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Dissertation Project Report On A study on Consumer perception of e-retailing in india
By

ABBAS MEHDI A0102211149 MBA- M&S Class of 2013
Under the Supervision of

PROF P.K BANSAL Department of Marketing
In Partial Fulfillment of the Requirements for the Degree of Master of Business Administration – Marketing & Sales At

AMITY BUSINESS SCHOOL AMITY UNIVERSITY UTTAR PRADESH SECTOR 125, NOIDA – 201303, UTTAR PRADESH , INDIA
2013

CERTIFICATE

I, PROF P.K BANSAL herby certify that ABBAS MEHDI student of Masters of Business Administration – M&S at Amity Business School, Amity University Uttar Pradesh has completed the Project Report on “A study on consumer perception of e-retailing in india.

PROF P.K BANSAL Department of Marketing

DECLARATION
Title of Project To study consumer perception of e-retailing in india

(a)

That the work presented for assessment in this Dissertation Report is my own, that it has not previously been presented for another assessment and that my debts (for words, data, arguments and ideas) have been appropriately acknowledged.

(b)

That the work conforms to the guidelines for presentation and style set out in the relevant documentation.

ABBAS MEHDI Date:…………….. A0102211149 MBA-M&S Class of 2013

Table of content
Chapter 1: Introduction…………………………………………………………………………….4-10 1.1 Online shopping…………………………………………………………………………. 1.2 Online shopping in india………………………………………………………………… 1.2 Advantages of internet ………………………………………………........................ Chapter 2: Literature Review…………………………………………………………………………11-18 Chapter 3: Research Methodology……………………………………………………………............19-22 3.1 Research methodology…………………………………………………………………… 3.2 Research Design…………….……………………………………………………………. 3.3 Data Collection…………………………………………………………………….............. 3.4 Software used …………………………………………………………………………….. 3.5 Sampling…………………………………………………………………………………. 3.6 Scaling….……………………………………………………………………………….... 3.7 Pilot Survey………………………………………………………………………………. 3.8 Limitations of study……………………………………………………………………….. Chapter 4: Data Analysis……………………………………………………………………………23-47 Chapter 5: Conclusions…………………………………………………………………………….......48-49 Chapter 6: Limitation…………………………………………………………………..............50 :Annexure……………………………………………………………………………….51-56 Chapter 7:Bibliography……………………………………………………………………………..57

CHAPTER 1: INTRODUCTION

Retailing consists of those business activities involved in the sale of goods and services to consumers for their personal, family or household use. It is the final stage in a channel of distribution, which comprises all of the businesses and people involved in the physical movement and transfer of ownership of goods and services from producer to consumer.

2.1. A TYPICAL DISTRIBUTION CHANNEL IS SHOWN BELOW:

In a distribution channel, retailing plays an important role as an intermediary between manufacturers, wholesalers, and other suppliers and final consumers. The retailer collects an assortment of goods and services from various sources and offers them to consumers. This procedure is called the sorting process. To maximize their efficiency, many manufacturers would like to make one basic type of item and sell the entire inventory to as few buyers as possible. Yet, many customers want to choose from a variety of goods and services and purchase a limited quantity. Through the sorting process, the retailer bridges the gap between manufacturers and final consumers. Another distribution function that retailers perform is to communicate with their customers and with their manufacturers and suppliers. Customers are informed about the availability and characteristics of goods and services, special sales etc. via ads, sales personnel and store displays. Manufacturers and wholesalers are informed about sales forecasts, customer complaints, defective products etc. from retailers. Many goods and services have been modified as a result of retailer feedback to suppliers. Over the last twenty years, retailing has changed as a result of following developments:  The development of a 'motor car economy'. This has led to one stop shopping where families buy all of their supplies at one shop.

 

Own branding- large retailers have developed brands of their own made by large leading manufacturers, New technology at the checkout and in the packaging and preserving of food has been developed, which has speeded up the checkout process and reduced the delivery times from suppliers.

  

Faster transport links across the world, which has made available a wider range of goods. The growing sophistication of the customers and a general rise in the standard of living, which has led to the fierce competition in the market. New technology in the home, which may cause a revolution in the shopping methods in the future.

1.1 ONLINE SHOPPING If there’s any doubt about how the Internet is changing the way consumers buy products, consider a few numbers associated with the July release of the popular children’s book “Harry Potter and the Goblet of Fire.” According to various reports, Barnes & Noble sold about 100,000 of 500,000 initial copies through its Web site following the book’s July 8 release, helping the company to its biggest weekend of sales—ever. Amazon.com received 350,000 preorders before the book was released, with 18% of total orders coming from new site customers. The online business also trickled down to FedEx, which said it would deliver 250,000 copies for Amazon.com on July 8, using 100 regularly scheduled flights, 9,000 employees, and vehicles from 700 stations. This example isn’t typical, but it does demonstrate the evolution of eretailing, or shopping online. According to a July eConsumer Shopping Report, U.S. online shoppers will total 63.4 million this year and reach 106 million by 2003, when three of four Internet users will make purchases online. Research company eMarketer estimates that 820,000 U.S. firms will do business online this year. Considering teenage and senior citizen markets haven’t been substantially tapped into yet and wireless Internet access will become more prevalent, the numbers are likely to grow higher. The e-retailing boon hasn’t necessarily meant

financial success for all dot coms; several have failed to turn a profit. Many have been unable to secure additional venture capital from investors or have fallen prey to competitors. Stock values initially soared in early 1999, but since then, the overall trend for e-retailers on the NASDAQ market has been one of slippage, especially since April 2000. Even for all its online success, Amazon.com’s stock fell from a December 1999 high of $113 to around $38 in late July. According to The Standard, 16 major e-retailers have gone out of business since December 1999. It appears the Internet is forever changing the way consumers and retailers do business.

