 12

keep customers interested, Click N Buy plans to offer several more items in the future such as watches, perfumes and handbags. They also plan to extend their access to other GCC countries. Click N Buy accepts major credit cards as well as K-net. The prices for IT products and services are considered lowest in Kuwait. Delivery is free for orders of KD10 and above, and you can expect to receive your purchase within 24 hours of ordering. They also accept trade-ins for old laptops, offer IT rentals, and there is even a discussion forum for customers. Q8 Flowers is Kuwaits first and only online flower delivery service. The geniuses behind this budding business are Khaled Al-Rshaid Al-Bader and Abdullah Faisal AlKhuzam. Both the partners have relied heavily on their educational backgrounds in the launching of their united business venture. Khaled is a Business Administration graduate from the University Of Toledo (USA) while Abdullah graduated from Kuwait University with a degree in Finance. Q8 Flowers offers a wide and beautiful array of flower arrangements in addition to balloons and greeting cards. In 8 months since their inception they have already received 20,000 hits. Just to summarize what I found on having a close look at Kuwait based companies' websites offering online products, it is important that site owner or manager must start building the reputation of the site first by providing sufficient information and easy access to the internet surfers and potential buyers for a certain period of time, 3 years at least. Keep the information free for customers and keep your site updated even if you had one hit per day. Most of us know how convenient the K-net and online payment services are here, especially in a small country like Kuwait where you can go to any place quickly and pay your bills or installment but paying online is surly a bliss. Many of us may have noticed that lots of Kuwaitis are running businesses from their homes which don't involve much overhead cost. For a catering business the overhead cost of ovens and stoves monthly rent, water, electricity can be saved resulting into hefty profit margins. In other countries these businesses would operate with full legal formalities, but in Kuwait they do not have to complete much formality to be in business. Since Kuwait is not a big country and most of the places are easily accessible and transport cost is very low due to very low petrol prices, the delivery of product becomes easy and cost effective. Most modern technology is also available easily; therefore cash on delivery becomes an easy proposition as consumers can pay by cash or credit cards through authorization. In view of that, Kuwaiti E-bay websites mostly work on cash on 13

delivery basis and not using K-net or credit card due to the illegal status of these companies which doesn't permit them to operate using a bank account and also are not eligible to use the online payment gateway in Kuwait. A business with legal status and necessary licenses can open a corporate account with any bank and apply for K-net gateway that costs about 400 to 500 Kuwaiti Dinnars as implementation fees and 1% per transaction on each transaction within the account. Such ease of payment would surly change the business is conducted and increase sales as well. In conclusion, online business in Kuwait has been picking up but in a limited way. Q8Car.com, Taw9eel.com, Click n Buy and the Q8flowers are just few notable examples, however a lot needs to be done. The question arises, Is Kuwait ready for such a transition from the brick and mortar shop into a virtual store? The answer is "yes". The success of online stores is largely assigned to geographical set up of the countries. If we look at the success from an American perspective, we can understand that, its much profitable for a store in New York city to sell to a customers spread over a huge geographical area where it might take several hours to get access a particular product or service. In case of Kuwait such characteristics do not hold much validity, because we can go from one end to the other in no time. So the major reason of the internet buying just blows out of the window in Kuwait. However it seems that it's working here in Kuwait, probably for some other reasons. The secret of Kuwaiti website's success lies in Kuwait's extreme weather conditions. The weather in Kuwait plays a major role in the retail business. If a store is not in a mall but in outdoor area where people have to walk outside, it becomes more a challenge than any enjoyment. The new generations of Kuwaiti youths have access of latest technology at their will and consider it life style and symbol of social status. Online buying which is another technological gift is definitely going to attract huge number of youths and middle aged people as they are also very sensitive to their life style and social status. Increasing educational level and unlimited access to funds are the important leads for a better future of online buying. Although it is not possible to eliminate the in-store buying but online buying just adds another dimension to the traditional shopping, though it is going to increase in the near future beyond any doubt.

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2.3 Overview of Consumer Buying Behavior

2.3.1 What is Consumer Buying Behavior Kotler, Wong, Saunders &Armstrong (2005:255) define consumer buying behavior as the buying behavior of final consumer- individuals and households who buy goods and services for personal consumption". The study of consumer behavior involves the understanding of who buys? How do they buy? When do they buy? Where do they buy? and why do they buy? Behavior occurs either for the individual, or in the context of a group (e.g., friend's influence what kinds of clothes a person wears) or an organization (people on the job make decisions as to which products the firm should use (Kotler, et al., 2005). On the other hand, Litvin & Maclautin (2001:821) state that consumer buying behavior is the process and activities people engage in when searching for, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires. However, it is not possible Buyer to be a Consumer. Kotler, et al. (2005:256) asserts Consumer as the person who actually uses the product or service, where Buyer is the person who actually purchases the product but may not necessarily use the goods and services. For my study purpose I have used these two terms in same meaning as the purpose of the study is to identify whether or not the online purchases are made and if yes, what factors influencing it. Therefore it is not significant whether the buyer is consumer or not. 2.3.2 Stages of the Consumer Buying Decision Process The consumer buying process is a complex matter as many internal and external factors have some impact on the buying decisions of the consumer. When purchasing a product, consumers go through several processes, which are discussed in the next page; however in routine purchases, generally a consumer doesn't go through all these stages.

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Figure 5: Consumer Buying Decision Process

Source: Kotler, et al (2005)

1. Problem/Need Recognition The problem recognition is the results of difference between a desired state and an actual state of a person. This motivates the person to start the buying process. The reasons for this situation could be many i.e. dissatisfaction from the current product or service, wants and desire for new product which are called internal stimuli. The influence of advertisements, promotions, tastes and smells etc. work as external stimuli in buying decisions (Kotler, et al., 2005). 2. Information search "The stage of buyer decision process in which the consumer is aroused to search for more information; the consumer may simply have heightened attention or may go into active information search (Kotler, et al., 2005: 282).The consumer searches for the information required to make a purchase decision. Belch and Belch (2007) explain that consumers undertake both an internal memory and an external search. The sources of information could be personal, commercial, public or experimental. Some times the perception of the people also plays important role in making a purchase decision (Kotler, et al., 2005). 3. Evaluation of alternatives The consumer evaluates different product or service alternatives on the basis of the information collected from various sources. The consumer evaluation of the alternatives

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is generally based on the type of need and benefits expected degree of importance, brand beliefs and the utility of the product or service. Consumer's evaluation usually based on some sort of brand preferences developed through past experience of their own or an influential group (Kotler, et al., 2005). 4. Purchase decision After going through the evaluation process the consumers forms the purchase intentions but before he makes the purchase decision some factors may come in the way such as attitude of others and unexpected situations. "A consumer's decision to change, postpone or avoid a purchase decision is influenced heavily by perceived risk" (Kotler, et al., 2005: 285). The amount of perceived risk varies with amount of money at stake, amount of consumer confidence and amount of purchase uncertainty. 5. Post-purchase Behavior Post-purchase behavior is the "stage of the buyer decision process in which consumers take further action after purchase based on their satisfaction or dissatisfaction (Kotler, et al., 2005: 285).The level of satisfaction and dissatisfaction depends upon the relationship between consumer expectations and products' perceived performance. Manufacturers of products clearly want recent consumers to feel proud of their purchase; it is therefore just as important for manufacturers to advertise for the sake of their recent purchaser so consumers feel comfortable that they own a product from a strong and reputable organization. This limits post purchase behavior. 2.3.3 Characteristics that Affect the Consumer Buying Decision Process "Consumer purchases are influenced strongly by cultural, social, personal and psychological characteristics"(Kotler, et al., 2005: 256). Figure 6 illustrates the four characteristics that affect on consumer in making purchase decision. See next Page

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Cultural Culture Sub culture Social culture

Social Reference group Family Roles and status

Personal Age and life cycle stage Occupation Economic circumstances Personality Self-concept

Psychologic al Motivation Perception Learning Beliefs and attitude

Buyer

Figure 6: Characteristics that affect the Consumer Buying Decision Process

Source: Kotler, et al (2005)

Cultural factors are "set of basic values, perceptions, wants and behaviors learned by a member of society from family and other important instructions" (Kotler, et al., 2005: 256). With in each culture there exist many subcultures such as nationalities, race, religion and social class who share similar values, interests and behaviors such as professionals, traders, managers, supervisors, etc.

