MBA 634: Consumer Behaviour

Online Buying Behaviour for Apparels

(Final Report)

Submitted by:-

Deepak Gaur (11125017)

Kaushik Choudhary (11125026)
Sagar Agarwal (11125047)
Sumit Kumar (11125058)

Department of Industrial and Management Engineering

Indian Institute of Technology Kanpur
March-2012
Table of Content

Contents
Acknowledgement: ....................................................................................................................................... 2

Executive summary ....................................................................................................................................... 3

Introduction .................................................................................................................................................. 4

Problem Statement ................................................................................................................................... 4

Background ............................................................................................................................................... 4
Motivation..................................................................................................................................................... 5

Hypothesis................................................................................................................................................. 5
Scope of research...................................................................................................................................... 6
Methodology................................................................................................................................................. 6

Literature review....................................................................................................................................... 6
Formulation of the model ......................................................................................................................... 6
Classification of web experience............................................................................................................... 7
Sampling.................................................................................................................................................... 7
Research Instrument ................................................................................................................................. 8
Scaling Technique ..................................................................................................................................... 8
Results and Findings...................................................................................................................................... 9

Managerial Implications.............................................................................................................................. 11

Appendix: I .................................................................................................................................................. 12

Appendix: II ................................................................................................................................................. 16

Reference .................................................................................................................................................... 12

1
Acknowledgement:

The successful accomplishment of this project and the contentment it accounts for would be
incomplete without the mention of people whose ceaseless cooperation made it possible, whose
constant guidance and encouragement crowned all efforts with success.

We are grateful to Prof. N K Sharma for the guidance, inspiration and constructive suggestions
that helped us in constant improvement and final preparation of this project.

We would further thank people within IIT Kanpur campus who participated in the survey, for
their cooperation and suggestions.

2
Executive summary

Online buying of apparels has seen a tremendous growth in India over the recent few years with
the presence of a large no. of e-sellers in the country. The purpose of this project was to identify
and rank various factors which influence online buying behavior of apparels. On the basis of the
literature review, the factors which affect the buying behaviour of customers have been broadly
identified into Functionality factors (Usability and Interactivity), Psychological factors (Trust),
and Content factors (Aesthetics and Marketing mix). These factors have been further broken into
specific factors such as convenience, site navigation, customer service, transaction security, site
design, price, fulfilment etc. The importance of these factors in customers buying
expectation/behaviour was studied using an online survey. The purpose was to find out the
relative importance of these factors. Their interrelationship and the combined importance were
also studied to determine how they collectively influence the buying decision. Based on the
literature survey, certain hypothesis were formed which were verified using the results of the
survey.

3
Introduction

Problem Statement

The purpose of this project is to identify and rank various factors which influence online buying
behavior of apparels.

Background

Online shopping is the process whereby consumers directly buy goods or services from a seller
in real-time, over the internet. After the downfall and internet bubble burst in year 2000, this
time e-commerce sites in India have come with a full swing. This time it is for real. Compared
with the population of India in year 2000 there were limited people having access to internet.
Now the scenario has changed and easily available internet connectivity has made this change.
Also the adoption of value added mobile services contributes further towards this. The major
share of purchases is occupied by the metropolitan cities, however, the tier 2 and tier 3 cities are
catching up fast as well. While the customers in the metros buy apparels online primarily due to
convenience and price, those in the non-metros buy because of non-availability of products and
price. Moreover, online shopping provides access to the best international brands. Customers
look for various attributes while shopping apparels online. Some of them are following: -

 Price of the product - Generally products are available at a cheaper rate than in retail
stores.
 Offers, coupons, gifts and such promotional schemes largely influence buyer’s decision.
A good deal or discount often tempts people to buy online.
 Convenience like cash on delivery option, net banking, customer reviews etc. also affect
buyer’s preference.
 Information provided like specifications and comparison with other models or brands, by
the website too influences a buyer while shopping.

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Motivation

Off late, there has been a boom in the online shopping industry. It has become highly
competitive with several players having entered the market. And this severe competition presents
an abundance of choices in front of the customer.

