Project Dissertation

On

Consumer Behavior In Online Shopping

Submitted To Lovely Professional University

In partial fulfillment of the requirements for the award of degree of

BACHELOR OF BUSINESS ADMINSTRATION

Submitted by:

Group No-46 Supervisor:

Kuljeet Minhas

Prashant Priyadarshi Roll no-17

Nitish Arora Roll no-15

Nandni Kashyap Roll no-20

DEPARTMENT OF MANAGEMENT

LOVELY PROFESSIONAL UNIVERSITY

PHAGWARA (2010-11)

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 TO WHOM SO EVER IT MAY CONCERN

This is to certify that the project report entitled “Consumer behavior in online
shopping-carried out by Nitish Arora, (S/O) Satish Kumar Arora, Prashant Priyadarshi,
(S/O) Sanjay Kumar Mishra, Nandni Kashyap, and (D/O)Sham lal kashyap has been
accomplished under my guidance & supervision as a duly registered BBA (H) student of
Lovely Professional University Phagwara. This project is being submitted by them in the
partial fulfillment of the requirements for the award of the master of business
Administration from Lovely Professional University.

.There dissertation represents their original work and is worthy of consideration for the
award of the degree of bachelor of Business Administration.

KULJEET MINHAS

LECTURER IN MANAGEMENT

LHSB

Lovely Hons. School of Business

Date: 17/5/2010

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 Declaration

I, Nitish Arora, Prashant Priyadarshi , Nandni hereby declare that the project report
entitled Study on Consumer Behavior in Online Shopping has been written and
submitted under the guidance of Miss kuljeet Minhas.
I further declare that it is original work done as a part of our academic course and has
not been submitted elsewhere. The conclusions and recommendations written in this
project are based on the data collected by me while preparing this report.

Prashant Priyadarshi Nitish Arora Nandni Kashyap

10803272 10806134 10809033

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 TABLE OF CONTENTS

S.No Particulars Page number

Chapter

1 1.Introduction 12

(Theoretical Foundation, Evolution of subject and its

Dimensions

1.1 Executive summary

10
1.2 Introduction
12
1.3 Theoretical Foundation
14
1.3.1 Online Shopping in India
14
1.3.2 Rising connectivity
14
1.3.3 Factors that Boot Online Shopping in India

1.3.4 Few Facts about Online Shopping

15

1.3.5 Changing Attitude Towards Online Shopping

16

4
2 Review of literature 18-32

3 Need,Objectives ,Scope & Methodology 33-36

3.1 Need 34

3.2 Objective 35

3.3 Scope of Study and Methodology

3.3.1 Scope of Study

3.3.2 Research Methodology 36

3.3.3 Research Strategy 36

3.3.4 Descriptive research method 36

3.4 Sample Design 37

4 Data analysis [factor analysis through spss] 39-44

4.1 Pie charts 45-58

5 Summary ,Conclusion ,Limitations & 63-67

Recommendations
63
5.1 Summary
64

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 5.2 Conclusion

5.3 Limitations& Recommendations 65-69

6 References 69-73

7 Appendix,(Questionnaire.Terms, 74-78
Abbreviations,Documents,Performa,Financial
Statements

Table of figures

S.NO Particular Page no

Chapter 4

Fig 1.1 40

Fig 1.2 40

Fig 1.3 41

Fig 1.4 42

Fig 1.5 43

Fig 1.6 44

Fig 1.7 45

Fig 1.8 46

Fig 1.9 47

Fig 2.0 48

Fig 2.1 49
6
Fig 2.1 50

Fig 2.2 51

Fig 2.3 52
 Table of Figures

S.No Particular Page

No.

Tables No .

1 Table 1.1 60

Table 1.2 60

60
Table 1.3
60
Table 1.4
60
Table 1.5
60

Table 1.5 60

Table 1.6 60

60
Table 1.7
60
Table 1.8
60
Table 1.9
62
Table 1.10 62

Table 1.11 62

62

7
Table 1.12 63

Table 1.13 63

63
Table 1.14

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 CHAPTER-1
INTRODUCTION TO SUBJECT

9
1.1Executive summary

The growing use of Internet in India provides a developing prospect for online shopping.
If E-marketers know the factors affecting online Indian behavior, and the relationships
between these factors and the type of online buyers, then they can further develop their
marketing strategies to convert potential customers into active ones, while retaining
existing online customers.

This project is a part of study, and focuses on factors which online Indian buyers keep in
mind while shopping online. This research found that information, perceived usefulness,
ease of use; perceived enjoyment and security/privacy are the five dominant factors
which influence consumer perceptions of Online purchasing.

Consumer behavior is said to be an applied discipline as some decisions are significantly

affected by their behavior or expected actions. The two perspectives that seek application
of its knowledge are micro and societal perspectives.

The online purchasing behavior of online shoppers and factor influencing online
shopping behavior and its future perspective. Internet is changing the way consumers
shop and buy goods and services, and has rapidly evolved into a global phenomenon.
Many companies have started using the Internet with the aim of cutting marketing costs,
thereby reducing the price of their products and services in order to stay ahead in
highly competitive markets.
Companies also use the Internet to convey, communicate and disseminate information,
to sell the product, to take feedback and also to conduct satisfaction surveys with
customers. Customers use the Internet not only to buy the product online, but also to
compare prices, product features and after sale service facilities they will receive if they

10
purchase the product from a particular store. Many experts are optimistic about the
prospect of online business.

In addition to the tremendous potential of the E-commerce market, the Internet

provides a unique opportunity for companies to more efficiently reach existing and
potential customers. Although most of the revenue of online transactions comes
from business-to-business commerce, the practitioners of business-to-consumer
commerce should not lose confidence. It has been more than a decade since business-to-
consumer E-commerce first evolved. Scholars and practitioners of electronic commerce
constantly strive to gain an improved insight into consumer behavior in cyberspace.
Along with the development of E-retailing, researchers continue to explain E-
consumers‟ behavior from different perspectives. Many of their studies have factors or
assumptions which are based on the traditional models of consumer behavior, and then
examine their validity in the Internet context.

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1.2 Introduction

Internet is changing the way consumers shop and buy goods and services, and has rapidly
evolved into a global phenomenon. Many companies have started using the Internet with
the aim of cutting marketing costs, thereby reducing the price of their products and
services in order to stay ahead in highly competitive markets. Companies also use the
Internet to convey communicates and disseminate information, to sell the product, to take
feedback and also to conduct satisfaction surveys with customers. Customers use the
Internet not only to buy the product online, but also to compare prices, product features
and after sale service facilities the will receive if they purchase the product from a
particular store. Many experts are optimistic about the prospect of online business.
In addition to the tremendous potential of the E-commerce market, the Internet provides a
unique opportunity for companies to more efficiently reach existing and potential
customers.Although most of the revenue of online transactions comes from business-to-
business commerce, the practitioners of business-to-consumer commerce should not lose
confidence .It has been more than a decade since business-to-consumer E-commerce first
evolved. Scholars and practitioners of electronic commerce constantly strive to gain an
improved insight into consumer behavior in cyberspace. Along with the development of
E-retailing, researchers continue to explain E-consumers „behavior from different
perspectives. Many of their studies have posited new emergent factors or assumptions
which are based on the traditional models of consumer behavior, and then examine their
validity in the Internet context.

12
1.3Theoretical Foundation

The Internet has developed an into a new distribution channel and online transaction are
rapidly increasing. This has created a need to under how the consumers perceive online
purchasing.

Price, Trust and Convenience were identified as important factors. Price was considered
as to be a most important factor for a majority of the students. The internet has created a
paradigm shift of the traditional way people shop. A consumer is no longer bound to
opening a times or specific location. So he can become active at virtually any time any
place and purchase the products or services.

