BUSINESS RESEARCH METHODS ASSIGNMENT 2

Business research methods

submitted to Dr.Bilal
ahmad

SUBMITTED BY AQSA SAREEF 0010

Khadija asghar 0025

Mehak ashraf 0002

Eman Irfan 0004

TOPIC online retailing and consumer behaviour

Mcom 7a

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Contents
Purpose Of Study.......................................................................................................................................2

1. Introduction.......................................................................................................................................2

2. Background of the Study...............................................................................................................2

3. Study Question...............................................................................................................................3

4. Scope Of The Study………………………………………………………………………………..3

5. Relevance Of The Study……………...……………………………………………………………3

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Effects Of Online Shopping Trends On Consumer Buying Behavior

1. Introduction
Online shopping is one of the commonly used mediums for convenient shopping. It is, in fact, a
popular means of shopping among the Internet community (Bourlakis et al., 2008). No matter
clothes, electronics, or pets, online shopping trend is becoming more popular with each passing
day. Hundreds of websites and applications are being created and deployed every year to cater
this rising demand of comfortable shopping trends.

Trust

Product Convenience

Time Variety

1.1 Purpose Of Study

This study focus on the links between different factors has great impact on the consumer
behavior towards online shopping. Online shopping refers to the recent fashion of being able to
buy everything from home. The focus of this study is to explain the influence of five major
variables that were derived from literature. These variables are trust, time, product variety,
convenience and privacy, which determine how consumer buying behavior is reflecting online
shopping trends.

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Keywords: Online shopping, Trust, Convenience, Privacy, Time, Product variety

1.2. Background of the Study

Online shopping is becoming a suitable way to make all people r purchases, whether people ’re
at home in office, or in a different country. This is especially true for developed countries, where
every store has its website people can buy from. People can easily convey about the promotions
like cash on delivery and special discounts on online purchases.

For Pakistan, however, the adoption of such trends has been more difficult. People usually don’t
trust the products being displayed in front of them. As a result, we can’t expect them to buy
online and be satisfied with it. However, the people th of Pakistan is open-minded and has slowly
embraced online shopping, even if it’s ordering food online. People, in Pakistan, have been
victims of scams both online and on mobile applications, so it’s understandable why they look
suspiciously at such an activity. This recent trends have to believe that age isn’t the only factor
causing the people th to turn towards online shopping. Other factors are also involved in making
online shopping one of the fastest growing markets in Pakistan, which is greatly helping the IT
industry in Pakistan to flourish. This study study will try to reveal such factors.

1.3. Study Question

A significant and positive relationship exists between trust and consumer buying-behavior
towards online shopping. An important and optimistic relationship exists between convenience
and consumer buying-behavior towards online shopping. A substantial and progressive
relationship exists between saving time and consumer buying-behavior towards online shopping.

1.4. Scope Of The Study

Main goal of this study is to find out which factors help more in adopting online shopping trends.

1.5. Relevance Of The Study

In 2011, the total global E-commerce sales grew to approximately 961 billion USD or 690 billion
Euros. An increase of 20% was recorded along with the estimation in 2013, the sales are
expected to cross the 1 trillion Euro mark by 2013. Growth is higher in the Asia Pacific Region

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as compared to more mature markets like US, UK, Japan and Europe etc. In 2011, Asia Pacific
Region witnessed groundbreaking 130% growth in sales with the highest contribution from
China. Online selling is now an essential part of any economy. All over the world, there had been
an obvious and increasing trust in consumers towards shopping online. (Aad, 2012).

Literature Review

Online Shopping

With the help of internet people can conveniently buy products and services from different
websites. Online shopping is very popular (Bourlakis et al., 2008). One advantage of Internet
shopping is that it provides the consumers with detailed information so they can compare
products and price online. The more the choice and convenience, the easier it is to find online
people desired product or service (Butler & Peppard, 1998). Online shopping provides more
satisfaction to the modern day consumers who are seeking convenience and pace (Yu & Wu,
2007).

Consumer Buying Behavior

“Consumer behavior can be described as the study of individuals, groups, or organizations and
the processes they use to select, secure, and dispose of products, services, experiences, or ideas
to satisfy needs and the impacts that these processes have on the consumer and society”.
(Kuester, 2012)

In 2011, the total global E-commerce sales grew to approximately961 billion USD or 690 billion
Euros. An increase of 20% was recorded along with the estimation in 2013, the sales are
expected to cross the 1 trillion Euro mark by 2013. Growth is higher in the Asia Pacific Region
as compared to more mature markets like US, UK, Japan and Europe etc. In 2011, Asia Pacific
Region witnessed groundbreaking 130% growth in sales with the highest contribution from
China. Online selling is now an essential part of any economy. All over the world, there had been
an obvious and increasing trust in consumers towards shopping online. (Aad, 2012)

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Pakistan comes second from the bottom in the world’s fastest online shopping adoption list. In
Pakistan, the social media do not have an effective role in influencing customers for online
shopping. Another reason, as proposed by Nielson (2010), is that the people in Pakistan have had
negative experience with online shopping in the past. Most people who shop online in Pakistan
buy only clothes or hardware online.