An online shopping portal can prevail in this intensely competitive industry if it exactly meets
the needs of the customers. It needs to precisely understand what the customers want. Hence the
focus of our project is to identify the features in the offering by the portal which would make it
lucrative.

With expanding e-commerce perimeter, there has been an advent of large number of websites
offering numerous products. Today, a customer has a large number of options for buying a
product online. The ranking of factors which influence online buying pattern of customers would
allow online goods providers to focus majorly on key factors determinant of the online buying,
specific to the Indian context. It will also assist providers to include customization options for
customers and hence assist in making the online selling process more efficient.

Hypothesis

Following are the four hypotheses which we have arrived at to test further:

 H1: Family members, friends and peers' online experience and suggestions will positively
influence online buying behavior.
 H2: Amount of time spent on internet will positively influence the online buying
decision.
 H3: Usability and performance will positively influence the online buying decision.
 H4: The risk of losing money and financial details will have negative effect on attitude
toward online Shopping of apparels
 H5: web design will positively influence the online buying decision.
 H6: Marketing mix will positively influence the online buying decision.

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Scope of research

Scope of the project would be limited to the study of IIT Kanpur customers decisions of buying
clothing and related accessories online.

Methodology

Literature review

A preliminary literature review is done in the same field which depicts the factors which
influence the online buying behaviour. Understanding the mechanisms of virtual shopping and
the behaviour of the online consumer is a priority issue for practitioners competing in the fast
expanding virtual marketplace. There have been plenty of research been conducted to understand
online consumer behaviour.

Formulation of the model

As in the case of traditional marketing of offline shopping, online buying behaviour is also
dependent on personal and external factors along with the marketing stimuli created by the
marketing mix. In case of online shopping marketers can influence the decision making process
of the virtual customers by engaging traditional, physical marketing tools but mainly by creating
and delivering the proper online experience, the Web experience: a combination of online
functionality, information, emotions, cues, stimuli and products/ services, in other words a
complex mix of elements going beyond the 4Ps of the traditional marketing mix (Constantinides,
2002).

The Web experience is in this sense a new, additional input in the traditional buying behavior
frameworks found in marketing textbooks (Kotler, 2003).With growing complexity and features
it is very important to know the factors and kind of interface platform which excites and bring
customers to purchase online.

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Classification of web experience

The controllable elements identified in the literature as influencing the online buying behavior
are grouped into three main categories and five sub-categories, each one including several of
these elements.

1. Functionality factors
a. Usability
b. interactivity
2. Psychological factors
3. Content factors
a. Aesthetics
b. Marketing mix

Sampling

The target population can be sampled on the basis of:-

 Age
 Gender and
 Education level.

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The scope of this study is limited IIT Kanpur students having age group of 16-32 as people of
this age are most likely to make online purchases. We intend to identify and rank various factors
which influence online buying behavior of apparels.

Research Instrument

Questionnaire:

The research instrument used for the purpose getting information for this project will be a
detailed questionnaire. The formulation of question is developed by considering the elements
present in each factors and the objective of our study. After removing the redundant data and
puzzling question, the number of questions was reduced to 23 (Appendix: I). The question tries
to capture demographic details of the respondent and then further probed into the factors which
influenced their purchase decision.

Scaling Technique

In this project likert rating scale will be used. In this technique the respondents are provided with
a number or brief description associated with each category. The categories are ordered in terms
of scale position and respondents are required to select specific category that best describes the
object being rated. In likert scale technique respondents are required to indicate the degree of
agreement or disagreement with each of a series of statements about the question. In likert
scaling technique there are generally five response categories ranging from “Not at all
important” to “Very important”.

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Results and Findings

1. Respondent Profiles: We have collected a data sample of 23 respondents, we have

taken 3 most important demographic variables in our analysis namely:
 Gender
 Age
 Education

Gender: The sample consists of 23 respondents out of which 82.6% are male and
17.4% percent are females. So, the collected data is slightly skewed in favor of the
no of males.

Age: The age variable has been divided into 4 categories, since research was done at
campus; the maximum number of respondents is in Younger age group.