Social factors include small groups such as family, friend circles, social roles etc. These groups have direct effect on person's behavior. In some cases the consumers are affected through direct face to face contacts and discussions or indirect references. The opinion leaders in social groups are always very effective in influencing consumer behavior (Kotler, et al., 2005).

Personal factors are the characteristics of a buyer such as age, occupation, life style, economic situation, personality, life cycle stage, and self-concept that influence buyer's decision (Kotler, et al., 2005).

Psychological factors are those attributes that an individual acquires through his past experience. The consumer beliefs and attitudes, perceptions, motivation and learning do have influence on the buyer's decision (Kotler, et al., 2005).

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2.4 Literature Review of Consumers Online Buying Behavior Research Studies and Approaches
2.4.1 What is online buying behavior Mathwich (2002:40) defines online buying behavior as the process of purchasing products or services via the Internet. The process consists of five steps similar to those associated with traditional buying behavior. In the typical online buying process, when potential consumers recognize a need for some merchandise or service, they go to the Internet and search for need related information. However, rather than searching actively, at times potential consumers are attracted by information about products or services associated with the felt need. They then evaluate alternatives and choose the one that best fits their criteria for meeting the felt need. Finally, a transaction is conducted and post-sales services provided (Mathwich, 2002). On the other hand, Goldsmith & Bridges (2000:22) describe consumer internet behavior as the domain of activities where Internet use and consumption behavior overlap. It comprises of gathering consumption information through exposure to advertising, shopping and online buying of goods, services and information (Goldsmith & Bridges, 2000). Thus, Mathwich (2002) definition of online buying behavior is more likely describe our research topic. As we study the consumer behavior in buying products or services over the internet and examine the factors that influence the buying decision. 2.4.2 Research Studies on Online Buying Behavior As in the case of traditional marketing in the past, most of the recent research and debate is focused on the identification and analysis of factors that one way or another can influence or even shape the online consumer's behavior; a good deal of research effort is focused on modeling the online buying and decision-making process. While many researchers do not see any fundamental differences between the traditional and online buying behavior, it is often argued that a new step has been added to the online buying process: the step of building trust or confidence (Lee, 2002).

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The study of consumer behavior helps marketers to improve their marketing strategies by understanding the behavior and motivation of consumers while shopping or making other marketing decisions. Babin, Darden & Griffin (1994) identified two dominant shopping motives i.e. shopping for fun and shopping with a goal in mind. Also, Wolfinbarger & Gilly (2001) showed that these two shopping motives are also evident in online shoppers. The fun shoppers generally search and buy specific products or services only. They mostly don't get involved in every kind of shopping. Whereas goal oriented shoppers are influenced by other motives such as convenience, information, wide choices and the ability to control the shopping experience (Babin, et al.,1994). There is considerable research to support their conclusion. Alreck & Settle (2002:30) found that consumers consider online shopping for more time saving than the traditional shopping. As well, Bhatnagar, Misra & Rao (2000:98) found that customers perceived convenience of shopping on the internet had a positive impact on online purchase behavior. Furthermore, Korgaonkar & Wolin (1999) in their study on "motives for web usage in general and online purchasing" identified seven motivations. These were: social escapism; transaction security and privacy; information; interactive control; socialization; non-transactional privacy; and economic motivation. Korgaonkar, et al. (1999:19) further concluded that transaction-based security concerns, interactive control, conversation motives, and economic motive were the main driving force behind online shopping. However, Bhatnagar, et al. (2000) examined perceived risk as it influences consumer internet shopping behavior. They defined two types of risk: product category risk and financial risk. High product risk was defined as situations where the product was technologically complex, and satisfied ego needs of the purchaser, was high priced, and was sold based on its feel or touch (Bhatnagar, et al., 2000:103). High financial risk was defined by fears about the safety of consumers' financial information online (Bhatnagar, et al., 2000:104). The results indicated that increases in both types of risk generally decreased the likelihood of online purchase behavior. This is consistent with the results from Vellido, Lisboa & Meehan (2000) where online purchase behavior was best predicted by consumer risk perception of shopping on the internet.

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In summary, consumer online shopping motives vary but they may be broadly classified as goal oriented (convenience, getting a good bargain) and for the fun of acquiring new information about an area of interest to them. Online shopping is positively influenced by the perception of convenience and need for information for making good choice. It is negatively influenced by high perceived risk. After discussing previously the consumer buying decision process, it is evident that there are various factors which affect the buying decision at different stages of process. These factors include the age, income, employment, education, economic conditions, perception and beliefs, feeling, risks, social and cultural influences. The study focuses some of these issues which were found relevant to the Kuwaiti market and Kuwaiti consumers

2.4.3 Approaches to Online Buying Behavior Studies As online shopping evolves, it has become the interest of many academicians and marketers. There are various approaches adopted by researches depending upon the needs and subjects of the study. Some of these approaches are discussed below:

1. Traditional Diffusion Model "In a traditional diffusion model, there are five categories of consumers in terms of when they adopt a new product--- Innovators, Early Adopters, Early Majority Consumers, Late Majority Consumers and Laggards" (Schutte & Ciarlante, 1998). Then, some marketers develop specific strategies to target each consumer category upon their similarities. This model is relevant in those places where consumers are prepared to take social risk and try new products first.

2. Technology Acceptance Model The Technology Acceptance Model (TAM) developed by Davis (1993) uses the Theory of Reasoned Action (TRA) to model and examines Internet users adoption of the web for retail usage. TRA has been used to model the Consumer online buying behavior by evaluating consumers attitudes and beliefs (Litvin &Maclaurin, 2001). The evolution of TRA into TAM attempts to explain and predict the determinants of individual behavior toward a given system that is exhibited as a system adoption. However, similar to the Traditional Diffusion Model, it measures intensions and reasons

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for some Internet users adopting online shopping or not, whereas the frequency and types of products commonly purchased online are not stated (Litvin &Maclaurin, 2001) 3. Online Shopping Acceptance Model The Online Shopping Acceptance Model (OSAM) explains consumer acceptance of online shopping and identifies nine types of consumer factors which influence the buying decision. This model established links between demographics, shopping orientation, risk perception which affects the consumer buying decision (Zhou, Dai & Zhang, 2007).

2.4.4 Common Factors affecting Online Buying Behavior/Decision Since there is no reliable data available on Kuwaiti consumer online buying behavior, it is useful to draw some conclusion on the basis of above discussion on different approaches and factors used in online buying decisions, which could be useful in the current study. The following most common factors affect the consumers online buying behavior/ decision which are generally evident in various studies and approaches. Personal factors The personal factors of consumers such as age, income, gender, internet usage etc are generally evident in various studies and could be important for this study. As well, they play crucial role in grouping the consumers and linking them to different type of factors which affect on their buying decisions.

Perceived benefits of online shopping The perceived benefits of online shopping in relation to traditional store shopping are one of the driving forces in the adoption. Convenience factors such as ease in purchase and time saving could be considered as perceive benefits of online shopping. Also, the products are available 24 hours a day and 7 days a week. Most importantly, the e-retailers offering wide range of products, ease of ordering, payment facility, and timely delivery could be motivating factor for attracting online buyers (Brown, Pope &Voges, 2003).

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Online Privacy and Security Similar to many countries the internet information security could be an equally important concern in the mind of the Kuwaiti consumers as well. Other factors such as lack of trustworthiness of the retailers in terms of delivery, refund issues and merchandise quality could be areas of concerns. Recreational Activity
Kuwait being a small country geographically has most of the population living in urban areas. Access to retail shops is convenient and trading hours are extended much longer than before. It is well known fact that the shopping is considered as a recreational activity. This could act negatively in relation to online buying behavior.

Difficulty in accessing product quality

The consumers' personal traits of touch, feel and see could also be an important element of consumer behavior that have some effect on online buying decision (Brown, et al., 2003). All the above mentioned factors could have different priorities for different group of consumers and additional factors may trigger the online buying. Therefore, the study would attempt to assess and analyze those factors which play major role in influencing online buying behavior/ decision.

