Consumer perceptions on online shopping

SUBMITTED BY -

Nikhil Poonia

SUBMITTED TO -

MRS. NANDINI SHARMA

REGISTRATION NUMBER-

2016PUSOMBBXX04234
 Consumer perceptions on online shopping

1. INTRODUCTION

In the business to consumer (B2C) e-commerce cycle activity, consumers use Internet for many
occasion and purposes such as: Searching for product features, prices or reviews, selecting
products and services through Internet, placing the order, making payments, or any other means
which is then followed by delivery of the
required products through Internet, or other means and last is sales service through Internet or
other mean (Sinha, 2010). Over the past few decades, the Internet has developed into a broad
global market place for the exchange of merchandise and services. In many developed countries,
the Internet has been adopted as an important medium,offering a wide mixture of products with 24
hour ready and wide area coverage. In some other countries, such as Iran, nevertheless business-
to-consumer electronic commerce has been much below than anticipated proportion of total retail
business due to its certain limitations (Sylke, Belanger, and Comunale, 2002). Also,E-commerce
has become an irreplaceable marketing channel in business transactions. Online stores and services
are important sales channels in B2C transactions. Studying online shopping behavior of consumers
has been one of the most important research agendas in e-commerce during the past decade (Chen,
2009). The research of online consumer behavior has been carry out in multiple disciplines
including information systems, marketing,
management science, psychology and social psychology, etc. (Hoffman and Novak,1996;
Koufaris, 2002; Gefen et al., 2003; Pavlou, 2003, 2006; Cheung et al., 2005; Zhou et al, 2007).
Online shopping behavior (also called online buying behavior and Internet shopping/buying
behavior) refers to
the process of purchasing products or services via the Internet. The process consists of five steps
alike to those associated with traditional shopping behavior (Liang and Lai, 2000). In the typical
online shopping process, when potential consumers recognize a need for some merchandise or
service, they go to the Internet and search for need-related information. nevertheless , 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 carry out and post-sales services
provided. Online shopping attitude refers to consumers’ psychological state in terms of making
purchases on the Internet (Li and Zhang, 2002). Although many studies examined various factors
affecting on online shopping behavior independently, most of them isolated a few major factors,
usually between three and six factors (Chen, 2009). The drawback of ignoring some factors is that
the compound effects resulted from the interactions among the factors involve in the research and
those not involve are often ignored and missing, which thus leads to the findings to be lack of
generalizability. This study attempts to develop such a research to study the effects of several
major factors which are identified by prior studies on online shopping behavior. The research
questions are thus stated as followed.
1) How do perceived Risks (Financial risks, product risk, convenience risk and non-delivery risk)
effect attitude
toward online shopping?
2) How do infrastructural variables and easy and appropriate return policy effect attitude toward
online
shopping?
3) How do subjective norms, Perceived behavioral control and domain specific innovativeness
effect online consumer behavior?
4) How does the attitude effect online consumer behavior?
The finding of this research offer a more comprehensive understanding of online consumer
behavior by
identifying the compound effects of various external behavioral beliefs, attitude, intentions and
perceived risks, social influence, etc. Specifically, the findings provides in-depth insight into what
factors drive online consumers
most, how they work and what are their implications for consumers and e-commerce vendors. The
findings also further confirm some previous research results and help clarify and explain the
inconsistent conclusions from prior studies in the area. In general, this study enriches our
knowledge of online shopping behavior from the behavioral perspective. To meet the objectives
of the research, first, we begin with a review of the literature on online shopping and factors
affecting consumers’ shopping behavior. This is followed by an outline of the methodological
approach and the results of the study are reported. Finally, the conclusion and managerial
implications are discussed.

Review of literature
● Consumer decision process carries five stages, starting with Problem recognition and
following Information search, Evaluation of alternatives, Purchase decision and finally
Post Purchase behaviour. Problem recognition starts with the perception of need and
moves towards information search where consumer uses internal and external sources
to analyse given information and use that information in the next step of evaluation
of alternatives. While evaluating alternatives one assessing values of the products by
giving weights. After evaluation of alternatives consumers move towards purchase
decision where they may encounter three possibilities, from whom to buy, when to buy
and do not buy. Once they have actually made the purchase now it comes to Post purchase
behaviour, whether they are satisfied or dissatisfied with the purchase. (Kotler, 2012)
● Soonyong Bae, Taesik Lee (2010) they investigates the effect of online consumer reviews
on consumer’s purchase intention. In particular, they examine whether there are gender
differences in responding to online consumer reviews. The results show that the effect of
online consumer reviews on purchase intention is stronger for females than males. The
negativity effect, that consumers are influenced by a negative review more than by a
positive review, is also found to be more evident for females.These findings have
 practical implications for online sellers to guide them to effectively use online consumer
reviews to engage females in online shopping.
● Isaac J. Gabriel (2007) studied online consumers’ risk perceptions and will reveal a
“cognitive map” of their attitudes and perceptions to online risks. It was accomplished
by composing a master list of online hazards and activities, measuring current level of
perceived risk, desired level of risk, and desired level of regulation associated with them,
composing a master list of online risk characteristics, determining online risk dimensions,
and revealing position of each online hazard or activity in the factor space diagram. A
factor space diagram captures a graphical representation of the results of the factor analysis.
This study is still in progress and results are not available yet.
● Guda Van Noort, M.A., Peter Kerkhof, Ph.D and Bob M. Fennis, Ph.D. (2007) in two
experiments, the effect of shopping context on consumers’ risk perceptions and regulatory
focus was examined. They predicted that individuals perceive an online (vs. conventional)
shopping environment’s more risky and that an online shopping environment, by its risky
nature, primes a prevention focus. The findings in Study 1 demonstrate these effects
by using self-report measures for risk perception and prevention focus. In Study 2,
replicated these findings and demonstrated that the effect of an online shopping
environment carries over to behavior in a domain unrelated to shopping.