Though Internet development has helped bring about an increase in number of online consumers,
many people still hesitate due to the concerns related to privacy and personal safety. As online
franchise and store become more sophisticated, online shopping continues to mark its existence
in the market (Lian& Lin, 2008). This shows that there’s now a dramatic revolution in the way
people buy products and services (Li, Kuo&Russell, 1999 Shergill& Chen, 2003).

Trust

“The concept “trust” is defined as the willingness of a party to be vulnerable to the actions of
another party based on the expectation that the other will perform a particular action important to
the trustor, irrespective of the ability to monitor or control that other party.”

Mayer, Davis and Schoorman’s (1995) study was one of the first and the most popular studies on
e-commerce trust and they viewed the main predictors of trust to be intention to take a risk and
perception towards the trustee’s characteristics. Customers’ willingness to buy from online store
is greatly affected by consumer’s trust in giving their personal particulars and security for paying
through credit card online. An easy way, an online seller can reduce the concerns customers have
regarding risk is to carry brand name products on their websites. It is also a good idea to have
people own brand name, like Amazon (Korgaonkar & Karson, 2007). Holding and also selling
products from a brand can improve the trust quotient. The brand name also greatly affects the
final buying decision of the customer (Lim & Dubinsky, 2004).

Customer relationships are the most significant factor in maintaining trust while building
ecommerce (Kim & Tadisina, 2007). As far as the fear for secure transactions is concerned, it is
imperative that online companies ensure that they will never use their customers’ private
information for any other purposes. This should be mentioned in the privacy policy. It will help
the customer have more security regarding their identity. Online stores can even build specially

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integrated mechanisms that ensure safeguarding of personal information of the consumers and
avoid misuse of information and payments through credit card (Prasad &Aryasri, 2009).One of
the major factors that are inhibiting online purchasing is the lack of consumers’ trust in vendors
over the internet (Gefen, Karahanna, & Straub, 2003).

Time

One of the major issues people are dealing with is perceived time pressures. This is defined by
Settle and Alreck (1991) as the degree to which an individual finds himself lacking time as
relative to the daily tasks of living. This perceived pressure could be rising from two distinct
sources, situational and personal. Most commonly cited reason is situational, and it is also very
easy to be identified. People often find that they have their hands full with too much work, too
many things that need to be done, and not enough time to be actually able to do them. Such
people who perceive a time pressure can and do document their predicament by blaming
demands associated with work pressures, family and other affiliations. (Lavin, 1993).

Product Variety

There are many researchers (Lian & Lin, 2008; Peterson et al., 1997; Bhatnager et al., 2000; Liao
& Cheung, 2001) who have insisted that there could be different product types and a diverse
range when they are being sold online.

A product factor can be any quality of the product or service that is for sale. More often, products
bought online are the same as those purchased from brick-and-mortar stores. Customers make
the decision of buying from either place based on factors like who is offering the best value for
the product (Keeney 1999). Other factors include the availability to customize the product, the
overall value and the merchandising (Zhu & Kraemer, 2002; Jarvenpaa & Todd, 1997;
Szymanski & Hise, 2000; Keeney, 1999; Torkzadeh & Dhillon, 2002). Researches like
Szymanki and Hise (2000), Ahn et al., (2004) found that product variety is a major factor when it
comes to satisfaction in online buying.

Convenience

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Copeland introduced the concept of convenience in 1923, and labeled good that consumer buy
most frequently and those that are easily accessible in stores on immediate demand as
convenience goods. Seiderset al., (2000) suggested four opportunities when it comes to retailing
in order to provide customers with convenience:

a) Access: Ability of customer to reach the retailer b) Search: Ability to identify and select
products that they want c) Possession: Ability to obtain the product of desire d) Transaction:
Ability to amend or effect transactions

Although convenience is one of the major positive factors prompting consumers to shop online,
(Ahmad, 2002; Jayawardhena et al., 2007), prior researches either treated convenience as a
predictor variable that affects outcome variables like customer service for customer satisfaction
(Colwell et al., 2008; Seiders et al., 2007), or as one of the facts regarding service quality online,
like accuracy (Hu et al., 2009; Kim & Park, 2012; Prasad & Aryasri, 2009; Udo et al., 2010).

According to Wang et al., (2005) convenience is one the most impactful factors concerning
online shopping willingness. You can shop online at any hour of the day as compared to
traditional shops. Online stores are open 24/7 (Hofacker, 2001; Wang et al., 2005). According to
Berry et al., (2002) and Sieders et al., (2007), service convenience is one of the major factors that
relates to the consumer’s efforts and time. There are many perceptions towards it when it comes
to buying or using a service. Service convenience is effort saving in the sense that it minimizes
the physical, emotional and cognitive activities that customers bear to buy goods and services
online (Berry et al., 2002).