The internet is relatively a new medium for communication and the information exchange
that has present in everyday life. The number of internet user is constantly increasing
which is also signifies that online purchasing is increasing. The rapid increasing is
explained by the consumer behavior. The internet is considered a mass medium that
provides the consumers with purchase characteristics as no other medium. Certain
characteristics are making it more convenient for the consumer compared to the
traditional way of shopping, such as the ability to any time view and purchase products
visualize the needs with products and discuss products with other consumers. Online
shopping is the process of consumer go through the when they decide the shop on the
internet.

The internet has developed into a new distribution channel and the evaluation of this
channel. E-commerce has now identified. Using the internet to shop online has become
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one of the primary reasons to use the internet combined with searching for products and
finding the information about them. Therefore internet develop the h Companies also
use the Internet to convey, communicate and disseminate information, to sell the
product, to take feedback and also to conduct satisfaction surveys with customers.
Customers use the Internet not only to buy the product online, but also to compare prices,
product features and after sale service facilities they will receive if they purchase the
product from a particular store. Many experts are optimistic about the prospect of online
business.

Due to the rapid development of the technologies surrounding the Internet, a company
that is interested in selling products from its web site will constantly has to search for an
edge in the fierce competition. Since there are so many potential consumers, it is of the
out most importance to be able to understand what the consumer wants and needs.

1.3.1Online Shopping In India

It is a fact that a great online shopping revolution is expected in India in the coming
years. There is a huge purchasing power of a youth population aged 18-40 in the urban
area.

1.3.2Rising Connectivity

If we observe the growth of Internet Subscribers from the above graph, it is getting
doubled year by year. The usage of internet in India is only 4% of the total population.
This is also getting increased day by day as the costs of computers are decreasing and net
penetration is increasing. The cost of internet usage is also getting lower, with good
competition among the providers. Wi-Fi & Wimax system has also started in India. This
will increase the usage as it goes more on wireless internet. Indians are proving every
14
time that they can beat the world when it comes to figures of online shopping. More and
more Indians are going to online shopping and the frequency of India„s online buying is
crossing the overall global averages.

1.3.3Few Factors That Boost Online Shopping in India

 Rapid growth of cybercafés across India

 Access to Information
 The increase in number of computer users
 Reach to net services through broadband
 Middle-class population with spending power is growing. There are about 200
million of middle-class population good spending powers. These people have
very little time to spend for shopping. Many of them have started to depend on
internet to satisfy their shopping desires

1.3.4 Few Facts about Online Shopping

The figures from IAMAI show that the internet users in India will grow to 200 million
by 2010. Around 25% of regular shoppers in India are in the 18-25 age groups, and 46%
are in the 26-35 year range.

 Indian online matrimonial sector is worth around $230 million

 Worldwide E-commerce is only growing at the rate of 28%, since India being a
younger market, the growth of e-commerce is expected at 51% in the coming
years.
15
  In line with global trends finally India has also started shopping online these
days. As per the study by IAMAI online shopping in India has rose from
$11million in 1999-2000 to $522 million in 2007 and it is expected to rise above
$700 million by end March 2010.

1.3.5 Changing Attitude towards Online Shopping:

“Awareness, Future Demand Focus for Emerging Markets & Current Issues” Malls
springing up everywhere and yet people are E-shopping! And not in small numbers
either. Consumers are more rational nowadays and have ability to get the choices from
the market. Awareness among the consumers is spread through internet. The number of
internet users is increasing day by day which attracts people who have an option to buy
online. It was never thought that Indians would go in for e-shopping in such a big way.
Ticketing, travel bookings and even books and movies seem fine to buy online. Knowing
that in India sizes vary from brand to brand and quality is inconsistent, even of some
electronic items, how is it that there are people buying these items online? In India there
are some segments of people who have not yet tried purchasing over internet.

16
CHAPTER-2
Review of Literature

17
2.1 Review of literature

Petrovic Dejan (2006) in his study on Analysis of consumer behaviour online explained
that the most relevant behavioural characteristics of online consumers and examine the
ways they find, compare and evaluate product information. Comparison of the newly
collected survey data with the existing consumer behaviour theory resulted in detection of
a number of issues related to a specific consumer group. The purpose of this report is to
translate these findings into a set of implementation activities on strategic and
technological level. Execution of these recommendations will result in better conversion
of visitors into customers and encourage customer loyalty and referrals.The focus group
of this study will be young adults aged between eighteen and thirty-four interested in
buying a mobile phone or a related product

18
Shun &Yunjie (2006) in their study showed that there are product types, which are
more likely to be sold online such as software, books, electronics and music. Reason for
this is that when purchasing these types of products, one does not require personal
inspection and most, if not all features, can be outlined in the product description and
images. Most products in the mobile phone family belong to this category. According to
the recent research on consumer behaviour on the Internet users (Cotte, Chowdhury,
Ratenshwar& Ricci, 2006), there are four distinct consumer groups with different
intentions and motivations:

 Exploration
 Entertainment
 Shopping
 Information

Music Videos, Lyrics - Daily updated collection of music videos and lyrics. Majority of
young adults interviewed for purpose of this research tend to be active information
seekers. A high level of technological confidence within this group tends to be an
encouraging factor when it comes to product information research online.The following
analysis presents both, focus group results and behavioural theory in a parallel fashion
divided into two main research topics:

Information Retrieval and Search Patterns

Perception of Product Information Online These two areas is mutually dependent and
particularly important in a market where consumers have the power to choose the right

19
product from a number of competing suppliers. Well-structured product information that
cannot be found easily online is as much of a problem as is having easily accessible
information that does not meet the consumer's expectations

Anders Hasslinger; Selma Hodzic; Claudio Opazo (2008-02-01) in their

study they showed that developed into a new distribution channel and online
transactions are rapidly increasing. This has created a need to understand how the
consumer perceives online purchases. The purpose of this dissertation was to examine if
there are any particular factors that influence the online consumer. Primary data was
collected through a survey that was conducted on students at the University of
Kristianstad.Price, Trust and Convenience were identified as important factors. Price was
considered to be the most important factor for a majority of the students. Furthermore,
three segments were identified, High Spenders, Price Easers and Bargain Seekers.
Through these segments we found a variation of the different factors importance and
established implications for online book stores

20
Harris Interactive (2009)in their study of online customer experience. The
survey found that online customer experience reached an inflection point in 2009. The
percent of consumers who have experienced problems when conducting transactions
online showed its first substantial decrease in five years -- from approximately 87% in all
previous Tealeaf surveys to 80% in 2009. While the percent of consumers experiencing
online transaction problems, at 80%, remains high (the potential online shopping dollars
impacted by transaction problems rings up at $47.6 billion), this improvement points to a
growing business focus on delivering better customer experiences.The survey sheds light
on forces driving this accelerated online customer experience focus, including the down
economy and increased consumer power due to experience-sharing via social media. It
also examines consumer behavior when transacting online, call center behavior related to
online issues and mobile commerce. Verticals represented in the findings include retail,
insurance, travel and financial services

21
San Francisco, CA – 6th October 2009 - the leader in online Customer
Experience Management software (CEM), today announced the results of the 5th annual
survey of online consumer behavior, commissioned by Tealeaf and conducted by Harris
Interactive® [results available at www.tealeaf.com/Harris]. The survey found that 48% of
U.S. online adults say that they are now conducting more online transactions than they
did in the past given the current economic climate. However, 80% of adults who have
conducted an online transaction in the past year experience problems when doing so in
2009. Previous Tealeaf surveys have consistently shown that approximately 87% were
affected.