2.4.5 Study Model We designed our study model based on the ideas derived from the following models used in previous researches. Sample Model 1 : Zhou, Dai & Zhang (2007) in their "Online Shopping Acceptance Model used the demographics, shopping orientation and risk perception as the key elements of their study. Sample Model 2: Li, Kuo & Russell (1999) in their study on "The Impact of Perceived Channel Utilities, Shopping Orientations, and Demographics on the Consumers Online Buying Behavior" focused on demographics, shopping orientation and risk perception as main factors of their study. The study model can be seen organized as shown in Figure 7

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Figure 7: Consumers Online Buying Behavior Study Model

2.4.6 Study Framework: Factors affecting Consumers Online Buying Behavior For the research purpose, the most common factors as mentioned previously were grouped together as described: Demographics, Shopping orientation and Risk Perception. 1. Demographics Previous e-commerce purchasing researches examined numerous demographic characteristics. Bhatnagar, Misra & Rao (2000) in a recent study on risk, convenience, and Internet shopping behavior included age, gender, marital status, and years on the internet found that marital status has no effect on purchase behavior and found mixed results based upon gender except for specific gender related products, years on the Internet, and age. Other studies report that e-commerce purchasers are younger; more educated and have higher incomes than non e-commerce purchasers (Ratchford, Talukdar & Lee, 2001). This study uses previous findings to choose the demographic factors which have been most commonly used. The study includes people of young and Middle Ages coming from different educational background and level of income. Main elements of demographic factor which form the major part of study are discussed below for clear understanding of their role in influencing consumer buying behavior a) Gender Alreck & Settle (2002:12) says that traditionally, shopping is an activity more favored by women. It is women who are usually in charge of household shopping and hold more positive attitudes towards the traditional store and catalogue shopping than their male counterparts. However, the new shopping channel provided by the internet seems to result 24

in a different gender pattern, if not opposite. Although there was no significant difference between online shoppers and non-shoppers in terms of gender, however men were found to make more purchases (Alreck & Settle, 2002). The effect of change in gender pattern in online shopping environment had been explained using various models. Swaminathan, Lepkowska & Rao (1999) explains that the gender pattern influencing buying behavior can be looked at from following three dimensions that is shopping orientation of men and women, choice of products and the urge for the product. Men and women are influenced differently under different circumstances. b) Age Bellman, Lohse & Johnson (1999: 32) points out that since the inauguration of internet till late 1990s, internet users were primarily middle-aged and younger. The younger age consumers had less purchasing power than the older consumers. Because of differences in purchasing power early research showed either no significant age difference among online shoppers. Swaminathan, et al. (1999), on the other hand, found that the age gap between online and non-online consumers has diminished considerably these days. It is still worth noting that the relationship between age and buying intentions is yet not very much clear. Some of studies find positive relationship while other shows either very little or no relationship. The result of this study should be of great interest for marketers.

c) Income and Education Online shoppers tend to earn more money than traditional store shoppers considering that the most popular items purchased online, including books, CDs, holiday and leisure travel, PC hardware, and software, are all normal goods those for which demand increases as income increases On the other hand, online shoppers are not necessarily more educated. Some studies identified a positive relationship between education and the time and money (Bagchi & Mahmood, 2004).

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2. Shopping Orientations Brown, Pope& Voges (2003) point out that shopping orientation is related to general predisposition of consumers toward the act of shopping. They are considered as a new dimension of the lifestyle and act on the basis of activities, interests, and opinion statements relating shopping activity (Brown, at al., 2003). The shopping orientation can be categorized as under: a) Convenience orientation: Refers to those shoppers who always take time, space, and effort into consideration. They prefer anytime anywhere shopping in a private setting with out hassle of waiting in long Q.

b) Economic orientation: Economic shoppers are price-oriented consumers who are concerned with buying products at the lowest price or getting the best value for the money they pay.

c) Recreational orientation (Entertainment): Those shoppers who enjoy the act of shopping whether a purchase is made or not. It results mostly out of personal motivation, life style (e.g., self-satisfaction and learning about new trends).

d) Experience Orientation (Psycho-socializing): These shoppers often shop out of their curiosity for social experience out of their home and love to touch feel and see the product and fun of bargaining. There are various other shopping orientation factors studied by various other researches, but my study considers the above listed orientations which have been most commonly used and form the major part of the consumer behavior especially in a country where online shopping is in early stages like Kuwait.

Donthu & Garcia (2004) revealed that various studies over a period time show that consumers tend to be convenience oriented. Freedom of anytime, anywhere shopping, the powerful of search engines, and convenience of price comparisons are the main triggers of online shopping (Donthu & Garcia, 2004:52).The values of convenience increases more as the consumer make more and more purchases.

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According to Rohm & Swaminathan (2004: 748) online shoppers are also innovative, variety-seeking, non-sensitive to brand or price and less conscious to risk than nonshoppers. For example, variety seekers and balanced buyers represent the majority of online shoppers, as well convenience and balanced buyers have the highest online propensity. In contrast, consumers who value social interactions and experience are less interested in online shopping.

3. Risk Perception Perceived risk is subjective belief of suffering a loss in pursuit of a desired outcome" (Pavlou, 2003:101). It plays a vital role in influencing consumer behavior to shop online. The online activity requires greater information sharing and higher risks than the traditional shopping environment. Perceived risk has negative influence on consumers intention to shop online, both for products and e-services. Type of risk that a consumer faces in online shopping generally refer to economic, privacy, personal, and performance Credit card security is the main example of a personal risk inherent in online shopping. Privacy risk reflects the degree to which a consumer may lose their privacy when they share confidential information while making online purchases while Performance risk refers to the consumer's perception that a product or service may fail to meet expectations, the fear of not getting what they want (Pavlou, 2003:103).

2.5 Conclusion
Based on the detailed review of literature on consumer behavior and its history of factors that influence on online buying behavior of consumer, a study model was prepared to investigate the online buying behavior of Kuwaiti consumer. The study model takes into account three factors demographics, shopping orientations, and risk perception along with their relative attributes. A questionnaire was prepared covering these factors and responses were colleted from different sections of society, as well we added some interviews to strengthen the study and give a comprehensive understanding of Kuwaiti online buyer.

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CHAPTER THREE: RESEARCH DESIGN AND METHODOLOGY 3.1 Introduction

This chapter explains the study methodology which consists of research problem and objective, research approach and strategy, sampling method, data collection method, analysis of data in general and methodology used for this study in particular with limitations of data collection.

3.2 Problem Statement

This research tries to identify the factors affecting online buying behavior/decision of Kuwaiti consumers. There are various factors that affect the buying behavior of the consumers but this study takes into account few of them which play major role in influencing consumer buying decisions i.e. demographics, shopping orientation and risk perception. The growth of online buying has added new dimension to shopping habits and also new challenges to the marketers to study consumer behavior from various angles. However it is worth understanding that most of researches do not see much difference in the buying behavior of online buyers and non buyers except to the fact that an online buyer must have good knowledge and understanding of the internet usage and access to it. The personal factors such as age, education, income and perceptions of online buying play important role in consumers' willingness to shop online.

3.3 Research Objective

The purpose of research is very important in deciding research approach, strategy, data collection method and analysis of data. In the modern world of advancing knowledge, the purpose and context of a research may differ considerably. Some researches may be limited to a particular organization or group of people or community and have specific area of interest to target where as others may be wide open covering larger population or many organizations targeting variety of issues. According to Sunders, Lewis & Thornhill (2003); In the light of the purpose and context, research can be categorized as Basic research and Applied research.

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Basic research: This type of research is generally conducted by academic organizations or individuals with self defined objectives in a flexible time scale with the purpose of expanding knowledge of business and management processes which has significance to society in general.

Applied research: This type of research is conducted by people from different sections of the society including academics in consideration with different interest groups, with a tight time scale and with purpose to improve understanding of a particular business or a management problem, acquiring new knowledge leading to some solutions for the interest groups. This study comes under Applied research category with purpose of acquiring new knowledge and gain better understanding of online buying behavior of Kuwaiti consumers. Thus, the outcome of which could help the Kuwaiti companies in improving their business by implementing the concept of e-commerce in more efficient way.

