THE WIGAN & LEIGH COLLEGE (UK)

USE OF INTERNET AS A MARKETING TOOL AND THE CONSUMER BEHAVIOR TOWARDS INTERNET MARKETING/E-COMMERCE IN SRI LANKA

BY

Mohamed Azri Mukthar

A Dis se rt at i o n s u bm it te d t o Wi g a n & L ei g h Co ll eg e ( U K ) i n F u lf il li n g t h e r eq u ir e me nt s f o r T h e Po s t g r ad u at e Di p l o m a i n M ar k et i n g

PGD/110/09/03

Copyrights 2010/11 by Azri Mukthar

All rights reserved.

ACKNOWLEDGEMENT

Writing this book has taken a tremendous amount of cooperation from friends, colleagues and many anonymous participants. The responses which I received for my questionnaire and few other surveys from ninety percent of the people from all the areas I have short listed provided a depth of information about the dissertation which is exceptional. I am heartily thankful to my lecturer in Research Methodologies, Mr Niaz, who provided me the knowledge in carrying this research out successfully and compiling this report. I am indebted to the 124 respondents to the questionnaire and to the individuals who participated in surveys and focus group discussion about their experiences in the topic of my relevance.

Most of all, I am indebted to my family and friends who nudged me when I needed it, and celebrated with me when I was done. These included my parents Mr. & Mrs. Mukthar for understanding the task that I have taken, my little sister for sacrificing her time with my computer, and my wife Bazeeha Kaleel for providing me the necessary motivation and most of all the required time I needed to complete this dissertation..

I am so happy to arrive at this day when I feel like I have done the best I can and await your comments and suggestions. Azri Mukthar January 2011

CONTENT
ABSTRACT INTRODUCTION LITERATURE REVIEW RESEARCH METHODOLOGIES DATA COLLECTION & ANALYSIS CONCLUSION & RECOMMENDATIONS REFERENCES APPENDIX

ABSTRACT

In this descriptive dissertation we will be looking at certain critical questions the consumers comes up with when considering purchasing online or responding to the online marketing models & methods. We will look into concerns the consumers have when purchasing online and the criteria that they look into before they make a move. Also, we will be derive as to which internet marketing method reaches out the right kind of prospect at the right way the most and what are the pull factors that trigger a visitor being a consumer.

The ways in which we have gathered the actual data were through observing certain organizations. Then, we distributed questionnaire based on the project and collected the replies from individuals and as well as from organizations for analysis. Also, as a backup we have conducted a focus group with some individuals who has experience in online purchasing and are literate in E-Commerce. This provided the luxury to fine tune my research and data.

Based on the details provided, we had plenty of contrasting information which were compared to one another. There were enough data to prove the increase in online sales in Asian countries and specially Sri Lanka. Many customers are prone to do shopping online while the majority are still getting used to the trend. But still, we have found there are many opportunities that organization has ignored without making use of them. I have also discussed some of the recommendations for organization who aspire going online or having a website and is looking for a change towards success.

And, simply this is not just a dissertation where major work has been duplicated but since the details and the literature that is relevant to my dissertation is extremely scarce I could state that this is an effort that I made to fill some vacuum and to provide a better insight to Sri Lankans who are interested in Internet Marketing & E-Commerce.

INTRODUCTION
CONSUMER BEHAVIOR The term consumer is probably a term often used in the discipline of marketing. And, studying about consumer behaviors has been quite popular in the past few years as it is observed that given the same inputs at different occasions, consumers could make completely different purchase decisions. It is very important that a marketer understands the buying behavior of his/her consumer in order to be successful in segmenting, targeting, positioning and selling their products/services. Philip Kotler explains that consumers go through five steps in buying process. Let me explain the process for better understanding. The purchase of a microwave is an important decision in the modern household. The need for a microwave is recognized, when time pressures impact the smooth work flow in a household. The need may be identified by the housewife and agreed by the rest of the family. Once the need is recognized, an active information search is carried out by the entire family or otherwise. Information regarding the types of microwave, brands of microwaves, payment terms etc., will be aggressively sought. Based on the information obtained, an evaluation process of the various options has to be carried out. The greater the choice the harder the evaluation would be. Thereafter, a decision has to be made namely, to purchase or not to purchase or to postpone the idea of purchasing. We should understand that the postponement of purchase is also a decision. If the decision to purchase has been made, then an evaluation after purchase is carried out and is referred to as a post purchase evaluation. Often this evaluation is satisfactory if the product and brand purchased, delivers its basic promise and satisfies the consumer. The above example is a traditional way of thought process that everybody would go through when thing of purchasing something. Same mechanism would be gone through when an individual considers purchasing online, but with some difference in their technical aspects. There are many external influences on this buying process ranging from advertising and promotional messages, prices, payment terms, product features, 6

brand messages, opinions of brand performance etc., Therefore, if it is an internet-based organization in order to market a microwave effectively, the purchase process must be clearly understood. The greater the understanding, the more accurate will be the stimulus, provided to the consumers. SRI LANKA EMBRACING IT

Ceylon or Sri Lanka which is the new name is an island in the Indian Ocean. Sri Lanka is also known for its high literacy rate which boasts about its 91% high ratio compared to India (point 1). But until late 90s, Internet was an alien to Sri Lankan. They found less use of internet and the way around it either. Sri Lanka found internet versatile more later than of many of the countries around the world. Internet became popular in Sri Lanka only after 2000. Until then we were happier and less curious about internet.

Now things have changed. Living in Sri Lanka in 2010, you could witness internet and the impact of information technology in each and every industry. According to the World Bank statistics, 8.3% of the population has continuous access to Internet which is
1,776,200 Internet users as of June, 2010.

Also, it has brought growth and improvements to

this little country.

This is a year-by-year statistic showing the penetration of internet in the island.

YEAR 2000 2007 2008 2009 2010

USERS 121,500 428,000 771,700 1,163,500 1,776,200

POPULATION 19,630,230 19,796,874 21,128,773 21,324,791 21,513,990

% PEN. 0.50% 2.20% 3.70% 5.50% 8.30%

GDP p.c.* N/A US$ 1,623 US$ 1,972 US$ 2,041 US$ 1,807

But Even though the internet has penetrated quite high, the versatility of the internet or the usage of internet was quite low until early 20th century. People in Sri Lanka use internet for basic purpose like, mailing to friends and relatives. Searching for news and 7

information in the web or for working purposes, business use internet to interlink their branches and share information primarily.

But then came the internet marketing creeping from all under. Very soon people saw advertisements in websites which link to other websites while they were browsing for information. It started with just the normal banner adverts and then it moved on to videos, high graphical content and various other things. Before most of the organizations has website and it is simply carrying information about the organization, what do they do, details about their board directors and their contact details. Now many organizations operating in Sri Lanka has come out of that traditional mindset. They started seeing internet as a tool to market their product. To sell things to the customers and to create perception in consumers mind this is quite competing. Many organizations have online purchasing options. And discount stores linked up to the internet. Now we could see customers browse products on the internet and order them and get it delivered to their door step. These are the trends today. The older days are gone.

