Analysis of e-purchasing behaviour

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RESEARCH METHODS AND TECHNIQUES

ANALYSIS OF E-PURCHASING BEHAVIOUR

PREPARED BY

Sheikh M. Sikandar


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ACKNOWLEDGEMENT

We would like to thank our respected mentor Sir. Mumtaz whose lectures and

explanations have guided us in different phases of this research report. Our

salutation and acknowledgment to him for providing the foundation of this

subject Research Methods & techniques. He has provided us an opportunity

to improve our skills. Without his explanations and guidance this task would

have been of immense difficulty.


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Abstract

Purpose: The purpose of this paper is to analyze the evolution of e-customer

purchasing behavior. Certain perceptions of electronic commerce may differ according

to the purchasing experience of customers. Three groups of e-customers aredifferentiated: potential, new & experienced.

Methodology: First of all, the socio-demographic characteristics of each group

were analyzed using mode. Then, using variance and the differences that exist in their

perceptions were analyzed.

Practical Implications: This research enables the companies who want to compete in

the e-market to know the type of customer they are addressing. Moreover, the results

obtained show what perceptions must be concentrated on if these companies want to

capture new customer (potential e-customer) or if they want to maintain existing

customers (new and experienced). The evolution of this behavior means that the

strategies oriented fomenting EC should stress one or another aspect depending on the

target customer.

Keywords: Electronic commerce & Consumer behavior.

Paper type: Research paper.


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INTRODUCTION

In last decade, The information and communication technologies has made a bench

mark in the world and has generated a millions of prospects for accomplishing different

task in much easier and precise way. Electronic commerce is the latest step in the

evolution of business transactions. It replaces the swapping of money for goods or

bartering with the exchange of information from computer to computer.

Electronic commerce is a very broad terminology. E-commerce enables organizations of

all sizes and in all market sectors to improve their effectiveness. It enables the globe to

go across geographical boundaries and time zones to save time and costs, to open up

new market opportunities and enable even the smallest of companies to compete

globally. E-commerce spans established processes such as bar code scanning and

electronic data interchange (EDI), as well as newer arrivals, electronic mail, the Internet,

the World Wide Web and mobile electronic commerce. The research is trying to

analyses e-customer behavior towards the purchasing evolution through the

experience, while doing number of purchases by them.

The Categorization of E-Customer:

Researchers illustrate three categories of e-customers:

(1) Potential, thinking about making their first purchase.

(2) New, made only a few purchases.

(3) Experienced, carried out a high number of purchases

E-shopping is attractive because it reduces the cost of doing business. Sending a few

bytes of data over a network is cheaper, faster and more convenient than sending a

messenger or even making a phone call. E-commerce covers any form of business or

information exchange that is executed using any information and communications

technology (ICT).


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This embraces the main areas of activity:

business to business

business to consumer

on-line learning

where e-commerce conducted between businesses differs from that carried out

between a business and its consumer.Analysts all agree that the next few years will

see an explosion in e-commerce fuelled in large by the Internet. It provides a medium

that is as easily useable by individuals as by organizations in both the public and private

sectors thus, providing instant access to products and services worldwide.

The follow of the research is that first the detailed explanation of studys variables.

Afterwards test of hypothesis, Description of methodology and analyses, and then

research will give the results, conclusions and suggestions.

Literature Review

The use of internet is growing day by day and as per International Telecommunicationthere are 2 billion people are involve in using the internet and in recent decades there

has also been a growing interest in managing customer relationship correctly, because

it has been observed that to maintain customers for a long time period generates an

increase in the net value of the firm (Morgan and Hunt, 1994; Gronroos, 1997;). This

concept leads to e-commerce through which the companies easily maintain their

customers and also the customers are loyal feel easy to purchase at once. It generates

series of benefits similar to those from traditional channels.

Most of the researches have done various researches about e-commerce and some of

them have identified that the benefits of e-commerce, challenges of e-commerce and

the behavior of customers while buying through e-commerce. After the adaptation in


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business, it is very difficult for the companies to face challenges; one of them is to

attract the traditional buyers who prefer to buy from outlet rather than through internet or

online. As this industry is service oriented business industry, companies are

implementing various new techniques to satisfy consumer needs and providing

information through web and different value generating strategies like value extraction,

value capture, value addition value creation (Werthner H., Ricci F., 2004). The benefits

of e-commerce pointed out by the researcher Kim (2004) are: providing convenience for

customers, creating new markets, establishing interactive relationship with customers,

reducing operating cost & saves the time of the consumers.