3.4 Methodological Framework

3.4.1 Research Question a) Major Research Question What does influence the online buying behavior of Kuwaiti consumers? Based on my personal experience of difficulty in going to stores to buy anything I need, coupled with availability of very few active online stores in Kuwait I decided to look into this problem. I talked few of my friends, relatives and colleagues at work and found that majority of them would like to try online buying but the choice is limited and they are not motivated to do so. When opportunity came to do my thesis I decided to tackle this issue in details. In order to understand the scope of the online store it was necessary to know what makes people buy on line therefore the study of their behaviour became the primary need of this thesis. b) Minor Research Questions d. What is the impact of demographics on Kuwaiti consumers online buying behavior? e. What is the impact of shopping orientations on Kuwaiti consumers online buying decision? f. What is the impact of risk perception on Kuwaiti consumers online buying decision? 29

The personal information is always important in evaluating the behaviour of the person as people with different attributes behave differently. The reasons for making buying decisions and perceptions of people play an important role; therefore these questions are answered in the research results. 3.4.2 Research Approach: Quantitative and Qualitative Every research project requires an adequate approach to fulfill all the requirements of the research based on the study nature. Although there are many variances among studies, there are only two approaches that must be considered to select either one or both of them in the desired study which are: Quantitative Approach: This approach involves the use of structured questions where the response options have been predetermined and a large number of respondents are involved. By definition, measurement must be objective, quantitative and statistically valid (Saunders, et al., 2003). Qualitative Approach: This approach based on collecting, analyzing, and interpreting data by observing what people do and say. Qualitative approach is much more subjective than Quantitative approach and uses very different methods of collecting information, mainly individual, in-depth interviews and focus groups (Saunders, et al., 2003). The research approach is mainly well of quantitative nature and some qualitative data is also used to help interpret quantitative results in a deeper insight. Under the quantitative approach the data was collected using questionnaire with close ended questions. The respondents were expected to respond to certain question in a given scale. In order to strengthen the research responses some qualitative data was also collected in which respondents were asked questions on same subject but were free to give their own opinion. This approach also helped in validating the research questions. 3.4.3 Research Strategy: Exploratory, Explanatory, and Descriptive According to Sunders, et al. (2003), the research strategy is general plan of how we go about our research which requires us to clearly stating the objective of research questions, source from which data is to be collected and the constraints in relation to time, access, money and ethical issues.

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There are several research strategies used in different scenarios. What is important is to select most appropriate strategy which can answer research questions and objectives. Some of the popular and most common strategies are experiment, Survey, case study, grounded theory, ethnography, action research, cross sectional and longitudinal studies and explanatory, descriptive and explanatory studies. The purpose of research is equally important as the research strategy. This study clearly indicates that it is the purpose of study which enables the choice of strategy which sometimes could be more than one as well. Exploratory: Sunders, et al. (2003: 96) states that Exploratory studies are a valuable means of finding out what is happening; to seek new insights: to ask questions and to assess phenomena in a new light. Furthermore, they claim that this approach is essentially useful if you aim to clarify your understanding of a problem. There are three preliminary ways of conducting exploratory research (ibid.): literature research, talking to experts in the area of study and conducting focus group interviews (Saunders et.al., 2003). Explanatory: The studies that attempt to establish casual relationships between variables may be termed as explanatory" (Saunders et.al., 2003:97). The focus in this study is to explain the relationship between the variables by studying a situation or a problem For example a quantitative data on female student's drop out from a course, may show a relationship between the marital status and absenteeism. Descriptive: Sunders, et al. (2003:97) states that the purpose of descriptive research is to portray an accurate profile of persons, events or situations. This can sometimes be an extension of, or a precursor to, an explanatory study. Since the main objective of this study is to gain a deeper understanding of online buying behavior of Kuwaiti consumers and the factors influencing their buying decision, we decided to adopt the Descriptive strategy to portray Kuwaiti consumer behavior and perception toward online shopping.

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3.4.4 Limitations Since the target population is not much aware of the value of researches and its impact on the people they generally don't show much interest in participating in the process. To make them agree to respond to the questionnaire was a tough task and I had to wait for a long time and remind them again and again to return the questionnaire back. Since the questionnaire was distributed at public places to follow up with respondent was not an easy task, as they were not interested in disclosing their personal contact details for follow up. However mail responses were better.

3.5 Research Design

3.5.1 Sample Selection Practically it is not possible to collect and analyze all the available data from all the sources due to constraints of time, money and access. Sampling technique provides a range of methods that enable us to reduce the amount of data we need to collect by considering data only from a subgroup, yet get the appropriate results to generalize the findings. This can easily be understood by following diagram.

Population

SAMPLE

Figure 8: Population Sampling

Source: Sunders, et al. (2003)

In the above diagram yellow part indicates the size of population to be studied and white part shows the size of sample selected for study to be generalized for whole population.

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3.5.2 Sampling techniques According to Sunders, et al. (2003); for many research questions and objectives it will be impossible to collect and analyze all the data available due to restrictions in time, money and often access. Sampling techniques provide a range of methods that enable the researcher to reduce the amount of data to be collected by considering only data from a subgroup rather than all possible cases or elements. Data for this study was collected randomly from the internet users. Initially the population was questioned if they were internet users, only then the questionnaires were distributed and interview is conducted. 3.5.3 Sample size Deciding a sample size is always a matter of judgment. The basic rule is that it should represent the rest of population, therefore, smaller the sample size more will be margin of error, larger the size of sample lesser will be margin of error. A representative sample size is the one which can adequately represents a population from where it has been taken. In order to have a reasonable sample size it is important to analyze the rate of response of the population chosen to respond. In most of cases we always have people who choose not to respond for their own reasons. In case of this study, the sample size selected was 60 (sixty); fifty questionnaires completed by consumers and ten interviews with the consumers. This was done keeping in mind the Kuwaiti culture and attitude of population understudy, their understanding of need for research, I estimated a response rate of 50%. Therefore, the sample size for the questionnaire was calculated as under Sample size = Min. sample size x100 50 Sample size = 50 x 100 50 = 100

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 For my study purpose, I therefore distributed 100 questionnaires to different sections of society at different locations such as social gatherings, malls, health centers and at university in person and through email. The responses received amounted to 55. Five responses were left out of study due to incomplete information which left me with 50 responses. Interviews were conducted by random selection of the consumers.

3.6 Data source

Primary data: It is a data which is original and being collected first time for studying any issues. The data under this category can be collected using questionnaires, observations, case study or any other method suitable for the subject. Secondary data: it is data which has already been collected and used by some one and same is been used for any current study. That data can come from previous studies, surveys or literature achieves and various type of documents. My study is based on Primary data collection as it is going to study the buying behavior of Kuwaiti internet users as on date. There is no authentic data available to suggest any trend in this regard. Some secondary data has been used to present the theoretical and conceptual part of the study and designing the questionnaire.

3.7 Data Collection Instruments

There are various data collection instruments that are used depending upon the type of information required. Data can be collected using; Observation of the behavior of the people understudy. Questionnaire with set of question aimed at answering the objectives of study to be either answered from with in a given choice or giving their free opinion. Interview of the people in a structured way or in depth interview.

For the purpose of this study we used questionnaire with a closed format where respondent had to rate the statements on a scale of 5 with strongly agree, to strongly disagree. I also used "interview" method to gather further information from the respondents in order to validate the questionnaire responses and add some more strength on the study.

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3.8 Questionnaire
According to de Vaus (2002:280) Questionnaire is techniques of data collection in which each person is asked to respond to the same set of questions in predetermined order. Questionnaire is most common form of data collection used widely by businesses and management around the world. 3.8.1 Types of Questionnaire The design of the questionnaire differs according to, how it is administered. Generally it can be divided in two types: a) Self Administered questionnaire: It is usually completed by the respondent. Such questionnaires are generally delivered either through mail and response collected with the same medium or delivered in person and collected as well.

b) Interviewer administered questionnaire: In this case the questionnaire is completed by interviewer on the basis of the answers given by respondent. These interview could be conducted either through prior appointments, on phone or randomly with permission from respondents. Variations of these two types of questionnaire can be described by the following diagram.