Education: Since study was done in university campus, among classmates, most of the
respondents were post graduates.

(Detailed tables with data are mentioned in Appendix II)

2. Inferential Analysis/Hypothesis Testing:

The attitude towards online buying behaviour among IITK students can be studied
under 4 factors named as Usability and Performance, Risk Factor, Web Design and
Marketing Mix. To test the correlations between the selected independent variables
and their corresponding dependent variable (Overall attitude towards online
purchase), Spearman’s (non-parametric) correlation was used. Table 1 presents the
correlation between each of the key determinants of consumers’ attitude towards
online buying behaviour and his overall attitude alongwith the hypothesis testing
results for the study, while Table gives the results of the testing of the hypotheses
(H1 to H.6).
Detailed correlation tables are mentioned in Appendix II.

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S. Independent Hypothesis Spearman's rho Test Result Significant
No Variables Correlation at Level
Coefficient

1 Recommendations H1 0.274 Rejected -

by friends and
relatives
2 Time spend on H2 .009 Rejected -
Internet
3 Usability and H3 0.733 Accepted .01 Level
Performance
4 Risk Factor H4 0.682 Accepted .01 Level

5 Web Design H5 0.626 Accepted .01 Level

6 Marketing Mix H6 0..498 Accepted .05 Level

Table1: Results of Hypothesis Testing for H1 to H6

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Managerial Implications

The present study was aimed towards the identification of factors which affect the online buying
behaviour of apparels for IIT Kanpur students. After the data collection and analyses, the
findings were put in order to identify the most influential factors among the various factors
identified after the exploratory research.

Based on the hypotheses which were tested, there are few important inferences which came out
and their managerial implications can be drawn. Firstly, usability and performance turns out to
be the major factor which affects the online buying decision of apparels. So, site speed,
convenience in using website and ordering & payment process are of utmost importance and
should be given top priority by any seller who intends to sell apparels online.

Secondly, risk factor also turned out to be high and the respondents gave high priority to
transaction security, return policies and data safety. This shows that an online buyer needs to
specifically mention the security policies which they follow in order to attract more customers.

Thirdly, web design i.e. usage of graphics and colors, logical web layout are also found to be of
prime importance for the buyer. So, in order to excel an online seller needs to properly work on
the presentation of his/her website.

Finally, high time spent on the internet does not make a person a prospective buyer of apparels
online. So, a more focused method needs to be adopted in order to get the target customer base
who would be interested in buying apparels online.

11
Reference

[1] Bellman S., Lohse G., and Johnson, E - Predictors of online buying behaviour, Communications of
the ACM (42:12), 1999.

[2] Bhatnagar A Misra S and Rao, H. R - Online risk, convenience, and Internet shopping behavior,.
Communications of the ACM (43:11), 2000.

[3] Gefen, D., and Straub,D - The relative importance of perceived ease of use in IS adoption: a study of
e-commerce adoption, Journal of the Association for Information Systems (1:8), October, 2000.

[4] Na Li and Ping Zhang – Consumer Online Shopping Attitudes and Behaviour – An assessment of
research, 2002.

[5] Influencing the online consumer’s behavior: the Web experience -Efthymios Constantinides [Nov
2004]

[6] Success Factors for Transactional eCommerce Websites: an Investigation Focusing on Technical and
Business contexts- Lian Wei [2012]

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Appendix: I

Questionnaire

Kindly fill the following details about you:

Gender:
1) Male 2) Female

Age (In Years):

1) 16-20 2) 20-24 3) 24-28 4) 28-32 5) 32 and above

Education:
1) Undergraduate 2) Graduate 3) Post-Graduate 4) PhD

Have you ever visited any ecommerce website before?

1) Yes 2) No

Have you purchased anything from an ecommerce website?

1) Yes 2) No

On average, about how many hours a day do you spend using the internet?
1) Less than 1 hour 2) 1 to 3 hrs 3) 3 to 5 hrs 4) 5 to 7 hrs 5) 7 hrs and more

Does your friends and family buy apparel online?

