1. INTRODUCTION

1.1 Meaning and definition

The study of consumer behaviour implies how and why a particular consumer or group reacts to decisions of producers. Consumer behaviour could be defined as “those actions directly involved in obtaining, consuming, and disposing of products and services, including the decisions process that proceeds and follow the action.”

According to another author consumer behaviour is “the behaviour that consumer display in scanning for purchasing, using, evaluating and disposing of products and services that they expect will satisfy their needs. The study of consumer behaviour is the study of how individuals make decisions to spend their available resources (time, money, effort) on consumption related items. It includes the study of what to buy, when to buy, why to buy, from where to buy, how often to buy, and how often they will use it.”

Normally in consumer behaviour one studies the behaviour of consumers for consumption goods but in the study the behaviour of the buyer is also included. He may be user i.e. ultimate consumer or he may be buying for someone else. In a competitive environment, one cannot trust a product or a consumer. The producer has to produce what is demanded or what can be demanded. Study of consumer behaviour will help us to know what can be sold and what goods and services are likely to get rejected.

In certain products like medicines one buys on the prescription of a physician which is also a part of consumer behaviour. In case of capital goods that is plant, equipment, machinery, buildings etc the decisions are often based on technical advice of others. In case of industrial raw materials the decision is influenced by supplier of equipment. Then there are purely consumer goods with short life and once they are used they extinguish. They are called Fast Moving Consumer Goods (FMCG). There are other consumer goods which are durable like cars, refrigerators, electrical iron, juicer-mixer, etc but they basically consumer items with long life. There are also goods like clothes, which are not consumed in one go but are used for long. The behaviour of consumers for all these products is taken on different considerations than short-term consumer goods like fruits, juices, ice cream or milk.

In short consumer behaviour implies study of behaviour of purchaser of all goods and services whether purely consumer goods, intermediate goods or capital goods. In other words it implies study of attitude of all consumers in disposing of their resources. Further it is not confined to final users but also include study of attitudes, of all those who take investment decisions whether they consume themselves or buy for others. It also includes study of behaviour of those who are consultant, advisers and give their opinion to buy or not to buy a particular thing and the study of factors which influence their advice/opinion.Consumer behaviour is an art and a science, economics, psychology, sociology. The study of consumer behaviour envelops all these and more. Be it a housewife buying a tube of tooth paste, an executive buying a tie, a school kid buying a pen or a multi-million dollar corporation buying heavy capital equipment, the process of buying is complex and, at times, intriguing. The consumer buying process is influenced by the consumer’s financial position, personality, tastes, preferences, reference groups, social standing, and even the economic sentiment that is dictated by the status of the economy.

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1.2 Buying Behaviour

In the field of Consumer behavior research the classical model of consumer buying behavior is of utmost important. We as persons take actions in purchasing and using products and services and actions are derived by mental and social process. Behavioral science helps us to better understand why we go for a certain product and why not, why we set priories while making decision.Consumer will buy whatever needed by him. But whatever he buys depends on some factors. The consumer buying is based on a particular behaviour, which if predicted helps the marketer to market his products thereby increasing the profits. This buying behaviour can be explained in the following manner:

It is very important for marketers to understand consumer-buying behaviour because that is the only possibility to offer greater satisfaction for the consumer. Although there remains a certain amount of consumer dissatisfaction, the reason for this is that some marketers still are not consumer oriented and do not regard customer satisfaction as a primary objective.

Another problem is that the tools for analyzing consumer behaviour are not very precise, so it is impossible for marketers to determine what is highly satisfying to buyers.

If a marketer can identify consumer buyer behaviour, he or she will be in a better position to target products and services at them. Buyer behaviour is focused upon the needs of individuals, groups and organizations.

1.3 Buying decision

For some purchases, a consumer will spend very little time considering the purchase itself before making the decision to buy e.g. buying a roll of selotape. However, in other cases, consumers will ask the opinions of other people before making their purchase decision. Hence, marketers are always interested in learning which people are likely to influence the purchase decisions of a typical consumer in a target group. For example, if a member of your family is considering attending college, then it is unlikely that they will decide which college to attend without first discussing the matter with several people. The opinions of parents, siblings, friends, teachers, professional acquaintances, etc. will all have a certain degree of influence over the person’s final decision. Identifying the key influencers is important. Companies may be able to target some forms of promotional activity at the influencers, so that they in turn will speak favourably about the company’s products/services to the actual purchaser or user.

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MotivationOpportunityAbilityConsumer Behaviour

Consumer decision process carries five stages, starting with Problem recognition and following Information search, Evaluation of alternatives Purchase decision and finally Post Purchase behavior. Problem recognition starts with the perception of need and moves towards information search where consumer uses internal and external sources to analyze given information and use that information in the next step of evaluation of alternatives. While evaluating alternatives one assessing values of the products by giving weights. Once you have successfully evaluated alternatives you will move towards purchase decision where you may encounter three possibilities, from whom to buy, when to buy and do not buy. Once you have actually made the purchase now it comes to Post purchase behavior, whether you are satisfied or dissatisfied with your purchase.

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2. THEORETICAL FOUNDATION OF ONLINE SHOPPING

The Internet has developed into a new distribution channel and online transactions are rapidly increasing. This has created a need to under how the consumers perceive online purchasing. Price, Trust and Convenience were identified as important factors. Price was considered as to be a most important factor for a majority of the students. The internet has created a paradigm shift of the traditional way people shop. A consumer is no longer bound to opening a times or specific location. So he can become active at virtually any time any place and purchase the products or services.

The internet is relatively a new medium for communication and the information exchange that has present in everyday life. The number of internet user is constantly increasing which is also signifies that online purchasing is increasing. The rapid increasing is explained by the consumer behavior. The internet is considered a mass medium that provides the consumers with purchase characteristics as no other medium. Certain characteristics are making it more convenient for the consumer compared to the traditional way of shopping, such as the ability to any time view and purchase products visualize the needs with products and discuss products with other consumers. Online shopping is the process of consumer go through the when they decide the shop on the internet.

The internet has developed into a new distribution channel and the evaluation of this channel. E-commerce has now identified. Using the internet to shop online has become one of the primary reasons to use the internet combined with searching for products and finding the information about them. Therefore internet develop the h Companies also use the Internet to convey, communicate and disseminate information, to sell the product, to take feedback and also to conduct satisfaction surveys with customers. Customers use the Internet not only to buy the product online, but also to compare prices, product features and after sale service facilities they will receive if they purchase the product from a particular store. Many experts are optimistic about the prospect of online business.

Due to the rapid development of the technologies surrounding the Internet, a company that is interested in selling products from its web site will constantly has to search for an edge in the fierce competition. Since there are so many potential consumers, it is of the out most importance to be able to understand what the consumer wants and needs.

