A

RESEARCH PROJECT REPORT

ON
“FACTORS AFFECTING CUSTOMER PREFRENCE TOWARDS ONLINE
MARKETING AND FUTURE PROSPECTS”

SUBMMITTED FOR THE PARTIAL FULFILMENT OF

THE REQUIREMENT
FOR THE DEGREE OF
BACHELOR OF BUSINESS ADMINISTRATION [BBA]
[SESSION 2016-2019]

SUBMITTED TO: - SUBMITTEDBY: -

Ms. Suchitra Yadav Geetansh Malhotra
Dept. of Management Studies BBA 6th SEM.
Maharishi Markandeshwar University 75168104

Maharishi Markandeshwar University

Sadopur Ambala, Haryana – 134007

1
 DECLARATION BY STUDENT

I Geetansh Malhotra, a student of Maharishi Markandeshwar University Sadopur,

Ambala, hereby declare that the Project report on “Consumer Perception Towards Online
Marketing And Its Future Prospects” is done by me is an authentic work carried out for
the partial fulfilment of the requirement for the award of the degree of BBA under the
guidance by Ms. Suchitra Yadav. ”This is to declare that all my work indulged in the
Completion of this Project Report such as research, competitor analysis and sales
promotion is a profound and honest work of mine.

Date: Geetansh Malhotra

2
 CERTIFICATE OF THE GUIDE

This is to certify that Geetansh Malhotra has completed the project entitled “Factors Affecting
Customer Preference Towards Online Marketing and its Future Prospects” under my
supervision. To the best of my knowledge, the report consists of result of the empirical study
conducted by the student. In my opinion, the work is of requisite standard expected of a BBA
student. Therefore, I recommend the same to be sent for evaluation.

Ms. Suchitra Yadav

Assistant professor
Dept. of management studies
Maharishi Markandeshwar University,
Sadopur, Ambala

ACKNOWLEDGEMENT
3
First and foremost, I would like to thank my respectable and learned guide, Ms. Suchitra Yadav
but for who’s untiring, unflinching help. It is she who initiated the development of the project
and was thus instrumental in showing the right direction. She provided encouragement and boost
in the transformation of my inherent internal knowledge into a real work for external audience.

Lastly, I would like to bestow my regards and gratitude to Dr. Priyanka Salgotra Cordinator of
the Department, which provided me this opportunity to undertake the research report on
“Factors Affecting on Customer Preference Towards Online Marketing and Future Prospects”
for allowing me to go through this worthy project.

Geetansh Malhotra

4
 EXECUTIVE SUMMARY

Eleven different factors were identified by studying the existing models of consumer attitudes
that play an important role in online purchase, then a model was proposed leading to online
shopping. The data was collected only through Questionnaires. The sample size was 100. And
random sampling was done among the internet users.

After examining the 10 empirical studies, we identify a total of eleven interrelated factors for
which the empirical evidences show significant relationships. These ten factors are perceived
usefulness, perceived ease of use, perceived enjoyment, and information on online shopping,
security and privacy, quality of internet connection, attitude towards online shopping, intention
to shop online, online shopping decision making, online purchasing, and consumer satisfaction.

Six (perceived usefulness, perceived ease of use, perceived enjoyment, information on online
shopping, security and privacy, quality of internet connection )are found to be ordinarily
independent and five (attitude toward online shopping, intention to shop online, decision making,
online purchasing, and consumer satisfaction) are ordinarily dependent variables.

Consumer satisfaction is considered to be a separate factor in this study. It can occur at all
possible stages depending on consumer’s involvement during the online shopping process. The
relationships between satisfaction, attitude, intention, decision making and online purchasing are
proposed to be two-way relationships due to the reciprocal influences of each on the other.

In addition, three of the antecedents, perceived usefulness, perceived ease of use, perceived
enjoyment , have been found to have direct impact on consumer satisfaction

5
 TABLE OF CONTENTS

Chapter No. Particulars Page No.

CERTIFICATE FROM THE GUIDE 2
DECLARATION BY THE STUDENT 3
ACKNOWLEGMENT 4
EXECUTIVE SUMMARY 5
1 INTRODUCTION 7-11
2 REVIEW OF LITERATURE 12-15
3 RESEARCH METHODOLOGY 16-22
4 DATA ANALYSIS AND INTERPRTATION 23-39
5 FINDINGS AND SUGGESTIONS 40-45
6 CONCLUSION 46-47
BIBLIOGRAPHY 48
50-53
QUESTIONNAIRE

6
 CHAPTER 1

INTRODUCTION

INTRODUCTION

Internet is changing the way consumers shop and buys goods and services, and has rapidly
evolved into a global phenomenon. Many companies have started using the Internet with the aim

7
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 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 that are based on the traditional models of
consumer behavior, and then examine their validity in the Internet context.

Online shopping is definitely a great way to shop with everything available on the websites.
From clothes, gift items, food, home needs, medicines, and many more, this mode of shopping
allows one to shop conveniently without hassle on spending hours in a supermarket or shopping
areas. The Internet with its wide array of information nooks, allows the customer to go through
various reviews of the product or service before actually heading for purchases. These online
shopping websites also have daily deals for the customer looking for discounts and store
offerings.