1.2 ONLINE SHOPPING IN INDIA . According to the study, mostly the products like music/video cassettes and books that are sold on the Internet. "Sixty per cent of the total purchase of products on the Internet, comprises cassettes and books," the study said. Movie and travel tickets, CDs and computer related items make for 25-35 per cent of the purchase, while apparel, household goods/general appliances, electronic goods, toys, flowers, payment of bills and groceries sell the minimum (10 per cent), it said. The awareness of online shopping sites was 91 percent with Rediff.com having 81 percent awareness, followed by sifymail.com and fabmart.com at 59 per cent each. The findings of study reveal that e-shopping was on the increase, thus implying a good potential for B2C sites. The survey findings were also in Sync with Nasscom estimates, which predict a multi-fold growth in B2C e-commerce transactions and an increased spend on online advertising. Commenting on the increase in Internet based transactions, Brandquiver CEO, Mr. Ranjyoti Barooah, said, "The B2C e-commerce transactions are bound to go up with consumers getting more familiar with the Internet and the concept of shopping on the net." The study said male online shoppers out-number female shoppers in the ratio of 82:18; in the U.S., a more evolved market, the figure stood at 49:51 in favor of women. "How long it will take for the scales to tilt in India, is anyone's guess, but female netizens have buying power, are well-off and wealthy," it added.

A total of 1,328 respondents participated in the search, of which the effective sample size was

904. Most respondents were working adults (77 per cent belonged to the age group 21-40 years and 74 per cent were working). It claimed more than 90 per cent of the respondents belonged to Sec (socio-economic category) A, while nine per cent belonged to Sec. B with no participation from Sec. C.

The study also revealed that 60 per cent of those who shopped online had made purchases three or more times, while 20 per cent bought twice and 13 per cent bought on the net just once. It indicated that a person engaging in an online transaction was very likely to shop again. A majority of transactions studied were in the price bracket of Rs. 1,000 and below and close to 10 per cent exceeded Rs. 5,000.

The survey showed that the single largest driving factor for online shopping was convenience, followed by good bargains. However, people still have some apprehensions about buying online that include fear of poor quality and a sense of insecurity with regards to credit card numbers.

1.3 ADVANTAGES OF INTERNET

1.

A Leading-edge Image

Presenting the company or organization as a leading edge shows one’s customers and prospective clients that is are financially strong, technologically savvy, and ready for the 21st century and that the firm cares enough for the clients to take advantage of new technologies for their benefit. And finally that one has the resources to support the clients in the most beneficial manner possible. More and more advertisers on television, radio, magazines, and newspapers are including a Web address (remember www.cricinfo.com). Now is the time to avoid playing, catch-up later.

2. Improved Customer Service One is available to the clients 24 hours a day, 7 days a week. The Internet never sleeps. Whenever a customer needs information about the company, products or services, he/she can access your Web Page. 3. Market Expansion The Internet is a global system. Latest estimates are that there are about 40 million people (NASSCOM estimates are much higher) who have an access to the Internet, and this number is growing every day. By simply posting a Web Page, the firm is also opening up International markets. 4. Low Cost Marketing Imagine developing a full color brochure without having to incur the costs of proofs, printers, waste paper, long lead times between revisions and more. Then imagine a full color, products' or services' brochure that is interactive and which incorporates text, graphics, audio, and/or video. One that can be immediately updated without incurring the usual cost of product material updates. For a minimal initial investment, your company or organization is presented to millions of Internet users worldwide. It's like a virtual electronic brochure in everyone's hand without the associated costs. 5. Low Cost Selling Without the cost of direct selling, potential clients can get detailed information about your products or services at any time. And they can easily order one’s products over the Internet, or request additional information to be sent to them via a request form on the Web page.

6. Lower Communication Costs One’s time and one’s employees' time is valuable. Most businesses and organizations spend time answering the same questions over and over again. With a website with a Frequently Asked Question (FAQ) section one can make the answers available to everyone immediately. One can also update one’s Web page with new information, quickly and easily. 7. Value Added Marketing One could use your Web page to provide useful information about one’s particular industry, product or its uses. Any type of information that one believes will be valuable to the customer base can be included in the Web page to encourage visitors to one’s site. One can also provide easy links to other sites with information that would be of value to the clients.

CHAPTER – 2 LITERATURE REVIEW

1.According to Monsuwe, Delleart and Ruyter (2004), there are five external factors to understand consumer's intention to purchase in the internet which is the consumer personality, situational factors, product characteristics, previous online shopping experiences and the trust in online shopping. Consumer's trait includes their demographic factors such as age, income, gender and educational level will lead them to have the intention to shop online. For age factor, consumers that are aged under 25 has more potential to shop in online because of their interest in using new technologies to search for product information and compare and evaluate alternatives (Wood, 2002). For educational level, higher educated consumers are more likely to use the internet for their shopping medium because they are more computer literate (Burke, 2002).