Most research on EC has tried to reveal what motivates the customer to purchase on

the internet rather than on the offline market (Chen et al., 2002; Klopping and

McKinney, 2004). Due to the low level of development of the new channel, there were

hardly any differences in behavior of customers, whatever their previous experience.

For this reason, researchers treated the perceptions of all e-customers indistinctly.

In spite of these researches, very little research has separately analyzed the inherent

perceptions of each type of e-customers. Our study considers prior internet experience

and the perceptions about EC change as the shopper carries out a greater number of

purchases.

Conceptual framework:

In this research we find out that there is an evolution seen in the perception of buyers

and their preferences have changed enormously. They are turning from normal

customers to e-customers as they discover more satisfaction in the online purchasing.

There isnt any single reason for this behavioral change but several dynamics caused

this advancement. Some variables like People find online shopping more convenient as

they dont have to walk through busy channels also save their valuable time and energy


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and enables them to make purchases effectively. Some people find it useful because

they can get variety of stuff and by just a single tick they can buy their desired product

and due to this technological support the concerns of people have been switched

towards the concept of e-purchase that has enhanced the loyalty of customer with the

firms which can be evaluated through the repetition and increase in the level of

purchases. This research also confirms that the progress will be seen as the customers

become more experienced, in addition it can also change the intention of the buyer

depending upon several other variables that might occur as they become more

experienced. This research can greatly help organizations to learn different strategies to

grab the attention of new potential e-customers; also help them to retain their existing

experienced customers.

Hypothesis;

As already mentioned, our objective is to analyze the evolution of the shopping

behavior of e-customers. To this end, we have differentiated three types of e-customer: potential, who are thinking about making their first purchase; new, who

have made only a few purchases; and experienced, who have carried out a high

number of purchases.

Our hypotheses based on the research data are as follows:


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H1. Customers prefer to use online shopping because it provides them more variety.

H2. Customers prefer to shop online because it saves their time.

H3. Customers prefer online shopping because they find it more convenient.

H4. Customers loyalty with the online service provider is enhanced as they become

experienced shoppers.

METHODOLOGY

The research tool applied was online questionnaire based survey. The target population

of this research is the customers of Karachi, Pakistan who shop online. The sample size

is 20 customers of the targeted population.

A survey questionnaire was developed to collect data for the study. Data was collected

through the use of written questionnaire hand-delivered to participants and the online

survey was also conducted through internet and social networking websites.

A total of 36 responses were recorded, from which 30 individuals were considered

habitual internet users. After the filtering process, 20 valid cases were obtained; of

these, 14 (70 per cent) correspond to potential shoppers, 4 (20 per cent) to new

Shoppers and 2 (10 per cent) to experienced shoppers who had made more than seven

e-purchases. As our data is nominal therefore the statistics we applied was mode &

coefficient of variation. Mode represented the responses that were frequently made by

the respondents while coefficient of variation was used to show the variability of replies

by the respondents.


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Results

We consider it interesting to look further into the differences between the groups ofshoppers. Results are shown in the table given below that elaborates the mode and thevariance of our research findings.

N Mode Variance Minimum Maximum

Valid Missing

Q1 20 0 1.00 .050 1.00 2.00

Q2 20 0 2.00 .450 1.00 4.00

Q3 20 0 4.00 .829 2.00 4.00

Q4 20 0 4.00 1.187 1.00 4.00

Q5 20 0 1.00 .661 1.00 3.00

Q6 20 0 1.00 .779 1.00 3.00

Q7 20 0 3.00 .537 1.00 4.00

Q8 20 0 1.00a

.737 1.00 3.00

Q9 20 0 1.00 .989 1.00 4.00

Q10 20 0 1.00 .095 1.00 2.00

Q11 20 0 2.00 .989 1.00 4.00

Q12 20 0 2.00 .366 1.00 3.00

Q13 20 0 2.00 .892 1.00 4.00

Q14 20 0 1.00 .747 1.00 3.00

a. Multiple modes exist. The smallest value is shown


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In what age group are you?