Many fully internet based organizations and semi internet based organizations are seen to be mushrooming. They have set a great perception towards consumers minds and they are following it up well too. We could come across many individuals who have experiencing purchasing products online even at times there are people who purchase products over international websites as well like eBay and etc. So what do you think have changed their perception towards internet purchase and the behavior so drastically? We will be taking a deeper look and see what triggered them in the first place to make a move on a product that they have encountered in the internet.

POSITIVE CHANGE IN SRI LANKAN SECTORS

The development of IT in the public sector has been hindered by the lack of funds. However, due to generous grants from the donor countries and with the help of the World Bank, IMF, etc, the public sector has initiated many IT projects and implemented them to a satisfactory level during the past ten years. The eradication of the millennium bug from

the computer systems in the public sector is a good example for the capability of this sector. There were no major incidents reported from the public sector due to Y2K bug.

Private sector of Sri Lanka has reaped the maximum benefits from the information technology revolution. Almost all private sector banks of Sri Lanka are now fully computerized and offer their customers various on -line services. All popular IT brands are well represented in Sri Lanka at present and 100% of the business houses as well as a majority of the medium sized companies use information technology for their day to day business and record keeping functions. The Colombo Stock Exchange (CSE) is known to be using the latest technology available in the field and also fully computerized and bidding could be done online.

And, according to Sunday Times, the government is planning to enact laws on information technology crimes to deter the misuse of IT related products and services, the Ministry of Economic Reform, Science and Technology has announced. It also intends to enhance the existing laws on intellectual property. The ministry said it also plans to enact laws to facilitate all forms of electronic commercial transactions (e-commerce) this year and introduce voluntary guidelines to fulfill the requirements imposed by the European community data protection directive. This has already begun and commencing right throughout.

Sri Lankan families have a deep thrust for knowledge acquisition and the children are sent to tuition colleges and IT education centres at very early ages. With the market being more competent and the computer literacy is known to be very vital, business of IT training is blooming. All popular IT training houses of India (such as NIIT) have established branches in Sri Lanka. In addition, all universities offer bachelors degrees in Information Technology while the University of Colombo has a postgraduate degree program for IT. There were no higher research degrees offered by any of the universities before. But, some private college as Informatics Institute of Technology has an extended range of courses that are in the field of computer programming, software engineering and web development.

Currently, you not only see individuals purchasing products and services online, but managing their work from home, studying from home and engaged in social networking. Now, many institutes have diplomas for internet marketing, website designing and search engine optimizing which was not even used a few years ago.

According to the topjobs.com more than 85% of the IT related jobs are related to search engine optimizations and website designing. Now young individuals are prone to pursue something that is web-based than of the traditional jobs which they feel less exciting.

Also, there are many moods that contribute the factors that trigger a Sri Lankan to go online and purchase. And, as Sri Lankans are in an early phase in forecasting the negatives or the disadvantages in purchasing online should also be addressed.

Internet marketing is not only about selling a product online, but also to satisfy a customer on whatever he/she is searching for in a professional manner at the same time by promoting our brand name and not forcing it.

I have listed out some benefits that could be found in E-Commerce which cannot be experienced through offline shopping.

E-commerce has the ability to take your business worldwide using rich IT capabilities of the Internet and working with global currencies, secured payment methods, etc bypassing the cultural and geographical barriers, etc pertinent to conventional commerce.

You can close more business deals rapidly enhancing business output and saving time and money for both the buyers and sellers since ecommerce allows you to interact dynamically and to make decisions online.

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You could assist customers by answering their questions in real time and solving their problems then and there thus improving the customer confidence and loyalty towards your organization.

You can conduct e-meetings with co-workers and business partners regardless of location, saving travel costs. You can streamline and connect processes like product discovery, negotiation, ordering, transaction fulfillment, delivery, inventory and accounting irrespective of the physical location of the resource.

It is easy to create value around the business transactions by offering enhanced order features such as order status verification, back orders information, immediate re-orders, etc

Doors of your shop are wide open to your customers from all over the world, 24hours X 7 days a week since there are no time boundaries for work on the Internet.

Integrated e-commerce solutions allow you to dispatch your merchandise with speed and accuracy to your customers and to carry out backend tasks such as inventory management and accounting with ease.

You can monitor customer preferences and behavioral patterns with much accuracy and develop your marketing and sales strategies to suit your requirements. This will result in less inventory management costs and obsolete stocks.

You can support your customers by listing useful links on your web site (sort of trade referencing) so that your customers may develop a brand loyalty with you. You can incorporate search features in your web site that allows multiple searches so that your customers will benefit by always coming to your site.

All the above would be extensively briefed in the below topics.

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LITERATURE REVIEW

Several terms have been coined to use to describe advertising on the internet. Among, them, some terms have been used more than others in academic literature as well as in trade publication. They include interactive advertising, internet advertising, online advertising, and web advertising. This diversity of the term that denotes advertising on the internet seems to reflect the dynamically evolving nature of the internet as a promising marketing communication medium. So, even the definition of internet marketing follows a similar path (I will use the term internet marketing hereafter to denote advertising on the internet in general).

Internet marketing has been defined in diverse ways by advertising researches as follows any form of commercial content available on the internet that is designed by business to inform consumers about a product or service (Schlosser et al., 1999,p, 36) or al paid for space on the website or in an email (Strauss & frost, 2001,p,221). Or that which occurs when a company pays or makes some sort of financial or trade arrangement to post its logo or product information with the intent of generating sales or brand recognitions on someone else internet space ) Kay Medoof, 2001, p,17)

In this dissertation, internet marketing is brand defined as internet content paid for by an identifiable advertiser with persuasive intent to achieve marketing communication goals. This proposed definition of internet marketing is consisted with the majority of options from a recent panel of discussion of the redefinition of advertising in general by a group of advertising experts in the United States (Richards Curran, 2002)

Also, shopping online is the future. Most of the individuals intent to purchase online for many reasons and some are as follows.

Convenient. No traffic problem.

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No fuel expenses. Open 356 Days and 24/7. Cheaper cost. Less time consuming. Home delivered. Could compare many products and read reviews in no time.

But still people argue on the fact that I mentioned before. The difference between what they visually witness over the internet and what they actually get once delivered are two different products which is a critical fact to consider.

THE FACTORS INFLUENCING CONSUMER BUYING BEHAVIOR There are four main factors, which are widely acknowledged as effecting consumer buying behaviour. They are: (a) Cultural Factors. (b) Social Factors. (c) Personal Factors. (d) Psychological Factors. According to Prasanna Perera who is a leading marketer in Sri Lanka, the culture of a country has a profound impact on the purchase behaviour of its consumers. E.g. in clothing, the fashion and styles adopted are in keeping with cultural norms or even the way they purchase. Cultural norms have an impact on the buying behaviour and the purchases made. The most powerful social group is the family. The parents may have a preference towards a certain manufacturer, brand and purchasing modes. The grandparents my have another preference. How do you reconcile these preferences and arrive at a purchase decision? This is not too simple, since two families are involved and

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to achieve a consensus is quite a challenge! Amongst personal factors, age and life cycle is very prominent. Purchase behaviour and the resultant purchase decisions, are greatly influenced by the age and the life cycle of the consumer. E.g., young and single persons would make independent decisions in terms of clothing, entertainment, food etc., Young married couples without children, would invest in housing, consumer durables and engage in leisure pursuits such as dancing, socializing with friends etc., Therefore, at different stages in their life cycle, purchase decisions and actual purchases vary amongst consumers. Moving onto psychological factors, the power of motivation is simply remarkable. Motivation is defined as a power, which impels action, in this case purchase behaviour.