SIGNIFICANCE OF THE STUDY

8
In recent years, online shopping has become very popular. The growth of technology has made
these a part and parcel of everyday lifestyle. The advent of plastic money or the debit /credit card
and the smooth access to the World Wide Web has brought the shops from around the world to
the desktop. We personally have seen many of our friends surfing through various online
shopping sites and purchasing things.

Student community has become so strong that even the parents seek the help and advice of their
children before conducting big purchases. This is solely because of their exposure to web and
social media. Moreover, while it comes to personal purchases, students are very particular that
they get best products available in the market and seek all the possible ways to secure the best
products. This is where the role of online shopping sites emerges. Students who are well versed
in the use of internet and active in social media, know about online markets and have tried at
least some of them.

The study is very relevant because it can give a clear picture of the future of online markets in
India and the emerging trends in this particular field. The various factors that influence online
shopping habits and its merits and demerits are also dealt with. The study also tries to have a
comparison of online shopping habits among different age group as well as income group.

Amount of Information

Amount of information is defined as the information which is available for the product which a
person wants to buy through online shopping. This factor eases the decision of the user to
actually buy the product or not, or which product to buy. This factor becomes even more
important in case of High Involvement product.

Security and Privacy

Security and privacy are the main factors which hinder the growth of online shopping. The user
is concerned about his ID and Password which can be stolen by persons with wrong intentions
and then misuse it. At the same time they are concerned that their personal information may be
sold to the third party which poses a serious threat to their privacy.

Attitude and perception towards online shopping

9
Consumer’s attitude and perception toward online shopping have gained a great deal of attention
in the empirical literature. It is believed that consumer attitudes will affect intention to shop
online and eventually whether a transaction is made. It refers to:-

1] The consumer’s acceptance of the Internet as a shopping channel

2] Consumer attitudes toward a specific Internet store (i.e., to what extent consumers think
Quality of Internet Connection

Not only is the presence of internet connection necessary but also its Quality is important to shop
online. This is an important factor which determines whether the user would shop online or not
because presence of internet is a basic necessity for this mode of shopping

that shopping at this store is appealing).

Intention to shop online

Consumer’s intention to shop online refers to their willingness to make purchases in an Internet
store. Commonly, this factor is measured by consumer’s willingness to buy and to return for
additional purchases. The latter also contributes to customer loyalty. Consumer’s intention to
Shop online is positively associated with attitude towards Internet buying, and influences their
decision-making and purchasing behavior. In addition, there is evidence of reciprocal influence
between intention to shop online and customer satisfaction.

Online shopping decision making

Online shopping decision-making includes information seeking, comparison of alternatives, and

choice making. The results bearing on this factor directly influence consumer’s purchasing
behavior. In addition, there appears to be an impact on user’s satisfaction. Though it is important,
there are only five studies that include it.

Initially, consumers typically screen a large set of products in order to identify a subset of
promising alternatives that appears to meet their needs. They then evaluate the subset in greater
depth, performing relative comparisons across products based on some desirable attributes and
make a purchase decision.

Online purchasing

10
This is the most substantial step in online shopping activities, with most empirical research using
measures of frequency (or number) of purchases and value of online purchases as measures of
online purchasing; other less commonly used measures are unplanned purchases. Online
purchasing is reported to be strongly associated with the factors of personal characteristics,
vendor/service/product characteristics, website quality, attitudes toward online shopping,
intention to shop online, and decision making.

Consumer satisfaction

It can be defined as the extent to which consumer’s perceptions of the online shopping
experience confirm their expectations. Most consumers form expectations of the product, vendor,
service, and quality of the website that they patronize before engaging in online shopping
activities.

These expectations influence their attitudes and intentions to shop at a certain Internet store, and
consequently their decision-making processes and purchasing behavior. If expectations are met,
customers achieve a high degree of satisfaction, which influences their online shopping attitudes,
intentions, decisions, and purchasing activity positively. In contrast, dissatisfaction is negatively
associated with these four variables

11
 CHAPTER 2

REVIEW OF LITERATURE

12
REVIEW OF LITERATURE

A literature review is a select analysis of existing research which is relevant to your topic,
showing how it relates to your investigation. It explains and justifies how your investigation may
help answer some of the questions or gaps in this area of research.

A literature review is not a straightforward summary of everything you have read on the topic
and it is not a chronological description of what was discovered in your field.

2.1 NATIONAL REVIEW OF LITREATURE

Rajeev Kamineni (2004) in his study finds that World Wide Web can change human behavior
and human interactions to a very large extent. Web based shopping behavior 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 behavior have been explored. A cross
cultural data set has been collected and an illustrative description of the shoppers has been
provided. As a final step the cross cultural differences between several shoppers explored.

Archana Shrivastava, Ujwal Lanjewar, (2011) in online buying, the rate of diffusion and
adoption of the online buying amongst consumers is still relatively low in India. In view of
above problem an empirical study of online buying the four parameters were designed after
statistical analysis.

These models were integrated with business intelligence, knowledge management and data
mining to design Behavioral Business Intelligence framework with a cohesive view of online
buyer behavior.