Q1

Frequency Percent Valid Percent Cumulative

Percent

Valid

15-25 19 95.0 95.0 95.0

26-35 1 5.0 5.0 100.0

Total 20 100.0 100.0

95% of the respondents are in the age bracket of 15-25.


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In terms of your current occupation, how would you characterize yourself?

Q2


Percent

Valid

BUSINESSMAN 2 10.0 10.0 10.0

STUDENT 14 70.0 70.0 80.0

EMPLOYEE 3 15.0 15.0 95.0

DESIGNER 1 5.0 5.0 100.0

Total 20 100.0 100.0

Majority of 70% of our respondents are male.


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How often do you shop online?

Q3


Percent

Valid

OFTEN 6 30.0 30.0 30.0

NOT OFTEN 3 15.0 15.0 45.0

OCCASSIONAL 11 55.0 55.0 100.0

Total 20 100.0 100.0

Around 55% of our respondents said that they shop online occasionally


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Since how long you have been shopping online?

Q4


Percent

Valid

STARTED RECENTLY3 15.0 15.0 15.0

LESS THAN A MONTH 4 20.0 20.0 35.0

MORE THAN 6 MONTHS

BUT LESS THAN A YEAR6 30.0 30.0 65.0

DON'T REMEMBER 7 35.0 35.0 100.0

Total 20 100.0 100.0

35% of the respondents dont remember when they started shopping

online.


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Do online shops provide variety of products?

Q6


Percent

Valid

YES 13 65.0 65.0 65.0

NO 2 10.0 10.0 75.0

NEUTRAL 5 25.0 25.0 100.0

Total 20 100.0 100.0

65% of our respondents replied that yes online shops provide them varietyof products.


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In what aspect you prefer variety?

Q7


Percent

Valid

PRE-SELECTED BRAND 2 10.0 10.0 10.0

PRICE 3 15.0 15.0 25.0

DESIRED PRODUCTS 14 70.0 70.0 95.0

ONLINE SHOPS 1 5.0 5.0 100.0

Total 20 100.0 100.0

70% of the respondents said that they prefer variety in their desired goods


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Online shops provide you:

Q8


Percent

Valid

WIDE VARIETY 7 35.0 35.0 35.0

MODERATE VARIETY 6 30.0 30.0 65.0

SATISFACTORY VARIETY 7 35.0 35.0 100.0

Total 20 100.0 100.0

There was almost similar response by the respondents when they were asked

about what online shops provides them.


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Which types of products are easily available on e-market?

Q9

Frequency Percent Valid Percent Cumulative Percent

Valid

ELECTRONIC ITEMS 14 70.0 70.0 70.0

HOUSEHOLD 1 5.0 5.0 75.0

GARMENTS 4 20.0 20.0 95.0

OTHERS 1 5.0 5.0 100.0

Total 20 100.0 100.0

70% respondents respond that electronic items are more easily available on e-

market


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You think online shopping saves your time?

Q10


Percent

Valid

YES 18 90.0 90.0 90.0

NO 2 10.0 10.0 100.0

Total 20 100.0 100.0

90% of the respondents said that yes, online shopping saves there time


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Which factor saves your time while shopping online?

Q11


Percent

Valid

AVAILABILITY OF

DESIRED ITEM3 15.0 15.0 15.0

EASE OF SEARCHING

DIFFERENT PRODUCTS10 50.0 50.0 65.0

VARIETY OFFERED AT

ONE PLACE3 15.0 15.0 80.0

LESS TIME IN SELECTING

A PRODUCT4 20.0 20.0 100.0

Total 20 100.0 100.0

50% of the respondents said that ease of searching different products saves their

time while shopping online.


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You think online shopping is convenient?

Q12


Percent

Valid

ABSOLUTELY YES 4 20.0 20.0 20.0

FAIR ENOUGH 13 65.0 65.0 85.0

NOT REALLY 3 15.0 15.0 100.0

Total 20 100.0 100.0

65% of the respondents agrees moderately that online shopping is

convenient.