2.This is the second part of a study on consumer preferences and attitudes towards the internet technology and e-Commerce activity in Greece. In this second part the authors build up on the results of the first part which investigated the role of the internet technology and the frequency of its use in everyday life in the country. More electronic transactions related issues were studied i.e. the ease and comfort of using plastic money, the types of products and/or services most preferred to be purchased or hired online, the obstacles that block almost the whole internet user population in the country from engaging such transactions. Unfortunately the results are not positive of the current situation in the country and the projects seem to be rather pessimistic at least for the near future of e-Commerce in the country. In the first part of this study the authors discussed about the role of the internet in everyday life in Greece and the frequency of the use of the new technology. This investigation was necessary in order to enable the authors draw conclusions as to what are the reasons behind the stagnation of e-Commerce growth in the country. The result of this research was two-fold. One, the majority of individuals (about 67%) uses the internet on a weekly basis whereas only 33% of them use it on a monthly basis. This fact verified the growth of the information society so far encouraging the motivation for its further development. The second, however, revealed a general confusion among the internet users and non-user alike as to the actual role of the internet in everyday life, be it an informative or a working tool. The above results look quite promising. However, a nice-looking and well-structured building may satisfy the people that invested in it,

those that built it and the passersby gazing at it. However, until and unless consumers and/or companies use it, it will remain an investment waiting to be paid back and it will not be too long before the specter of bankruptcy knocks on the door. This, of course, is also true of the information society grown in Greece during the period 2000-2006

3. Situational factors will also lead a consumer to have the intention to shop in the internet such as time pressure, lack of mobility, geographical distance, need for special items and attractiveness of alternatives (Monsuwe, Delleart and Ruyter, 2004). Time pressure can be the insufficient time for consumers to shop in traditional stores because of their hectic lifestyle. Consumers are able to shop any time of the day or night in the comfort of their home; especially for consumers who have little amount of free time because of extended working hours (Wolfinbarger, et, al,. 2001). For consumers that lack of mobility might be caused by their inability to reach the traditional store. Geographical distance is referred to as the far distance between the consumer's residential area and the shopping mall. Need to special items could be the consumer's needs of customized products to suit their demand (Monsuwe, Delleart and Ruyter, 2004).

4.Product characteristic is also another factor that will influence the consumer's intention to purchase in the internet. Product characteristic can be tangible or intangible; standardized or customized. In an online context, lower tangibility of a product is caused by the lack of physical contact and assistance in the shopping process; consumer's intention to shop on the internet will be low when there is a need to seek advice from a salesperson regarding the considered product (Monsuwe, et. al., 2004). Products such as car, computers, perfume, perfume or lotion has the lower potential to be purchased by the consumer because it requires more personal knowledge and experience (Elliot, et. al., 2000).

5.Another factor that influences the consumer's intention to purchase in online is the previous online shopping experiences. Consumers will continue to shop in the internet in the future is because they are satisfied with the online shopping experience and it was evaluated positively (Shim, Eastlick, Lotz and Warrington, 2001). Consumer's perceived risk will tend to reduce when they are satisfied from the shopping experiences (Monsuwe, Delleart and Ruyter, 2004).

The last factor that will influence consumer's intention purchase in online is the trust in online shopping. According to Lee and Turban (2001), reasons that consumers choose not to shop online is because consumers lack of trust in online shopping. Attitude towards security transaction such as payment security, consumer information privacy, return policy, and product shipping guarantee predicts online purchasing intentions for apparels product (Kim, et. al., 2003). Similarly, consumer's trust towards online shopping is based on the level of security and privacy.

Price attractiveness

Price is a form of monetary that people use for any transactions. It is predicted that price of a product differs in online and offline shopping. According to Xia and Monroe (2009), consumers will save in monetary when there are price promotions on specific products. In an online context, consumers are more likely to depend on the price cues to determine the quality of a product which are presented in the web site because they cannot see or touch the actual product (Jiang and Rosenbloom, 2005).

The study of So, Wong and Sculli (2005) resulted that when there is the presence of promotional offers, consumers will have higher intention to purchase in web-shopping; purchasing decisions and choice making from alternative evaluations can be made easily when there is the presence of promotional offers. . According to Xia and Monroe (2009), their study resulted that consumers with a shopping goal are more responsive towards promotional messages such as "pay less" and "discount" while consumers without shopping goal are responsive towards promotional messages such as "save more" and "free gift". Xia and Monroe (2009, p.691) cited from (Monroe, 2003) that price promotion have several benefits such as to increase demand, adjust fluctuations in supply and demand, and increasing consumers' purchasing over time.

As we know that online shopping requires shipping fees for product delivery. It is expected that some consumers intention to purchase a particular product because they have to pay extra charges for the delivery service. But according to Jiang and Rosenbloom (2005), e-tailers can use charges for shipping and handling as a tool to attract patronage by matching consumers' delivery needs; for example, some consumers who would prefer a quick delivery will have to pay higher cost while others may prefer to wait if they pay lower shipping and handling charges.

According to Parasuraman, Zeithaml and Berry (1988), perceived quality and price are thought if as a cue to assume a product's value. Xia and Monroe (2009) viewed that at a certain point, perception of lower quality of the product will evoked when there is a price reduction or there will be questions on the retailer's intention to reduce the price. Price will be a primary factor when consumers search product in a web and this would show that customer behavioral intention are related to the price cues that are more readily accessible from memory (Jiang and Rosenbloom, 2009).

According to Liu, He, Gao and Xie (2008), it is important for e-tailers to provide varied types of merchandise and preferential price because customer satisfaction is still based on product price and product variety; to create competitive advantage, small e-tailers should offer more product choices for the consumers and offer competitive prices.. In online shopping, consumers are able to compare prices on the internet in different web sites and they will have the material benefit because they can analyze and compare prices based to enhance their decision to purchase (Liu, He, Gao and Xie, 2008)

. According to Jin and Kim (2003), diverse consumer groups with various motivations and economic conditions can be satisfied through discount stores that are available in Korea. Pricing factor will also contribute to the shopping convenience. Price perception is positively and strongly correlated with shopping convenience (Jiang and Rosenbloom, 2005). Similarly agreed by Jayawardhena and Wright (2009), shoppers who value convenience can obtain the benefits of product and services with less money spent and this would have a positive relationship with shoppers' excitement; increasing search efficiency by eliminating travelling costs and psychological costs brings convenience in e-shopping.