13
 For better understanding the factors of internet and consumer shopping behavior towards
internet shopping, this chapter would provide academic research reviews and relative ideas
expressed in the literature that associated with this subject.

Furthermore, a number of hypotheses will be tested to answer the research questions that
mentioned already in the introduction.

Due to the recent research shows that internet shopping becomes a full and effective business
model (Black, 2005), therefore there are several studies that already investigated more or less
related on internet shopping and consumer behavior. In the following chapter, some point of
view will be taken from literatures, and needs careful review to achieve them as the basis of the
subsequent research investigation.

J.SINHA(2010)The number of people engaged in various online activities is increasing every

day. While the number of online shoppers is increasing, it is not proportional to that of brick-
and-mortar shoppers.

Research has tried to explain the dismal performance of online shopping as compared to the
physical shopping format. Reasons for the lower level of Internet sales have been cited as being
perceived risk in carrying out an online transaction, socio-psychological factors (Like - influence
of friends and relatives) and infrastructural limitations (Availability of Internet, computers,
credit-cards, cyber laws etc.).

Under the purview of aforementioned factors this study tried understanding the online shopping
behavior of Indian consumers. Socio-psychological factors and infrastructure have been found
influential factors while the perceived risk surprisingly is not significant as a whole but at gender
level there was significant difference between the online behavior of male and female due to risk
perception.

14
M.Lal(2012) studied the determinants of adoption of Information Technology (IT) in India. The
study was based on 59 electrical and electronic goods manufacturing firms situated in NOIDA.
Semi-structured questionnaire were used to collect the data.

The study examined the factors influencing the degree of IT adoption by firms. The factors
included are entrepreneur characteristics measured by entrepreneur’s qualification, importance
given to market share, R&D and quality consciousness, firm’s international orientation factors
measured by import and export intensity, work force skill and firm size. The sample firms were
divided into four categories depending on their intensity of IT.

15
 CHAPTER 3

RESEARCH OBJECTIVE AND

METHODOLOGY

16
Research Objective

To know and understand the consumer’s perception and awareness about internet marketing/
shopping. This will help to know the attitude and perception of consumers towards online
shopping and what are the factors which shape the consumer’s perception towards online
shopping. Also what are key concerns from the point of view of consumer while online
shopping?

Determination of information needs and sources the following was the information required:

1. To analyze the consumer interest on online marketing.

2. To determine the factors affecting online buying.

3. To evaluate the growth of online marketing.

Research Methodology

Eleven different factors were identified by studying the existing models of consumer attitudes
that play an important role in online purchase, then a model was proposed leading to online
shopping.

The data was collected only through Questionnaires. The sample size was 100. And random
sampling was done among the internet users.

Proposed Model

After examining the 10 empirical studies, we identify a total of eleven interrelated factors for
which the empirical evidences show significant relationships. These ten factors are perceived
usefulness, perceived ease of use, perceived enjoyment, and information on online shopping,
security and privacy, quality of internet connection, attitude towards online shopping, intention
to shop online, online shopping decision making, online purchasing, and consumer satisfaction.

17
Six (perceived usefulness, perceived ease of use, perceived enjoyment, information on online
shopping, security and privacy, quality of internet connection )are found to be ordinarily
independent and five (attitude toward online shopping, intention to shop online, decision making,
online purchasing, and consumer satisfaction) are ordinarily dependent variables.

Consumer satisfaction is considered to be a separate factor in this study. It can occur at all
possible stages depending on consumer’s involvement during the online shopping process. The
relationships between satisfaction, attitude, intention, decision making and online purchasing are
proposed to be two-way relationships due to the reciprocal influences of each on the other. In
addition, three of the antecedents, perceived usefulness, perceived ease of use, perceived
enjoyment , have been found to have direct impact on consumer satisfaction.

Perceived Usefulness

Perceived usefulness is defined as the degree to which a person believes that using a particular
system would increase his or her job performance. It is an important factor affecting acceptance
of an information system, because the ultimate aim of any person is the superior job
performance.

Perceived Ease of Use

This is an important factor that affects the acceptance of a particular information system. It is
defined as the degree to which a person believes that using a particular information system
would be free of effort. Hence an application perceived to be easier to use would more likely be
accepted by the user.

Perceived Enjoyment

Enjoyment refers to the extent to which the activity of using a computer is perceived to be
enjoyable in its own rights. This is seen as an intrinsic source of motivation to use a particular
application.

Amount of Information

18
Amount of information is defined as the information which is available for the product which a
person wants to buy through online shopping. This factor eases the decision of the user to
actually buy the product or not, or which product to buy. This factor becomes even more
important in case of High Involvement product.

Security and Privacy

Security and privacy are the main factors which hinder the growth of online shopping. The user
is concerned about his ID and Password which can be stolen by persons with wrong intentions
and then misuse it. At the same time they are concerned that their personal information may be
sold to the third party which poses a serious threat to their privacy.