This improvement over prior years may be attributed to a growing business focus on
delivering better online customer experiences. While this reported decline in online
transaction issues is good news, online customer experience is still very much a work in
progress. The percentage of consumers affected by issues such as error messages (38%),
1
endless loops (19%) and login problems (28%) is still extremely high. Further, the
resulting business impact is significant, as 32% of those who experience issues when
conducting transactions online would simply take their business elsewhere (to either an
online or offline competitor) or abandon the transaction entirely. In 2009, $47.6 billion

22
will potentially be impacted by online transaction problems, on U.S. shopping websites
alone.

Bikramjit Rishi (2010) in their study on Online shopping is an innovative option

of distribution available in the hands of marketers. It is innovative and creative because
marketers can experiment with it in form, content, visibility and availability. In India
online shopping is considered as a relevant alternative channel for retailing and it is now
an important part of the retail experience. This research study is an empirical study to
find out the motivators and decisional influencers of online shopping. The sample has
been selected from the youth population as this group of people actually use internet to
buy online. The study highlights that reliability; accessibility and convenience are the
major motivator factors which motivate the Indian consumer to buy online. Similarly,
reluctance and preference are the two decisional factors which influence the decision.

23
Kamali and Loker (2002), in their study Internet retail sales represent a new and
increasingly vital commercial milieu. E-commerce or electronic commerce saw sales
revenues grow 12.1 percent in 2001 to $31.4 billion a figure expected to reach $81.1
billion by 2006 (Kamali & Loker, 2002). While it is clear that many more consumers are
electing to shop online than in the past a shift in behavior that may be due to the sense
that online shopping is safer and more secure than it was initially and to the adoption of
alternative shopping avenues. This essay will examine these issues, arguing that browsers
become buyers in cyberspace as perception of safety, product quality, and retailer
reliability increase an idea also advanced by Li, Luo, Lepkowaska-White and Russell .

Atanasov (2001) in their study it is anticipated that the worldwide market for business-
to-business and business-to-consumer e-commerce will total $3.1 trillion in 2004 as
compared to $350.4 billion in fiscal 2000-2001. Among the most profitable products and
services sold online are consumer goods such as books, videos, music, computers and
other tech products, and travel (Schmerken, 2001). Other profitable sectors include
investment transactions, which Schmerken (2001) considers to have generated a wave of
corporate spending on e-commerce. The Internet and its myriad e-commerce or
marketing sites, represents what researchers believe to be the security concerns of online
shoppers and potential shoppers. These researchers and others reported that online buyers
are also concerned about security issues when making online purchases. Though many
consumer concerns regarding the inherent safety of financial transactions online have
been resolved through the development of sophisticated encryption programs, many

24
consumers require additional assurance that their financial data will be held in
confidence. Other security issues that were identified by Mauldin and Arunachalam
(2002) focus on retailer disclosures, information risk, product risk, and familiarity with
the retailer and the product. Generally, Mauldin and Arunachalam (2002) found that
intent to purchase rather than merely browsing online increases in direct association with
a sense of security and comfort. Retailers who offer their products online are therefore
advised to emphasize product disclosure and retailer disclosure and reduced information
risk in their e-commerce sites. Though most online retailers do provide clear descriptions
of security procedures, some Internet shoppers still avoid using credit cards online.
Overcoming resistance to this fear is one of the key tasks that must be under taken.

Ogenyi Ejye Omar, Alan Hirst (2006) in their study they evaluates women's
attitude as an overall inclination towards apparel shopping online via e-mail
questionnaire. Its findings suggest that women generally show positive attitudes towards
shopping online for apparel. Women who shop for apparel online are aware of some of
the discouraging features of online shopping, but these features do not deter them from
buying online. The implication for online retailers is that they should focus on making the
experience of online shopping more accommodating and more user-friendly. This is
important because the positive features of online shopping ('convenience', 'usefulness',
'ease of use', and 'efficiency') appear to be more important than the negative features
('lack of security', 'privacy of information' and 'online fraud').

25
Ruiliang Yan, John Wang (2009) in their research it provides a useful framework to
help business marketers identify the effect of consumer online purchase costs on firm
performances in online and traditional channel competition. A game theory model is
developed to determine the optimal strategies for online and traditional retailers. We
demonstrate that consumer online purchase costs always have a valuable impact on firm
profits, and further show that consumer online purchase costs always have a much more
valuable impact on firm profits whenever the traditional retail transaction costs and the
product web-fit change. We also find that consumer online purchase costs have a greater
impact on the retailer's profits in a Stackel berg competitive system than in a Bertrand
competitive system. Based on our results, managerial implications are discussed and
probable paths of future research are identified.

Scott M. Smith, Chad R. Allred, William R. Swinyard(2008) in their

research paper they discusses online shopping in context of diffusion of innovation
theory. It proposes that online shopping is a discontinuous innovation whose adoption
rate is influenced by several of Rogers' (2004) diffusion deterrents. A new 12-item
'Computer Competence Index' (CCI) is proposed and tested using data from an internet-
administered US probability study of 1800 online users. EShoppers are profiled using a
tertile split of the CCI. Each tertile's demographics, computer activities, computer-
oriented lifestyles, and online purchase activities are reported. Evidence is presented that

26
concepts related to the diffusion of innovation may explain resistance in the growth of
online shopping

A.M. Sakkthivel (2009) in their research paper aims to identify the impact of
demographics on consumer buying behaviour towards online purchase of different
products based on the involvement and investment (High, Medium and Low). It attempts
to unearth the impact of the demographics on online purchase which is at present
relatively limited. It would help the marketers to identify the demographic profile of
consumers which is otherwise not known due to the intangible nature of internet. The
findings would help the marketers to design their offerings based on the demographic
profile of online consumers and would help the online marketers to identify and segment
the online consumers which will enhance their focus and eventually leads to financial
growth.

27
Jianwei Hou, Cesar Rego (2007) in their study in traditional auctions, it is often

assumed that bidders are a homogenous group. However, since most online bidders are
average consumers instead of professional bidders, we suspect that online bidders are a
heterogeneous group. The purpose of this paper is to explore the types of online bidders
based on their real bidding behaviour in the context of consumer-to-consumer online
auction market. A cluster analysis is employed and four types of online bidders are
finally identified in a private value auction, namely, goal-driven bidders, experiential
bidders, focused bidders, and opportunistic bidders. The profile and performance of each
group are also discussed.

Tomomi Hanai, Takashi Oguchi (2009) in their study to investigate what kind
of information contributes to trust formation in online shopping. Twenty-seven female
undergraduate students were recruited and asked to evaluate the trustworthiness of 20
online shopping websites. All the online shopping websites dealt with branded products
where there is greater emphasis on the trustworthiness of online shops or products. The
results show that information described on the websites was classified into two
categories, firstly, information about the shop and its procedures and services. Secondly,
the concrete information necessary for the consumption process, such as payment
information and return information, which heightens the reliability of these shops.The
term “brand” originally refers to a “description or trademark which indicates a type of
product made by a particular company.” However, in modern Japanese society it refers to
those branded products that are perceived to have a higher quality than other similar
products. Thus, the term “brand” authenticates that its products belong to a high-class,

28
and the people who possess these branded products are regarded as “exclusive people”
through the “basking-in-reflected glory process” (Cialdini, Borden, Thorne, Walker,
Freeman, & Sloan, 1976). The branded products interest female young people and
recently they have been more inclined to purchase them via online shopping. However,
they tend to refrain from purchasing these products via online shopping due to their
distrust of it. Consequently, it becomes more and more important to analyse what kind of
information contributes to trust formation in online shopping. Female Undergraduate
Students‟ Attitudes toward Branded ProductsFirst, we introduce several surveys for
determining the attitude towards, and ownership of, branded products among female
young people, especially female undergraduate students in Japan, who are the target
group of this study. Infoplant (2007) showed that nearly half of all people are interested
in some branded products. Although branded products generally attract the attention of
various kinds of people, young females are especially interested in branded products.
Infoplant (2007) revealed that more than 60% of females under 20 years of age and
nearly 80% of females in their twenties have purchased some branded products.
Furthermore, the percentage of people who usually buy new branded products is about
20% among females under 20 years of age and more than 10% in females in their
twenties.