2.1 Rising Connectivity

If we observe the growth of Internet Subscribers from the above graph, it is getting doubled year by year. The usage of internet in India is only 4% of the total population. This is also getting increased day by day as the costs of computers are decreasing and net penetration is increasing. The cost of internet usage is also getting lower, with good competition among the providers. Wi-Fi & Wimax system has also started in India. This will increase the usage as it goes more on wireless internet. Indians are proving every time that they can beat the world when it comes to figures of online shopping. More and more Indians are going to online shopping and the frequency of India’s online buying is crossing the overall global averages.

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2.2 Few Factors That Boost Online Shopping in India

Though there are several factors that influence consumers to shop online, but as mentioned above researchers have selected four factors after reading literature in the field on consumer attitudes towards online shopping and these factors are discussed below in the light.

Convenience Convenience factor refers that it is easy to browse or search the information through online is easier than the traditional retail shopping. Through online, consumers can easily search product catalog but if the consumer look generally for the same product or item in a traditional store manually it is difficult to visit physically and time consuming also. Convenience has always been a prime factor for consumers to shop online. Online shoppers carry multiple benefits in terms of convenience, such as less time consuming, flexibility, very less physical effort etc. The major motivation for online purchasing is convince in terms of shop at any time and having bundles of items delivered at door step. Rohm and Swaminathan’s (2004) claims in “typology of online shoppers into”: Convenience shoppers, balanced buyers, variety seekers and store-oriented shoppers, based upon their preset shopping motivation. Rohm and Swaminathan’s (2004) findings about ’convenience and variety seeking’ are major motivating factors of online shopping and this study is consistent with Morganosky and Cude’s (2000) research findings. Webcheck’s (1999) study shows that convenience factor is one of the biggest advantages of online shopping. Through online purchase consumers can easily compare the price than the traditional purchase. So price comparison is also another convenience factor of online shopping.

Time saving Time savings is one of most influencing factors of online shopping. Browse or search an online catalogue can save time and patience. People can save time and can reduce effort by shopping online. According to Rohm and Swaminathan’s (2004), one possible explanation that online shopping saves time during the purchasing of goods and it can eliminate the traveling time required to go to the traditional store. On the other side, some respondent think that it is also time taken for delivery of goods or services over online shopping.

Unexpectedly time saving is not the motivating factor for the consumers to shop online because it takes time receiving goods or delivery. But time saving factor can be seen through different dimensions i.e. “person living in Florida can shop at Harod’s in London (through the web) in less time than it takes to visit the local Burdines department store”. Morganosky and Cude (2000) have concluded that time saving factor was reported to be primary reason among those consumers who have already experienced the online grocery buying. So the importance of the time saving factor cannot be neglected as motivation behind online purchasing. Additionally Goldsmith and Bridges (2000) emphasize that there is a discrimination between online shopper and non-online shoppers, online shoppers are more worried about convenience, time saving and selection whereas non online shoppers are worried about security, privacy and on time delivery. A study by Kamariah and Salwani (2005) shows higher website quality can highly influence customers to shop online.

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Website design/features Website design and online shopping activity is one of the vital influencing factors of online shopping. Website design, website reliability/fulfillment, website customer service and website security/privacy are the most attractive features which influence the perception of the consumer of online buying Shergill & Chen (2005). Kamariah and Salwani (2005) claims the higher website quality, the higher consumer intends to shop from internet. Web design quality has important impacts on consumer choice of electronic stores, stated by Liang and Lai (2000). Website design one of the important factor motivating consumers for online shopping. A study conducted by Yasmin and Nik (2010) shows a significant relationship between online shopping activity and website features. Website design features can be considered as a motivational factor that can create positive or negative feelings with a website. A study of website is designed with quality features it can guide the customers for successful transactions and attract the customers to revisit the website again. However, worse quality website features can also hamper online shopping. According to Liang and Lai (2000), web design quality or website features has direct impact on user to shop online. Moreover researchers concluded that a large segment of internet users have serious concerns of security.

Security Security is another dominant factor which affects consumers to shop online. However many internet users avoid online shopping because of credit card fraud, privacy factors, non-delivery risk, post purchase service and so on. But transaction security on the online shopping has received attention. Safe and secured transaction of money and credit card information increases trust and decreases transaction risk. In 1995, UK has introduced Fraud free electronic shopping and later on Europe and Singapore introduced secured electronic transaction (SET). Security is one of the attribute which limits buying on the web as they claim that there is a large segment of internet shoppers who don’t like to buy online because of their thinking about the security of their sensitive information. The internet shopping with advanced technology, and frequent online shopping to the internet being secured as a trustworthy shopping channel. Middle-class population with spending power is growing. There are about 200 million of middle-class population good spending powers. These people have very little time to spend for shopping. Many of them have started to depend on internet to satisfy their shopping desires

Few Facts about Online Shopping The figures from IAMAI show that the internet users in India will grow to 200 million by 2010. Around 25% of regular shoppers in India are in the 18-25 age groups, and 46% are in the 26-35 year range.

Indian online matrimonial sector is worth around $230 million.

Worldwide E-commerce is only growing at the rate of 28%, since India being a younger market, the growth of e-commerce is expected at 51% in the coming years.

In line with global trends finally India has also started shopping online these days. As per the study by IAMAI online shopping in India has rose from $11million in 1999-2000 to $522 million in 2007 and it is expected to rise above $700 million by end March 2010.

Comparative analysis of four factors In the comparative analysis of four factors we will take the averages of each factor by their corresponding modules, for instance “Convenience” as one of the four factors contains four modules, we will take the average of four modules under convenience and compare with other factors averages to see which factor is

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relatively more attractive, we will also discuss the each factor as well. In table 21 in appendix you can see Convenience contains 4 modules, Website design/ Features contains 5 modules, Time saving with 3 modules and Security contains 3 modules. The average score for convenience is 3,9625 which is high score and it indicates convenience is the important factor for online shoppers in Gotland, and convenience as a factor influence consumers to shop online and it also attracts online shoppers, if we compare the convenience with the other factors it has second highest score and this also indicates as it is one of the important factor for online shoppers in Gotland, as it is an Island and there are not so many options for people in Gotland , so it is perhaps more convenient for people to shop online.

CorrespondingAverage0

500

1000

1500

2000

2500

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3500

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4500

Convenience Website Design/FeaturesTime saving Security

The corresponding average scores of Website Design/Features is 4064 which the highest score we have received as compare to other factors, so it is concluded that for online shoppers, Website design/Features is the most attractive factor that influence consumers to shop online. Though time saving has the lowest score of all i.e. 3280 but still the score is positive and it indicates that time saving is also an attractive factor for online shoppers in Gotland. Lastly the average score for the security i.e.3350 is also positive and it’s above 2, which shows security is an important factor that online shoppers keep in mind while shopping online.