1) Yes 2) No

Does recommendation from your Friends and family influence your online buying
behavior:
1) Strongly Disagree 2) Disagree 3) Neutral 4) Agree 5) Strongly Agree

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 Following are certain statements regarding your perception about Pre Release Advertising of
Indian movies. The data gathered will be used strictly for the purpose of this research. Kindly
state your agreement or disagreement for the same as per the following scale.

‘1’ stands for ‘2’ stands for ‘3’ stands for ‘4’ stands for ‘5’ stands for

Not Important at
Not Important Neutral Important Very Important
All

In terms of usability and performance rate the importance of each feature

1 Speed of the site (processing speed for views) 1 2 3 4 5

2 Convenience in using website (easy to understand) 1 2 3 4 5

3 Ease of navigation through website 1 2 3 4 5

4 Easy to read and understand 1 2 3 4 5

5 Search facility and process for products categories 1 2 3 4 5

6 Ordering and payment process 1 2 3 4 5

In terms of Risk Factor rate the importance of each feature

1 Transaction security 1 2 3 4 5

2 Data misuse 1 2 3 4 5

3 Data safety 1 2 3 4 5

4 Guarantees 1 2 3 4 5

5 Return policies 1 2 3 4 5

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 In terms of Web Design rate the importance of each feature

1 Usage of animation 1 2 3 4 5

2 A balance between design and functionality 1 2 3 4 5

3 The page fitness for scrolling entire page 1 2 3 4 5

4 Simple and logical layout 1 2 3 4 5

5 Usage of colour 1 2 3 4 5

6 Ease to understand product categories 1 2 3 4 5

7 Appropriate typefaces and font size 1 2 3 4 5

In terms of Marketing Mix rate the importance of each feature

1 Sufficient product information 1 2 3 4 5

2 More possibilities to compare apparel 1 2 3 4 5

3 A better quality of apparel 1 2 3 4 5

4 Lower prices 1 2 3 4 5

5 More fashionable clothing 1 2 3 4 5

6 More merchandise options 1 2 3 4 5

7 Discount/ promotional offer 1 2 3 4 5

Overall, I consider online shopping:

1) Strongly Disagree 2) Disagree 3) Neutral 4) Agree 5) Strongly Agree

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 Appendix: II
Tables and Results for Analysis:

Table2: Correlation b/w Overall attitude and Recommendation from friends and relatives.
Correlations

Does recommendation
Overall, I from your Friends and
consider online family influence your
shopping online buying behavior

Spearman's rho Overall, I consider online Correlation Coefficient 1.000 .274

shopping
Sig. (2-tailed) . .206

N 23 23

Does recommendation from Correlation Coefficient .274 1.000

your Friends and family
influence your online buying Sig. (2-tailed) .206 .

behavior
N 23 23

Table3: Correlation b/w Overall attitude and Time spend on internet.

Correlations

On average, about how

Overall, I many hours a day do
consider online you spend using the
shopping internet

Spearman's rho Overall, I consider online Correlation Coefficient 1.000 .009

shopping
Sig. (2-tailed) . .966

N 23 23

On average, about how Correlation Coefficient .009 1.000

many hours a day do you
spend using the internet Sig. (2-tailed) .966 .

N 23 23

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Table4: Correlation b/w Overall attitude and Usability and Performance.
Correlations

Overall, I consider Overall, Usability and

online shopping Performance

**
Spearman's rho Overall, I consider online Correlation 1.000 .733
shopping Coefficient

Sig. (2-tailed) . .000

N 23 23

**
Overall, Usability and Correlation .733 1.000
Performance Coefficient

Sig. (2-tailed) .000 .

N 23 23

**. Correlation is significant at the 0.01 level (2-tailed).

Table5: Correlation b/w Overall attitude and Risk Factor.

Correlations

Overall, I
consider online
shopping Overall, Risk Factor

**
Spearman's rho Overall, I consider online Correlation Coefficient 1.000 .682
shopping
Sig. (2-tailed) . .000

N 23 23

**
Overall, Risk Factor Correlation Coefficient .682 1.000

Sig. (2-tailed) .000 .