David Anderson (02.02.2006) in their research carried out by a consumer

behaviour researcher at Henley Management College has investigated what drives people
to search online. The findings reveal that convenience, time-efficiency and personal
control are the key drivers for consumers to search online, rather than cost. It also shows
that the relationship between traditional and online retailing outlets needs to be more
unified E-shopping has changed the face of retail, and surfers are now looking for spring
sale bargains. This is following a bumper e-Christmas, where Internet shopping soared
almost 50% during the 10-week run-up to Christmas 2005 (IMRG).

29
However, the new findings reveal that convenience and personal control are the key
drivers for consumers to search online. Dr Susan Rose, from Henley Management
College, said: “What motivates online shoppers is the ability to shop, where, when and
how they like. Nowadays people can shop over their Shreddies in the morning.
The research, that analyses data from 304 electrical goods Internet shoppers, provides
businesses with a guide to getting the information highway buzzing with potential
customers. Big-ticket items such as digital TVs, cameras, or iPods now feature on our e-
shopping list. The Internet provides a rich source of information about brands and retail
channels that enable us to search and find information to help us with our final purchase
decision. For businesses there are some steps to help them embrace the Internet
revolution with success.A key factor driving Internet use for „online window shopping‟ is
its usefulness in our personal lives. The Internet frees time and makes the information
search process,Research suggests that people search online for some goods, yet buy from
a traditional high street retailer, or look around for goods in shops, then take their search
online. In turn, it is essential for retailers who operate both on and off line to ensure that
they embrace a joined up process that appears seamless to the customer. Some retailers
have still to successfully unite the two retailing methods - this is key to contemporary
customer service. Factors such as how much the medium challenges us mentally and our
confidence to navigate and understand the technology can turn us on or off the idea of
browsing online for products. A clear divide is appearing between the occasional online
shopper and the regular experienced user. Concerns about how easy the system is to use
have almost disappeared for online shopping enthusiasts, but for occasional users
etailingsites need to be easy to navigate. Websites must be accessible and operate
efficiently. The research found that the expectation of getting a good financial deal is still
a strong motivator to seek out products online, but this is secondary to the importance
but, many people steer clear of electronic buying because of security worries. Only once
online retailers can reassure customers about fraud and privacy, will the online shopping

30
curve really take off. Worries about the risk involved, in terms of financial transaction
and privacy remain. A move from „big brands‟ to „bargains‟ may only take place once.

Rajeev Kamineni (JAN 1999) in their study The World Wide Web can change
human behaviour and human interactions to a very large extent. Web based shopping
behaviour is one major example to point out the trends in this direction. This study is of a
very exploratory nature and it intends to establish the differences between several web-
based shoppers from different parts of the world. Several critical factors associated with
online shopping behaviour will be explored. A cross cultural data set will be collected
and an illustrative description of the shoppers will be provided. As a final step the cross
cultural differences between several shoppers will be explored. One question which will
run as a theme throughout the course of this paper is, “Will the traditional consumer
behaviour theory and research be altered by the advent of web based shopping?”

There is a huge difference between a physical store and its electronic counterpart. A help
button on the home page of the web-shopping site replaces the sales clerks‟ friendly
advice and service. The familiar layout of the physical store becomes a maze of pull
down menus, product indices and search features. Now more than ever, the promise of
electronic commerce and online shopping will depend to a great extent upon the interface
and how people interact with the computer. At the same time, there are some inherent
difficulties in maintaining an online inventory. In a regular store, the managers can pull
out a product from the shelf if they feel that it is not fast moving or has no demand. This
is a privilege that cannot be extended to the online retail store.

31
Anita desai (2003) in her sudy E-tailing is the practice of selling retail goods on the
internet. It is the abbreviated version of “electronic retailing” which essentially
constitutes business to consumer transaction. While the concept of online retailing or e-
tailing is no longer in its nascent stage; it continues to evolve, as advanced e-commerce
applications act as a potent catalyst in the development of e-tailing.

The idea of online retailing or e-tailing which almost every net-savvy individual is
familiar with; offers a convenient mode of shopping online and the consumer gets to
choose from a diverse range of products and services as opposed to the analogous
physical shopping experience. Furthermore, online retailers or e-tailers get to expose and
sell their products to a global audience through their e-stores. (Also termed as online
stores, internet shops, web shops etc.)
The E-commerce industry plays a vital role in its growth and development. The consumer
or buyer is usually provided with detailed information and description of the product
which helps them make a judicious choice before making an online purchase. For
consumers who face a paucity of time or want a diverse range of products to choose
from, e-tailing proves to be an ideal option. Every e-tailer wants his/her share of domain
amidst the vast World Wide Web galaxy. Due to the intense competitory quotient
involved, every e-tailer out there wants to offer their customer/buyer a smooth and
pleasant shopping experience. Therefore, e-tailing is just not restricted to putting up
products for sale for consumers to buy. As consumers today are well-informed, it is
understood that they would make a well informed decision as well. This involves a fair
amount of product research, price comparison and checking the credibility of the e-store

32
 CHAPTER-3
NEED, OBJECTIVES, SCOPE &
METHODOLOGY

33
3.1 Need
The need of this research is to identify and get insight into what main factors the online
consumer takes into consideration when most he buy products on internet what affects
their shopping behaviour, basic need of this research is to find out what are the main
factors affect the online consumer when considering and making a purchase over
Internet.

3.2 Objective of the study

 To study the online shopping behavior of customers

 To study the factors influencing online shoppers and consumers
 To study the customer‟s level of satisfaction with regard to online shopping
 To examine whether customers prefer online shopping to physical stores.

3.3 Scope of the Study and Methodology

3.3.1 Scope of the study

At any given time there are millions of people online and each of them is a potential
customer for a company providing online sales. Due to the rapid development of the
technologies surrounding the Internet, a company that is interested in selling products
from its web site will constantly has to search for an edge in the fierce competition. Since
there are so many potential consumers, it is of the out most importance to be able to
understand what the consumer wants and needs. The importance of analyzing and
identifying factors that influence the consumer when he or she decides to purchase on the
Internet is vital. Since the Internet is a new medium for there have been new demands set
by the consumer. That is why it is crucial for the online retailers to know what influences
34
the online consumer. Analyzing consumer behavior is not a new phenomenon. The
renowned marketing expert Philip Kotler has published several works on the topic of
consumer behavior theories. These theories have been used for many years not only to
understand the consumer, but also create a marketing strategy that will attract the
consumer efficiently Hence, understanding and identifying the consumer is closely
related to the directions a company will take with their marketing strategy. These theories
can also be applied to identify the online consumer and to create certain consumer
segments. However, some distinctions must still be made when considering traditional
consumer behavior and online consumer behavior.

Since online retailing is a new retailing medium and online consumer behavior is diverse
from traditional consumer behavior, one must identify what influences the online
consumer. Analyzing the process that the online consumer goes through when deciding
and making a purchase over the Internet, shows some factors that consumers consider
these factors need to be identified and taken into account by online retailers in order to
satisfy consumer demands and compete in the online market.