2.3 Main building blocks of Web experience

The controllable elements identified in the literature as influencing the online buying behavior were grouped into three main categories and five sub-categories, each one including several of these elements (Table I). The selection of papers, review and allocation of the Web experience elements to one of the above categories and sub-categories was done by the author, in order to ensure the conformity of the selection criteria; a minimum of one literature reference was necessary for including a given component in the classification.

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The definitions used in describing the main building blocks of the Web experiences, as basis of the classification are the following:

1. Functionality factors: Factors enhancing the online experience by presenting the virtual client with a good functioning, easy to explore, fast, interactive Web site. Functionality includes “Usability” and “Interactivity” elements.

2. Psychological factors: Web sites must communicate integrity and credibility in order to persuade customers to stop, explore them and interact online. Psychological factors are those playing a crucial role in helping online customers unfamiliar with the vendor or unfamiliar with online transactions to overcome fears of fraud and doubts as to the trustworthiness of the Web site and vendor.

3. Content factors: Factors referring to creative and marketing mix related elements of the Web site. These factors exercise a direct and crucial influence on the Web experience. They are divided in two sub-categories: “Aesthetics” and “Marketing mix”.

The above terms reflect the nature and/or the effect of the Web experience elements on the buying process. As an example the policies regarding the use of customer data by online vendors and product return policies, factors likely to affect the customer trust, were classified as psychological issues while design and atmosphere, typical aesthetic elements were considered as elements of the Web site content.

Main building blocks of Web experience and their sub-categories

The Web experience components per category (functionality factors, psychological factors and content factors) and sub-category (usability, interactivity, trust, aesthetics, marketing mix) and the total number of literature references.

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1. Functionality factors:Usability and interactivity are the two components of Web site functionality. These factors are frequently referred to in the literature as closely associated with success or failure of Web sites, by directly and profoundly influencing the online consumer’s experience. Slow, dysfunctional Web pages and poor interactivity prompt most online customers to look for alternatives, since time saving and shopping convenience are important motives to do business online for the majority of Internet users.

UsabilityNah and Davis (2002) defineWeb usability as “ the ability to find one’s way around the Web, to locate desired information, to know what to do next, and, very importantly, to do so with minimal effort.Central to this idea of usability are the important concepts of ease of navigation and search”. Usability is considered as an important quality criterion of information systems and Web sites. Elements enhancing the Web site usability are the convenience of using the site, the loading speed of the pages, the information structure etc. Creating a user-friendly Web site not only requires high quality, state-of the- art technology but also thorough knowledge of the needs and characteristics of the potential Web site user.

The different components of usability in short:

Convenience: Research indicates that convenience is a prime motivator for Web customers to stop and interact with online vendors. Customers associate convenience with easy and fast information browsing, shopping and settling of the online transaction; Web designers must try to understand how their customers are likely to perform these activities online and adjust their procedures accordingly.Site navigation, information architecture and search facilities/search process: online customers expect easy site navigation and easily accessible information. Search engines providing fast and reliable results helping customers to quickly locate information in the site, must be part of every well-designed commercial Web site.

Site findability and accessibility: most Web consumers are searching for products and services by means of search engines and online directories. It is very important that site designers apply a consistent search engine strategy so that online consumers can easily find the site. Web sites must be furthermore accessible by users making use of different types of Web browsers.

Site speed: online customers expect fast loading Web pages. Web designers must keep in mind that the average time customers per page viewed is low and steadily diminishing over time.

Ordering/payment processes: cumbersome and lengthy processes required for ordering and settling online transactions are still one of the most important sources of customer irritation, loss of goodwill and interrupted online transactions. A balanced approach is necessary so that Web sites remain simple to use and secure at the same time.

InteractivityThe interactivity of Internet allows online vendors to enhance the Web experience by presenting the customer with more personalized services and facilitating interaction with other online users willing to share experiences and suggestions.

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Interactivity therefore can be seen as underpinning two of the basic elements of the Internet revolution, namely personalization and networking. Interactive elements are contributing to a positive customer experience by reducing uncertainty during the online transaction and the cognitive dissonance afterwards. Elements enhancing interactivity are facilities allowing interaction with vendors in case customers have questions or difficulty to use the site, online helpdesks for technical assistance or support. Networking and the possibility of establishing contacts with other users by means of active or passive interfaces (user’s forums, chat-rooms or bulletin boards) are also factors enhancing the Web site interactivity.

The Interactivity components are divided in two categories:(1) Interactivity with the online vendor.(2) Interactivity with other Web users.

Customer service/after sales service online, interaction with company personnel and customization are components of interactivity between customer and online vendor. Web customers expect next to convenient shopping and support in case of problems with products or services purchased. Good organized online or offline helpdesks, efficient reverse logistics, quick response to e-mail complaints and inquiries are some of the issues where marketers and Web designers must focus their attention. As in the case of usability, good knowledge of customer profiles and needs are of vital importance for the designers of these online services.

2. Psychological elements

Online trust is one of the issues researchers, as well as practitioners, frequently associate with the success or failure of online ventures. Web users are seriously concerned about the safety of their personal information, transaction security and misuse of private consumer data.

Subjects like hacking, fraud, spam and online scams frequently make headlines, raising security concerns as well as skepticism and mistrust. The physical distance, lack of personal contact and the anonymity of the Internet are also factors further increasing the consumers’ anxiety and risk perceptions. Online firms, especially those lacking strong brand recognition and physical presence, should not underestimate the importance of trust as a Web experience element.

The multi-dimensional character of online trust makes it a complicated issue and despite considerable research attention several online trust issues are still very little explored. Multi-channel firms with well-established reputation, brands or products usually have a serious advantage against online novices and startups. High levels of brand awareness and good reputation make it easier for customers of physical firms to trust them online, reducing the online customers” demands for credibility or integrity credentials.

The different elements of the online trust in more detail are: Transaction security and customer data safety are principal concerns of online customers purchasing

products or services online. Service disruptions, hacking into online vendors’ databases and display of customer data on clandestine Web sites are frequent Internet incidents asking for constant vigilance by online firms.

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Clear ordering, payment and refunding procedures as well as concrete customer policies, good communication and strict security help customers face online transactions with more confidence. Online vendors can also win security-minded customers by offering multiple payment alternatives, something though not always feasible (ex. customers overseas).

Customer data abuse: A critical question for privacy-minded customers is whether personal data known to online firms is used for any type of commercial purposes against their knowledge and will. This is a growing concern among Internet users confronted daily with an explosive growth of spam, fraud and online scams. Web vendors should allow online customers to opt for possible follow-up activities and ask always the customer’s clear permission for any further use of data for commercial purposes.