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Online shopping is convenient because there is

Q13


Percent

Valid

ABSOLUTELY NO

TRAFFIC JAMS7 35.0 35.0 35.0

NO LONG CHECKOUT

LINE9 45.0 45.0 80.0

AUTOMATIC

REPLACEMENT SYSTEM2 10.0 10.0 90.0

OTHER 2 10.0 10.0 100.0

Total 20 100.0 100.0

45% of the respondents answered that online shopping is convenient

because there is no long checkout line.


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Are you satisfied with the available variety on online shops?

Q14


Percent

Valid

YES 11 55.0 55.0 55.0

NO 4 20.0 20.0 75.0

NEUTRAL 5 25.0 25.0 100.0

Total 20 100.0 100.0

55% of the respondents replied that yes they are satisfied with the available

variety on online shops.


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Discussion

Our results show that most of the internet users in Pakistan, particularly in

Karachi are the people under the age bracket of 15-25. We can say that youth is

more actively involved in the e-purchasing. Moreover, majority of our

respondents are students who are studying and in the phase of completing their

education. Furthermore, most of our respondents answered that they shop online

but occasionally and fewer shop online habitually. In addition, our respondents

responded that they dont remember the time since they started shopping online

but as the ages of our respondents are not more than 25 so we can say that they

might not have that much experience of purchasing online. When it comes to

preference, majority of our respondents went in favor of variety. It is because the

new and changing trends of the modern era bringing so many innovations in

every product therefore people also want variety in the desired stuff. This aspect

can also transform new customers in experienced one as they will more likely to

buy things on the internet as they get their desired products and variety. Majority

of the e-purchaser have the same opinion that they need variety in the desired

product because most of the people wish to make online purchases as they

come across to any new product in the market and that product creates a desire

to purchase it that become a reason to make purchase online, therefore

mainstream of the sample population demands variety in the desired goods.

Additionally our results show that people finds variety on the internet that make

them stick to make online purchases as they get their desired goods on a singleclick which is undoubtedly feasible for the potential e-customer. Another

important factor is that, online purchasers have a general consent in searching

different variety of goods on a single window which is the factor that enables

them to save their time. This also leads to the convenience of the e-purchaser

and encouraging them to make more purchases online and becomes a cause of

self efficacy. Additionally the factor that saves their time is that e-customer

doesnt have to wait in long checkouts lines that also lead to the factor of

perceived ease.

Finally our results illustrate that healthy majority of our sample population is

satisfied with the variety they gets and the various other factors like time saving,

perceived ease, perceived usefulness, and self effectiveness that convert new

potential e-customers into experienced e-customers as they progresses by the

passage of time.


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Conclusions

The conclusions obtained have important implications for future research for the

analysis of different e-customers. Most previous research treated all e-customers

indifferently because it was considered that the lack of development of the channelmade it impossible to differentiate levels of shopping experience. Nevertheless, in

recent years, E-Commerce has grown enormously and, although many users are still

in the adoption phase, others have carried out several transactions. In this context,

to study their behavior adequately, we must distinguish between users with potential

new shoppers who have carried out some purchases online and, finally, the

experienced shoppers. As the consumer progresses and make more and more

purchases on the internet, they become more dependent on making purchases

online rather than going physically to the market. This change in preference have

many reasons behind that we tried to explain in the previously. Technological

advancement is playing vital role in the increase of e-purchases as in previous times

people were least bothered by the internet thus they were not interested at all in

making e-purchases but now as technology is at its peak and every day new

innovations are introduced in form of different products which is increasing the

curiosity among the people and people wants to acquire that thing without any

waiting. Therefore for that quick and easy move people go for online shopping which

they find an easy approach and where they can get desired goods by just a single

click. Hence it is becoming easier for them to buy desired item without any stay.

Limitations of research

The major limitation of our research is the limited sample size because very less

people participated or showed interest in cooperating with the researcher. The

other limitation was time. For an authenticity and accuracy research, researcher

needs time to work on it. As researcher had time constraints therefore theres a

high probability that results might deviate if more time was given to conduct this

research. There are chances of being given wrong data as it was online

questionnaire based survey and no personal face to face interaction involved in

it.

Analysis of e-purchasing behaviour

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