Questionnaire

Self Administered

Interview administered

Online questionnaire Postal Questionnaire Delivery and collection questionnaire

Telephone questionnaire Structured interview

Figure 9: Types of Questionnaire

Source: de Vaus (2002)

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 For the purpose of this study I have used "delivery and collection questionnaire". The questionnaires were distributed to the respondents through email and in person and collected in same manner. 3.8.2 Objectives of the Questionnaire The questionnaire was designed to test different variables of demographic, shopping orientations, and risk factors and their cause and effect relationship in influencing the buying behavior of the Kuwaiti internet users. The questions were categorized in the manner to get as accurate responses as much as possible. 3.8.3 Questionnaire Design The questionnaire was divided into three broad sections: a) Demographics: In this section the attributes of respondents were listed i.e. Gender, age, income, education, employment, and marital status. Gender and age relations were tested to see its effect on online buying behavior of the consumers. Like wise gender and marital status were tested to see the effect of it on buying behavior and relationship with various shopping orientation attributes and risk perception.

b) Shopping orientations: In this section questions were further divided into four categories i.e. economy, convenience, experience, entertainment. The behavior pattern of the consumer in each of these four categories was tested in relation to demographic factors. The study further evaluates the impact of each of the four categories of shopping orientation on consumers online buying behavior. c) Risk Perception: In this section, four questions were included to establish link between risks factors and online buying behavior. These questions refer to consumer worries related to credit card information stolen; sharing of personal information and willingness to buy online due to these listed risk factors. 3.8.4 Questionnaire testing validity and reliability In order to ensure validity and reliability of the questionnaire I asked my supervisor to give his feedback on suitability and structure of the question. Necessary adjustments were made based on the feedback from the supervisor. I further forwarded the questionnaire to 5 people to complete the questionnaire to identify if the target population will respond in the way I 36

intend to. Based on the responses further adjustments were made in shopping orientation and risk perception questions to simplify them for easy understanding.

3.9 Interview
Sunder, et al. (2003: 245) asserts an interview as a purposeful discussion between two people and help to collect reliable and valid data. Interviews can be conducted in many ways such as structured, semi- structured and in-depth. The type of interview depends upon the nature of research strategy. The descriptive research strategy uses structured interview more frequently. Structured interviews are built around an already prepared interview schedule. Interviewer asks the questions as they appear in the schedule, and also record the answers. However, he is expected to provide explanations, wherever necessary, to clarify the questions. Interviewer may also do some probing and ask the respondent to explain the answers, if found vague.

In my study I used the structured interview technique to gather additional responses which helped me to validate the responses from questionnaire.

3.10 Data Analysis Method

3.10.1 Quantitative Data Analysis Almost all researches involve some form of numerical data or data that can be quantified to answer research questions. To be useful these data need to be analysed and interpreted. The quantitative analysis technique assists this process. This analysis could range from simple diagram that shows frequency of occurrences, relationship between variables or more complex relationships. In order to analyze the data of this study I used MS Excel and created logical links between the variables and used quantitative analysis approach

3.10.2 Data types The quantitative data analysis is largely dependent upon the types of data collected. The quantitative data can be divided into two groups.

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a) Categorical data: Those values that can not be measured numerically but can be classified into sets according to their characteristics in which we need it. If a Nokia the mobile manufacturer wants to know which model N72, N76, N 92 is liked by customers most. The answer to this can not be numerically measured. However there are variances of this type of data such as ranked and descriptive data but still they do not give accurate numerical measurement (Sunders, et al.,2003).

b) Quantifiable data: Those values which can actually be measured numerically. This type of data is more precise and easy to analyze. The variance of this type of data are "continuous" which takes into account any length of measurement and "discrete" which is more precise and takes into account measurement with in a given range (Sunders, et al. ,2003). This is illustrated through the diagram.

Data

Categorical

Quantifiable

Descriptive

Ranked

Continuous
Increasing precision

Discrete

Figure 10: Types of data and levels of numerical measurement

Source: Sunders, et al. (2003)

In my thesis the questionnaire was of a quantifiable type where the responses were quantified to make analysis easy Strongly agree = 5 Agree = 4 3.10.3 Qualitative Data Analysis Qualitative data collected generally provide wide range of answers to the research questions. In order to analyze the results of such data it is important to categories them in some Neutral = 3 Disagree = 2 Strongly Disagree = 1

38

meaningful way. The qualitative data can be analyzed in a structured way or semi structured way, depending upon the research strategy and approach. For my research I depended on a structured analysis of the qualitative data where the responses were categorized according to the requirements of the research questions and responses were recorded with the scope of my study.

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CHAPTER FOUR: DATA ANALYSIS

4.1 Introduction
This chapter deals with analysis of the data collected from the target population Kuwaiti internet users using a questionnaire with standard set of questions, answered by different sections of the society, selected randomly. Further data was gathered through structured interview to collect additional information on the various factors that influence the online buying behavior of Kuwaiti consumers.

4.2 Data Tabulation

The data gathered was tabulated using MS Excel and important elements of study were identified. Using the Ms Excel features, links were created between demographic, shopping orientation and risk factors. Since the data was quantifiable therefore the response scale of five were termed as 5-1 for analysis purposes however the response scales of five were further tabulated to create a three scale measurement for interpretation.The data collected were input into the analysis table specially developed to summarise it and calculate the ratios. Microsoft Excel is used for the purpose. The functions actively used for analysing data were: functions, data sort, data filter, sheet linking, auto sum and graphical presentation. For the comfort of analysis the respondents were regrouped according to their demographic status from a scale of 5- 1 to 3 as shown below: Below 500 Low Income 501 - 100 1001 - 1500 Medium Married Married Collage Moderately Qualified 29 - 38 Middle Aged 1501 -200 More than 2000 High Widowed Others

Income

Marital Status

Single Engaged Single High School or less Reasonable Qualified

Divorced

Education

University Highly Qualified 39 -48 49 & over Old Aged

Age group

Under 18 19 - 28 Younger Aged

Table 3: Demographics scale

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4.3 Assumptions
During the study it was assumed that all Kuwaiti internet users have easy access to internet use and familiar enough to use it for useful purposes. It was also assumed that the internet users do not have any language barrier in terms of accessing the relevant sites. All the responses in the category of strongly agree and agree were grouped together and considered as the positive opinion of the responded, like wise strongly disagree and disagree were grouped together to be considered as negative opinion.

4.4 Statistical Analysis

The data collected using questionnaire was analysed keeping in mind three main factors that is; demographics, shopping orientations, and risk factor. Although there are other factors as well but the objective of our study required us to limit to three main factors. The analysis focuses on establishing link between; demographic factors and shopping orientation factors demographic factors and risk factor

The Analysis of data gathered was done using functions, sorting, filtering and graphical presentation. The data was put into analysis table on the basis of their scale rating i.e. if a respondent strongly agree with a statement in questionnaire it was input as "5" and if he strongly disagree it was put as "1". The responses with score of "5" and"4" were grouped together as the agreement of the respondent to a situation or statement, while the scores of "2" and "1" were grouped together as disagreement. The qualitative data collected through structured interview was also taken into account and relationship was compared with analysis of the quantitative data gathered from questionnaire.

4.5 Quantitative Data Analysis: Questionnaire Responses

The quantitative data gathered through questionnaire is presented in graphical form for clear understanding. A brief explanation for each graph has been included as well to clarify the meaning of each graph. The analysis of the data collected shows that consumers online buying behavior was highly influenced by two major variables which are gender and age. The responses of other demographic factors were not indicative of any trend or pattern, therefore the analysis of data has been done keeping these elements as base.

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4.5.1 Online Buyers vs. Non Buyers

34%

66%

Online Buyers

Non Buyers

Figure 11: Online Buyers vs. Non Buyers

The figure shows that 66% of the internet users (respondents) bought at least once in last three months which is a reasonable level. 4.5.2 Demographic Factors The sample size has a mix male and female respondents which is shown in the following diagram a. Gender

39%

40%
61%

60%

Male

Female

Male

Female

Figure 12: Overall Respondents- Gender wise

Figure 13: Online Buyers Gender wise

These two figures show very little difference in male and female proportion of "overall Respondents" and "Online Buyers".

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b. Age

60 50 40 30 20 10

58%

36%

6%
0

Young

Middle Age

Old

Figure 14: Online Buyers - Age wise

This data consist of young and middle aged and old aged online buyers. The figure shows that 58% of online buyers are young (28 years or less), and 36 % being middle aged (between 28 and 38). This makes total of 94% online buyers at age less than 38 years. c. Income Level

70 60 50 40 30 20 10 0

64%

36%

0%

Low

Moderate

High

Figure 15: Online Buyers Income wise

The figure clearly shows no online buyers in the low income group that is KD 500 or less. However there are 64% of online buyers who have moderate income. This clearly indicates that income plays an important role in online buying decisions.