Quality of Internet Connection

Not only is the presence of internet connection necessary but also its Quality is important to shop
online. This is an important factor which determines whether the user would shop online or not
because presence of internet is a basic necessity for this mode of shopping

Attitude and perception towards online shopping

Consumer’s attitude and perception toward online shopping have gained a great deal of attention
in the empirical literature. It is believed that consumer attitudes will affect intention to shop
online and eventually whether a transaction is made. It refers to:-

 The consumer’s acceptance of the Internet as a shopping channel

 Consumer attitudes toward a specific Internet store (i.e., to what extent consumers think
that shopping at this store is appealing).

Intention to shop online

Consumer’s intention to shop online refers to their willingness to make purchases in an Internet
store. Commonly, this factor is measured by consumer’s willingness to buy and to return for

19
additional purchases. The latter also contributes to customer loyalty. Consumer’s intention to
Shop online is positively associated with attitude towards Internet buying, and influences their
decision-making and purchasing behavior. In addition, there is evidence of reciprocal influence
between intention to shop online and customer satisfaction.

Online shopping decision making

Online shopping decision-making includes information seeking, comparison of alternatives, and

choice making. The results bearing on this factor directly influence consumer’s purchasing
behavior. In addition, there appears to be an impact on user’s satisfaction. Though it is important,
there are only five studies that include it.

Initially, consumers typically screen a large set of products in order to identify a subset of
promising alternatives that appears to meet their needs. They then evaluate the subset in greater
depth, performing relative comparisons across products based on some desirable attributes and
make a purchase decision.

Online purchasing

This is the most substantial step in online shopping activities, with most empirical research using
measures of frequency of purchases and value of online purchases as measures of online
purchasing; other less commonly used measures are unplanned purchases.

Online purchasing is reported to be strongly associated with the factors of personal

characteristics, vendor/service/product characteristics, website quality, attitudes toward online
shopping, intention to shop online, and decision making.

Consumer Satisfaction

It can be defined as the extent to which consumer’s perceptions of the online shopping
experience confirm their expectations. Most consumers form expectations of the product, vendor,
service, and quality of the website that they patronize before engaging in online shopping
activities.

These expectations influence their attitudes and intentions to shop at a certain Internet store, and
consequently their decision-making processes and purchasing behavior. If expectations are met,
customers achieve a high degree of satisfaction, which influences their online shopping attitudes,

20
intentions, decisions, and purchasing activity positively. In contrast, dissatisfaction is negatively
associated with these four variables

Data Collection Method

Primary Data

It is original primary data, for specific purpose of research project. For this project, I have to use
following common research instrument or tool-

Secondary Data

It will be collected to add the value to the primary data. This may be used to collect necessary
data and records by different websites, magazines, annual reports, journals, reference books, and
newspapers, etc. 5.5 Sample Design

Sample Unit

For studying consumer perception on online shopping, samples were selected from Ambala city
Sample Media

The respondents in the samples are reached through personal interviews.

Sampling Methods

Sampling methods fall under two broad categories-

a) Non-probability sampling methods.

b) Probability sampling methods.

Sample size:

The research conducted on 100 respondents.

Area of Research:

Ambala city.

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Sample Design:

I have prepared this project as descriptive type, as the objective of the study.

The Internet Usage:

The objectives of the research were studied with respect to a regular online shopper who shopped
more than once because they would be the right respondent to give an insight about the online
shopping. Therefore it is firstly important to understand who is a regular online shopper. In the
survey the respondents were asked the following questions which helped to know about a regular
shopper.

Questionnaire development is the critical part of primary data collection method. For this I will
prepare a questionnaire in such a way that it will be able to collect all relevant information
regarding the project. The questionnaire was designed using various scaling techniques. The
questionnaire was used mainly to test the model proposed for consumer perception towards
online shopping. Likert five point scales ranging from Strongly Agree to strongly disagree was
used as a basis of Questions. The data collection was done over a period of 8 weeks.

Scope of the Study

The theoretical scope of the study includes the popularity of online shopping, the need of virtual
markets, their role in influencing the consumption pattern and habits, merits and demerits of e-
markets, major players in online retailing etc.

We can listed the scope as below:

1. The Study was conducted among the Internet users.

2. The Geographical area covered was Ambala City.

3. The Study was based on a Schedule of Questions.

4. The scope of internet shopping.

22
 CHAPTER 4

DATA ANALYSIS

AND

INTERPRETATION

23
Q.1 Do you use Internet?

Usage Of Internet Yes No

In (%Age) 98 2

Figure1

INTERPRETATION

The above pie -chart represent that 98% consumers had used the internet. The uses of internet is
a vital thing in today competitive era. The rapid uses of computer has make the internet well
known to others.

While as the influence of social media and mobile internet makes the uses of internet more
popular. The 0.2 % people were those who have never used the internet from the study of 100
individual respondent.

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Q.2 How long have you been using Internet?

Less than 1 year 3 – 5 years

Figure 2

INTERPRETATION

The diagram shows that shopping has increased with the usage of Internet over the years.
Regular shoppers who have been using Internet for more than one year had shopped to 98% and
regular shoppers who have been using Internet for more than five years have shopped to 78%.

Internet is not a new concept for these regular online shoppers and they have been using it for
more than 5 years now. The increased usage over the years has led to an increase in shopping, as
these regular shoppers are able to make use of the various e-commerce activities.
25
Q.3 On the average, how much time (per week) do you spend in surfing the Web?