Guarantees and return policies: Like in traditional business, product guarantees offered by Web firms are powerful tools for gaining competitive advantages, raising the level of customer trust and reducing the online transaction anxiety. Clear policies outlining product returning procedures and compensation in case of dissatisfaction with the product have been found to have a positive effect on online vendors’ credibility.

Uncertainty reducing elements: Components of uncertainty reducing elements are “frequently asked questions” (FAQs) and conflict-resolution policies. Allowing easy access of online customers to this type of information enhances trust but also reduces the number of inquiries of customers with questions on such issues.

3. Content elements

The content factors are divided into two categories:(1) Aesthetics.(2) Marketing mix.

(1) AestheticsSpecial attention must be paid to aesthetics, not only because aesthetic elements are often important indicators of online vendor quality but also form the main clue of vendor and Web site credibility for the majority of Web users.

Aesthetics embrace the artistic and creative elements of the online presentation, aiming at a pleasing appearance or effect (Merriam-Webster’s Online Dictionary. These elements communicate the Web site’s atmosphere, something important for attracting online customers by inducing positive and powerful motives for visitors to stop, explore and possibly interact with the site.Traditional retailers are well aware of the fact that a positive experience of new customers entering their shop is an important factor in their decision to stay or leave; the atmosphere is a major retailing quality evidence affecting his/her impression about a sales outlet and defining the customer’s further actions and behavior.

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(2) Marketing mixSeveral researchers have been focused on the impact of marketing mix elements on the behavior of Web users searching the Internet or buying products and services online. Researchers agree that the marketing mix’s 4Ps – including fulfillment– are essential contributors to the Web experience. The ongoing debate on the value of the marketing mix as the toolkit of conventional marketing underlines though the fact that more research is needed in order to define its exact role of the Ps as part of the online content and online marketing in general.

The marketing mix elements and the relevant literature references are depicted.

Communication: The literature references on this aspect refer to the quality of information provided about the firm’s products, the clarity of selling conditions and the delivering terms. Information can to a certain degree compensate the lack of physical contact with the product, reducing the online consumer’s uncertainties.

Fulfillment: With the exception of digitized products (music, software, e-books, etc.) easily delivered online, for all other types of products offered online the order fulfillment and product delivery do not coincide with the placing the online order. The way online vendors follow up orders and deliver products has an immediate impact on the willingness of customers to order and more importantly, to return to the Web site for business in the future. Alternative payment methods, fast delivery, flexible delivery options and order tracking are frequently mentioned elements of the fulfillment process.

Product elements affecting the Web experience are the online brands and product assortment, product features and product presentation. Online vendors can in some cases improve the customer experience by enhancing their product presentation by means of 3D or other high-tech methods.

Price: The number of literature references of the price as an input influencing the online consumer’s behavior is limited. Next to that, research on the role and importance of the online price contradicts the predominant belief that price is the main motivator for consumers when choosing a particular Website. And while most online consumers would insist that low price is their major motive to buy online products, facts do not seem to confirm this. Factors found in the literature associated with the price as part of the Web Experience are the price level, the online promotional actions or discounts and the price transparency.

Promotion: This element is also rarely found to be one of the essential ingredients of the Web experience; the number of relevant literature references is rather limited. Specific promotional elements mentioned in the literature as enhancing the Web experience are free extra services, sales promotions and incentive programs.

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3. ONLINE SHOPPING IN INDIA

It is a fact that a great online shopping revolution is expected in India in the coming years. There is a huge purchasing power of a youth population aged 18-40 in the urban area.

If we observe the growth of Indian online transactions from the above graph, it is getting doubled year by year.

The usage of internet in India is only 4% of the total population. This is also getting increased day by day as the costs of computers are decreasing and net penetration is increasing. The cost of internet usage is also getting lower, with good competition among the providers. Wi-Fi & Wimax is also getting tested in Bangalore and other cities in India. This will increase the usage as it goes more on wireless internet.

Indians are proving every time that they can beat the world when it comes to figures of online shopping. More and more Indians are going to online shopping and the frequency of India’s online buying is crossing the overall global averages.

Factors That Boost Online Shopping in India: Rapid growth of cybercafés across India Access to Information The increase in number of computer users Reach to net services through broadband Middle-class population with spending power is growing.

There are about 200 million of middle-class population good spending powers. These people have very little time to spend for shopping. Many of them have started to depend on internet to satisfy their shopping desires.

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Few Facts about Online Shopping:

The figures from IAMAI show that the internet users in India will grow to 200 million by 2015. Around 25% of regular shoppers in India are in the 18-25 age groups, and 46% are in the 26-35-year

range. Indian online matrimonial sector is worth around $230 million. Worldwide e-commerce is only growing at the rate of 28%, since India being a younger market, the

growth of e-commerce is expected at 51% in the coming years. Inline with global trends finally India has also started shopping online these days. As per the study by

IAMAI online shopping in India has rose from $11million in 1999-2000 to $522 million in 2007 and it is expected to rise above $700 million by end March 2010.

Indians are also Shopaholics like other Asians. There is a strong booming young adult population in India with good levels of disposable income.

INDIA - Over $50 Billion and growing rapidly - Most popular online shopping products include:

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4. POTENTIAL INFLUENCES ON CONSUMER BUYING BEHAVIOUR

Consumers are constantly being bombarded with marketing information and promotional messages. These messages could be about new product launches, special product promotions, and low-price offers. These appear everywhere from television advertisements to web site banners. Consumers do not retain much of this marketing information. However, when a promotional message is targeted to a specific group of consumers, it can prove very effective indeed. This is because the marketing message has been developed to appeal specifically to people in target group of consumers. Furthermore the marketing message will have been transmitted using promotional methods that these consumers have access to e.g. the Internet, T.V., etc.

Before developing a marketing access, a company should first determine the likely influence on a potential consumer.

The behaviour of consumer is dependent on a number of factors, which may be economic or non-economic factors and are dependent upon economic factors such as income, price, psychology, sociology, culture, and climate. Therefore the study is dependent upon all these sciences and consumer behaviour scientists study it through research and they believe that behaviour can be influenced which has been proved by actual sales promotion of a large number of products. However there is dispute whether customer should be influenced or not and what methods should be applied to influence him. In certain cases wrong statements are made that may influence the buying behaviour. For instance, producers of certain face creams advertise that with usage of their creams, complexion will become fair but actually it does not happen. There are ads for removing baldness by using certain oils or creams, but this does not happen actually.

4.1 Consumer characteristicsConsumer characteristics are explained by: Cultural characteristics, Social characteristics, Personal characteristics, and Psychological Characteristics. These characteristics are identified, by the marketer, in order to identify the consumer and to be able to decide on the strategy to what kind of consumer to target. Hence, these characteristics are used in order to segment the market and target specific consumer groups.