Privacy

According to Bélanger et al., (2002), privacy in ecommerce can be defined as the willingness to
share personal information over the Internet, which allows for a transaction regarding a purchase
to be made. To ease people’s minds about the issue of privacy, many websites have privacy
policies in place (McGinity, 2000). There are also certain independent companies that can verify,
audit and then certify privacy policies for online shopping, such as TRUST (Ranganathan &
Ganapathy, 2002). According to Vellido et al., (2000), out of the nine factors they found that
relate to consumer opinions regarding online shopping, consumer risk perception was often

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highlighted. It defined the users who had actually brought something online and those who had
not. The security of online transactions is still a leading issue when it comes to online
shopping(Park & Kim, 2003; Elliot & Fowell, 2000; Liao &Cheung, 2001; Szymanski & Hise,
2000).

Kesh, Ramanujan and Nerur (2002) stated that in the success of ecommerce, one of the most
important factors is security. Privacy, defined by Collier (1995) is a term generally used to
describe a group of values that include the right of people to the privacy of their own bodies,
private spaces, communications and information. In the realm of cyberspace, privacy can be
described as the ability of the user to control the terms and conditions by which their personal
data is collected and used (Flavián&Guinalíu, 2006).

According to Pan and Zinkhan (2006), privacy issues majorly affect the trust of the consumer
towards the online retailer. In fact, some studies say that the concern of privacy is the main bump
in the road to the expansion of Internet shopping (Hoffman et al., 1999; Hou & Rego, 2002). The
more the security and privacy offered to the customer in online shopping, thus less risk about
exchange of information. The more positive is the effect on the trust of the consumer, and the
better is the shopping experience.

Hypotheses

H1: An important relationship between convenience and consumer buying-behavior towards

online shopping.

H2: A major relationship between established sense of privacy and consumer buying behavior
towards online shopping

H3: A significant and positive relationship between trust and consumer buying-behavior towards
online shopping.

H4: A substantial and progressive relationship exists between saving time, product variety and
consumer buying-behavior towards online shopping.

Theory of Reasoned Action

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Created by Martin Fishbein and Icek Ajzen in the late 1960s, the Theory of Reasoned Action
centers its analysis on the importance of pre-existing attitudes in the decision-making process.
The core of the theory posits that consumers act on a behavior based on their intention to create
or receive a particular outcome. In this analysis, consumers are rational actors who choose to act
in their best interests.

According to the theory, specificity is critical in the decision-making process. A consumer only
takes a specific action when there is an equally specific result expected. From the time the
consumer decides to act to the time the action is completed, the consumer retains the ability to
change his or her mind and decide on a different course of action.

Engel, Kollet, Blackwell (EKB) Model

The EKB Model expands on the Theory of Reasoned Action, and lays out a five step process that
consumers use when making a purchase. The first step, input, is where consumers absorb most of
the marketing materials they see on television, newspapers or online. Once the consumer collects
the data, he or she moves into information processing, where the consumer compares the input to
past experiences and expectations.

Consumers move to the decision making stage after a period of thought, choosing to make a
purchase based on rational insight. Consumers are affected in the decision making phase by
process variables and external influences, including how the consumer envisions his or herself
after making the purchase.

References

Aad Weening. (2012). B2C Global e-Commerce Overview: Interactive Media in Retail Group

Ahmad, S. (2002).Service failures and customer defection: a closer look at online shopping experiences,
Managing Service Quality, 12(1), 19-29.199.http://www.forrester.com

Flavián, C. and Guinalíu, M., (2006). Consumer trust, perceived security and privacy policy: Tree basic
elements of loyalty to a web site, Industrial Management & Data Systems, 106 (5), 601–620.

Gefen, D., Karahanna, E. & Straub, D. W. (2003). Trust and TAM in Online Shopping: An Integrated
Model. MIS Quarterly, 27(1), 51-90. Hofacker, C.R., (2001), Internet Marketing, (3rd ed.).

Wiley, New York. Hoffman, D. L., Novak, T. P., & Peralta, M. (1999). Building consumer trust online.
Communications of the ACM, 42(4), 80-85.

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Keeney, Ralph L. (1999). The Value of Internet Commerce to the Consumer. Management Science
45(4),533-542. Kim, B.C. and Park, Y.W. (2012). Security versus convenience? An experimental study of
user misperceptions of wireless internet service quality, Decision Support Systems, 53(1), 1-11.

Kim, E., & Tadisina, S. (2007). A model of customers' trust in e-businesses: micro-level inter-party trust
formation. Journal of Computer Information Systems, 48(1), 88-104.

Lavin, M. (1993). Wive's employment, time pressure, and mail/phone order shopping - An exploratory
study, Journal of Direct Marketing 7(1), 42.

Li, H., Kuo, C. and Russell, M. G., (1999), The impact of perceived channel utilities, shopping
orientations, and demographics on the consumer’s online buying behavior, Journal of Computer-Mediated
Communication, 5 (2), 2245.

Theory of Reasoned Action: http://www.acrwebsite.org/volumes/5719/volumes/v01/NA-01

EKB:
https://www.researchgate.net/publication/282350425_An_old_model_for_a_new_age_Consume
r_decision_making_in_participatory_digital_culture

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