0 – 5 hours 16 – 20 hours

6 – 10 hours More than 20 hours

11 – 15 hours

Figure 3

INTERPRETATION

The research shows that 36% of the online shopping had been done who use Internet for more
than 20 hours a week and 96% of the shopping has been done by regular shoppers who have
been using Internet for more than 5 hours a week. As more the regular online shopper are using
the Internet it is seen that they end up buying more also. This shows that Internet is becoming an

26
integral part of the daily activity of the regular online shopper. The regular online shoppers who
have been using Internet for more than 20 hours are more comfortable and confident as a result
they purchase more online as compared to who use Internet for less number of hours.

Q.4 Have you purchased anything online ever?

Figure 4

INTERPRETATION

The research showed that 65% of the Internet users had shopped online while 35% had not
bought anything. This is mainly because of the changing lifestyle and taste patterns. As the life is
getting more and more fast paced more people are moving on to shop online mainly because of
convenience.

27
This shows that a more Internet users are using it as a shopping medium and there is a huge
potential in this sector but one should not be carried away by this figures. There could be a
possibility that only a small section of the online shoppers are shopping or only a particular
category of good had brought about this huge number. As a resultthe entire analysis was done
incase of a regular online shopper to understand the shopping behavior of the online shoppers.

Q.5 Whichcategories of goods have you bought through Internet?

Figure 5

INTERPRETATION

The Internet offers four basic services communication (socializing service with peer group or
core group (email) or with new groups of people (chat), information services, entertainment
services and commerce services and shopping. The research shows 32% of the regular online
shoppers use Internet for communication while only 10% uses it for shopping which shows that
communication still forms the major activity among the regular online shoppers.

28
Q.6 Online Activities by Age

Figure 6

INTERPRETATION

This classification further provides an insight that Internet is mainly used as a means of
communication in respect all the age groups of the regular online shoppers. It contributes to 60%
of the major activity among the regular online shoppers who lie between the age group 18-30
years. It could be seen that shopping as a basic activity on the Internet contributes to the
minimum.

29
Internet as a medium of shopping is maximum used by regular online shoppers between the age
group18-30 years, which is 18% while above 50 years it is used just to 2%. The increase in usage
among the 18-30 years is basically due to high awareness. The marketers should focus mainly on
the age group between18-30, as they are the main drivers for growth. Thus the research shows
that though the regular shoppers are using the Internet for quite some time now but shopping still
remains a small part of the major activity

Q.7 Online Activities by Time

Figure 7

INTERPRETATION

It is evident that regular online shoppers also spend a major part of their time in communication
unlike the occasional online buyers. In 0-5 hours a week they spend 77% of their time in

30
communication, which includes email, and chat as the major activity with shopping which does
not seem to exist at all. Information search constitute 20% of the time.

The information search increases as the regular online shoppers tries to figure out ways to surf
the Internet and access the information they require. It is true that more regular online shoppers
use Internet shopping sites to gather information about products rather than to make a direct
purchase.

Q.8 Online Shopping & Gender

Figure 8

INTERPRETATION

Among the 65% of the online shopping, males (72%) had purchased more as compared to
women (28%). This shows that it is true that more males are shopping online as compared to
women. This is mainly because women still like to feel, see and touch the product before buying.
It was noticed that some of them felt shopping as a reason to go out with the family and spend
time together, which was not possible in case of online shopping.

31
As more and more Indian women are flocking to Internet there is a possibility that they might
end up in a purchase. Also an increase in the spending power in the hands of the women might
lead to an increase in the online shopping.

The research showed that 28% of the women who shopped online fall mostly in the service and
executive class with an income above Rs10000. The marketers should make sure that they
produce the item keeping in mind the needs of the women population as they still continue to be
an important decision maker when shopping for the family.

Q.9 Online Shopping & Educational Qualification

Figure 9

INTERPRETATION

Educational difference is a significant demographic variable, which shows that regular shoppers
who were better educated made more purchases online. 89% of the shopping has been done by
the regular shopper whose is educated with a graduate or postgraduate degree.

32
This shows that frequency of purchase is more in case of a higher educated regular shopper as
compared to an online shopping done by a regular online shopper with matriculate (8%) and
non-matriculate (3%).

Q.10 Online Shopping & Income

Figure 10

INTERPRETATION

Income and buying behavior are positively related. It was seen that a regular online shopper
with a higher income had purchased more online as compared to lower income online shopper.
This trend was seen in all segment of the population. It is true that more the income in the hands
of the population they would indulge in shopping.
33
The service class had done the major purchase in all the various levels of income. It can be seen
that hardly any purchase is done among the regular online shopper whose income lies below
Rs5000.

Q.11 Online Shopping & Motivating Factors

To identify the factors which Internet users choose to buy or not buy online and how frequently
they make such purchases. Analyzing the importance of satisfaction level in the online
purchasing environment.

Figure 11

34
INTERPRETATION

It is believed that consumers whether online shoppers or non-online shoppers value price to
convenience but the study contrast this popular belief. The study showed that 32% of the
shopping had been done by the regular shopper who think convenience is the main driving force
while 23% of the shopping had been done for whom price was the main orientation for shopping
online.