Cultural CharacteristicsThe Cultural Characteristics are recognized as the main influencer of consumer behaviour. These characteristics are developed by three features underpinning consumer behaviour: Culture, Subculture, and Social Class.

Culture is mentioned as the most basic cause of a person’s wants and needs. Kotler and Armstrong (2007) argues that human behaviour is mostly learned and that we are exposed to different sets of values and beliefs from a young age, and that these values influence our behavior and decision making. Hence, these characteristics are interesting for marketers and important indicators of certain consumer behaviour and taste.

Subcultures are small group formations with a certain number of people that share values and beliefs such as nationalities, religions or geographic regions. An identified subculture can serve as an important and effective market segment which can be targeted.

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Social class is recognized by Kotler and Armstrong (2007) as a class structure, consisting of a combination of factors which gather different types of members. Some identified factors are income, age, education, and wealth.

Social characteristicsThe Social Characteristics are divided into three different categories, namely Reference Groups, Family and Social Role and Status.

Reference Groups – According to Kotler and Armstrong (2007) the effects of the Reference Groups is mainly based on the belief that a person’s behaviour is influenced by many small groups. When a group has a direct influence it is called a Membership Group, for example: family, neighbours and co-workers. Reference Groups are the groups to which the person often wants to belong to and to be a part of but is not.

These groups indirectly and directly form a person’s behaviour and attitudes. There are three different ways by which these groups influence a person’s behaviour; they may expose a person to new behaviours and lifestyles, influence a person’s attitudes and self-concepts and also create a pressure of confirmation by Reference Groups. Another influence of importance is the opinion leader. An opinion leader is a person that influences others to follow his believes and attitudes towards certain issues, products or areas.

Family – Family members have a great influence on the buying behaviour. The involvement and influence by different family members varies, both to which degree but also in what way. Therefore, it is important for marketers to understand which role is played by whom in the family and direct the advertisement towards the main influencing part of the family.

Roles and Status – Each person belongs to different types of groups and also plays different roles whilst having different positions in the various groups. Roles are identified by Kotler and Armstrong (2007) as what activities people are expected to perform from other members of the group.

Personal characteristics: These personal characteristics are categorized into: Age and Life-Cycle Stage, Occupation, Economic Situation, Lifestyle, Personality and Self- Concept.

The Age and Life-Cycle Stage: These stages explain different periods in life that the consumer experiences as he goes through life. These different stages also represent different changes that the consumer may experience when reaching a new stage. According to Kotler and Armstrong (2007) marketers, therefore, define their target markets in terms of the different stages in order to develop appropriate marketing plans.

Occupation: The occupation tends to have an effect on the products and services bought by the consumers. This leads to the possibility of developing different types of products or services that suits interests identified to be above average within an occupation.

The Economic Situation: Wealth will affect a consumer’s product choice. A consumer may be price-sensitive or not depending on the level of income, level of savings, level of interest rates, and also the product or service itself.

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Lifestyle: This is identified to be a person’s way of living which is recognized by the activities, interest, or opinions he or she has and it also explains the way a consumer interacts in the world.

Personality: This is mainly explained by the terms self-confidence, dominance, sociability, autonomy, defensiveness, adaptability and aggressiveness. These psychological factors are a result of one’s environment. Personality can be defined as a dynamic and organized set of characteristics possessed by a person that uniquely influences his or her cognitions, motivations, and behaviours in various situations.

Self-concept or Self Image: Is the conceptual understanding that people’s possessions reflect their personalities. This concept does bring some conflict since people may have an image that satisfies who they are but does not agree with who they want to be (the ideal self-concept), the question then arises which one we would want to satisfy.

Psychological CharacteristicsThe psychological characteristics are divided into the following concepts: Motivation, Perception, Learning, and Beliefs and Attitudes.

Motivation: Motivation refers to a person needs that must be satisfied. These needs are of different kind; some are biological, such as hunger, thirst and discomfort, and some are psychological such as the need for recognition, esteem and belonging. Needs are not satisfied until they reach a certain point of intensity and become a motive for the consumer to satisfy them. Kotler and Armstrong (2007) discuss several motivation theories, among them are Freud’s and Maslow’s theories of motivation. Freud argued that a person does not really and fully understand his or her motivations. Maslow on the other hand wanted to understand why some people set out to satisfy some needs before others.

Perception: This characteristic is based on the understanding of how differently we perceive the same situation or the same stimuli. Kotler and Armstrong (2007) explains perception as the process by which people select, organize, and interpret information. There are three different processes that decide how we interpret certain information. These are Selective Attention, Selective Distortion, and Selective Retention.

Learning: Learning is, according to Kotler and Armstrong (2007), an act that changes people’s behaviour because of their experience. It occurs through drives: strong internal wants that call for action, stimuli: object that drives for certain action, cues: small stimuli that determinate when, where and how the person will respond and reinforcement: when the response and stimuli towards an object is experienced more than once.

Beliefs and Attitudes: These are acquired by people through learning and experiencing. They influence the buying behaviour by making up brands and product images in the consumer’s heads. A belief is explained by Kotler and Armstrong (2007) as a descriptive thought about something and is based on real knowledge, opinions or faith. Beliefs can also be emotionally charged. Attitudes are

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described as a person’s evaluations, feelings, and tendencies towards something, but also determinations of people such as like and dislikes.

4.2 Online Consumer CharacteristicsMore specific identifications of the online consumer need to be made in order to understand the online purchase behaviour. The identified characteristics are some key characteristics in regard to the online consumer. These key characteristics were made in order to identify online consumers and to be able to segment them.

Cultural Online CharacteristicsSmith and Rupp (2003) identify that the difference in social class creates a difference in purchasing Online Behaviour. Consumers from a higher social class generally purchase more and have a higher intention to purchase online because there is a higher probability that they possess a computer and also have greater access to the Internet. Consumers from lower social classes would not have the same properties. The authors also point out that consumers with lower social class, and thereby not having the same properties, would not have the needed computer literacy to be able to leverage a computer.

Social Online characteristicsThe social influence on the online consumer comes from new Reference Groups compared to the traditional way. For the online consumer new Reference Groups were identified as virtual communities, consisting of discussion groups on a web site. The consumer can read about other people’s experiences and opinions which have shown to have the effect of Reference Groups (Christopher & Huarng, 2003).

Personal Online characteristicsPersonal online consumer characteristics and concluded that income has a vital role for online purchasing behaviour. The consumers with higher household income would have a more positive attitude towards online shopping. This conclusion was explained by the fact that households with higher income would have a positive correlation with the possession of a computer, Internet access, and higher education.