Time saving

Time is also perceived as one of a factor that relates with intention to purchase in a shopping context. It is believed that consumers have their own perception of time, whether or not to shop from the internet. According to Hansen and Jensen (2009), accomplishing the shopping trip as soon as possible refers to the time-saving oriented consumers and they prefer store choices favoring quick shopping; people who dislike shopping and approaching for time saving retail stores refers to the economic shoppers or known as "problem-solvers".

In online shopping, it requires less effort and better decision making for consumers who opt to purchase at the e-store (Jiang and Rosenbloom, 2005). Shoppers may save their time in eshopping because they do not have to go through any effort on travelling to a mall or saving their time in other psychology factors such as traffic jam etc. Online shopping increases search efficiency by eliminating travelling costs and psychological costs brings convenience in eshopping (Jayawardhena et. al., 2009). Comparing online and traditional shopping, Alreck and Settle (2002) found that internet shopping was viewed as saving more time.

Shoppers who value convenience can obtain the benefits of product and services with less effort and this would have a positive relationship with shoppers' excitement (Jayawardhena et. al., 2009). Ordered products are directly delivered to the door is the greatest interest to many consumers because online shopping does not requires us to leave the hours or office (Chen and Chang, 2003). According to Monsuwe, Delleart and Ruyter (2004), the main drive of online shopping is that the internet is time saving and accessible 24 hours a day. Shopping in the internet saves time and effort because consumers are able to shop any time in the comfort of their home; especially for consumers who have little amount of free time because of extended working hours (Wolfinbarger and Gilly, 2001).

Enjoyment and excitement

Consumer also associate shopping with enjoyment and excitement which they would think is a fun activity to them regardless in an online or offline context. Enjoyment is defined as the extent to which online shopping is perceived to be personally enjoyable and fun (Chiu, Chang, Cheng and Fang, 2009, p.767). Shoppers nowadays tend to be more leisure driven compared to the shoppers in the early 1990's (Nicholls, Li, Kranendonk and Roslow, 2002). For some consumers, shopping for apparels is fun, enjoy, relaxing, pleasure or leisure. In offline shopping, consumers may associate enjoyment and excitement in the shopping mall environment with their friends or family. According to the research of Dennis (2002), he suggests that offline shopping will be more enjoyable than online shopping as regarded by the consumers. Hunter, (2006) suggested that retailers should increase the level of positive emotions in their shopping mall by creating an exciting and happy experience.

The research of Millan and Howard (2007) resulted that Hungarian shoppers visited shopping centers for both utilitarian and experiential reasons; some viewed shopping as a leisure activity accompanied by somebody and enjoyed looking around while accomplishing their shopping task. Rajamma, Paswan and Ganesh (2007) suggested that there is a higher importance to the enjoyment aspect of shopping for consumers who prefer to shop in offline stores compared to those consumers who feel comfortable purchasing from the internet. Otieno, Harrow and LeaGreenwood (2005) stated that women enjoyed shopping because of the fashion, trends, fun, for browsing, felt special, looked good on the apparels, claimed to be "shopaholic", retail therapy, forget other problems, love for clothes, etc.

While in online shopping, consumers is expected to relate enjoyment and excitement with the experience absorbed in the purchasing process and the excitement level is expected to arise during the product delivery process. According to Broekhuizen and Huizingh (2009), online shopping causes enjoyment which is fun and playful rather than from shopping task completion;

customers may regard the purchase of goods in online shopping as an experience and the perceived entertainment will be regarded as enjoyment to them.

Consumers tend to browse more, engage in more unplanned purchasing and seek out more stimulating products when they feel pleasant and aroused in the shopping environment (Monsuwe, Delleart and Ruyter, 2004). Consumer's intention to return should increase as the extent a consumer associate excitement with an e-tailer increase; as the psychological cost reduces, the online shopping experience will be more enjoyable and therefore creates excitement (Jayawardhena and Wright, 2009). Consumers will have more positive attitude when they enjoy the experience of online shopping and are more likely to adopt internet as a shopping medium; potential of entertainment of online shopping will reflect consumers' enjoyment (Monsuwe, Delleart and Ruyter, 2004). From the research of Jayawardhena and Wright (2009), it resulted that the assessment of the e-tailing environment leads the customers to enjoy the shopping experiences; they also found that positive word of mouth will be created when it is influenced by the excitement positively.

High Interactivity

Interactivity is defined as the degree to which two or more communication parties can act on each other, on the communication medium, and on the messages and the degree to which such influences are synchronized (Liu and Shrum, 2002, p.54). According to McMillan and Hwang (2002), interactivity is defined as direction of communications, user control and time. Interactivity can be applied in online and offline shopping. The terms of interactivity in an online context is based on the detailed information given, easy-to-read or descriptive information is available (Park and Stoel, 2005) and also the degree of communication between the buyer and the seller. In an offline context, interactivity will be based on the atmosphere of the shopping mall and also the interaction between the consumer and the shop's promoter.

To highlight the term of "atmospheric", consumer's purchasing probability is enhanced through purposefully design the buying environment to produce specific affective responses in shoppers (Kotler, 1973-1974). When purchasing on the internet, perceived trustworthy will be higher when the web site has greater interactivity (Merrilees and Fry, 2003). A citation has been done

on Hoffman and Novak (1996) by Ballantine, (2006, p.463), there are two main types of interactivity are considered to be applicable to the web. The first, person-interactivity, is the ability for a person using the web to communicate with other individual. The second, machineinteractivity, refers to the ability for an individual to access hypermedia content.

Consumers are then able to make better purchasing decision because of the increased availability of information provided in the web site, causing a consumer to be more knowledgeable. (Cook and Coupey, 1998). The research of Ballantine (2006) resulted that the satisfaction of customer increases when the level of interactivity provided by an online shopping environment increase; and similarly the consumer's satisfaction is also increased when the greater number of attributes provided on a per-product basis; similarly, Dholakia and Zhao (2009) agreed that the shoppers were more satisfied when there are higher interactivity level compared to lower interactivity level web site.