Other motivating forces, which had led to online shopping, were saves time (26%), product
availability and superior selection (12%), and product comparison (7%). Convenience here is
characterized as ease of purchase, home delivery and ability to shop 24x7.Every connection is a
potential for net shopping.

Q.12 Barriers to Shopping Online

Figure 12

INTERPRETATION

The main areas for concern in respect of the regular online shoppers while shopping were
privacy and security (33%). Most of them still preferred the conventional method of shopping

35
like the touch and the feel factor (21%). They felt that it is possible to see, feel, touch and try the
products before buying in a shopping store as compared to Internet shopping.

Other reasons that concern the regular online shoppers were inability to reach the customer
service (16%), hassle of returning the product (14%), technical foul –ups, hesitant in purchasing
from an unfamiliar source and person and delivery costs. The marketers should formulate such
strategies so that the privacy and security concern can be taken care off.

Q.13 Convenience- The Motivating Factor

Figure 13

INTERPRETATION

36
It has been seen that there is a positive correlation between the frequency of purchase and the
convenience factor for buying in the Internet arena. The regular online shopper who had
purchased more than 6 times (9%) for them convenience is the most important motivating factor
(48%)for shopping on the Internet.

Convenience has been characterized as ease of purchase, home delivery and ability to shop 24x7.
The online shopper believes that large amount of information about the product and the ability to
compare prices is available at a click of a mouse thus making the entire shopping experience
very convenient. Thus the marketers to should keep the convenience factor in mind while
providing the goods and services.

Q.14 Satisfaction Index

It is important to understand the satisfaction level among the regular online shoppers, which had
lead to online shopping. This could be understood by the satisfaction index and the frequency of
purchase among the shoppers.

Figure 14

37
INTERPRETATION

A 55% of the regular online shoppers were satisfied with 12% dissatisfied. An important thing
to be noted is that only 2% of the regular online shoppers were highly satisfied while 31% of the
regular online shoppers were neither satisfied nor dissatisfied. This shows satisfaction level plays
an important role in online shopping with more regular shoppers falling under the category of
satisfied.

This shows that they were overall satisfied by the experience of shopping online. But the
companies should take measures so that the dissatisfied and the neither satisfied nor dissatisfied
category of regular online shoppers could be moved to satisfy or highly satisfied. A note should
be taken that only 2% of the regular online shoppers are highly satisfied which shows that there
are still concerns, which poise the regular shoppers from using the Internet frequently as a
shopping medium.

Q.15 Present & future categories of Goods

This can be understood by the categories of good bought by the regular online shoppers presently
and the future of the various categories.

Figure 15

38
INTERPRETATION

It is seen that railway tickets 70% and airline tickets 93% are the most popular categories among
the online shoppers followed by books and electronic gadgets. This is the main category, which
is bringing about online shopping culture among the regular online shoppers. The companies
should bring out innovative ways so that there is a growth in other categories of goods also.

The entire shopping culture among the regular shoppers is brought mainly by the travel
categories followed by electronic gadgets. The graph shows that online shopping is tend to grow
in the coming years as consumers want to buy more in the future.

LIMITATIONS OF THE STUDY

Utmost care has been taken with regard to the collection, classification and analysis of data.
However, the study is subjected to the following limitations:

There were hardly any previous studies on the topic and it was a great challenge to deal with a
fresh topic.

1. Lack of environmental support for the study on the topic.

2. Less sample size, as it is just survey with 100 respondent

39
CHAPTER 5

FINDINGS

AND

SUGGESTIONS
40
FINDINGS

The findings show that Internet usage has increased over the years and it is leading to an increase
in online shopping and also shows the consumers attitude and perception towards online
shopping. Communication still forms the major activity among the large number of online
shoppers as 32% of regular online shopper use Internet for communication as compared to
shopping (10%).

Online shopping is affected by demographics as it has been seen that more males are shopping
online as compared women online shoppers and there is a positive relation between education
and income levels with respect to the increased online shopping behavior.

The most important motivating factor, which influenced the online shopping, was convenience
followed by time saving and price. Regular online shoppers considered convenience as the main
motivating factor while buying and were less price sensitive. But the online marketers should
attempt to differentiate their products or services making the comparison easier. The marketers
should bring out innovative ways so that the consumers can do more online shopping while
taking the full advantage of rich information, easy access and convenience of the Internet.

One of the main concerns among the online shoppers was privacy and security. Another reason
that hindered online shopping was the touch factor. Consumers still preferred the experience they

41
get from traditional stores like feeling the store’s atmosphere, interacting with a salesperson, and
seeking sensory stimulation.

This might hinder the use of certain goods like grocery and apparel, as the touch factor is the
main factor, which drives the shopping for these goods. The future of online shopping is bright
especially in the categories of travel, books, electronic gadgets and gifts.

SUGGESTIONS
Online shopping in India is poised for greater acceleration as PC and Internet penetration grows.
It is becoming one of the top Internet activities and there is a huge growth in this business as
more manufacturers and providers are integrating the Internet into their sales model. But there
are many things that need to occur in online shopping to generate higher revenues and the key to
it lies in the hands of the marketers. To make online shopping a boom following methods can be
followed.