VIRTUAL GOODS Virtual goods are goods that we purchase online virtually. Mostly it could be something which is non physical. Like software that we purchase online, or games, or game credits like gold coins in Facebook.

According to Nielson Survey in 2009, Virtual Goods Grow 8% in Popularity Since 09. Also, 13% of online consumers have bought virtual goods online in the past 12 months, representing a roughly 8% increase from 12% who had done so in 2009. Furthermore, 21% of virtual goods buyers will buy more virtual goods in the next 12 months. In this study, virtual goods are defined as non-physical objects that are purchased and exchange on the internet in games, virtual worlds and social networks. Virtual goods can be simple items such as virtual points, tokens, or more complex items such as avatars.

Growth in virtual goods are especially strong among the male 18-to-24-year-old demographic (increase from 15% to 31% of online consumers in this demographic since 2009). Growth was also notable among males aged 25-34 (increase from 12% to 21%) and 12-17 (increase from 15% to 23%). In contrast, growth among most female

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demographics was flat or negative, with only the 18-24 age group showing positive growth (from 8% to 14%). This chart was extracted from www.marketingcharts.com which represents the Virtual Goods purchased by consumers for 2010 by Asians

According to Mehdi Khosrow-Pour understanding people behavior in the online market place can help online business to primarily focus on their target customers, predict customers purchasing behavior and make more profit through online channels. Bellman et al (1999) describes some factors that predict customer buying behavior; look for products information for months online, read number of emails daily, work online at work every week, read news online at home every week, total household working hours, click on banners, and agree that internet improves productivity.

In the stores at the streets, sales people are hired to distinguish shoppers and to stimulate their maximum consuming desire based on their in-store behavior. When shoppers show special interest in some specific product, sales people will help them find what they are

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looking for. In other case, for shoppers who are merely window shopping, sales person can recommend some product to persuade their shopping motive. However, in the virtual shopping environment, there is no sales person to perform this role. Therefore, to understand consumer behavior in virtual stores is very important for online business. This research aims to provide theatrical analysis to explain consumers shopping behavior in virtual stores. We first review literatures on aspects of consumers online purchasing behavior and then propose a model for customer online behavior.

According to Man Luo who wrote Consumer Behavior, tourism, and the internet, studies shows that internet provides opportunities to reduce dependency on traditional intermediaries for remote peripheral and insular destinations Additiona buhalis (1998) suggested that the Internet provides a mechanism to develop and promote specialized products for mini market segments.

Some studies have examined the profile of internet users among tourist in the pleasure segment. According to Nielson research, the number of consumers that access internet and the time they spend online is growing in an rapidly and many organization wants to get a piece of profit by marketing their product to them.

Also, marketing online is an expensive but an effective tool that many organizations use freely at the moment. Below is a chart that would explain the budget spent for marketing online alone and it is presented based on the industrial sector.

This chart was extracted from Nielson research organization which was from a survey conducted in Asia at January 2008.

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This chart depicts that online marketing is a serious business at present and many organizations are spending a huge fortune as they have reaped the benefit of doing so. Currently, among the hottest topics in the internet, Search Engine Optimization (SEO) is at the highest. Before a decade nobody in Sri Lanka or in the world would have heard of this term, but now there are institutes carrying out SEO training programs and organizations searching for SEO specialists to be recruited.

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Below are few mostly used methods in which SEO Specialists or Web Marketers increase their internet traffic and gain more productivity in their websites. Some of these were extracted from Corleys SEO Bible (2009)

Affiliate Marketing: A form of marketing or advertising used on the internet. Companies that sell products or services online link to relevant sites. The advertising on the other or 'affiliate' sites is paid for according to results.

Banner Adverts: Adverts on web pages used to build brand awareness or drive traffic to the advertisers own website. Blogs / Blogging: Contraction of Web log. An internet publishing device allowing an individual or company to express their thoughts and opinions. Businesses can use blogs as a marketing communication channel.

Click through Rate (CTR): The percentage of those clicking on a link out of the total number who see the link. For example, imagine 10 people do a web search. In response, they see links to a variety of web pages. Three of the 10 people all choose one particular link. That link then has a 30 percent click through rate. Also called CTR.

Conversion Rate: The relationship between visitors to a website and actions that are considered to be a conversion, such as a sale or requesting to receive more information. Often expressed as a percentage. If a website has 100 visitors and 3 of them convert (make bookings / reservations), then the site has a 3 percent (3.00%) conversion rate.

Cost Per Click: System where an advertiser pays an agreed amount for each click someone makes on a link leading to their web site. Also known as CPC. Keyword Research: Doing research on a single keyword to find it's relatives and related keywords. This is often done to find the highest producing keywords. Landing Page: The specific web page that a visitor ultimately reaches after clicking a search engine listing. Marketers attempt to improve conversion rates by testing various landing page creative, which encompasses the entire user experience including navigation, layout and copy.

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Navigation: Describes the movement of a user through a website or other application interface. This term also indicates the system of available links and buttons that the user can use to navigate through the website.

Quality Score: This is the basis for measuring the quality and relevance of your ads and determining your minimum CPC bid for Google and the search network. This score is determined by your keyword's clickthrough rate (CTR) on Google, and the relevance of your ad text, keyword, and landing page.

Link Popularity: A raw count of how "popular" a page is based on the number of backlinks it has. It does not factor in link context or link quality, which are also important elements in how search engines make use of links to impact rankings.

Organic Listings / Natural Listings: Organic Listings: Listings that search engines do not sell (unlike paid listings). Instead, sites appear solely because a search engine has deemed it editorially important for them to be included, regardless of payment.

Paid Listings / Sponsored Listings: Listings that search engines sell to advertisers, usually through paid placement or paid inclusion programs. In contrast, organic listings are not sold.

Search Engine Marketing (SEM): The act of marketing a web site via search engines, whether this be improving rank in organic listings, purchasing paid listings or a combination of these and other search engine-related activities.

Search Engine Optimization (SEO): The act of altering a web site so that it does well in the organic, crawler-based listings of search engines. In the past, has also been used as a term for any type of search engine marketing activity, though now the term search engine marketing itself has taken over for this. Also called SEO.

Search Engine Rank: How well a particular web page or web site is listed in a search engine results. For example, a web page about hotels may be listed in response to a query for hotels." However, "rank" indicates where exactly it was listed -- be it on the first page of results, the second page or perhaps the 200th page.

