CHAPTER I

INTRODUCTION

Background of the Study

Shopping became a part of our daily lives. People get their necessities and
wants from shopping. Some perceives it as a stress reliever after a hectic schedule or a
way to space up our usual way of life. Shopping has started in the ancient times but was
termed as “trading” or “bartering”

In general there are two types of shopping, online shopping and traditional shopping
Both have some mends and shortcomings respectively.

Online shopping is a form of electronic commerce which allows consumers to

directly buy goods or services from a seller over the internet using a web browser. In
fact some of the benefits of online shopping is that it is convenient and no need to worry
about having to find means to exchange monetary paper because not just online
banking is made available, the consumer is given the option to pay through different
payment methods. It is also a much faster easier and economical way of shopping.

In its original context a traditional market is defined as physical place where

buyers and sellers meet in order to make exchanges (Kotler, Wong, Saunders &
Armstrong,2005) On the other hand traditional shopping is having the ability to
physically choose and check out what an item or product is like, would look like and its
features are the benefits of traditional shopping . That is why some people still prefer
this kind of shopping it is because it allows them to meticulously check out an item.

Nowadays, online shopping is very rampant specially that technology made it possible
Its popularity can be credited to the fact that convenience is highly valued in our world
today.

The focus of the study is on the consumer’s choice to shop on internet and at the traditional
stores at the information gaining period . While making any purchase decision consumer should
know the medium to purchase whether online shopping or the traditional shopping. Consumer
should decide the channel for them which can best suit to their needs and wants and which can
satisfy them. In this competitive world how consumer can decide the particular medium for their
purchase of goods is very important to understand in a managerial point of view.

Many studies have focused that the high touch products that the consumer feels when they need
to touch, smell or try the product. It requires the offline shopping at the purchasing stage because
it cannot be done in the online shopping. Even with the increase in the online shopping and the
recognition that online shopping is more likely to impose the pressure on offline shopping or
traditional shopping. In general the population from high level of income and high level of
learning are more favourable to do online shopping. The population who are more
knowledgeable and more explored to the internet are more into online shopping. The increase in
technology increases the online shopping by the consumer. The increase in technology creates a
favourable attitude towards the consumer for online shopping.
 CHAPTER II
REVIEW OF RELATED LITERATURE

The extensive literature review has been conducted to gain deeper understanding of
research about the customer’s preference between online and traditional shopping and their
experience. The review clarifies and simplifies the dominant dimension consumer consider when
they make any online purchase decision. Following this, the major theoretical gap related to
understanding what and why consumers do, and do not purchase using the Internet is explored
with respect to the theories of retail change and consumer behavior theory with particular
reference to the buying decision process. More specifically, the study examined the
interrelationships among quality, value, satisfaction, and loyalty when consumers choose to shop
online.

According to the study of Kozinets, (1999) they identified that social media provides a
new channel to acquire product information through peer communication, and these
informational society influences affects the consumer decision processes and product
evaluations.

Kotler and Amstrong (2001) customers go through five stage of purchasing decision
process when making a purchase decision. These five steps of buying decisions are (i) Need
Recognition, (ii) Information Search, (iii) Evaluation of Alternatives, (iv) Purchase Decision, and
(v) Post Purchase Behavior.Rubin A. M. (2002) has indicated that there is a connection between
social interaction and framing of consumers’ opinion. Schlosser (2005) has indicated that even a
small amount of negative information from a few postings can have substantial impacts on
consumer attitude.

According to Riege A. (2007) an effective relationship is necessary for transferring the

knowledge. Different types of proximity affect the effectiveness of knowledge transfer between
individuals. The reason is that proximity can be part of culture factor which can be linked with
values shared by a different group of people, which provide guidelines for their
behaviors.Allsop, D. T. et al., (2007) says that one of the peers to peer communication with high
influential channel is the Word-of-mouth or e-word of mouth.Mirza, H. (2008) says that social
media is the medium with the highest respondents in term of expressing themselves and sharing
of experience is something that the respondents are looking for in social network. Further he
identifies four basic characteristics of social media which are Openness, Conversation,
Community and Connectedness. Openness because social media are open for comments,
participation and sharing of information and contents are usually not password protected.
Conversation as a characteristic of social media is a two way communication channel unlike
traditional media where the main approach is broadcasting of messages. The next characteristic
is that social media allows people to build community with in a short time and discuss their
interest. At last social media make use of links in other websites to connect people and
resources.Shin (2008) Interactivity with target brand in social media is perceived differently by
consumers depending on the message they convey.

The Economist (2009, April 2) stated that consumers rely on personal sources such as
“recommendation by friends” to make purchases.Mangold and Fauld (2009) suggests that social
media has also influenced consumer behavior from information acquisition to postpurchase
behavior such as dissatisfaction statements or behaviors.Kozinets et al., (2010) says that Social
media websites provide a public forum that gives individual consumers their own voice, as well
access to product information that facilitates their purchase decisions.Bernadette D’Silva et al.,
(2011) suggest that social media can be used as a growing platform for launching new products.
This can lead to higher sales and helps in increasing the market share of the products. Further
analysis indicates that the youth have their own set of preferences for different social media
websites.

Arora and Yadav (2012) in their study find that three factors are considered for checking
the impact of Facebook on product purchase decision i.e. brand community engagement,
information about the product and word of mouth. Consumer is mostly influenced by positive
word of mouth rather than other factors.