India has a strong research and development (R&D) capability so companies should innovate
rapidly to take care of the security issues. Technology like text to speech software’s should be
innovated to take care of the security concern.

In India the total ownership of credit cards is small as compared to its population and there are
also hesitant in using it as a mode of online payment therefore alternative methods of payment
like cash on delivery (COD) where the end user pays cash after the product is delivered and debit
cards where the bank accounts are directly debited should be used. Other technologies like
encryption technologies trusted third-party certifications; digital ID systems and prepaid cards
should be used.

The consumers should be made aware that one of the safety aspect of using credit cards online is
that in case of disputed credit card payments for online transactions the onus is on the merchants
to prove that the transaction actually took place, as online users don't physically sign a credit slip.
As a result online users are protected from fraudulent use of credit cards.

There is a growth in the cellular phone market in India, more merchants should make use of this
device allowing the customers to access the Internet and use it as mode of payment thereby
obviating the need for PCs and credit cards.

42
It is not only important to pay strong attention to the security issue and create new, innovative
safeguards that protect consumers but the merchants should promote these safeguards to the

Marketplace and make the prospective consumers aware that the communications, personal data,
credit card accounts, and transaction information can be protected.

One of the factors that hinder Internet penetration in India is access. More companies should
adopt click and mortar model with the real world operations to complement its online presence
for e.g. customers can walk to the office to access its services. Merchants should provide goods
and services that offer the right value for money. There should be transparency in policies
(returns, privacy, shipping, etc), insurance against fraud and a good after sales services should be
provided to consumers making it an enjoyable experience.

Consumers today demand a better, more efficient and less cumbersome way to compare and buy
products online. Innovative service should be provided to consumers so that they can compare
products, which are available online using their mobile phones.

Online shopping today is an incomplete, fragmented, and sometimes frustrating process.

Therefore merchants should set themselves apart from their competitors by factors other than
price, constantly innovate and move towards creating customer confidence to trade online. They
should provide massive selection at lower prices, offer a personalized customer experience and
their web sites should deliver a shopping experience that addresses all of the consumer needs like
recommendation about the products, feedback from other customers, etc.

Vendors should educate the customers about e-commerce like educating them on safety tips like
reading the item description, looking for a seller’s feedback score and asking questions, detecting
spoof mails and informing them about the new online crimes which happen regularly.

In India still the penetration of Internet has not happened the way it should have been which
hampers online shopping. Ecommerce revolution can be brought about by providing more
broadband connections at affordable prices.

There is a huge market for business in the rural India therefore efforts should be such that to
bring these people also into experiencing online shopping. Companies should create more Indian

43
language software or content as Internet still is a primarily English language world and language
could be a barrier in rural India. Only few language portals like webduniya.com exist today.

Most of the Indians still like to see the product before buying; efforts should be made to change
this mindset of the people by making them aware of the benefits of online shopping.

To make online shopping big the shopping web sites should give the customers the convenience
to shop anything on a single site like ordering pizzas, movie tickets, groceries, etc rather than in
scattered places. The site should not only provide information content but also tools to navigate
and evaluate this information. The information on the site should be just sufficient for the
consumers to make a decision and not to overload them with information, which results in
confusion. Convenience and time saving are the main reason to shop online.

Therefore Business to Consumers (B2C) sites should be designed in such a way that consumers
spend less time in finding information they are looking for as delays in searching or loading a
web page might turn the consumers to other sites which have faster download and display times.

Since consumers control the experience they receive from shopping over the Internet, there is a
need to find ways of managing the amount of information available over the Internet. Sites that
are able to offer this information and present it in a simple way to understand will become the
preferred destination for online shopping.

The key to selling to a customer which cannot be seen is to get the customer to trust the website
with which they have electronic transactions. Active participation from consumer marketing
companies to manufacturing industries is required to make online shopping a booming sector.
Some of the things, which the consumers should take into considerations while online shopping,
are Use a secure browser.

The browser should comply with industry security standards, such as Secure Sockets Layer
(SSL). Consumers should shop with the known companies, as it is easy to set up a shop online
under any name. If they are not familiar with a merchant they should ask for paper catalogue or
brochure to get a better idea about the merchandise and services and should find about the
company’s refund and return policies. Consumers should also search for the reviews of the
company.

44
CHAPTER 6

CONCLUSION

45
CONCLUSION:

This research shows that online shopping is having very bright future in India. Perception
towards online shopping is getting better in India. With the use of internet, consumers can shop
anywhere, anything and anytime with easy and safe payment options. Consumers can do
comparison shopping between products, as well as, online stores.

This study is mainly focus on the factors from the Internet and examines those factors that affect
the consumer’s online shopping behaviors. The research focus on the Internet shopping (include
the nature of Internet shopping, E-commerce website, and online security, privacy, trust and
trustworthiness) and online consumer behaviors (include background, shopping motivation and
decision making process). Those factors were looked at, and examined to reveal the influence at
online consumer behaviors. In addition, the previous researches were used to help researchers
understanding more comprehensively.