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d. Educational Level

70 60 50 40 30 20 10 0

67%

24% 9%

High School

Collage

University

Figure 16: Online Buyers- Educational Background

The figure shows that majority of online buyers are moderately qualified which means they have some collage education. The online buyers with some collage or university education account for 91% respondents indicating that qualification is an important element, influencing the buying decision 4.5.3 Shopping Orientation Factors
70 60 50 40 30 20 10 0

64%

48% 39%

48%

Convenience

Economic

Experience

Entertainment

Figure 17: Online Buyers - Shopping Orientation Factors

The figure indicates the percentage of online buying behavior affect on each shopping orientation factor. Convenience is most influential factor, while experiential element is least influencing of all.

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a) Convenience- orientation

70 60

68%
50 40 30 20 10 0

50% 42%

Young Aged

Middle Aged

Old Aged

Figure 18: Online Buyers- Age wise

The figure shows that 68% of young aged people buy online because of convenience while only 42% of middle aged buyers consider convenience as major factor. However the figure of 50% convenience orientation of old aged people is not a representative figure because of very less number of respondents. b) Economic- orientation

54
100

52

54%

90 80

100%

50

70 60

48

48%

50 40 30

46

47%

42%

44

45%

20 10 0

42

40

Young Aged

Male

Female

Overall

Middle Aged

Old Aged

Figure 19: Online Buyers -Gender wise

Figure 20: Online Buyers -Age wise

Figure 19 indicates that 54% females are economic oriented while only 45% males are economic oriented. Figure 20 shows that young aged buyers are more economic oriented than middle aged buyers. However the figure of 100% convenience orientation of old aged people is not a representative figure because of very less number of respondents.

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c) Experience- orientation

40
100

40%
40

90 80

100%

39%
39

70 60

39

50

38%
38

40 30 20

42% 32%

38

10

Male

Female

Overall
0

Young Aged Middle Aged

Old Aged

Figure 21: Online Buyers -Gender wise

Figure 22: Online Buyers -Age wise

Figure 21 shows that almost equal percentage of male and females are experience oriented where they like to see and touch before buying. Figure 22 shows that only 32% of young aged buyers are experience oriented while 42% middle aged buyers are experience oriented. d) Entertainment Orientation

70

70

60

60

50

61%

50

61%
40

40

39%
30

30

39%

20

20

10

0% Young Middle Age Old

10

Female

Male

Figure 23: Online Buyers -Age wise

Figure 24: Online Buyers -Gender wise

Figure 23 shows 61% of young people enjoy the fun of buying online while only 39% of middle aged considers online buying a fun activity. Figure 24 clearly indicates that 61% of male buyers consider online buying an entertainment compared to 39% females.

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4.5.4 Risk Perception

54

100 90 80 70
48

100%

52

54%

50

60 50 40 30

67%
46

48%

44

45%

32%
20 10 0
40 42

Young Aged

Middle Aged

Old Aged

Male

Fem ale

Overall

Figure 25: Online Buyers- Age wise

Figure 26: Online Buyers- Gender wise

Figure 25 shows that 67% middle aged buyers are worried about the risks involved in online buying while only 32% young aged buyers are worried about risks of online buying. However the figure of 100% convenience orientation of old aged people is not a representative figure because of very less number of respondents. Figure 26 shows that females are more worried about risks of online buying than males. 4.5.5 Non-online Buyers Perception

90 80 70 60 50 40 30 20 10 0 Convenience Economic Experience Entertainment Risk

88% 82%

53% 35% 41%

Figure 27: Non online Buyers Perception

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 Figure 27 shows that those respondents who did not buy online anything in last three months are affected mainly by two factors i.e. the risks involved in online buying and their perception of experiencing the product before buying. It is worth noting that 88% internet users do not buy because of their risk concerns. Only 35% internet users think that online buying is convenient while 53% agree that it could be economical to buy online.

4.6 Qualitative Data Analysis: Interview Responses

Structured interviews were conducted with ten Kuwaiti internet users in Arabic to ensure a complete response avoiding any language barrier. The answers were later translated and recorded into English. The interview responses were matched with convenience questions to check how far it is consistent with results of quantitative data. This also helped to know if the types of question used in quantitative data collection were representative of the general consumer behavior. On the question of convenience most of the respondents mentioned that it saves a lot of time and also cost which gives them opportunity to buy only when they find the best price. The working married females often mentioned that it is convenient for them to buy online as they get little time after work to go out and shop for them and their children as they have other obligations i.e house duty, family gathering, personal stuff. The respondent no. 3, 4 and 9, however mentioned that although it is convenient but it confines people with in their houses and restricts their physical activity and social contacts. They further stated that, in Kuwaiti culture, most of the time shopping at stores is good way of outing for families as most of the malls provide a lot of fun activity for children and adults as well. They went on to explain that there are no other places except shopping malls to have fun, meet friends and relatives because of weather conditions which are generally tough through out the year. With regard to questions on economic orientation, the respondents were of opinion that in cases of electronics, DVDs and services like tickets and holiday tours, they can get very good bargain which is not possible for them to get if they visit to sellers directly. In online shopping they can compare the prices of many sellers and buy from the one that offer the best for them. However respondent no.5 & 9 did mention that these days the trend is increasing in Kuwait where all big malls and super markets do provide detailed information through the home delivery of booklets and brochures which helps us to compare the prices at home and 48

visit the place which is best for us. Respondents in general, although agree that in Kuwait the range of products available are very limited, therefore majority of shopping has to be done only by visiting the stores physically. The respondent no 1 & 10 however stressed that shopping online becomes more convenient in festive season like Eid because they find a lot of rush on the road, traffic jams and long Qs for checking out. Most the time of the year generally they do not find these problems. With regard to experiencing the product before buying, the opinion was split. Respondent no. 2,3 and 5 mentioned that in some cases such as new product with new features it is always better to see and try the product for its usefulness and be sure before buying it because a lot of time the promotions are cleverly worded and misguide the consumers. However, in case of day to day use products such as groceries, books or the products that they have seen and used it before, it is convenient to buy online because they expect to get what they have ordered. On the question of entertainment aspect of online buying the respondents seem confused as on one hand they agreed that it is fun but at the same time majority of them feel that we don't buy only because of fun alone but there are other factors also that work together to make buying decision. Only the respondent no 6 who was computer graduate also, mentioned that he likes to try new things always and enjoys the online shopping concepts because he is always able to strike best deals. This indicates the knowledge and experience of using computer and internet possible could be an important factor in making decision. On the question of risk the opinion were similar to results of quantitative data. All the respondents except respondent no 6, showed their concern with regard to risks involved in online shopping. This limits them to buy only from few trusted sites only. However non of them mentioned any experience of cheating of credit card information by Kuwait based companies primarily because it is a small place and every company and every person is easily accessible. Some of the respondents experienced the leakage of their personal information such as email address and mobile numbers being passed to many other sellers who keep on sending emails or messages for product promotions. These responses show that generally it is mere perception of online buyers and non buyers about online buying risks.

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4.7 CONCLUSION
The graphical presentation of the results is shown of only those attributes which were found to be most influential in nature. A brief interpretation of the outcome has been given for each graphical presentation to guide the reader to understand the relevance of result. The qualitative data responses have been explained in details based on the true statements and opinions expressed during the interview.

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CHAPTER FIVE
CONCLUSION, RECOMMENDATIONS AND FURTHER RESEARCHES

5.1 Introduction
In this chapter, the data analyzed in chapter four is interpreted in details to understand the findings and make necessary recommendations for the improvement in the online business. In addition we find out that how far minor research questions were answered and to what extent research objectives were achieved.

5.2 Conclusion
The objective of the research is to gain a deeper understanding of online buying behavior of Kuwaiti consumers and study the factors influencing their buying decision. The study focused on three factors i.e. demographics, shopping orientations, and risk perception. The demographic factors which are the personal attributes of consumers were analysed to understand which of them play crucial role in making buying decisions. The other two factors, shopping orientations and risk perception are the opinions, beliefs and perceptions resulting into behavior, which were analysed to understand which of these behaviors, are most common to personal attributes of the consumers. The research findings show that more males buy online than females. It further suggests that those who are more educated buy more online than those who are less educated. The education plays important role in online buying. Government's role is also crucial as there is need for promoting the education culture and more importantly the computer education. The better educational environment will produce more skilled and educated people who in turn will take active part in the growth of the economy by participating in e- commerce revolution. Thus, the research concludes that: Majority of online buyers are young age and have higher than average education. Consumers with moderate to high income buy more online than those with low income. More males buy online than females. More female buyers are risk laden than the men buyers. More females buy online because of economic reasons than males More online buyers are convenience oriented.