3.3.2Research Methodology

Data for this study was collected by means of a Survey conducted in Lovely Professional
University. The sample size was 100. .The Questionnaire (shown in Annexure) was used
Mainly to test the model proposed for Attitude towards online shopping. The type of
research was both exploratory as well as Descriptive. Likert five point scales ranging
from Strongly Agree to strongly disagree was used as a basis of Questions. We took
around eleven different factors by studying the existing models of consumer attitudes that
play an important role in online purchase, and then proposed a model leading to online
35
shopping. This model was then tested in our research by the mode of factor analysis in
SPSS.

3.3.3Research Strategy

When collecting data to approach the purpose of a research there are two ways in which
the data can be collected. In order to acquire a General knowledge about the topic,
secondary data is primarily used and is one of the ways by which data can be collected.
The second way to collect data is the primary data collection. Usually when a study is

Conducted, secondary data is not su fficient enou gh and needs to be

completed with primary data which is collected by the research.

3.3.4Descriptive Research Method

We will condu ct our research in order to collect primary data and reach the
objective of the Dissertation. We will also be discu ssing which different
types of Methodologies that were u sed. Since our research is of descriptive
character our primary intention was to collect seconda ry data and analyze it.
By doing so we found the factors Price, Trust and Convenience. We then
collected primary data through a survey. The main purpose of the survey was
to collect data about Online Consu mer Behavior and the significance of the
established factors, Price, Trust, and Convenience In order to be able to find
and establish Online Consu mer Segments, Consu mer Traits and Online
Behavior had to be identified. The segments were u sed in order to further
36
identify what impact the factors Price, Tru st, and Convenience have on
Online Consu mer Segments.

3.4Sample Design

The factors that we intended to examine can be applied to and investigated at

any population that u ses the Internet and bu ys online produ cts Online. Since
there are time and resource res traints, a specific Population had to be
identified in order to generalize and create relevant segments. We decided
that the sample size should contain over 100 respondents and we collected
answers from100 respondents. The populations for this research are
university students at the Lovely Professional University the University was
chosen on a convenience basis.
Convenience sampling involves using samples that are the easiest to
Obtain and is continu ed until the sampling size that is need is reached.

We will attempt to collect as many respondents as possible but since we will be

studying students we assume that there will be little variation in the population making it
more approved to generalize the response rates. The sampling method for students took
also place on a Convenience basis since the students that agree to answer the
questionnaire are those that were chosen

Type of Research:

 Descriptive Research.
 Sample Size:-
 100

37
CHAPTER- 4
DATA ANALYSIS

38
 FACTOR ANALYSIS

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.543

Bartlett's Test of Sphericity Approx. Chi-Square

349.989

df 190

Sig. .000

39
 Total Variance Explained

Communalities

Initial Extraction

q1 1.000 .562

q2 1.000 .616

q3 1.000 .717

q4 1.000 .584

q5 1.000 .638

q6 1.000 .688

q7 1.000 .570

q8 1.000 .718

q9 1.000 .713

q10 1.000 .778

q11 1.000 .576

q12 1.000 .625

q13 1.000 .521

q14 1.000 .766

q15 1.000 .669

q16 1.000 .589

q17 1.000 .781

q18 1.000 .500

q19 1.000 .688

q20 1.000 .550

Extraction Method: Principal Component Analysis.

40
Comp Initial Eigenvalues Extraction Sums of Squared Loadings Rotation Sums of Squared Loadings

onent Total % of Variance Cumulative % Total % of Variance Cumulative % Total % of Variance Cumulative %

1 3.075 15.373 15.373 3.075 15.373 15.373 2.091 10.454 10.454

2 1.926 9.629 25.002 1.926 9.629 25.002 1.891 9.456 19.910

3 1.633 8.163 33.165 1.633 8.163 33.165 1.709 8.546 28.456

4 1.441 7.203 40.368 1.441 7.203 40.368 1.563 7.815 36.271

5 1.328 6.641 47.009 1.328 6.641 47.009 1.560 7.800 44.071

6 1.269 6.345 53.354 1.269 6.345 53.354 1.368 6.839 50.910

7 1.135 5.677 59.032 1.135 5.677 59.032 1.335 6.673 57.583

8 1.042 5.208 64.240 1.042 5.208 64.240 1.331 6.657 64.240

9 .979 4.894 69.133

10 .875 4.377 73.510

11 .817 4.087 77.598

12 .765 3.826 81.423

13 .685 3.427 84.850

14 .629 3.144 87.994

15 .530 2.651 90.644

16 .501 2.505 93.150

17 .457 2.283 95.433

18 .325 1.626 97.059

19 .309 1.545 98.604

20 .279 1.396 100.000

Extraction Method: Principal Component

Analysis.

41
 a
Component Matrix

Component

1 2 3 4 5 6 7 8

q1 .582 -.003 -.151 -.118 .127 .148 -.370 .106

q2 .623 .088 .143 -.335 -.265 .095 .094 .000

q3 .264 -.287 .278 .286 -.575 .217 -.051 .158

q4 .249 -.549 -.005 .389 -.003 .185 .185 .025

q5 .423 -.626 -.042 -.146 -.117 .074 -.116 .102

q6 .526 .117 -.195 .060 .262 .263 -.458 -.089

q7 .411 .333 .238 -.261 -.097 -.132 .350 -.128

q8 .189 .577 .359 -.235 .120 -.081 -.207 .318

q9 .143 .071 .547 .314 .315 .158 .400 -.073

q10 .058 .293 -.314 .396 -.309 -.181 .075 .547

q11 .180 -.174 -.523 -.256 .105 .130 .355 .141

q12 .579 .181 -.327 .014 .181 .012 .308 -.148

q13 .473 .072 .098 -.227 -.284 -.363 -.030 -.134

q14 .261 .228 .146 -.047 .197 .670 .125 .344

q15 .203 .326 -.574 .321 .064 .018 -.013 -.289

q16 .310 .107 .174 .487 .175 -.299 -.282 .116

q17 .360 .290 .085 .274 -.461 .236 -.064 -.461

q18 .193 -.344 .329 .072 .403 -.098 -.114 -.213

q19 .557 -.032 .007 .294 .188 -.411 .250 .156

q20 .508 -.388 -.031 -.229 .041 -.281 -.034 .082

Extraction Method: Principal Component Analysis.

a. 8 components extracted.

42
 a
Rotated Component Matrix

Component

1 2 3 4 5 6 7 8

q1 .202 .094 .701 .091 .087 .062 -.003 -.040

q2 .698 .125 .249 .010 -.100 .170 .027 .104

q3 .169 .581 .030 -.368 .071 .111 .235 .376

q4 -.114 .710 -.018 .108 .169 .134 -.089 .027

q5 .216 .636 .332 -.111 -.066 -.107 -.112 -.188

q6 -.004 -.013 .757 .226 .134 .098 -.112 .155

q7 .673 -.180 -.123 .148 .046 .186 -.057 .087

q8 .325 -.565 .241 -.281 .220 .297 .122 -.062

q9 .058 .055 -.305 .036 .371 .585 -.340 .133

q10 -.042 .015 -.039 .091 .297 .005 .823 -.009

q11 .095 .235 .077 .469 -.314 .069 .146 -.401

q12 .337 .056 .181 .665 .111 .145 .006 -.006

q13 .644 .003 .106 -.007 .125 -.265 .004 .093

q14 .026 .005 .288 .014 -.122 .811 .092 -.009

q15 -.137 -.113 .202 .671 .093 -.141 .183 .291

q16 -.030 -.017 .209 -.043 .726 -.032 .032 .115

q17 .259 .073 .105 .140 .003 .030 .046 .821

q18 -.005 .172 .099 -.072 .319 .008 -.588 -.088

q19 .328 .205 -.003 .305 .639 .037 .059 -.179

q20 .421 .342 .257 .024 .152 -.203 -.135 -.327

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

a. Rotation converged in 13 iterations.