Moreover, the customer’s purchase decision making process was also examined to identify the
potential factors. The information search is the most important factor that helps the customers
find the suitable products or services for their needs. Therefore, the online retailers have to
enhance and improve the information supporting such as provide much detailed product
information and use internal search engine in order to increase the efficient of information

46
search. For the evaluation stage, customers more think a lot of the reputation from the E-
commerce website, and the payment security for the purchase stage.

At the post-purchase stage, the factor of after services which is the most concerned about.
Overall, the factors from the Internet that influenced or prevented online consumer behaviors
need to be carefully concerned by the online retailers, who can utilize the appropriate marketing
communications to support the customer’s purchase decision making process and improve their
performance.

Bibilography:

Ramaswami&Namakumari, Marketing Management-Planning, Implementation and Control,

MacMillan India Ltd, New Delhi.

Bhatnagar, A, Misra, S., and Rao, H. R., ‘Online risk, convenience, and Internet shopping
behavior,’ Communications of the ACM 2000

Alexandru M. Degeratu, ArvindRangaswamy and Jianan Wu (2000) Consumer

Choice Behavior in Online and Traditional Supermarkets: The Effects of Brand Name, Price, and
other Search Attributes, International Journal of Research in Marketing, Vol. 17, No.1, p. 55-78.
Available at:

http://www.smeal.psu.edu/ebrc/publications/res_papers/1999_03.pdf

Aron M. Levin, Irwin P. Levin, and C. Edward Heath (2003) PRODUCT

Category dependent Consumer Preferences For Online And Offline Shopping Features And
Their Influence On Multi-Channel Retail

47
Alliances, Journal of Electronic Commerce Research, VOL. 4, No. 3. Available
at:http://www.csulb.edu/web/journals/jecr/issues/20033/paper1.pdf

Ali S S, Models in Consumer Buying Behavior, Deep & Deep Publications.

Kothari C. R., Research Methodology Methods and Techniques, WishwaPrakashan, New Delhi.

 www.wikipedia.com
 www.amzon.com
 www.flipkart.com

QUESTIONNAIRE:
Name: _____________________________

Contact No.: ______________________________

City: ______________________________

1. Do you use Internet?

• Yes
• No

2. How long have you been using Internet?

• Less than 1 year

• 3 – 5 years

48
 • 1 – 3 years
• More than 5 years

3. On the average, how much time (per week) do you spend in surfing the Web?

• 0 – 5 hours
• 16 – 20 hours
• 6 – 10 hours
• More than 20 hours
• 11 – 15 hours

4. Have you purchased anything online ever?

• Yes
• No

5. Which categories of goods have you bought through Internet?

• Books
• Railway tickets
• Electronic Gadgets
• Airline tickets
• CD/Videos
• Computer Hardware
• Accessories apparel
• Computer Software
• Gifts
• Magazines
• Event Tickets
• Movies tickets
• Hotel Rooms/Car Rental
• Office Supplies
• Jewelry

49
 • Food / Groceries

6. When did u shop for the first time?

• Last 6 months
• 6 months- 1year
• 1-3 year
• 3-5 year
• More than 5 year

7. How frequently did you purchase online?

 Only once
 2-4 times
 More than 5 times
 More than 6 times

8. Overall, were you satisfied with your experience of online shopping?

 Highly Satisfied
 Satisfied
 Neither satisfied nor dissatisfied
 Dissatisfied
 Highly Dissatisfied

9. Where do you most often access the Internet?

50
  Home
 Cyber-cafes
 Office / College
 Any other, specify

10. What are the activities that you use Internet for?

 Communication
 Information Gathering
 Entertainment
 Finance
 Shopping

11. Which categories of goods are you planning to buy through internet in the near future?

• Books
• Railway tickets
• Electronic Gadgets
• Airline tickets
• CD/Videos
• Computer Hardware
• Accessories apparel
• Computer Software

12. What is your main motivation for buying through Internet?

• Convenience
• Price Saves time Superior selection
• Availability Product comparison
• Any other, specify

13. What, according to you, are the most important barriers to purchase online?

51
 • I am worried about giving out my credit card number
• I don’t have a credit card
• I don’t like providing personal information
• I don’t want to purchase from someone with whom I am not familiar
• I enjoy going out to do my shopping
• I like to see/touch the product in person, before I buy it
• Internet is too slow / Pages take too long to load
• I am worried about the cost/hassle of returning the product
• Delivery costs are too high
• Prices are too high

14. Age:

 Below 18 yrs.
 18 - 30 yrs.
 31 - 40 yrs.
 41 – 50 yrs.
 Above 50 yrs.

15. Educational Background:

 Non-Matriculate
 Matriculate
 Graduate Postgraduate

16. Occupation:

 Business/Self Employed
 Service/Executive
 Student

52
  Any other, specify

17. Gender:

 Male
 Female

18. Average Monthly Income:

 Less than Rs. 5,000

 Rs. 5,000 – Rs. 10,000
 Rs. 10,000 – Rs. 25,000
 Rs. 25,000 – Rs. 50,000
 Above Rs. 50,000

53