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 Male and females both have almost same opinion on experience orientation. More male consider online buying a fun activity than female buyers.

The Middle income group in most of the world economies play major role in development. This study clearly indicates the huge potential to target the middle income group who are yet not in main stream of online buying. The Middle income group shows more concerned of risks involved in online buying. It is therefore the administration in general and business men in particular have to make a concerted effort to gain the confidence of middle income group to involve them in online buying activity. The quantitative data in the questionnaire, there were six questions related to demographic and three related to the Internet experience which was used to collect reasonable information about the respondent to correlate it with their online buying behavioral factors. The following data collected did not show any significant trend or relationship to online buying; therefore they were not included in the graphical analysis. These data has been described below

Q4 Marital Status Unmarried

Q5 Employment Unemploy ed Employed

Q7 Internet usage Experience (years) Occasional Frequent Regular

Q8 Daily internet usage Occasional Frequent

Q9 Online Purchases Occasional Frequent 33%

Married

Regular

52%

48%

48%

46%

33%

36%

31%

33%

33%

33%

31%

36%

Table 4: Online Buyers Responses

a) Question No. 4 & 6 related to marital status and employment status showed no clear trend or relationship between online buyers and non buyers. The percentage of married and unmarried people is almost equal and same trend was evident in case of employment status where employed, self employed and students show equal percentage of online buyers. b) Question No. 7, No. 8 and No. related to internet experience also did not show any significant trend and most of the variables are almost evenly distributed.

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Regular

The Shopping orientation was divided in four parts i.e. convenience, economic, experience and entertainment. Each section has different set of questions. The analysis of those questions did not indicate any significant level of preference for any particular questions. a. For Convenience factors there were six questions and responses to each of them range from 61- 67% giving an average percentage of 64.24%. b. For Economic factor there were four questions and responses to each of them range from 64- 70% giving an average of 66%. c. Likewise three questions for Experience orientation gave response range between 55 and 61. d. The two questions related to Entertainment gave similar percentage of responses. The findings show some inconstancies in stance when it comes to online buying. The consumers are willing to shop online because it is convenient and a time-saver, but they are worried about sending personal or credit card information over the Internet, although majority of respondents say that their online shopping experience has been satisfactory. This gives a mix signal that risk perception factors needs to be taken care of in long run to keep the existing buyers intact and attract new buyers. The findings of the study can be concluded to provide a basis for future study and potential of the online buying in Kuwait. Non buyers: The responses of the internet users who do not buy online produced some interesting results. 82% people who do not buy believe in experiencing orientation while 88% do not buy because of their risk perception of online buying. Those who do not buy online are not much convenience oriented. The qualitative data collected through structured interview provided further strength to the quantitative data collected through questionnaire. The results of the interview were similar to that of questionnaire responses. The concerns regarding online buying risk were highlighted during the interview. They further suggested that Kuwait being small place, it is not that difficult to access to these places easily and quickly. The respondents stressed that in store shopping is generally more fun than online shopping as most of the malls provide a lot of entertainment for children and provide first hand look at the products and services which is useful. However they agreed that the products which the consumers are familiar with and have used in the past can be purchased online.

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5.3 Recommendations
Demographics

Internet users who are better educated are more likely to use online shopping less than those who are not. More male Internet users are likely to buy online than females. Internet users whose income is higher are more likely use online shopping than those whose income is lower Young age consumers are more likely to make online purchases than middle age or old consumers.

Shopping Orientations

Consumers who are convenience-oriented are more likely to purchase online than those who are not. Consumers who are experience-oriented are less likely to purchase online than those who are not. Middle-aged Male consumers are more likely to buy online for fun and entertainment than female consumers. Female consumers are more price-conscious and are more likely to make online purchase more than male consumers.

Risk Perception Consumers in moderate income group, who are young, perceive fewer risks toward online shopping than those who are in higher age group and are likely to buy more than those who perceive higher risk.

5.4 Further Researches

Since not much work has been done to study the online buying behavior of Kuwaiti consumers, therefore no comparative conclusion was drawn to show the difference over a period of time. This study may provide a bench mark for future researches in this field and can be used to compare with any new study taking place and changes taken place over a period of time in Kuwaiti online business and buying behavior of Kuwaiti consumer. The future researches can utilize the data and literature as secondary source of information to study the online buying trend and consumer buying behavior.

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CHAPTER SIX: RELEVANCE TO THE KUWAIT ECONOMY

6.1 Introduction
This chapter throws light on the relevance of the thesis to Kuwait economy at macro level. The understanding of Kuwaiti business culture and economic indicators are included to establish the link.

6.2 Background
Kuwait is a small but third richest country in the Middle East with economy mainly dependent on oil revenues. Almost all the consumer and non-consumer goods are imported from all over the world. Since the Kuwaiti Government has an open policy towards the modernization and technological developments, people have access to nearly everything happening around the world. The level of education is still a grey area, although the consumer revolution is very much evident in every sphere of life. Since the e-commerce is still in its early stages of development in Kuwait, no reliable data is available to show the past trend or opinion or behavior of Kuwaiti population. 6.2.1 Overview of Kuwaiti Economy According to CIA Word fact book (2008) following data represents an overview of the Kuwaiti economy.

Population

2,505,559 note: includes 1,291,354 non-nationals (July 2007 est.)

Age structure

0-14 years: 26.7% (male 340,814/female 328,663) 15-64 years: 70.5% (male 1,128,231/female 636,967) 65 years and over: 2.8% (male 44,542/female 26,342) (2007 est.)

Gender ratio

at birth: 1.04 male(s)/female under 15 years: 1.037 male(s)/female 15-64 years: 1.771 male(s)/female 65 years and over: 1.691 male(s)/female total population: 1.526 male(s)/female (2007 est.)

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Literacy

definition: age 15 and over can read and write total population: 93.3% male: 94.4% female: 91% (2005 census)

Internet users: 816,700 (2006) agriculture: 0.4% industry: 54.7% services: 44.9% (2007 est.) 1.167 million note: non-Kuwaitis represent about 80% of the labor force (2007est.) Labor force: Imports $17.74 billion f.o.b. (2007 est.)
Table 5: Kuwait Economy Statistics
Source: CIA Word fact book (2008)

GDP composition by sector

The study of online buying behavior of Kuwaiti consumers was conducted with objective to find out the factors influencing the online buying decisions. The need for the study arose because of my personal experience of difficulties in buying online in Kuwait and discussion with some of close friends and relatives having various businesses. Kuwaiti companies have developed the websites mainly out of status symbol than serving the consumers or generating business. These web sites provide very little information and often not updated regularly even in most of cases for years. The reason for Kuwaiti businessmen not focusing on web business is that they still do not consider it an additional method of doing business. 6.2.2 Kuwaiti Business & Culture Kuwait is generally open to bring in any kind of product in Kuwaiti market subject to government regulations on international standards and Middle Eastern cultural, ethical and moral standards. The international brands are extremely popular despite very high prices due to status conscious nature of the population in general. Government supports the citizens in almost all social and economic issues which includes low rate personal 56

loans, corporate loans, easy credit card facility to every section of society, waiving of loans, grants for marriages and education, free education at school levels, unemployment benefits, social security, compensation for foreign studies etc. All this put together increases the purchasing power of individuals as well as their quest for change, fashion and trends in every sphere of life. Oil production and maritime are the indigenous businesses in Kuwait. Also trading and services are other two most popular business activities. However, manufacturing is very limited which represents a very small part of business activity in Kuwait. Business is conducted in Kuwait using aggressive promotion campaign. Kuwaiti consumers in general love to bargain hard and are loyal to stores offering regular discounts, instant gifts, regular prizes through public draw etc. The high end customers though don't bargain, but products on sale and seasonal discounts do attract them a lot.