Smith and Rupp (2003) also identified the age factor as a determinant for online purchase intentions. They argued that older people who had no frequent interactions with the Internet and the computer would not use the Internet as a medium for purchases, while young adults would. This was concluded by that the young adults used the Internet and computers more frequently. Younger people were also identified to have more technical knowledge.

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Psychological Online CharacteristicsSmith and Rupp (2003) identified the psychological characteristics of consumer behaviour as questions the online consumer would ask himself before making a purchase online.

Motivation: The consumers are reasoning for incentives to engage in a particular behaviour. He may ask himself questions like: should I look around for better price? If online shopping saves me time, should I shop online more often? How much do I really need this product?

Perception: The consumer is interpreting acquired information by classing it. Questions such as the following may come about: I feel that this site seems pretty secure. It seems that this site has a good product but how can I be sure?

Personality: The consumer is adapting to influences of his cognitions. He may ask himself, what types of Web sites are best suited for his personal buying preferences.

Attitude: The consumer is working out what his likes and dislikes are in respect to a particular situation. He may ask himself: I am pretty unsure about extra costs, should I really be buying items from the Internet? If I do not buy the item online, how else can I get it?

Emotions: The consumer is without conscious effort detecting how he is being affected by his cognitive choice. He may ask himself: The last time I ordered from the Internet I had a really bad experience. Should I try buying online again? What is the future of buying online? If Web sites get better should I invest more time in buying online?

4.3 Specific Consumer Traits and Online Behaviour

The online consumer’s characteristics that we have identified to be the most important ones to have an effect on the online consumer, will be referred to as specific Consumer Traits and how the consumer uses the Internet will be referred to as Online Behaviour.

The online consumer characteristics such as personal, social, and psychological characteristics need to be identified in order to understand what is important for the online consumer. These characteristics reveal the consumers’ lifestyle and identify who the consumer is and what attitudes he has towards online shopping.

These are the consumer characteristics that are relevant for this research and need to be identified in order to find out who the online consumer is and what affects him when shopping online. These we will be referred to as Consumer Traits and Online Behaviour.

To summarise the prior text and to answer the question what identifies an Online Consumer, one can draw the conclusion that for this research the important consumer characteristics that need to be identified are:

Consumer Traits Demographics Attitude and Beliefs

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Impact of Reference Groups Online Behaviour Webographics Online Shopping Patterns Internet Usage

The Online Consumer Segment Subdivisions

The outline below is an attempt to more closely identify the different influencing factors and their connection to the online purchase behaviour.

4.4 Important Influencing Factors

When processing the previous literature in order to find what Specific Consumer Traits and Online Behaviour that needs to be identified, we gained knowledge of which factors that were highly important for the online consumer.

Segment online consumers through first identifying the Internet usage lifestyle of every consumer; they believe that the Internet experience is highly relevant for the identification of the online consumer. Lifestyle is, as presented above, a describing group of consumers’ personal characteristics and is expressed as a person’s demographics. These living patterns show what opinions and interests a consumer has for certain products, for what reasons and which interest they have in the Internet, the Internet usage. The study came to the conclusion that four segment groups could be conceptualized and these would categorise the online consumers according to their shopping behaviour. The different attributes, that explain these segments, show that the factors Price, Trust and Convenience are highly relevant influencers on the online consumer shopping behaviour.

A framework through their study that would help the understanding of consumer’s attitudes towards online shopping. Attitudes and beliefs are separated from consumer’s psychological characteristics and mainly

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determined by learning and prior experiences. Further, points out that the ability to conduct price comparisons has been cited as a major reason why consumers use the Internet (Wallace, 1995). Price sensitive shoppers are essentially concerned with buying products at the lowest price or getting the best value for the money they spend.

A comparison of the traditional way of shopping and online shopping and that the comparison indicated that online shopping is a more convenient way of shopping compared to the traditional ones. This was mainly concluded on the fact that the Internet allows for more information to be gathered with a minimal amount of effort, inconvenience, and invested time by the consumer. With this conclusion, the authors show that the convenient factor is indeed relevant for the identification of the online consumer.

The factors that affected the identified segments and that were relevant for the framework were: consumer traits, product characteristics, previous online shopping experience, situational factors, and trust in online shopping. Consumer trust in online shopping and prior experience with online shopping were identified to have a significant impact on a consumer's intention to shop online. Prior experience with positive outcome is also identified to decrease a consumer's risk perception with online shopping. As presented above, Smith and Rupp (2003) identified the psychological characteristics of an online consumer through questions a consumer would ask himself. The factors trust, security, and prior experiences are present and they are highly relevant for the online consumer. Here the factor trust is recognised as important, which is highly connected with prior experience and expectations of online shopping.

Smith and Rupp (2003) discuss and identify factors in their work that influences the online consumer behaviour. These were identified as marketing efforts, socio-cultural influences, psychological factors, experience, purchase and post-purchase decisions. The authors plot a model which would explain the different stages that consumers go through when making a purchase decision online. They start out with identifying the first stage as the input stage where the consumer is influenced by the marketing efforts made by the media and the sociocultural influences. The second stage is identified as the process stage, which attempts to identify and explain how the consumer makes the buying decision online. In this stage they identify that the convenience factor is one of the main determinants for the consumer’s intention to shop online. They also show that the consumer is affected by psychological factors, such as perception, motivation, personality, attitude, and emotion. The identification indicated that trust and security factors are a major influence for the consumers when considering a potential purchase.

Due to the importance of making the consumer feel safe and comfortable, the authors argue that information regarding security must be mediated to the consumer in such a way that the perceived security is increased. The last stage is identified as the output stage, which is a post-purchase decision process. The article clearly states that that Trust and Convenience are major influencers to consumer online shopping behaviour, even though they are influencing the decision making process (Smith & Rupp, 2003).There have been many attempts to identify and segment the online consumer through various studies. By reading different studies we have identified certain factors that were constantly present in the literature.There are many factors that have an impact on the online purchase behaviour, but we have identified Price, Trust and Convenience to be very important and will put our attention to these three factors.

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4.4.1 Identified Factors affecting Online Consumer Behaviour

Price which is a part of the marketing mix is a factor used in order to stimulate the consumer and is also a communicator, bargain tool, and a competitive weapon. The consumer can use price as a mean of comparing products, judge relative value for money, and judge product quality (Brassington & Pettitt, 2000).The factor Trust is considered to be a concern on the emotional basis in the minds of the consumers. The consumers have a focus on their safety needs and want to satisfy them before making a purchase.The factor Convenience is considered to be a benefit in the eyes of the consumer and a quality derived from purchasing over the Internet. It is therefore considered to be a motivator and a benefit to consumers.We believe that these factors have a significant influence on the consumer when purchasing online. To further analyse the factors, we study underlying attributes that represent what way the factors affect the consumers.