Viral Marketing: Spreading a brand message using word of mouth (or electronically - 'word of mouse') from a few points of dissemination. Typical

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techniques include using email messages, jokes, web addresses, film clips and games that get forwarded on electronically by recipients. According to Sunil Chopra, the Internet is revolutionizing the way companies conduct business. We argue that the value of the Internet for a firm is strongly dependent on the firms industry and on the strategy it pursues. A survey of firms with an online presence displays wide disparities in performance. While Dell has successfully used the Internet to boost revenues and earnings, Amazon lost $585 million on revenues of $1.6 billion in 1999. Firms that fully exploit the revenue enhancements and cost reduction opportunities offered by the Internet and optimally integrate e-business with existing channels are likely to be the big winners in the Internet age.

The above is a graph to show how internet could enhance your business. Also, Onesmartcart.com says Google analyses the amount of time that a user spends on a site after he/she has clicked a link from a search results page.

If there is a significant decline in the time spent on the site then it could indicate that the document contains information that is out of date and has become stale.

For instance, if after clicking from a Google search results link to a timetable, an average person spent 2 minutes on the site and now the average was under 30 seconds, it would indicate that the timetable was out of date. Google collects this information using the Google toolbar. So, more the information is frequently updated and it is relevant to your

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customer, then your customers would spend more time on your website providing you a change to make a sale.

E.g. A product that you no longer sell should link through to the replacement product. Pages Per Visitor. Another statistic all programs provide is Page Per Visitor (PPG). This number tells you how many pages on your website the average visitor checks out while visiting your site. So if your PPG is 1 that means that people are exiting you right after seeing your homepage and a good indication that you need to fix your homepage.

Depending on the nature of your site the PPG will vary. The higher the PPG, the more interest visitors are taking in your site and the more time they are spending on it. Try to find the exit pages that visitors are using the most. This means which one of you web pages most people exit your site from. Knowing and fixing these pages will help you tremendously.

Google looks at the number of people and the growth in people that add a document to their internet browser's bookmarks/favorites. The basis of this is that people would only add a site to their bookmark/favorites, if the site would be useful in the long term and wanted to visit the site in the future. Google looks at the number of people that then use these bookmarks/favorites to rank a document higher. Conversely, a decline in the number of bookmarks, their usage or deletion of bookmarks could indicate that a document is out-dated and no longer relevant. Google gathers this information from the users of the Google toolbar.

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RESEARCH METHODOLOGIES This chapter would describe the research design, setting of study, subject of the study, sources of data gathered and the procedure of the study and statistical treatments applied in the conduct of study.

PRIMARY DATA

At the beginning, I planned to have structured formats of questions which will be used for below purpose where the individual have to tick the appropriate checkbox based on the likeliness. The scale will be set as 1 being the least likelihood of a particular action and10 being the most likelihood of performing the action. Also, there will be two formats totally where we will be using to survey both the consumer group and the online marketing organizations data as well.

Initially I started off with crafting a sample questionnaire including all the pointers that needs to be covered in order to analyze and match with my research objective. There were set of questions that were based on buying habits, frequency, and the areas the consumers have concerns the most when purchasing online. And, this was planned to be distributed to150 individuals who match the segmented group mentioned below. I selected a sample of five individuals who matched my sample criteria and presented my questionnaire. Then I found there were plenty of fine tuning that needs to be done in terms of broadening the questions I pose in the questionnaire. Also, found the need to make the questionnaire more general to get more facts.

So, with the help of those individuals I crafted the final questionnaire and distributed it to my colleagues, friends, relatives and some individuals who I have short listed through my sampling selection. As I planned to collect the data from 4 groups of individuals as mentioned in (Table 02) but finding them was quite hard due to limitations and lack of knowledge. I distributed 150 questionnaires to the above mentioned groups offline and online and received their thoughts which were very informative and insightful. I found it

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very successful in using a questionnaire to break the ice in my dissertation. But, it was also time consuming to find the ideal candidate which matches my requirement and most of all regular follow ups were required in making the individuals fill the questionnaire and submit it to you.

Then, I moved from individuals to organizations that have online presence and provide ecommerce services to their consumers. I planned to collect all the necessary data that would provide me a clear picture on how consumers react to the marketing method of these organizations also the data would provide strength to my initial questionnaire which I provided to the individuals.

I found it more challenging that the initial task as Sri Lanka being a developing country many organizations are not quite thorough with the advantages of internet marketing so there were a few organizations that I have short listed in order to get the relevant information I require. And, even though some of the organizations do maintain a website for E-Commerce and marketing purpose, they do not have a mechanism or the skill to collect the data in terms of number of customers visited, the average purchasing per order, the time spent by an average visitor, or the links through they end up in the website. None of these figures were stored in their organization. So I got the permission from the organizations and installed softwares to monitor and gather the information I require. Also, I went through the control panel of some of their websites and collected the raw data that is captured automatically by the web itself.

Then, after collecting the data that I received from the organizations, I created a different questionnaire which was for web based organizations that operates E-Commerce. This is to understand the background of Sri Lankan consumers, profitability and the position Sri Lanka stand in terms of online activities. Also, I extracted the maximum data possible with regards to the latest statistics in online activities of Sri Lanka. This was filled by website managers to strengthen my research. I distributed 20 questionnaires and collected the filled information for analysis. There were another set of questions

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SECONDARY DATA

After sorting the data gathered from individuals and organizations which were my primary data, I started working on collecting secondary data. I started with desk research where in I searched for research statistics regarding internet marketing, e-commerce and any statistics related to my dissertation. Our search of secondary sources was carried out to refine the objectives and provide lines of enquiry for the next stages, specifically; this desk research phase will gather information in national usage of internet over the last ten years.

At this point, we also would generate a list of organizations and brands that the consumers opt to look for and their strategies on E-Marketing. But the information that I received was quite limited as there were no much of research in the area I am pursuing. It gave me more pressure and at the same time excitement as I was contributing some piece of information to a vacuum found in researched areas in Sri Lanka.

Then, through a reliable source, I managed to get some issues of research done by foreign organizations in Sri Lanka to aid and develop the Information Technology & ECommerce aspect of the country. The information that I received was extensively helpful and provided me some great knowledge about the trends and analysis of consumers buying behavior online.

The secondary data was targeted on focusing some sub objectives such as below.

How many households have internet access (Broadband / Dialup) Where the individuals use internet mostly used at. The websites Sri Lankan users visit the most. The age & gender category surfing the internet most. The average income of the individuals who are most prone to purchase online.

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The type of goods mostly Sri Lankan are willing to purchase online.

TABLE 01, explaining the groups that I would be distributing the questioners.

Group A B C D

Age 18 - 25 25 - 40 18 - 25 25 - 40

Gender M/F M/F M/F M/F

Geography Sri Lanka Sri Lanka Sri Lanka Sri Lanka

Income 20,000 - 50,000 20,000 - 50,000 Above 50,000 Above 50,000

Individuals 30 20 30 20

The above samples applies only for individual consumers only and not for organizations.

After strenuously gathering the surveys that my hands get grab, I went on researching for trends and information through some established E-Commerce organization. I came up with the below organizations that provided me very insightful information regarding the consumer behavior and how internet marketing has improved in Sri Lanka.