43
 Component Transformation Matrix

Compo
nent 1 2 3 4 5 6 7 8

1 .643 .309 .517 .289 .324 .163 -.027 .086

2 .153 -.815 .023 .188 .086 .248 .330 .314

3 .258 -.066 -.253 -.670 .287 .365 -.408 .184

4 -.480 .284 -.149 .159 .637 .084 .201 .435

5 -.332 -.271 .181 .303 .302 .286 -.528 -.490

6 -.281 .204 .285 .010 -.517 .663 -.040 .300

7 .273 .186 -.719 .439 -.097 .370 .050 -.179

8 -.051 .077 .120 -.350 .178 .338 .633 -.556

Extraction Method: Principal Component Analysis.

Rotation Method: Varimax with Kaiser Normalization.

44
Q1. TO KNOW THE AGE OF THE REPONDENTS?

AGE
0%
7% AGE
14% 31%
15-20
20-25
48% 25-30
30-ABOVE

Figure 1.1

INTERPRETATION
The above diagram shows us the percentage in the age of respondents. As it shows that
from age 15-20 the number of respondents are31 % and from age of 20-25 it is 48 % and
from 25-30 it is 14% this is the above data which is shown by the this pie chart

45
Q2 TO KNOW THE GENDER OF THE RESPONDENTS?
GENDER

14

MALE
FEMALE
86

Figure 2.2

INTERPRETATION

As our respondents are mostly from the hostel of Lovely professional University and the
campus of university itself, we use to get more data from males as they were ready to
give their experiences, it this graph itself is showing more percentage of males rather than
females, the percentage of male respondents is 86% and percentage of female
respondents is only 14%.

46
Q3 TO KNOW THE DEMOGRAPHY WHETER RESPONDENT LIVE IN RURAL OR
URBAN AREA?

ADDRESS

24

RURAL
URBAN
76

Figure 3.3

INTERPRETATION
The above diagram is showing the percentage of demography of respondents and what is
the percentage of respondents who lives in rural or urban region,, the above diagram is
showing that 76% of the respondents are from urban areas and 24% of the respondents
are from urban area.

47
Q4 TO KNOW THE OCCUPATION OF THE RESPONDENTS?

0 10

4 5
OCCUPATION
STUDENT
PROFESSIONAL
GOVT.EMPLOYEE

90 SELF EMPLOYED
OTHER

Figure 4.4

INTERPRETATION

This graph help us to know the occupation of the respondents, this is to know that which
segment of people are buying more products on the internet whether they are the segment
of students o government employees or professional , the above graph shows that the
segment of the students i.e. 90% of the students are using internet and use to buy online
products.

48
Q5. TO KNOW THE MONTHLY INCOME OF THE REPONDENTS?

MONTHLY INCOME

3 3

LESS THAN10000
10000-20000
20000-30000

94 30000-40000
40000ABOVE

Figure 5.5

INTERPRETATION

This above graph shows the percentage of monthly income of the different respondents,
and it show that less than 10000 income respondents have buyed more online products
because most of them are students and they use to buy music Cds, gadgets, laptops .

49
Q6 TO KNOW WHETHER RESPONDENTS HAVE THEIR OWN INTERNET
CONNECTION?

35
DO YOU HAVE YOUR INTERNET
CONNECTION
YES
65

NO

Figure 6.6

INTERPRETATION

This graph show us the percentage of respondents who have their own internet
connections, its shows that 65% of respondents have their own internet connections and
35% people don‟t have their internet connection.

50
Q7 TO KNOW WHAT MOTIVATES PEOPLE TO DO ONLINE SHOPPING

WHAT MOTIVATES YOU TO BUY ONLINE

Column1,
NO TRAVEL
TO SHOP, 37 EASY PAYMENT
46, 47%
NO HIDDEN COST
WIDE RANGE OF PRODUCTS
NO TRAVEL TO SHOP

5
10

Figure 7.7

INTERPRETATION

This graph shows us what motivates the people to buy internet, as from above result we
found out that no travel to shop is the main thing which motivates the people to buy
products online.

51
Q8 TO KNOW WHETHER CONSUMERS ARE GETTING COMPETITIVE PRICE

Do you feel that the online marketers are

providing competitive prices?

27

YES
NO
67
CANT SAY

Figure8.8

INTERPRETATION

This diagram shows us that whether online marketers are giving competitive price or not
and result which is came is that most of the people thought that online marketers are
providing competitive prices than physical stores. And result shows 67% of people says
that it provides competitive prices and only 27% people says no.

52
Q9 WHAT PRODUCTS DDO YOU BUY ONLINE?

WHAT PRODUCTS YOU BUY ON INTERNET?

20 25

BOOKS
MUSIC CD'S
23 T-SHIRTS
20
MOBILE

12 LAPTOP

Figure 9.9

INTERPRETATION

The above graphs gives result that most of time people use to buy books25% but the
margin with other things is very less as music Cds have percentage of 20 and mobile
23%So this graph shows us this useful data .

53
Q10 DO YOU FEEL THAT ONLINE SHOPPING IS BETTER THAN SHOPPING
AT PHYSICAL STORE

DO YOU FEEL THAT ONLINE SHOPPING IS

BETTER THAN SHOPPING AT PHYSICAL BRICK
AND MORTAR STORE?
0
12

45
YES

38 NO
CAN'T SAY

Figure 10.1

After analyzing the above graph shows that the people are in favour of that online
shopping is better than physical store, The percentage of people who says online
shopping is better is 45% and the people who says it not good is 38 %. Still the
percentage of people who says yes is more than other who says no.

54
Q11 WHICH OF THE FOLLOWING STORES HAVE YOU VISITED

WHICH OF THE FOLLOWING STORES HAVE

YOU VISITED ONLINE

10 4
35
e-BAY
YAHOO SHOPPING

40 AMAZON
BEST BUY
16
OTHER

Figure 11.1

INTERPRETATION

This graph shows that 35% people use to visit e-bay for online shopping,40% use to go at
amazon.com because % of people who buys books is more than any other products so
people mostly visits amazon.com, 16 % people do at yahoo shopping and for other people
use to visit at BestBuy and others.

55
WHAT FACTORS HELP YOU TO DECIDE WHICH SITE TO USE FOR
ONLINE SHOPPING?

WHAT FACTORS HELP YOU TO DECIDE WHICH

SITE TO USE FOR ONLINE SHOPPING?

3 18
17 SEARCH ENGINE
10 PERSONAL RECOMMENDATION
SPECIAL OFFERS ON SITES
32 ONLINE ADVERTISING
20
TV ADVERTISING
OTHERS

Figure 12.1

INTERPRETATION

This diagram shows us what affects people to buy products on internet and it shows that
32% people came to know about shopping sites through online advertisements. And they
attracted towards it and start getting products from there. And 20% people decision is
affected by special offers by the offers and the discounts given by the sites.

56
Q13 HOW YOU MAKE YOUR PAYMETS ON THE INTERNET

HOW DO YOU MAKE YOUR PAYMENTS ON

INTERNET ?

15 2

5
CREDIT CARD/DEBIT CARD
BANK TRANFER
PAYPAL
78
ANY OTHER

Figure 13.1

INTERPRETATION

This diagram shows that mostly people uses credit card to pay their payments 78%
people use to pay by credit/debit card and 5% through bank transfer and 15% through pay
pal and 2 from paypal.