Review of literature by Indian author -

● Kanwal Gurleen. (2012) focuses on the understanding of demographic profiles of adopters
and non-adopters of online shopping. For this purpose the data from 400 respondents was
collected in the form of questionnaires. The study has been carry out in 3 cities of Punjab,
a sample of urban respondents were selected from the Jalandhar, Ludhiana and Amritsar
The paper also analyses the various occasion for adoption and non-adoption of online
shopping.
● Darush shabazi - The purpose of this study is to use structural equation modeling (SEM)
to explore the influence of online bookstore consumers’ perception on their purchase
intention. Through literature review, four constructs were used to establish a causal
relationship between perception of online shopping and consumers’ purchase
intention. Results of this study show that product perception, shopping experience, and
service quality have positive and significant influence on consumers’ purchase
intention, but perceived risk has negative influence on consumers’ purchase intention,
and shopping experience is most important.
● Laxmi prebha - examined the factors influencing consumers’ perception of online shopping
and developed a causal model that explains how this perception affects their online-
shopping behavior. Research found that factors like, trust, customer service, customers’
income, price of products or services and security are more important to encourage
people to purchase online the computer related products and services. In other side
factors like product customization and price of product were not much effective on
 purchasing behavior of the respondents. So high level of security in online marketing of
computer related products and services has this potential to growth more and more to
encourage people to reduce the time and cost of transaction.

About the topic -

In recent years, online shopping has become very popular. The growth of technology has made
these a part and parcel of everyday lifestyle. The advent of plastic money or the debit /credit card
and the smooth access to the World Wide Web has brought the shops from around the world to the
desktop. We personally have seen many of our friends surfing through various online shopping
sites and purchasing things. Student community has become so strong that even the parents seek
the help and advice of their children before conducting big purchases. This is solely because of
their exposure to web and social media. Moreover, while it comes to personal purchases, students
are very particular that they get best products available in the market and seek all the possible ways
to secure the best products. This is where the role of online shopping sites emerges. Students who
are well versed in the use of internet and active in social media, know about online markets and
have tried at least some of them. The study is very relevant because it can give a clear picture of
the future of online markets in India and the emerging trends in this particular field. The various
factors that influence online shopping habits and its merits and demerits are also dealt with.The
study also tries to have a comparison of online shopping habits among different age group as well
as income group.

1.2 Objective of the Study -

The objective of this research study is to investigate online consumer behavior, which in turn
provides E-marketers with a constructional framework for fine-tuning their E-businesses’
strategies. The specific objectives of this research are:
1.To know the consumers awareness and perception about the products and services provided on
internet.
2.To know how it provides products and services and satisfies their customers.
3.To know how it reduces the uncertainty in purchase decision process.

1.3 Scope of the Study

The theoretical scope of the study includes the popularity of online shopping, the need of virtual
markets, their role in influencing the consumption pattern and habits, merits and demerits of e-
markets, major players in online retailing etc. We can listed the scope as below :
1. The Study was carry out among the Internet users.
2.The Geographical area covered was jaipur .
3.The Study was based on a Schedule of Questions.
4. The scope of internet shopping

1.4 RESEARCH OBJECTIVE

1.To analyse the consumer interest on online marketing.
2.To determine the factors affecting online buying.
3.To evaluate the growth of online marketing.
4.To forsee the demand of online shopping in india.
5.To study the effect of traditional retailer over the online retailer.
6.To gather information regarding growing sector for online purchasing.
7.To understand the barriers of online marketing.
8.To know the consumers awareness and perception about the products and services provided on
internet.
9.To examine what the consumer had bought and what they want to purchase in the near future.

1.5 LIMITATIONS OF THE STUDY

Utmost care has been taken with regard to the collection, classification and analysis of data.
nevertheless , the study is subjected to the following limitations: There were hardly any previous
studies on the topic and it was a great challenge to deal with a fresh topic.
1.Lack of environmental support for the study on the topic.
2.Less sample size, as it is just survey with 100 respondent
3.Basically based on primary data , hence we can not argue that the research is applicable in each
condition,time& place.
4.Short time duration, with in such short span of time it is too much difficult to analyse the topic.
5.Lack of customer support, while asking the consumer they were behaving rudely and not
responding to the questions.