1. www.topjobs.lk 2. www.lankagifts.com 3. www.lanka.info 4. www.roomservice.lk 5. www.emarketingeye.com 6. www.echannelling.com

Now, these websites provided me more information that I possibly imagined as they were following the best practices of E-commerce diligently. So, once I received their part of information things got clear and ambiguity was eradicated from my case. Then I simply carried out analyzing the data received from all sources and sorting them according to my objectives.

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And, finally in order to add a rich topping to my research, I was lucky enough to stumble upon a group of individuals who were experts in online purchasing and activities, so without wasting time, I carried out a focus group regarding my objectives with a group of 8 members. This assisted me a lot in bring my dissertation to the right track and remove off unnecessary information from the dissertation. There were many interesting and shocking pointers that were dished out.

So this is where my research ended and I did the last part by my own.

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DATA COLLECTION & ANALYSIS In this chapter, I have analyzed the data that I have gathered through the primary and the secondary research that I have conducted as explained previously and I have provided the analysis below.

PRIMARY DATA

Below are some of the ways I chose to gather the primary date for my dissertation. Individual Questionnaire Corporate Questionnaire Focus Group

As mentioned, using multiple tools to gather the primary data could provide you advantages in looking at a problem from many angels. Questionnaire would provide straight forward information as to what the customers look for, the behavior, and the concerns about internet marketing. Also, it provides the same for Corporate. While, Focus Groups are more sort of a discussion we are having where every idea that is mentioned are fine tuned and more redefined. And, observation provides you more details of the activities that you actually see in the real market.

Firstly, I decided to structure a Questionnaire in order to collect primary data by considering the below points. It is cost effective by far compared to the other tools. The Questionnaire could be filled by an individual at free time or at his/her convenience. It safeguards his/her anonymity, so the individual would feel safe in what he/she is trying to mention. The data collection and feeding would be easy. It could be filled by anyone without any hassle.

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INDIVIDUAL QUESTIONNAIRE REVIEWED

Initially, I prepared a basic questionnaire and tested it using five candidates. It provided me many details in fine tuning the questions, generalizing some details and maneuvering things as per my objectives.

Then, I structured the final Questionnaire and distributed to 150 individuals. Below is a table presenting the end status for my 150 Questionnaires.

The Questionnaire was distributed to individuals who have fair knowledge in ECommerce and the Internet Marketing experience.

RESULTS The facts extracted from the questionnaire received from individuals are provided in point form for clarity.

QUESTIONNAIRE I have mentioned the findings that I received through the questionnaire that is gathered.

General: Average Age: 17 - 35 Female: 35% Male: 65%

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Income: Under 10K 0% 10K - 30K 24% 30k - 40K 21% Over 50K 45% Misc. (unemployed, retired, wouldn't respond) 11%

Total respondents to surveys based on cities: Colombo: 87% Kandy: 8% All Other Cities: 5%

Internet Usage: 78% of respondents use their web browser more than once a day 56% use it more frequently than 4 times a day 36% use the web 1-4 times a day 8% use it less frequently than once a day

Frequency of Online Purchasing: Never 19% Less than once a month 63% Once a month 17% Once a week 1%

Amount Spend Online Between Jan10 - Jan11: Less than 500/- 13% 500/- to 1000/- 27% 1000/- to 5000/- 41% 5000/- or more 19%

Activities on the Internet:

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It is report that 39% of individuals investigate on the information of a product/service. 22% use Internet to communicate with people, work, and study. 21% use Internet to get connected to their favorite social network or chat with friends Also, 15% of the individuals report that they use internet more than once for entertainment purpose daily. 4% Chat daily.

Primary Usage (Individuals selects multiple categories): Personal information 75% Work 65% Education 60% Entertainment 60% Shopping 50%

Bookmarks: 54% have between 11-50 bookmarks. 45% have over 100 items listed 1% never bookmark anything or don't know how to bookmark

Marital Status: 34% married. 45% single. 13% divorced or separated 8% other

Occupation: 39% works on computer related field. 22% works on marketing & sales field. 19% works on finance field. 7% miscellaneous 30

13% educational field.

Used Web Browser: Microsoft 31% Mozilla Firefox 32 Mobile browsers 18% Google Chrome 19%

Internet Entry Environments: 31% of users access the internet from home. 40% of users access the internet from work. 27% of users mentioned that they use internet from both home & work. 2% of users access the internet from the college/educational institute.

Reason to Buy Online: 51% Convenience in Shopping. 22% Shopping for Latest Products. 27% Door Step Delivery. 12% Cheap in Price. 19% Time Restriction.

Internet Type Used: 59% Dial Up 29% Leased Line/ ADSL. 12% ISDN

CORPORATE QUESTIONNAIRE REVIEWED As mentioned before, I distributed 20 Questionnaires to website managers and individuals who maintain corporate websites. This was structured differently compared to what I provided to the individuals.

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WEB SITES MAINTENANCE

More companies are inclined to run own web sites. The driving forces for establishing web sites are the global exposure and the direct interface with the customers Primary purpose of the site is to promote sales and to create awareness to the public. The web hosting companies developed most of the sites while in-house development came second. The majority had entrusted the management of the website also to a web hosting company. Location of the site is equally divided between in-house server and the web hosting company. Most of the websites were professionally maintained and updated. Development cost and the annual running cost of the web sites were within the reach of the organization. Majority of the respondents agree that the websites are important to improve business exposure. Visitor profiles are not monitored by the organizations who own websites.

E-COMMERCE PENETRATION

Web based selling is not well established in Sri Lanka. Sales volumes were at the low end for the few who used web-based selling. Everybody is positive about the sales to increase in the coming months. The portals do not provide enough sales information at present. Web based buying is limited to a few types of items.

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No local establishments have B2B transactions. Buying frequency varied among the respondents and 37% declared that they buy very rarely. Purchase volumes over the Internet are very low. Payment method is the bottleneck to purchase goods over the Internet. Using web portals for business propagation is not widespread among organizations we surveyed. Back end applications such as Accounting Systems, Delivery Systems and Stock Control Systems are not used within the organizations in order to effectively engage in E-commerce.

WAP systems though available, are not widely used or profitable within the Sri Lankan marketplace.

KEY FINDINGS ON BANKING SECTOR APPLICATIONS

Number of users of Internet Banking is very low. The main reason for non-usage is the security concern. Most of the respondents have been using the I-banking for less than one year. I-banking may sure catch up similar to the ATM cards since most of the banking operations except cash could be carried out from home.

KEY FINDINGS ON NON USERS

Undue worries about the cost is a barring factor for SMEs to establish Internet facilities. Lack of staff with adequate knowledge to run an Internet based application is another bottleneck. Infrastructural facilities such as insufficient telephone connections are another disadvantage.

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The managements perceived lack of knowledge on the benefits of e-commerce is preventing them from investing in Internet based applications. Some of the SMEs are already on the way to establishing Internet connections and an increase in the Internet implementations within SME sector could be seen within a few years.