57
Q14 HAVE YOU FACE ANY PROBLEMS WHILE SHOPPING ONLINE

HAVE YOU FACE ANY PROBLEMS WHILE

SHOPPING ONLINE

14
28

YES
48 NO

Figure 14.4

This graph shows that whether people faces any problem while doing online
shopping or not and the result shows that 48% people says that they have
faced problem while buying online and 28% people says that they don‟t face
any problem and 14 says that we can‟t say

58
 List of Tables

Age No of respondents % of respondnts

15-20 31 31
20-25 48 48
25-30 14 14
30 and above 0 7
Fig 1

Gender Respondents

Male 86
Female 14
Fig 2

Address Respondents

Rural 76
Urban 24
Fig 3

Occupation No of respondents

Student 90
Professional 4
Govt.employee
Self employed 5
Others 1
Fig 4

Income of respondents % of Respondents

59
LESS THAN 10000 94
10000-20000 3
20000-30000 3
30000-40000
40000ABOVE
Fig 5

Internet connection % respondents having internet

connection
Yes 65
No 35
Fig 6

WHAT MOTIVATES YOU TO % of Respondents

BUY ONLINE
EASY PAYMENT 37
NO HIDDEN COST 5
WIDE RANGE OF PRODUCTS 10
NO TRAVEL TO SHOP 46-47
Fig 7

Do you feel that the online marketers % respondents

are
providing competitive prices
Yes 67
No 27
Cant,say 6
Fig 8

What products you buy on internet % Respondents

Books 24
Music 25
t-shirts 12
Mobile 23
Laptop 20

60
Fig 9

Do you feel that online shopping is % Respondents

better than shopping at physical brick
mortar store
Yes 45
No 38
Cant ,say 12
Fig 10

Which of the following stores have you % of Respondents

visited online
e-bay 35
Yahoo shopping 16
Amazon 40
Best buy 10
Others 4
Fig 11

What factors help you to decide which % of respondents

site is use for online shopping
Search engine 18
Personal recomdations 10
Special offers on sites 20
Online advertising 32
TV advertising 17
Others 3
Fig 12

How do you make your payments online % of respondents

Credit card/debit card 78
Bank transfer 5
Pay pal 15
Any other 2
Fig 13

Have you face any problems while % of respondents

shopping online

61
Yes 48

No 28

Cant ,say 14

Fig 14

62
 CHAPTER-5
Summary, conclusion, Limitations, Recommendations

63
Summary
The three segments that were found show a significant difference in the primary factor of
concern. The general distribution showed that the factor price was the primary factor for
the entire population sample, and that second factor was trust was closely followed by
convenience.
When we segmenting the respondents through the different variables we found that
segment one were mainly trust oriented and the respondents had a high positive attitude
towards purchasing books online.
Other segment was mainly price and convenience oriented therefore took the most
consideration to the opinions and experiences of the Reference groups. As they low
disposable income and were somewhat convenience oriented when acquiring information
about low prices, we chose to label them price easers. We found that most of the time
youngster who are from the age of 20-25 shops a lot on the net rather than other age
limits. People used to do online shopping because of its convenience rather than its
pricing, But the main thing which is very common in the most of the people about online
shopping is its risk of privacy i.e. hacking of account number getting passwords and all.

CONCLUSION

Increased Internet penetration, a hassle free shopping environment and high levels of Net
saviness see more and more Indians shopping online. But at the same time the companies
need to reduce the risks related to consumer incompetence by tactics such as making
purchase websites easier to navigate, and introducing Internet kiosk, computers and other
aids in stores. The goal is not to convert all shoppers to online purchasing, but to show
them it„s an option. In addition to above, efforts need to be taken to educate the online

64
buyers on the steps that need to be undertaken while making an online purchase.
Moreover, the feedback of an online buyer should be captured to identify flaws in service
delivery. This can be done through online communities and blogs that serve as
advertising and marketing tools and a source of feedback for enterprises. I found that it is
a challenge for E-marketers to convert low frequency online buyers into regular buyers
through successful website design and by addressing concerns about reliable
performance. Thus, the online retailing raises more issues than the benefits it currently
offers. The quality of products offered online and procedures for service delivery are yet
to be standardized. Till the same is done, the buyer is at a higher risk of frauds.

Limitations of the Study

Limitation of the study is the selection of the existing studies. Owing to time limitation, I
only searched a few number of journals. This may leave some other prominent empirical
studies out. In addition, owing to the multidisciplinary nature of online shopping, it
would be very interesting to compare IS literature to other disciplines that study online
shopping attitudes and behavior.

Indian E-Comm. Report Finds Heavy Spenders Driving Sales

By Devin Comiskey

August 16, 2007

A Survey by Indian research organization Juxtconsult found that more and more Indian
Internet users are opening their wallets online. While such hurdles as limited broadband
access and security concerns remain, the report finds there are currently more than 10
million shoppers online in India. While current trends point to increased e-commerce
growth in India, the online marketplace in the country of more than 1 billion people is
still relatively small. Juxtconsult's survey found that 40 percent of all urban Internet users
65
buy online, while 42 percent of the sales originate through just five percent of consumers.
The survey was conducted in April 2007 and sampled more than 30,000 users.

"This section of buyers spends 5,000 rupees or more per month on the net," states the
report. "It is interesting to note that two out of every three heavy spenders are also
'netholics,' those who are on the net for more than three hours per day...Of all those who
buy online, only 25 percent are spending more than 1,000 rupees per month while the
(remaining) 75 percent bill less than 1,000 rupees per month." (1,000 Indian rupees is
currently equal to approximately $23 US.)

The report also found that buying and search patterns among Indians differ between
genders. "While 43 percent of male users buy online, only 31 percent of urban female
users are consumers as well. Women tend to search more. Defying their more common
attitude towards shopping, women are more guarded when it comes to the online market,"
says Juxtconsult. "Depending on the product type, nine percent to 25 percent are buying
online, whereas 33 to 47 percent are searching the net for product information," it says.

Security Fears Persist

Juxtconsult says the motivation for Indian users to make purchases online varies, but
users fear compromised personal information is still a great risk when it comes to e-
commerce. "The single biggest motivation for buying online for net users is saving time.
Thirty-two percent of them look to shop online with this purpose. Convenience of
shopping '24x7' and home delivery are other major incentives," says the report.
"However, the concern of possible misuse of credit card or personal information is
extremely significant among online buyers, with almost 55 percent of them voicing their
concern. Clearly, tackling and countering the issue of online safety figures as an
imminent challenge for net marketers."

Books, CDs Top the List

66
The products that are purchased most online in India, according to Juxtconsult, are books
and CDs - making up 25 percent of all online purchases. "Ironically, computer hardware
and software, despite having the home advantage are among one of the least bought
products online, with only 13 percent buying them," says the report. "In sum, the online
market in India is blossoming but is yet to take off in a considerable way. The Internet is
still being used more for searching than buying products and services. Though a
noticeable proportion of net users are also net consumers, essentially, at present only a
small tribe among them is driving online shopping momentum," says Juxtconsult.

LATEST

.A new trend in this space is that of Meta search engines. Ixigo and Ezeego are two
players in this space. A Meta search engine searches all the online travel sites (including
the airlines sites as well) and displays the best deals for the user.

Travel websites, such as Make My Trip India Pvt. Ltd and Yatra Online Pvt. Ltd, are
battling to win over India„s Rs16,000 crores ($400 million) religious travel market

Opportunity in Online Travel Industry: $2billion

Online travel company MakeMyTrip (MMT) has recorded sales of Rs. 1000 crore for the
financial year ending March 2008, as per a release.

Barriers to the Growth of the Market:

Consumer Bias

67
Consumers often display a bias for brands that they know well and have had a good
experience in the past. Thus products of brands with a favorable bias will score over the
products of less popular brands. A few would risk buying expensive jewelry from an
unknown jeweler online.