6.3 Research Findings and Conclusions Relevant to Kuwaiti Economy

The study concluded that high percentage of young internet users are engaged in online buying but in a limited way because of lack of sufficient information, poor presentation of web sites and lack of willingness on the part of companies. The education plays important role in online buying. Government's role is also crucial as there is need for promoting the education culture and more importantly the computer education. The better educational environment will produce more skilled and educated people who in turn will take active part in the growth of the economy by participating in e- commerce revolution. The findings show that consumers are willing to shop online because it is convenient and a time-saver, but they are worried about sending personal or credit card information over the Internet, although high majority of respondents say that their online shopping experience has been satisfactory but this is limited to small number of purchases. Those who are not buying claim that online buying is very risky proposition. Therefore, necessary steps from the government authorities, financial institutions and controlling bodies to ensure security of shared information would most likely result into increased online buying volume. Since not much work has been done to study the online buying behavior of Kuwaiti consumers therefore no comparative conclusion was drawn to show the difference over a period of time. This study provides a basis for researchers to build on more in depth studies to find the scope of online business in Kuwait. More and more studies will give new dimension to the online buying activity as it will discover more and more new factors which will be indigenous and

57

represent the needs and aspirations of Kuwaiti people. This will help to take appropriate measures to attract more online buying which will add another dimension to shopping channel. The economic data shows that out of approximately 1.3 million Kuwaitis merely 14% account for labor force (CIA Word fact book, 2008). The reason being either they are not qualified enough to take the jobs or not interested. This scenario needs to change if we go by the outcome of our study which shows that around 54% of our online buyers were employed in some way or other.

6.4 Future of online buying

The stores have both physical and online presence leading to online buying and in-store buying. I believe that there will continue to be emphasis on this type of selling strategy. In the times to come the priorities might change but both form of stores will co exist. Online stores only add another dimension to buying habits. I also think that the numbers of online stores will continue to grow because of the growing popularity in online selling and buying. The reasoning behind this is due to an increasing number of technologically savvy consumers who want to research their products, buy them now, and get them now. I would be unwise to predict that online shopping will take over for buildings of stores and shopping centers right away. This is highly unlikely because shopping malls have now become more than just a place to shop. Shopping malls now provide various forms of entertainment, including movie theaters, restaurants, art displays, video amusement complexes, and even amusement parks. Yet, browsing or window shopping is still a popular leisure.

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REFRENCES
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Lee, P. M.(2002) Behavioral model of online purchasers in e-commerce environment. Electronic Commerce Research, 2: 5-10 Li, H., Kuo, C. & Russell, M.G. (1999) The Impact of Perceived Channel Utilities, Shopping Orientations, and Demographics on the Consumers Online Buying Behavior. Journal of Computer Mediation Communication, 5(2) Litvin, S. M., & Maclautin, D.J. (2001)Consumer Attitudes and Behavior. Annuals of Tourism Research, 28 (3): 821-823 Mathwich, C. (2002) Understanding the online consumer: A typology of online relational norms and behavior. Journal of Interactive Marketing, 16(1): 40-42 Miniwatts Marketing Group (2007) Usage and Population Statistics, (World internet usage statistics News and Population stats), Available: http://www.internetworldstats.com/stats.htm , (Accessed: 2008, March 23). Pavlou, P. A.(2003) Consumer Acceptance of Electronic Commerce: Integrating Trust and Risk with the Technology Acceptance Model. International Journal of Electronic Commerce, 7( 3): 101-103 Ratchford, B., Telukdar, D. & Lee, M. (2001) A model of consumer choice of the internet as an information source. International Journal of Electronic Commerce, 5 (3):7-22. Reitsma, R. (2007) Global Online Shopping Patterns. (Forrester Research), Available: http://www.forrester.com/rb/search/results.jsp?N=0&Ntk=MainSearch&Ntx=mode+MatchAllPartial& Ntt=global+online+shopping+ , (Accessed: 2007, July 15). Rohm, A. J., & Swaminathan, V.(2004) A Typology of Online Shoppers Based on Shopping Motivations. Journal of Business Research ,57( 7): 748-758 Saunders, M., Lewis, P., & Thornhill, A. (2003) Research Methods for Business Students 3 rd edn. London: Prentic Hall. Schutte, H., & Ciarlante, D. (1998) Consumer Behavior in Asia. New Jersey: Prentice Hall Swaminathan, V., Lepkowska-White, E. & Rao, B. P.(1999) Browsers or Buyers in Cyberspace? An Investigation of Factors Influencing Electronic Exchange. Journal of Computer-Mediated Communication, 5( 2) Vellido, A., Lisboa, P. & Meehan, K. (2000) Quantitative characterization and prediction of online purchasing behavior: a latent variable approach. International Journal of Electronic Commerce, 4 (4): 83 Wolfinbarger, M., Gilly, M. (2001)Shopping for freedom, control and Fun. California Management Review, 43(2): 34 Zhou, L., Dai, L.& Zhang, D. (2007) online shopping acceptance model. Journal of Electronic Commerce Research, 8(1): 51

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APPENDIX A: QUESTIONNAIRE Online Buying Behavior

The impact of Demographics, Shopping orientations and Risk Perception on Kuwaiti consumer

This questionnaire aims at studying the Kuwaiti consumer's perception towards online shopping of products and services available with in Kuwait and also factors influencing their buying behavior/decisions. It further investigates the negative perception of internet users with regards to online shopping and their concerns. The study will be useful to understand the future of online shopping in Kuwait and barriers to it. Would you like to help me to enhance my knowledge and complete my studies? If yes, please take little time to answer the questions which describe you and your behavior most accurately. You need to check (x) appropriate box and send it electronically via email eeanwaar@hotmail.com. Thank you for your Help! And appreciate for taking time out to complete the questionnaire.

Demographics 1. Please specify your Gender 2. Your age Group 3. Average income per month (KD) 4. Your Martial status Male under 18 Under 500 Single High School or less Employed Female 19-28 29 -38 10011500 Others 39 - 48 1501 2000 over 48 over 2000

501- 1000

Married Some collage/ diploma Student

5. Educational Background

Bachelor

Master

Others

6. Employment Status

Others

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Internet experience 7. How many years have you been using the internet? 8. How many hours on average do you use the internet per day? 9. How many times did you buy online in last three months under 3 4- 5years 5- 6 years 6 -8 hrs 6-7 years over 7 over 10 hrs

Under 3

3-5 hrs

8-10 hrs

none

3 or less

4 -6

7-10

over 10

If your answer to Question no 9 is "None" Please move on to "Question N.o 16" Below are some statements of people attitudes toward online shopping. Please check the box that best indicates how well you agree/disagree the statement which describes you personally and reflects your impressions. Strongly Convenience Orientation 10. I don't have much time to go to stores myself. Agree Agree Neutral Dis Agree Strongly Dis Agree

11. online shopping saves a lot of time 12. I can get detailed information online about the product and opinion of those who have used it before. 13. I can get even those products online which I can't find on off line stores 14. I like to buy products at time of my choice which I can do in online shopping. 15. I hate waiting long for checking out while in stores.

Economic Orientation 16. I usually search for the lowest price 62

17. I usually purchase items on sale. 18. I usually compare prices at different stores before buying any product or service.

19. Online stores provide lowest prices Experience orientation 20. I like to touch and feel the product before buying them 21. Seeing and believing is my motto for buying products 22. I like to try the product before buying it.

Entertainment Orientation 23 I consider online shopping an exciting and great fun activity 24. I love the fun of surfing without any pressure of buying it

Risk perception 25. I am concerned about my credit card and personal information being stolen

26. The reputation of websites is an important consideration.

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I don't buy online because 27. Website of companies based in Kuwait do not provide sufficient information

28. Online shopping is convenient for those who are very busy

29 Online shopping does not interest me because all places are easily access able in Kuwait

30. Online shopping requires a lot of knowledge and understanding of internet

31.selecting, buying and paying on online stores is complicated,

32. Number of products can be purchased online is very limited.

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APPENDIX B: INTERVIEW QUESTIONS

Specify the personal information of respondent: gender, age, educational level, marital status, income and employment status.

1. Did you purchase anything online in last three months? 2. Is it convenient to buy online? 3. Why do you think it is convenient buying online? 4. Do you think it is economical to buy online? 5. Do you think buying online fun and entertaining or you prefer visiting the mall and shop around? 6. Why do you think it is economical? 7. What are the benefits of buying in stores than online? 8. Do you like to feel and try the product before buying? 9. Do you think buying online is risky? 10. Have you ever experienced any cheating in online purchases? 11. Have you ever felt that your personal data has been used for other purposes?

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