RECOMMENDATIONS TO THE BUSINESS Develop e-commerce activities where feasible since it improves Supply Chain Management (SCM) by targeting just-in-time approach. It also improves the Customer Relations Management (CRM) that is highly beneficial for a commercial organization in the long run. Remove techno phobia from all elements within the organization. Train staff in new technologies since by default a well-trained staff brings in less production defects and efficient services to the customers. Create awareness of the benefits of embracing Information Technology before implementing them which will assist the organization to implement the process smoothly without any resistance. Make staff use the new facilities and new technology as much as possible by encouraging them with production related incentives. Carry out necessary business planning incorporating e-commerce activities so that more benefits could be reaped from future investments. Commence online selling of goods. Especially commodities such as Ceylon Tea, Antique items, etc, could be easily sold over the Net.

RECOMMENDATIONS TO THE GOVERNMENT

Enact laws conducive to the establishment and proper management of ecommerce activities in the country.

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Invest in the improvement of the telecom infrastructure and other communication facilities in the country to be in par with the growing technology. Allow deep penetration of personal computers to rural areas and townships by removing all taxes on import of the IT equipment and reduce taxing on IT related and software development companies.

Carry out further studies on how to build up an e-commerce savvy business environment. Provide incentives to ICT infrastructure projects by way of tax relief similar to roads/ highways, air and seaports, etc Have a national policy on e-commerce and the development of web-based applications. Make the technology and services available to grassroots levels encompassing the whole country and propagate methods and technologies conducive to the development of e-commerce within the SME sector too.

Country level implementation of distance learning facilities embracing all universities, provision of tools and funds for innovation and research in the ICT, establishing a network of Internet centers at village level, etc are some positive steps that the government could take to improve the e-commerce implementation in the country.

FOCUS GROUP

After reviewing the two sets of questionnaires that was collected, I moved on in setting up a questionnaire among 15 individuals who have experience in internet marketing, purchasing online, and website managers. And. below are the points we discussed and concluded.

REASONS FOR PURCHASING ONLINE

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Most of the consumers prefer shopping online if they are short of time and would prefer comparing certain products and brands to make a quick decision.

E.g. If a customer is checking out to purchase a wedding cake, he would simply browse through few websites, compare the prices and the specification and make a call to purchase the relevant one.

We could observe two things clearly from the above example.

1. People not only go online with the intention to purchase but also to compare prices and make a decision. 2. People use internet to purchase when they are short of time or has no other convenient choices.

Also, we came received an interesting fact as consumers also purchase online in order to have it delivered to a different address, or to the same address at a different day. As the delivery services would not come in a bundle when purchasing a product through any traditional retail shop or any outlets. So, these facts lead us to research some activities on the internet at a special day in Sri Lanka.

We started observing and collecting sales data and other related information which could provide us some insight of the movements in the internet for the Valentines Day (February 14). Then we received some shocking news where many E-Commerce websites reported high sales than any other special occasion. There were huge traffic inflow from all directions to the websites that sell flowers, cakes and other gift items. And, surprisingly there were delivery booked for almost all regions in Sri Lanka for the purchases to be delivered.

I have presented the description of two organizations that benefited the most from the Valentines Day.

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1. Kapruka.com is a famous website that has a stable customer base in Sri Lanka and specially Europe countries and America. Mostly their customers use their services to deliver goods to relatives living in Sri Lanka. The Customer Service manager in Kapruka.com reported that the Valentines Day 2010 was very profitable compared to other days such as Mothers Day, Festivals and etc. It was recorded that there were 432 inquiries over the phone about the products published on the internet on 12th & 13th and out of them, 308 consumers purchased which is to be delivered on the Valentines Day

2. Lankafoods.lk a leading organization in Sri Lanka that is managing well in ECommerce business in Sri Lanka and ibuy.lk which is a part of Dialog Telekoms initiative reported a spike in sales.

Though there research we came up with a fact and that is consumer purchases online to deliver items to a different place which is not available in the normal shops. Or a surprise gift to be sent to your loved ones.

PROBLEMS IN CORPORATE WEBSITE

An overwhelming 97% told that the primary purpose of their web site was to promote the company to potential customers. The bad news is that none of the respondents use the company web site for selling goods over the Internet. That means Sri Lankan SMEs have to go a long way before effectively engaging in online selling of goods. However, there are hotels that perform room reservations online with limited success.

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We asked the SMEs to rate the importance of the web sites to the operation of their companies in terms of Promotion, Sales and Procurement. The outcome was as follows.

CONCERNS IN ONLINE PURCHASING

Also, when discussing the concerns related to online purchases, I received majority being the cause of not receiving the exact product that was originally ordered online. Many consumers get disillusioned by the end product delivered to the consumer.

E.g. A consumer checks a Chocolate Fudge Cake which is 1 pound in size and on a website and decides to purchase it and get it delivered to his friends home for a later date. It has been noted that the size of the cake and the variety of the cake that was purchased was not sent but for a different product. And, this scenario has been encountered by many individuals providing a bad impression towards online purchasing. And this shows Sri Lankans are not following the best practices of internet marketing and it is crucial as we are in the initial phase.

And, Sri Lankans still feel that nothing could compare the feeling that they get by browsing through shop stores physically with their friends and witnessing the tangible evidence would be a greater experience and a way of shopping rather than the convenience of purchasing online which some are ready to forgo.

Many individuals also agreed that many corporate and e-commerce websites operated in Sri Lanka were either neglected or outdated. Consumers always come across dead contact numbers, wrong addresses and dead website links when visited. There were also instances when the product as a whole did not exist at the time consumers contacted the organization. This seems to be quite alarming, and some organizations are not aware about the damage that is been done to the companies reputation.

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SECONDARY DATA

In this topic, I would present some statistical analysis on the secondary data that I have gathered. Mainly, I gathered the data through Desk Research where I used Internet and some offline contacts of mine to collect some surveys that were conducted in same grounds with the objectives possibly close to my objectives.

INTERNET RESEARCH STATISTICS

The below are some statistics of average Internet buyers. This will provide you with a general idea of the kind of people who would visit websites with the intention of purchasing online. All of the figures are based on professional surveys done in 2010.

As I mentioned in the early chapter about the desk research that I performed in order to collect the secondary data to support my dissertation. Below are some interesting facts that were collected.

Firstly, the sample included 716 respondents who were males. Of those respondents who were willing to provide information about their age. 26% were between the ages of 35 and 44, while 17.5% and 13.9% were in the age categories of 25-34 and 55-64 respectively. These three age categories comprised the majority of the respondents. Of those who answered the question regarding education, 18.8 of them had earned a high school diploma, 17.3% of them had been to college but had no degree, 30.7% reportedly that they had bachelors degree and 15.1% of them had masters degree. With regards to the income questions, 528 respondents provide information on house hold income

With increasing consumer interest in online shopping, the amount of trade that is conducted electronically has seen extraordinary growth. According to MasterCard's latest Insights Report, Online Shopping in Asia Pacific - Patterns, Trends and Future Growth, this growth is poised to further accelerate in the region and is expected to increase at an annual rate of 23.3%, reaching US$168.7 billion by 2011.