CHAPTER-3: RESEARCH METHODS & PROCEDURE

3.1 Purpose of the study . To study the different parameters used in online shopping which help the customer make different mindsets for the product.

The aim of the study is to find how the modern internet user is keen to shop online rather than going to retail outlets for shopping.

3.2 Research methodology

Research methodology is the arrangement of condition for collection and analysis of data in a manner that aims to combine the relevance to the research purpose with economy in procedure. Research is conceptual structure within which research is conducted. It is way to systematically study and solve the research problems. The steps which complete the process are mentioned below: a) Problem Identification b) Development of Approach to problem c) Research design Formulation d) Fieldwork and Data Collection e) Data Preparation and Analysis f) Report preparation and Presentation

3.3: Research Design:A Research Design is a frame work or blue print for conducting the marketing research project. My research is exploratory in nature. Explorative studies valuable means of finding out what is happening to seek new insights to ask questions and to access phenomenon in a new light.

Exploratory research could be used for any of the following purposes: Formulate a problem or define a problem more precisely. Identify alternative course of action.

3.4 : DATA COLLECTION

Primary data: The first hand information bearing on any research is the one which has been collected by the researcher. The data in my research project is collected through: 1:-A structured questionnaire 2:-Personal interview of both retailer and consumers.

Secondary data: The data which has already been collected, compiled and presented earlier by any agency may be used for purpose of investigation. The data collected through: 1:-Various publications in form of annual reports, various papers and journals published from time to time. 2:-Through internet and Books.

SOFTWARES USED:1. Microsoft Excel:- Used for storing the data. 2. Microsoft Word:- Used for report preparation. 3. SPSS:- Used for analyzing data

SAMPLE AND SAMPLING TECHNIQUES Sample basically means a subgroup of elements of population selected for participation in study. And number of elements to be included in the study is known as sample size. Execution of the sampling process requires a detailed specification of how the sampling designs decisions with respect to the population, sampling frame, sampling unit, sampling technique, and sample size is to be implemented. Sampling technique is broadly classified as:

Non Probability Sampling Sampling technique that do not use chance selection procedures and rather they rely on the personal judgment of the researcher.  In this study basically Convenience sampling. Non Probability Sampling Technique is used. Convenience sampling attempts to obtain a sample of convenient elements. The selection of the sampling unit is left primarily to the interviewer. In this type of sampling technique often the respondents are selected because they happen to be in the right place at the right time. Examples of convenience sampling includes Use of students, church groups, and other members of social organizations. Mall- intercepts interviews without qualifying the respondents. Department stores using charge account lists. Questionnaires included in a magazine. Convenience sampling is the least expensive and least time consuming of all the sampling techniques. The sampling units are accessible, easy to measure and cooperative. In spite of these advantages, this form of sampling has serious limitations. Many potential sources of selection bias are present, including respondent self-selection. Convenience sampling is not representative

of any definable population. This study basically included mall-intercept as the sampling technique.  The sample size for the study was taken in Delhi and it was 110 people.

SCALE USED:In the study the scales used are Ordinal scales like Likert scale, Dichotomous.

PILOT SURVEY: The study constituted of the people those who purchase the product online and what is the reason they shop online rather than going to retail outlet for shopping.

Limitations of the study:  Research is based on the collection of data from both primary and secondary sources.  There may be a possibility of biasness on the part of some respondents, but very much care has been taken to make this report unbiased.  Some respondents might not give the correct information due to their lack of interest and shortage of time.  Time constraint.  All the information, which is taken, is biased on primary and secondary data that has its own limitations

Chapter 4: Data analysis and Findings

Surveyed data was collected and coded in statistical computer package Ms-Excel and then further analyzed. The data has been analyzed with reference to the objective of the study. During the analysis various techniques were used to segment and define of customer profiles. Each question as asked to respondents with a purpose behind. The analysis will show how each question and data collected through them depicts the purpose behind the study.

1.

Where do you access the net?

 Home  Friend’s Place  Work Place  Cyber café  School/College  Others

The question talks about the number of net users those are present in India and the amount of people who access the Internet from different places. The question is basically to find out how many people access the Internet from the different locations such as home, friend’s place, work place, cyber café, school/college and any other place.

Break-up of places used for accessing the Internet
Others 1% Home 17%

Home Friends Place Work Place Cyber Café School/College Others

School/College 32%

Friends Place 1%

Work Place 5%

Cyber Café 44%

According to the study done results show that out of the total sample size, the maximum number of users have accessed the web using cyber cafes (44%) followed by the educational institutes studying (32%) and then followed by their own homes that have internet connections (17%).

The results show obvious results because the number of Internet connections in India is very low than the number of Internet users. Therefore, maximum number of users access the web from cyber cafes at a pay per use basis.

Q2.

How often do you access the net?

 Twice a day  Once a day  Twice a week  Once a week or less

This question states the frequency of Internet usage by the person. The question is important to show that different people are exposed to the websites for different periods and due to this there is an effect of this type of qualitative exposure time. This influences the decision for purchasing something online.

Frequency of Usage
Once a week or less 0% Twice a week 9%

Twice a day

Twice a day 36%

Once a Day Twice a week Once a week or less

Once a Day 55%

Results from the study show that people who have access to the web via cyber cafes, educational institutes, work place, home etc use the web at a maximum of once a day (55%) followed by people who access the net twice a day (36%). The number of users who use the web use it at one sitting and so the frequency depended on logging in and then logging out taken as once and subsequently the frequency increased if this was done so again. This shows that people used to access the web once at one sitting and so had managed their time in this particular frame to do all kinds of activities.

Q3.

What is the purpose of access?