The Factor PriceThe Internet has become a global marketplace on which consumers can gather and compare information such as product information and prices.The technologies and innovative business ideas of the Internet allow sellers to discriminate between buyers and buyers to discriminate between vendors. Historically, however, prices have been set by negotiations after having examined the product (Kotler & Keller, 2006). The Internet facilitates the scenario that comparisons can be achieved with ease, overlooking several digital attributes (which can be communicated through the web) and possibilities with several different vendors simultaneously. On the Internet it is after all the price comparison prospect that interests price sensitive consumers, whilst another category of consumers focuses on finding unique products with specialized features that might be difficult to find offline and who, therefore, perhaps even consider the price as secondary. However, when online, only digital attributes can be evaluated by the consumer, while offline non-digital attributes (for which physical inspection of the product is necessary) can be tested. This could even influence impulsive shoppers to become more cautious about the product as it can only be inspected digitally.Furthermore, when buying online, additional costs such as freight charges, customs or prolonged delivery times can influence the online consumer’s decision to reconsider the transaction even though the price is low. The fact that the factor price has two attributes, saving money and price comparison.

The Factor Price and its Attribute

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The Factor TrustThe Internet is a relatively new way of shopping, it is challenging for the consumers and therefore perceived by the consumer as risky. They further identify the salesperson to be a silent source of trust for the consumer, and that the consumer is dependent on the salespersons’ expertise. But since the salesperson has been removed in online shopping, the authors argue that the basis of consumer trust has disappeared. They further explain that the consumer is not able to check the quality of an item, nor is he able to monitor the safety of the security when revealing personal data. The authors, therefore, conclude that if a high level of security and privacy is communicated to the consumer the result would have a positive effect on consumer trust and the intention to buy online.

A sociological point of view on the theory of trust, there are three modes of maintaining expectations about the future, familiarity, confidence and trust. To experience trust, familiarity and confidence must have been established. However, trust is only necessary when there is a high perceived risk, such as during a purchase transaction or a similar action.The consumer’s previous experience and trust in the computerized medium is likely to affect his amount of trust in online shopping. According to Lee and Moray, human trust in computerized systems depends on three factors:

1. The perceived technical competence of the system - The systems apparent ability to perform assigned tasks.

2. The perceived performance level of the system - How fast and reliable it appears to be able to finish the tasks.

3. The human operators understand of the underlying characteristics and processes governing the system’s behaviour.

Previous knowledge also affects trust states that, "Practical experience tends to teach us the opposite: the more we know, the better we know what we do not know, and the more elaborate our risk awareness becomes”.A model that highlights what trust is constituted from when purchasing on the Internet. It is a scaled version based on “A Trust Model for Consumer Internet Shopping”; trust is dependent on the six variables.

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A company must show the consumer that it is competent in managing information and supporting the consumer after a purchase is done. If that can be achieved, the consumer is more likely to "engage in trust related Internet behaviours like purchasing, cooperating, and sharing information".

The Factor ConvenienceConvenience is anything that is intended to save time and frustration according to the Swedish National Encyclopedia. Further definitions of the concept of convenience are:

The quality of being suitable to ones comfort, purpose or needs Personal comfort or advantage Something that increases comfort or saves work at a suitable or agreeable time

Online shopping as a new medium for retailing creates a number of different advantages. One of these is that it is considered to be more convenient to shop online compared to the traditional way of shopping.

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The convenience attributes that online shopping provides are: Less effort Being able to shop at home Time saving Being able to shop at any time of the day

Online shopping provides convenience for consumers such as time savings and search convenience if compared to the traditional way of shopping.

Kim and Park (1991) also argue that if online shopping is to be perceived as convenient for the consumer, the consumer must perceive a certain amount of easiness with accessing the Internet and also with carrying out the behaviour with shopping online. The less complexity the consumer perceives with accessing the Internet the more attention the consumer has to enter the Internet and search for information.

Further, the authors found that there is a positive relationship between the time spent, the intention to shop online and the attitude towards the Internet. Therefore, Kim and Park (1991) came to the conclusion that the consumers that found the Internet to be easily accessible and used, would spend more time online and search for information and also shop more online. Hence, the consumers that perceives Internet information search as easy, would perceive it more convenient. They also conclude that the information online should be easy to find and, therefore, the consumer should develop effective search tools which would enhance the perceived behavioural control for the consumer online. Kim and Park (1991) argue that the perceived easiness of the Internet is one of the determinants consumers regard when deciding on convenience.

Consumer characteristics play an important role in the consumer's decision to shop online. The authors then identify the so called convenient oriented consumer as the most potential online buyer since they value the convenience of shopping at home as a large motive for purchase.The characteristics of convenience with online shopping can be summarized as follows:Consumers can shop from their homes meaning they do not have to take certain aspects, needed when shopping in the traditional way, into consideration. Online shopping is, therefore, considered to require less effort. It is also considered to be time saving, the consumer can search for products and prices easy through the developed search engines.Through tracking devices a consumer can at any time check where their package is. Another time aspect of online shopping is that it allows the consumer to shop at any time of the day, the consumer does not need to consider if the stores are open or not.

FACTOR ATTRIBUTESConvenience Saving Time

Less EffortShopping at any time

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4.5 SummaryBy first examining consumer behaviour theories we have investigated what identifies the consumer and the processes that the consumer goes through before making a purchase. This has been applied to gain understanding of the online consumer buying behaviour and has then been used in order to find which characteristics those are relevant to identify and segment the online consumer. These have been identified as Consumer Traits and Online Behaviour and are listed below along with the respective sub segments:

Consumer Traits: Demographics Attitude and Beliefs Impact of Reference Groups

Online Behaviour: Webographics Online Shopping Patterns Internet Usage

Furthermore, we have pointed out certain factors that we believe are important for the online consumer when shopping online through the literature overview. These factors have been identified as Price, Trust and Convenience through the literature. In order to comprehend how the identified factors influence the online consumer we must first identify the online consumer. This identification needs to be done mainly through the relevant Consumer Traits and online consumer behavior that have been identified earlier.

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5. CHANGING ATTITUDE TOWARDS ONLINE SHOPPING

“Awareness, Future Demand Focus for Emerging Markets & Current Issues”

Consumers are more rational nowadays and have ability to get the choices from the market. Awareness among the consumers is spread through internet. The number of internet users is increasing day by day which attracts people who have an option to buy online. It was never thought that Indians would go in for e-shopping in such a big way. Ticketing, travel bookings and even books and movies seem fine to buy online. Knowing that in India sizes vary from brand to brand and quality is inconsistent, even of some electronic items, how is it that there are people buying these items online? In India there are some segments of people who have not yet tried purchasing over internet.