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The report, which analyses consumer behavior in relation to e-commerce across the region (Australia, China, Hong Kong, India, Japan, South Korea, Singapore and Thailand), reveals that the focal point of this growth is likely to shift from the consumers in Japan to new consumer populations in China and India. Some of the key findings include:

63% Survey Respondents Shop Online; South Koreans and Japanese Most Active Shoppers (83% each)

In terms of total spend on shopping online the survey revealed that online shoppers in the region spent an average of US$612.40 online over a period of three months, with Singaporean ($770.70) and South Korean (US$707.50) consumers emerging as top spenders. Online shoppers from Thailand and Hong Kong were the least active, making an average per person purchase of 1.8 times and 2.1 times respectively.

44% of online shopper respondents indicated that they have been shopping online for more than three years now, with 76% indicating that they will make a purchase in the next six months. More specifically, a majority of respondents from South Korea (93%) and China (87%) were likely to make an online purchase in the next six months. Japan to Lose Pre-eminence as China Leads Region in Online Shopping Market Size by 2011; India Will Rise Strongly to Emerge Second.

The rising population of upper-middle-income urban elites is likely to boost the online shopping markets in China and India significantly. Domestic consumption spending in the two countries is poised to pick up strongly, underpinned by a rapid pace of urbanization, robust economic expansion and rising spending By 2011, Chinas online shopping population is projected to increase to 480 million and contribute to 58.6% of the total online shopping population in the region compared to 49.9% that it does currently. Meanwhile, Indias online shopping population is poised to overtake Japan and Korea in terms of share of the online shopping population in the region.

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Additionally, 2011 will see China offering by far the largest market in Asia Pacific in terms of online shopping revenue turnover - US$1415.7 billion compared to the $297.8

Focus Centers of E-Commerce Set to Shift as Online Sales in Asia reach US$168.7 billion by 2010. India in the interim will rise strongly (from US$70.8 billion in 2007 to US$734.3 billion projected in 2011), to emerge as the second largest online shopping market in the region in terms of revenue turnover.

Majority of Region's Shoppers Plan Purchases and Conduct Research before Spending Online

A majority (84%) of online shoppers in the region tend to plan their shopping in advance and conduct research on their planned purchases, including browsing on the internet (87%) and the merchant's website (61%) and through recommendations (47%). The level of opportunistic spending online therefore does not seem to be a major factor for many online shoppers, with tendency for impulsive spending in e-commerce varying widely among markets in the region. Some 41% of respondents across the region had bought on impulse while shopping online, with 34% indicating that they hardly ever bought on impulse.

In markets such as Singapore, South Korea and Australia, which are somewhat more mature financially, only about 10% of shoppers frequently made opportunistic purchases. This proportion jumped drastically in markets like India (30%), China and Thailand.

For those who made opportunistic purchases online, they attributed this to the low prices/ substantial discounts they found (74%). Other factors included the availability of unique items available only online (48%) and advertisements and promotions (33%).

Internet Penetration Rate, Income Level & Culture Key Factors Driving Online Shopping Penetration in the Region

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Based on analysis conducted, a strong relationship (an 87.1% possibility) was found to exist between the online shopping penetration rate and the above three factors. Asia Pacific markets with higher internet penetration rates (Japan, Korea and Australia) were reported to have higher online shopping penetration rates. While China has one of the lowest internet penetration rates (15.9% of population), the online shopping penetration rate this small group was unusually high at 70% - indicating that the online population has a high tendency to make online purchases. Similarly, higher-income markets tend to have relatively higher online shopping penetration rates.

Based on the survey where respondents were asked their reasons for not making purchases online, the cultural affinity for online shopping across the region was analyzed as part of the report. A key finding was that cultural factors in Hong Kong tend to be less favorable towards online shopping activity compared to other developed countries such as Australia, Japan and Korea.

Secure Payment Facility, Price and Convenient Payment Methods Top Factors Affecting Propensity of Online Shopping

While consumers in Asia Pacific perceived online shopping to be convenient (71%) and easy (66%), 87% of the regions online shoppers regarded secure payment facilities and price as the most important factors affecting their tendency to shop online. These were followed by convenient payment methods (85%).

Credit Cards Top List of Preferred Form of Online Payment Methods in Asia Pacific

Credit cards were the dominant and most preferred mode of payment for online shopping in most of Asia Pacific (53%), with the exception of China (25%) and Thailand (41%), where debit cards were preferred. In most markets, consumers indicated that they would shop more online and use more of their credit cards if their security concerns were allayed. On average, 74% of online shoppers in the region felt that payment security and

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user confidence in online transactions could be improved. Power of urban elites. (Reference 05)

ORGANIZATIONS IN SRI LANKA Based on ICT Survey conducted in Sri Lanka at 2009, below are some of the data related to organizations operating in the country.

Initially, the question, What is the primary purpose of your site was asked from the 34 Companies who told that they were maintaining company web sites. The responses were summarized as follows. Primary Purpose: Promote company to potential customers (Promotion): Collect visitor information for database(Record): Sell goods over the internet (Sales): Convey messages to public and other corporate(Media): 34% 15% 11% 40%

Percentage

Media 40%

Promotion 34%

Sales 11%

Record 15%

Promotion

Record

Sales

Media

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NIELSON ONLINE SHOPPING REPORT FEB 2008 This is a comprehensive report that I received and it states, Consumers across the globe are increasingly swapping crowded stores for one-click convenience, as online shopping becomes a safer and popular option these days. According to a recent global survey conducted by The Nielsen Company, over 85 percent of the worlds online population has used the Internet to make a purchase, up 40 percent from two years ago, and more than half of Internet users are regular online shoppers, making online purchases at least once a month.

The Nielsen survey, the largest survey of its kind on the topic of Internet shopping habits, was conducted from October to November 2008 and polled 26,312 Internet users in 48 markets from Europe, Asia Pacific, North America and the Middle East. When The Nielsen Company conducted its first survey into online shopping habits two years ago, only 10 percent of the worlds online population (627 million) had made a purchase over the Internet. Within two years, this number has surged by approximately 40 percent to a staggering 875 million.

This table indicated that the Asian are rapidly adapting in purchasing products/services online than other continents.

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The online shopping revolution has had a marked effect on shopping for air travel. Internet shopper interest in buying airline tickets/reservations online rose three percentage points in the past two years. Today, one in four online shoppers globally said they had purchased airline tickets on the internet in the past three months. More than 70 percent of Indians and more than 60 percent of Irish and UAE Internet users said they bought airline tickets/reservations on the Internet in the last three months, making travel the fourth most popular shopping category on the web. Travel is a category extremely suited to the Internet due to the latters ability to provide efficient access to an extremely wide range of comparable information. Whilst certain areas of the travel industry were initially slow to utilize the benefits of the Internet, it is now one of the undoubted success stories of online, playing an integral part in the arrangements and experience of todays traveler, said Jonathan Carson, President, International, Nielsen Online.