      

E-mail Chat Work/studies News Entertainment Shopping Any other

This question was set to see what exactly is the purpose of people who spend their time on the Internet. The people who are basic net users spend their time doing lots of things like E-mail, chat, entertainment purposes, news items, using it for their study purpose or shopping. There may be many other uses too like conferences, searching for important stuff etc, but consideration in the question was given to just some very few things.

Number of people using different Internet features
120

Number of respondents

100 80 60 40 20 0

email

chat

study

news Activity

entrnt

shppg

other

The number of users who used the Internet did all kinds of activities, which included E-mail, chat, work/study related activity, accessing the web for news features, for entertainment purposes, and shopping. The results from the question showed that e-mail was the activity people did most using the web followed by chat and then study related activities. The question showed that the shopping activity was done by least number of people as a Internet activity.

This shows that the number of Internet users mainly rely on the Internet for communication of messages followed by one of the most important leisure activity like chat. Shopping came as one of the activities but was not taken into consideration as one of the main activities. Now this may be due to the users having access to the Internet through cafes only, which means that they try to optimize their time in the cafes for a maximum use of e-mails only and shopping being one of the minimal of activities.

Q4.

Please rate the sources you rely on to get information provided (1-5) o Books/magazines o Newspapers o Radio/TV o Friends & Family o Internet o Others

This question was posed on the sample to see what exactly is the source of information for people in order to make a purchase decision about anything: apparels, books, music, groceries etc. Different people have different sources of information that have different impacts on the decisive behavior of the customers. The question revealed the importance of each source of information provided above. This question could be used to see the most important source of information and thus try to influence that particular information source to spread out the message.

Ranking of different sources of information

120 Break-up of ranking 100 80 60
2 5 4 3

40 20 0 books npaper TV frnds internet other

1 0

Sources of information

The question showed some interesting results as to the weightage of each source of information in influencing the audience to make a buying decision. The data collected showed that the users took books, TV and Internet as the main sources of information. A few users also rated newspapers as one of the main sources of information and rated it No.1. No other source of information was considered except books, newspapers, TV, friends and family, and Internet.

This shows that the Internet is also a potential source to advertise about products those are sold online. However, it would be more feasible to advertise about products that sell online in Internet as well as TV including magazines and other such leisure books. This is because most of the people rely on these sources to gain information as well as for leisure.

Q5.

Have you ever purchased anything online? Yes/No

This question was posed to see that out of the sample size how many people really use the Internet to make shopping activities and have ever considered using it as a medium of shopping.

yes/no

Yes 27%
No

No 73%

Yes

The question revealed that most of the people who had used the Internet had been in a minority when it came to buy products online. There were about 27% of the total respondents who had bought goods online. Seventy three percent of people who were a majority had not ever bought of buying goods online

This shows that the trend of buying goods online was still in the nascent stage and had to gain more popularity in order to be successful in the hugely successful era of the Internet. There may be certain reasons for this kind of behavior that was probed into in the next set of questions.

Q6. If yes, what did you purchase?

 Clothes  Books  CDs/Tapes  Groceries  Consumer Electronics  Tickets  Others

This question was posed to see that how many people have used the Internet as a medium to buy clothes in particular. This is because the web serves as a medium to buy other products too, which can be easily bought. But buying sometime like apparels online is a very big risk because it lacks the touch-and-feel experience, the most important aspect necessary for a purchase.

Breakup of sample who have used Internet to buy different types of products

120
Number of people

100 80
Yes

60
No

40 20 0
tkts cloth books tapes Products grocery elec other

The results from the question showed that most of the people who have bought anything from the net have bought books first and then followed by tickets and then cloth. This shows that books are the most popular items that one has ever bought on the Internet.

The question reveals the fact that books that were purchased would have been the ones that are available only online like the limited editions ones. Tickets are amongst the highest because people have used the web to buy tickets, which are railway tickets, cinema tickets, and other kinds of tickets for different matches.

Q7. Which channels would you prefer for buying the following?

Internet

Store

Public Kiosk

Mail catalogue

order

Clothes Books Consumer electronics CDs/Tapes Groceries

The above question would show a relative comparison of the different channels of buying a product like Internet, Stores, Public Kiosks, and Mail Order Catalogues. The question was framed to basically find out which channel does a person rely on while buying the products and if so in case of apparel what channel is regarded as the best. There is a big difference in the dynamics of the different channels and it depends on the product also what channel is preferred by the person.

Breakup of people prefering or not prefering the particular channel with the product

120 100 80 60 40 20 0

frequency

Yes No Product-channel combination

The question shows that the numbers of respondents who have given their preferences for buying anything have quoted their choice of channel for that particular item. Out of this product-channel combination most of the people  Have preferred to buy clothes from the store ad then by mail order catalogues than the Internet.  Have preferred to buy books from the stores as the most feasible option  Have preferred to buy electronic items from the Internet higher than buying it from the Internet or public kiosks or by mail.  Have preferred to buy CDs or music from stores as the best option.  Have preferred to buy groceries from stores rather than any other channel.

This shows that stores are still more popular than any other medium. However, the study also shows that people are starting to use Internet to buy products like electronic items. Another point to be noted is that to buy clothes mail order catalogues are preferred rather than the Internet. Buying on the Internet is nothing but a fact way of buying from a mail order catalogue itself. So it the method is made web friendly and the trust of the people is gained the popularity of buying clothes on the Internet is not a distant dream but will soon turn out to be reality.

Q8.

Which attributes would you prefer/consider while shopping for clothes? (Please rate form 1-5 as least important to most important) 1         Ease of navigation Pricing Ease of Regulation Variety Mode of Payment Customized search Quality of service Information about products 2 3 4 5

_________________________ _________________________ _________________________ _________________________ _________________________ _________________________ _________________________

_________________________

The question has been framed to see the weightage of different attributes related to purchasing on the Internet. There are some parameters that are very necessary and some are not so necessary but the sample would show which according the people is the most important ones and what can be used to make the website and the online shop more effective.