N 23 23

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 N 23 23

**. Correlation is significant at the 0.01 level (2-tailed).

Table6: Correlation b/w Overall attitude and Marketing Mix.

Correlations

Overall, I
consider online
shopping Overall, Marketing Mix

*
Spearman's rho Overall, I consider online Correlation Coefficient 1.000 .498
shopping
Sig. (2-tailed) . .016

N 23 23

*
Overall, Marketing Mix Correlation Coefficient .498 1.000

Sig. (2-tailed) .016 .

N 23 23

*. Correlation is significant at the 0.05 level (2-tailed).

Chi Square Test: For finding relationship between factors and demographic variables:

Overall, I consider online shopping * Gender

Crosstab

Count

Gender

1- Male 2-Female Total

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Overall, I consider online Somewhat favorable 6 0 6
shopping
Favorable 9 2 11

Exceptionally favorable 4 2 6

Total 19 4 23

Chi-Square Tests

Asymp. Sig. (2-

Value df sided)

a
Pearson Chi-Square 2.329 2 .312

Likelihood Ratio 3.184 2 .203

Linear-by-Linear Association 2.219 1 .136

N of Valid Cases 23

a. 5 cells (83.3%) have expected count less than 5. The minimum expected count is 1.04.

Directional Measures

Value

Nominal by Interval Eta Overall, I consider online .318

shopping Dependent

Gender Dependent .318

Overall, I consider online shopping * Age

Crosstab

Count

Age

2-20-24 3-24-28 4-28-32 Total

19
Overall, I consider online Somewhat favorable 2 4 0 6
shopping
Favorable 4 7 0 11

Exceptionally favorable 1 4 1 6

Total 7 15 1 23

Chi-Square Tests

Asymp. Sig. (2-

Value df sided)

a
Pearson Chi-Square 3.359 4 .500

Likelihood Ratio 3.279 4 .512

Linear-by-Linear Association 1.140 1 .286

N of Valid Cases 23

a. 8 cells (88.9%) have expected count less than 5. The minimum

expected count is .26.

Directional Measures

Value

Nominal by Interval Eta Overall, I consider online .309

shopping Dependent

Age Dependent .294

20
Overall, I consider online shopping * Education level

Crosstab

Count

Education level

1-
Undergraduate 2-Graduate 3-Postgraduate

Overall, I consider online Somewhat favorable 1 0 5

shopping
Favorable 1 1 8

Exceptionally favorable 0 2 4

Total 2 3 17

Crosstab

Count

Education level

4-PhD Total

Overall, I consider online Somewhat favorable 0 6

shopping
Favorable 1 11

Exceptionally favorable 0 6

Total 1 23

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 Chi-Square Tests

Value df Asymp. Sig. (2-sided)

a
Pearson Chi-Square 4.978 6 .547

Likelihood Ratio 6.012 6 .422

Linear-by-Linear Association .000 1 1.000

N of Valid Cases 23

a. 11 cells (91.7%) have expected count less than 5. The minimum expected count is .26.

Directional Measures

Value

Nominal by Interval Eta Overall, I consider online .397

shopping Dependent

Education level Dependent .112

Frequencies for Demographics:

Frequency Table

Gender

Cumulative
Frequency Percent Valid Percent Percent

Valid 1- Male 19 82.6 82.6 82.6

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 2-Female 4 17.4 17.4 100.0

Total 23 100.0 100.0

Age

Cumulative
Frequency Percent Valid Percent Percent

Valid 2-20-24 7 30.4 30.4 30.4

3-24-28 15 65.2 65.2 95.7

4-28-32 1 4.3 4.3 100.0

Total 23 100.0 100.0

Education level

Cumulative
Frequency Percent Valid Percent Percent

Valid 1- Undergraduate 2 8.7 8.7 8.7

2-Graduate 3 13.0 13.0 21.7

3-Postgraduate 17 73.9 73.9 95.7

4-PhD 1 4.3 4.3 100.0

Total 23 100.0 100.0

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Graphs:

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