MASTER CARD INSIGHT REPORT

Visa leads the charge in online credit card payment. Credit cards are by far the most common method of payment for online purchases 60 percent of global online consumers used their credit card for a recent online purchase, while one in four online consumers chose PayPal. Of those paying with a credit card, more than half (53%) used Visa. Shopping on the Internet with the ease of a credit card is especially appealing to consumers in emerging markets who simply cannot find or buy items they want in their retail trade. The Internet has opened up a whole new world of shopping for these consumers, said Carson.

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While Latam and Asian online shoppers are also more likely to use credit cards than any other form of payment, debit cards are most popular among UK (59%) and U.S. (40%) online shoppers.

So the research findings end here by concluding that Sri Lanka as a country has a great deal of untapped opportunity to explore. And, many industries I Sri Lanka could prosper online. We are trending upwards for a great future.

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CONCLUSION & RECOMMENDATION

s many countries that has revolved due to the presence of Internet, Sri Lanka too should adopt the change more effectively and efficiently. Many organizations seems to be going online at present which is a positive note towards the right direction, but it is just a

beginning, there are many models that the Sri Lankan organization could adopt from successful organization that has a strong online presence.

But, according to my finding and analysis in this subject as a whole I could strongly state, most of the Sri Lankans are not yet ready to respond to a 100% virtual organization at present. Sri Lankans are still in stages where they go online for reference or in search of information and then call up the relevant store or visit them personally and purchase the required product. This is witnessed even for organization that has been in business for several years. So, if an organization is totally depending on E-commerce and has no offline presence like a shop in the streets, or any posters in the road or at least a leaflet mentioning the offers; it is likely the company has to struggle immensely.

Also, it is noted in many Sri Lankan organizations have websites and it is maintained by the youngest individual in the organization due to lack of knowledge in managing the websites or due to the misunderstanding of such practice by the higher management. A corporate website is just critical as the newspaper advert about the organization or your perfect proposal that you present to your clients. There articles, contact numbers, product portfolio and the address are the most critical part of a website and it should be frequently updated and maintained with due diligence and with the precise marketing mix to gain reputation and revenue.

Even though many websites have set the default payment method as through credit cards to their customers who are willing to purchase online, it is less likely they would feel safer to provide it. As, marketers should understand that Sri Lanka has just

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started purchasing online and would be paranoid about giving out such confidential information, but if organizations have many payment options to choose for customers, then it is more likely that they would choose one among them and it would most likely to be the credit card option. This might sound confusing, but it is just the way Sri Lankans grade an E-Commerce organization.

E.g. Some of the payment methods that could be facilitated by organizations to have a better result. Online credit card payment. Order through phone and get it delivered. A street address to collect the order which is purchased. Standing order or through direct debit. Coupon code or through any promotional point system.

So, in the current situation, if an organization is planning to have an online shop running, they could consider some of the below points to expect more responses.

Simply print some leaflets about your online shop with the promotions and the website and attach it along with the weekend newspapers in order to give tangible evidence about your online organization.

Publish your special promotions campaign you are running in any magazine or in the newspaper with the promotion code and the deadline.

It is recommended to use outdoor billboards or some posters in the street. This has a higher tendency to remind the advertisement that you have published in the newspaper to the customers.

Do not place a promotion offer in the internet or adverts in other websites promoting your products and sit there expecting the Sri Lankans to make use of the offer.

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It is highly recommended to have an online support system placed in the website where customer queries could be answered immediately through an agent and the purchasing decision is made right there.

Try to have more than 2 payment methods for customers to choose if purchasing online, and do not make the mistake of having only the credit card payment method alone.

Have your website updated frequently and it should be among the frequently used media to communicate to the public and corporate.

It is important to organizations to actually fine-tune their business model and the standard operating procedures before they go online as it is a total different platform compared to the traditional way of carrying out business.

Finally, there are great deals of opportunity to expand the business online as the E-Commerce business is still surrounded with Blue Ocean and the possibilities are endless. Internet is just an ocean and many business ideas could be generated by just formulating the existing technology. Provided the business idea is unique and the usage of online marketing tools are chosen wisely and business model is in par with the recommendations that is mentioned in this dissertation, an organization could succeed in every aspect and foresee every challenge and be prepared for it.

And I would like end this by mentioning one of my favorite quote:

"Marketing is not a battle of products, it's a battle of perceptions." Sometimes the best product does not win.
By Al Ries & Jack Trout

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REFERENCES BOOKS: Research Methods for Business Students, (Fifth Edition,2009) Mark N.K. Saunders, Adrian Thornhill & Philp Lewis The Internet and Travel and Tourism Education, (Volume 01, 2001) Bob Mckercher, Gary Williams & William Chernish Global E-Commerce, (First Edition, 2001) Ali Farhoomand & Peter Lovelock Secrets of Asia's Most Successful Internet Gurus, (First Edition, 2009) Pearlin Siow The 22 Immutable Laws of Marketing Al Ries & Jack Trout

LINKS: Internet Marketing Tools used for Sri Lankans http://www.emarketingeye.com/internet-marketing.html Marketing chart pasted on literature review. http://www.marketingcharts.com/direct/online-ad-spend-by-industry-january-2008-3446/ Website that provides global statistics related to online users. www.emarketer.com Website that provides details related to searches that were conducted based on countries. www.alexa.com Nielson online shopping report Feb 2008. Sri Lanka Business Development Center survey conducted for SLBDC http://id.nielsen.com/news/documents/GlobalOnlineShoppingReportFeb08.pdf

Literacy rate, adult total (% of people ages 15 and above) (world bank 2008) gathered some data on what Prasanna Perera wrote. http://print.dailymirror.lk

MasterCard Insight Report http://www.asiatraveltips.com/news08/266-OnlineShopping.shtml

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APPENDICES

INDIVIDUAL QUESTIONNAIRE

Please fill the below Questionnaire diligently and accurately. Do not hurry but take your own time to complete all the relevant fields. OCCUPATION: _________________ CITY: _______________ 1. SEX: MALE FEMALE 10K 30 K 30K 40K Over 50K MARITAL STATUS: _____________

2. INCOME: Under 10K

3. INTERNET USAGE: More than once a day. Frequently than 4 times a day. 1-4 times a day. Frequently than once a day.

4. Frequency of Online Purchasing: Once a Week. Once a Month.. Less than once a Month. Never.

5. Total Spent Online Less than 500/500/- to 1000/1000/- to 5000/5000/- or more.

6. Primary Usage of Internet Personal information. Work. Education. Entertainment. Shopping.

7. What do you do in internet the most? _______________________________________

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8. No. of Bookmarks ________________________________________

9. Used Web Browser: Microsoft. Mozilla Firefox. Mobile browsers. Google Chrome.

10. Internet Entry Environments: Access the internet from home. Access the internet from work Access internet from both home & work. Access the internet from the college/educational institute.

11. Reason to Buy Online: ________________________________________

12. Internet Type Used: ________________________________________

Any Suggestions that you expect E-Commerce should be like or any concerns that you have when purchasing online. ______________________________________________________________________________ ______________________________________________________________________________

I am very grateful to you for allocating some of your precious time in filling my questionnaire.

Thank You.

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