Breakup of sample for different attributes Number of respondents 70 60 50 40 30 20 10 0

Least Important Not Important

Neutral

Important

Most Important
Attributes

The question here shows that the most important factor according to customers when they buy products according to descending order of preference is  Mode of Payment  Quality of products  Variety available  Price  Information about products  Ease of Navigation  Search options This shows that there is a risk involved when buying clothes from Internet. This also reveals the fact that people would like to be on the safe side in order to consider an option of buying clothes online. The quality of products should be good in order to gain customer satisfaction and confidence in the retailer. There should obviously be variety in the online store because it is the main reason an online site has an edge over offline sites. Pride is not considered as one most important thing as was the cliché. This is because the Internet user is quite upwardly mobile and has no problem in spending money over things that give a value-for-money in it. Therefore, retailers should focus on the payment mode rather than pricing and producing confusing information about products and other site development features as navigation and advanced search options.

Q9.

What are the major reasons for not making a purchase decision for clothes on the Internet? (Please rate form 1-5 as strongly disagree to strongly agree) 1  Confusing sites 2 3 4 5

_________________________

 Failure to find the intended product _________________________  Slow downloads  Unreliable delivery  Low security  Low information about the _________________________ _________________________ _________________________ supplier _________________________

 Absence of a credit card  High prices  Skill required for surfing  Absence of the feel-and-touch experience

_________________________ _________________________ _________________________ _________________________

The above question was posed to see what are the negative factors that are associated with consumers not preferring the site for buying products like apparels. There were many things that concerned people buying on the Internet like security features, credit cards, and prices etc, which were hindrances during shopping online. The question was intended to see what the actual reason was and which factor was attributed the most.

breakup of possible reasons for not buying online
90 number of responses 80 70 60 50 40 30 20 10 0
Important Neutral Not Important Least Important

Most Important

Possible reasons

The question revealed very different answers than intended. The answers showed that customers had preferred the following factors in a descending order.

 Feel-and-Touch experience  Low security  Failure to find intended product  Unreliable delivery  Product information  Slow downloads  Confusing sites  Absence of credit cards  Skill in buying  High Price of products

The answers produced were very different than expected. This was because again price was not accounted as one of the main factors. This shows that the customers were still ready to pay a price for any products that still gave value-for-money. This made it very clear that retailer should not focus on the price aspect of the product too much. Even though this factor is an important part while making a purchase decision, there are still different factors that have to be considered before influencing the customer to buy a product. The feel-and-touch experience cannot be created in the Internet until and unless there is a whopping advancement in technology to give that feeling. Therefore, retailers should focus on other aspect as security in the transaction by focusing to more on a reliable source of transaction method. This may be done so by using the COD (Cash On Delivery) method to gain customer confidence as Redif.com does in its transactions. The customer should be given the assurance that the product will be delivered using a very reliable delivery method like a courier service which is acclaimed in its business and then providing articulated product information.

Q10.

Which modes of contact from the online shop would you consider? (Please rate form 1-5 as least important to most important) 1    Telephone 2 3 4 5

__________________________

Personalized contact __________________________ E-mail __________________________

This was the last question that was presented in the questionnaire. In online retiling the reach of the retailer is totally boundary-less. The retailer can reached to almost any part of the world by the help of the website and to any consumer anywhere. This even gives the customer another option of giving his feedback to the retailer very efficiently. This is not possible in an offline store because of the time constraint by the customers and the shopkeeper. So the question gave a picture of how people would like to be contacted personally in order to be more efficient in handling customer problems.

Contact by phone

2% 6%
Least Important Not Important

16%

Neutral Important

10% 66%

Most Important

Contact in Person

2% 4% 16%

4%

Least Important Not Important Neutral Important Most Important

74%

Contact by Email

10%

Least Important Not Important

28% 58%

Neutral Important Most Important

4%

0%

The customers who responded to this question preferred the phone and then the mail facility and then in person contact as in descending order in order to be in touch with the online store for making a transaction.

People took it very serious when they buy products and a phone gave a more intimate personal touch and then he mail facility. The in person contact was chosen as last because people are normally not available at a single place all the time and this makes it more untraceable for the person in the online to make a personal touch. Phones (Cell phones) are best in such a case because they are with the person all the time and so make the person traceable.

DEMOGRAPHIC BREAKUP OF THE SAMPLE

1. Age

Percentage of sample according to age

37% 63%

20-23

24-26

The number of respondents varied from the age group of 20 years to 26 years, which was the prime group out of the total Internet users in India. The Internet user base being from 15-35 years, which is, group which uses the Internet in a maximum amount. The respondents fell into the 20-26 year group category out of which 63% were in the age of 24-26 and 37% in the age group of 20-23.

2. Gender
Breakup of sample according to gender

Female
39% 61%

Male

The gender break up was:

Males- 61% Female-39%

3. Family income

Percentage of sample size according to family income
6% 8% 15000-20000 20000-25000 25000-30000 30000-35000 35000-40000 5% 14%

67%

The family income breakup came to around Rs. 15000-20000 – 14% Rs. 20000-25000 – 67% Rs. 25000-30000 – 8% Rs. 30000-35000 – 6% Rs. 35000-40000 – 5% The maximum number of respondents belonged to the Rs. 20000-25000 bracket followed by Rs. 15000-20000 – 14% bracket.

4. Educational Background

Percentage of people with different backgrounds

Profesional degree
29% 33% 38%

Post Graduates Undergraduates

Out of the total respondents 38% were Professionally qualified, then 33% were Postgraduates and 29% were undergraduates.