Lack of „Touch –Feel-Try‟ Experience

The customer is not sure of the quality of the product unless it is delivered to him and
post-delivery of the product, it is sometimes a lengthy process to get a faulty or the
unsuitable product changed. Thus, unless the deliverables are as per the customers
„expectations, it is hard to infuse more credibility in the e-Tailing market.

Mounting Competitive Pressures

To attract customers, the competing online players are adopting all means to provide
products and services at the lowest prices. This has resulted in making the consumers
choice-spoilt, who in turn surf various websites to spot the lowest price for the product.
Thus, although the number of transactions is increasing, the value of the products sold is
continuously falling owning to high competition and leaner margins.

Seasonality

E-Commerce Market is faced by seasonal fluctuations. As told by an Industry player,

.August to February is the peak seasons for sale, while March to July is the dry seasons
for sale.. During the peak season, occasions that drive the sales are Diwali, Rakhi,
Valentine‟s Day, New Year, Christmas, Mother„s Day, Friendship Day etc. are. On these
occasions younger generations prefers buying and sending gifts online.

Credibility in Payment System

68
Online frauds and breach are the biggest barriers to online sales. As a result, prospective
buyers prefer staying away from revealing their credit card and bank details.

Untimely Delivery of Products

It might take a few minutes to search, book and pay for products and services online, but
the delivery of the product may take unreasonable time.

Recommendations

As we came to know after researching on this topic we recommend that, the online sellers
have to make their payment transparent, and as people are coming on their sites and they
are buying their products , so retailers have to give more discounts to their customers so
that they can visit again and again to their site , and it also helps to make people more
aware about the low rick shopping of the net, and one more thing is that there should be
transaction of money is very slow they have to make it fast so that customer don‟t have to
face much problem to pay for the product, if customer is going to face some problem he
is not going to visit our site and buy product .

Following implications should be followed

 Discount prices
 A transfer and reliable retailer
 Fast transactions
 Focus on customer satisfaction

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CHAPTER-6

70
REFRENCES

http://analogik.com/article_analysis_of_consumer_behaviour_online.asp [27april 2010]

http://www.essays.se/essay/e1fb0c636f/ [13april 2010]

http://www.tealeaf.com/Harris/[12april]

http://inderscience.metapress.com/app/home/contribution.asp?referrer=parent&backto=is
sue,2,6;journal,15,40;linkingpublicationresults,1:110844,1[11april 2010]

http://www.inderscience.com/search/index.php?action=record&rec_id=32383&prevQuer
y=&ps=10&m=or1m[12 may 2010]

(International Journal of Business Innovation and Research 2010 - Vol. 4, No.3 pp. 195 -
209)

http://www.lotsofessays.com/viewpaper/1693412.html [11april 2010]

http://www.inderscience.com/search/index.php?mainAction=search&action=record&rec_
id=11032&prevQuery=&ps=10&m=or[22april [11april 2010]

( International Journal of Electronic Marketing and Retailing 2006 - Vol. 1, No.2 pp. 169
- 182)

http://www.inderscience.com/search/index.php?mainAction=search&action=record&rec_
id=11032&prevQuery=&ps=10&m=or[2 may 2010]

(International Journal of Electronic Marketing and Retailing 2006 - Vol. 1, No.2 pp. 169
- 182)

71
http://www.inderscience.com/search/index.php?mainAction=search&action=record&rec_
id=10096&prevQuery=&ps=10&m=or [8 may 2010]

(International Journal of Electronic Marketing and Retailing 2006 - Vol. 1, No.1 pp. 67 -
82)
.http://www.inderscience.com/search/index.php?mainAction=search&action=record&rec
_id=19151&prevQuery=&ps=10&m=or
(International Journal of Internet Marketing and Advertising 2008 - Vol. 4, No.4 pp. 302
- 327) [1 may 2010]

http://www.inderscience.com/search/index.php?mainAction=search&action=record&rec_
id=27851&prevQuery=&ps=10&m=or [2 may 2010]

(International Journal of Electronic Finance 2009 - Vol. 3, No.3 pp. 284 - 296)

.http://www.inderscience.com/search/index.php?mainAction=search&action=record&rec
_id=14847&prevQuery=&ps=10&m=or [ 16 april2010]

(International Journal of Electronic Marketing and Retailing 2007 - Vol. 1, No.4 pp. 322
- 338)

http://www.cyberpsychology.eu/view.php?cisloclanku=2009111002&article=6#authors[2
2 may 2010]

http://www.innovations-report.com/html/reports/social_sciences/report-54694.html
22april 2010]

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CHAPTER-7
APPENDIX

73
 APPENDIX

It is humbly submitted that we are doing research project on the topic entitled “
Consumer Behaviour In Online shopping .
In this regards your kind cooperation is needed in filling the questionnaire herewith.
Further, I assure you that all the information provided by you would be kept strictly
confidential and will be used for academic purpose only.

Thanks

With regards

NAME ROLL.NO

Prashant Priyadarshi Q1808A17

Nitish Arora Q1808A15

Nandni Kashyap Q1808A58

BBA 4th SEM

Specialization: Marketing

74
QUESTIONNAIRE

1. Name ___________________
2. Age
1) 15-20 2) 20-25 3) 25-30 4) 30 above
Q3. Gender
1) Male 2) Female
Q4. Address
1) Rural 2) Urban
Q5. What is your occupation?

a) Student ÿà b) Professional c) Govt.employed d) Self Employed

e) Other

Q6. What is your monthly income?

a) Less than 10000 b) 10000 to 20000 c) 20000 to 30000

d) 30000 to 40000 e) More than 40000

Q7. Do you have your own internet connection?

a) Yes b) No

Q8. How frequently do you purchase online?

75
 a) Once a week b) More than once a week c) once a month
d) more than once in a month

Q9. What motivates to buy products online?

a) Easy payment b) No hidden cost c) No travel to shop

d) Wide range of products e) other [Please specify] ____________

Q10.Do you feel that the online marketers are providing competitive prices?
a) Yes b) No c) Can‟t Say

1 2 3 4 5

Strongly Agree Can‟t Disagree Strongly

agree say Disagree
1.It saves your time
2.It does not require travelling to far off distance
3.Anywhere any time shopping
4.It takes a long time to deliver products
5.It takes more time to search specific product
6.Speed of internet affects your online shopping
7.It gives me ease of shopping at home
8.Shopping 24x7
9.Ease to make payment assistance
10.I get better discounts & offers on internet
11.I do not think that online shopping results in monetary benefits

12.I can customize the products according to my specification

13. I cannot negotiate prices on internet.

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14. I can shop from stores located at any part of the world.
15.I have access to Global brands
16. Lack of physical evidence affects my purchase decision.
17.Wide choices of brands to choose
18. The actual products do no match the products shown on site.
19.I do not get much variety in products
20.I feel difficulty to choose a product because of intangibility

Q11. What products you buy on internet?

a) Books b) Music CDs c) T-shirt d) Mobile

e) laptop

f) Other [specify] ___________

Q12. Do you feel that online shopping is better than shopping at physical brick & mortar
store?

a) Yes b) No c) Can‟t say

Q13.Which of the following stores have you ever visited for shopping online?

a) e-bay b) Yahoo shopping c) Amazon d) Best buy

e) Other [please specify]

Q14. What factors help you to decide which site to use for online shopping?

a) Search engine b) Personal recommendation c) Special offers on sites

d) Online advertising e) TV advertising f) other_________

Q15.How do you make your payments on internet?

a) Credit card/Debit card b) Bank transfer c) PayPal d) any

other______

77
Q16. Have you face any problems while shopping online?

a) Yes b) No c) Specify _________________________

78