5. Occupation According to educational background, everybody in the sample size was a student. This was intended because students are the best and only target audience for using the web as the best source for news, entertainment, chat, study purposes, E-mail, etc.

6. Ownership
Ownership of the sample size

90 80 Frequency 70 60 50 40 30 20 10 0 crcard cell Ownership parameters netbnkg
No Yes

The respondents who answered this question revealed that out of the total most of them owned mobile phones and credit cards, which was around 84% and 83% respectively. Net banking facility was used by only 27% of the respondents.

7. Trip Abroad
Number of respondents who had gone for a trip abroad

No. of respondents

70 60 50 40 30 20 10 0 No Yes

Out of the total respondents 62% respondents had been to abroad in the recent past.

CHAPTER 5:-CONCLUSIONS

1.

Most of the net users in India have access to the net from cyber cafes and therefore, there are more number of Internet users in India rather than the number of Internet connections.

2.

The Internet is accessed by most of the Internet users only once a day out of which the maximum users do it for checking and sending E-mails and chatting.

3.

Sources of information for Internet users are books, Internet and TV/Radio.

4.

Clothes are still preferred to be bought offline rather than online but electronic goods are preferred to be bought online rather than online which was a new finding. Slowly but steadily the Internet is also used for buying products online. Books are also being bought in larger proportion in case and groceries are still preferred to be bought offline.

5.

The most important factor according to customers when they buy products is mode of payment, quality of products and variety available. Pricing is not one of the factors in case of online shopping, that which is actually considered as important in Indian markets while buying online

6.

The probable reasons that customers see for not buying online is preferably the Feeland-Touch experience, Low security, Failure to find intended product, and Unreliable delivery. Slower Downloads and High Price was not considered to be an important factor. Since almost everybody in the sample size owned credit cards, it was not posed as a problem.

7.

The reasons that customers quoted, as would be the parameters to be considered when buying clothes online were low overall cost, variety, competitive evaluation and convenience. Price was quoted low again in this case followed by status symbol and quality. This was because people presumed that whatever is sold on the Internet has to be of good quality.

8.

For obtaining and confirming transactions when buying online respondents said that they would prefer contact by phone and personal E-mails than by contact in person.

CHAPTER 6: LIMITATIONS

1.

The sample survey is done with only a small group of people restricted within a small locality in Delhi. This sample may not be the perfect sample and may not be possible to produce the exact trend for the entire market. So the arguments and suggestions that are given in this report are strictly on the basis of the results obtained from the survey.

2.

Convenience sampling was used in order to keep up with he time limit and collect as the target sample.

3.

A sample size of more than 100 i.e. of about 150+ would have proved to be a better sample size but due to time constraints the sample size was restricted to 100 only.

4.

Even though there may be definite process assumed in the report as a probable model for Internet users to make a buy decision, it may not work in the way it is explained.

ANNEXURE

QUESTIONNAIRE 1 Where do you access the net?  Home  Friend’s Place  Work Place  Cyber café  School/College  Others

2.

How often do you access the net?

o Twice a day o Once a day o Twice a week o Once a week or less

3.

What is the purpose of access?  E-mail  Chat  Work/studies  News  Entertainment  Shopping  Any other

4.

Please rate the sources you rely on to get information (1-5)

 Books/magazines  Newspapers  Radio/TV  Friends & Family  Internet  Others

5.

Have you ever purchased anything online? Yes/No

6.

If yes, what did you purchase?  Clothes  Books  CDs/Tapes  Groceries  Consumer Electronics  Tickets  Others

7.

Which channels would you prefer for buying the following?

Internet

Store

Public Kiosk

Mail order catalogue

Clothes Books Consumer electronics

CDs/Tapes Groceries

8.

Which attributes would you prefer/consider while shopping? (Please rate form 1-5 as least important to most important) 1 2 3 4 5



Ease of navigation

________________________        Pricing Ease of Regulation Variety Mode of Payment Customized search Quality of service Information about products ________________________ ________________________ ________________________ ________________________ ________________________ ________________________

_________________________

9.

What are the major reasons for not making a purchase decision on the net? (Please rate form 1-5 as strongly disagree to strongly agree) 1   Confusing sites Failure to find the intended product    Slow downloads Unreliable delivery Low security ______________________ ______________________ ______________________ ______________________ 2 3 4 5

______________________



Low information about the      supplier ______________________ ______________________ ______________________ ______________________ ______________________

Absence of a credit card High prices Skill required for surfing Absence of the feel-and-touch

10.

According to you, what do you think is the reason for the customer to buy clothes online? (Please rate form 1-5 as strongly disagree to strongly agree) 1  Quality of information about the product          Convenience Time saving ______________________ ______________________ ______________________ 2 3 4 5

Presence of info about seller ______________________ Low price of products Status symbol Overall, cost is low Security ______________________ ______________________ ______________________ ______________________

Variety of products/services- ______________________ Compare and evaluate products ______________________

11.

Which modes of contact from the online shop would you consider? (Please rate form 1-5 as least important to most important) 1    Telephone 2 3 4 5

__________________________

Personalized contact __________________________ E-mail _________________

More about yourself Age Gender Family income Occupation Educational background Ownership (Pl. tick) Credit cards Cell phone

__________________ __________________ __________________ __________________ __________________

Internet banking

Have you recently gone for a trip abroad

Yes No

CHAPTER 7:- BIBLIOGRAPHY

The data used in the study has been compiled and/or obtained from the following publications and websites.

1. 2. 3. 4. 5. 6. 7. 8. 9.

http://www.retailwire.com http://www.indiainfoline.com http://www.rediff.com Journal of Retailing Journal of Marketing Journal of Marketing Research Marketing Management, Philip Kotler Marketing Research, Naresh Malhotra Retail Management, Barry Berman & Joel R. Evans

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