Malls malls springing up everywhere and yet people are e-shopping! And not in small numbers either. E-commerce figures are going through the roof, according to Assocham (Associated Chambers of Commerce & Industry of India). Today (2007-08) the figures are touching Rs. 2200 crore, but are expected to increase by 150 percent by 2008-09 - to Rs 5,500 crores and two metros - Delhi and Mumbai are driving the growth:

Well, Assocham says that books are the hottest selling item on the internet. In fact most products bought and sold off online are: books, electronic gadgets and railway tickets. However, people are also buying clothes; gifts, computer and peripherals, and a few are buying home tools and products, home appliances, toys, jewelry, beauty products and health and fitness products.Here are few reasons for this:

1. ConvenienceIt is the major reason. Both the cities are spread out over a large area and the best stores in both these cities are often concentrated in certain ‘posh’ areas. In Mumbai for example there are certain items you get only in Crawford market which is at the other end of town in South Mumbai. And demographics show that the population of Mumbai is now concentrated in the suburbs. Of course, huge malls have come up in the suburbs as well, and India’s biggest mall Nirmal Lifestyle is in far-flung Mulund but often you find a better choice of sizes and styles choice in other malls, say Phoenix (central Mumbai). And though both Mumbai and Delhi have transport system, few people like to travel for two hours just to get to a shop at the other end of town. Clearly the transport systems leave much to be desired. In Delhi, safety is also an issue for women traveling alone in the evenings.

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2. Literacy Rate and the Cities’ Internet Savvy PopulationMost cities in India have a higher literacy rate as compared to the national average of 64.8 percent. In fact Mumbai has a highest literacy even amongst the cities (86 per cent). Delhi too has a high literate population (81.2 per cent). Oddly, although Bangalore has a higher literacy rate than Delhi, at 83 per cent, the city’s share of e-commerce is not very high. Kolkatta too has a literacy rate (80.8 per cent) and so does Chennai (80.1 percent.) If one compares these rates to literacy rates of cities like Patna (62.9 percent), Jaipur (67 percent), Indore (72 percent) or Warangal (73 percent) it’s clear why it’s the metros which are going to continue to lead e-shopping.

3. Home delivery conceptIn any case, home delivery is a concept that Indians are familiar with and love. The mall craze has started only now. Earlier it was a choice between sweating it out in small crowded markets, or asking a friendly neighborhood kirana (grocer) to deliver groceries home and this system is still thriving.

4. Increase in the Internet usersIncreasing penetration of Internet connectivity and PCs has led to an increase in the Internet users across India. The demographic segments that have witnessed maximum growth comprise college going students and young persons. These segments are the users of advanced applications and technologies online and are most likely to be heavy Ecommerce users.

5. Increase in the number of buyers and sellersThe success of a marketplace depends on the presence of a large number of buyers and a large number of sellers. In addition to online buyers, many offline stores have begun to sell their products in the online marketplace. The greater the number of sellers and buyers, the faster the market grows.

It was never thought that Indians would go in for e-shopping in such a big way. Ticketing, travel bookings and even books and movies seem fine to buy online. Knowing that in India sizes vary from brand to brand and quality is inconsistent, even of some electronic items, how is it that there are people buying these items online?

Descriptive analysis showed that the consumers outside India are friendlier doing shopping on internet. They have better political system to protect their rights in case of any frauds. Every consumer of foreign country has chosen Debit Card and Credit Card as their mode of payment. They are more used to with their system which allows them free flow of number of transactions they make on internet.

While in case of Indians there are some segments of people who have not yet tried purchasing over internet. The reason found was insecurity of transactions and they also found that the price was similar to the market price. There was no forcing factor for them to purchase over internet. Also they analyzed in the way that they had to make payment in advance and have to wait for the delivery which again restricted them to purchase over internet. Comparative analysis of Indian Buyers and Foreign Buyers revel that Indians less comfortable purchasing on internet. In the same way foreign buyers are mostly purchasing from internet. The comparative analysis below will make it clearer.

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Point of Distribution Foreign Countries IndiaDemographic Segmentation

The per capita income of people is much higher.

The per capita income of people is very less.

Demographic Segmentation

The age factor is less important. Every person is knowledgeable about the use of Online Shopping.

Only youngsters below the age of 30 are more aware of Internet Shopping. Other age group people are least aware of Online shopping

Socio EconomicBoth Urban & Rural population are the customers of E-Marketers.

Only Urban population is the customer of E-Marketers.

Psychographic Segmentation

People in foreign countries have very speedy life style that allows them to buy online and save their time.

People in India are very conscious and they have a tendency to compare, analyze, touch and feel and then buy the product.

Benefit Segmentation

Well-established govt. system to protect rights of people making online purchase.

Govt. is less aware of the online shopping trend so the legal system does not fully support the consumers.

Usage SituationLess number of frauds recorded. So more usage

More number of frauds recorded. So less usage

Use-related SegmentationPeople are well aware of internet usage.

People are less aware.

Payment Mode

All people normally use debit cards or credit cards to make purchase over internet.

All consumers don’t have their personal debit cards or a credit card that restricts them.

Increasing penetration of Internet connectivity and PCs has led to an increase in the Internet users across India. The demographic segments that have witnessed maximum growth comprise college going students and young persons. These segments are the users of advanced applications and technologies online and are most likely to be heavy E-commerce users.

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6. PROPOSED MODEL Total of 11 interrelated factors for which the practical evidences show significant relationships.

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

6.1 ORDINARILY DEPENDENT VARIABLES 30

ORDINARILY INDEPENDENT

VARIABLES

ORDINARILY DEPENDENT VARIABLES

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

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

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

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

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

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

6.2 ORDINARILY INDEPENDENT VARIABLES

Attitude towards Online Shopping Consumer‘s attitudes toward online shopping have gained a great deal of attention in the empirical literature. It is believed that consumer attitudes will affect intention to shop online and eventually whether a transaction is made. It refers to:

1) The consumer‘s acceptance of the Internet as a shopping channel

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

Intention to Shop Online

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

Online Shopping Decision Making Online shopping decision-making includes information seeking, comparison of alternatives, and choice making. The results bearing on this factor directly influence consumer‘s purchasing behavior. In addition, there appears to be an impact on user‘s satisfaction. Though it is important, there are only five studies that include it. Potential consumers appear to use a two-stage process in reaching purchase decisions. Initially, consumers typically screen a large set of products in order to identify a subset of promising alternatives that appears to meet their needs. They then evaluate the subset in greater depth, performing relative comparisons across products based on some desirable attributes and make a purchase decision.

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

Consumer Satisfaction It can be defined as the extent to which consumer‘s perceptions of the online shopping experience confirm their expectations. Most consumers form expectations of the product, vendor, service, and quality of the website that they patronize before engaging in online shopping activities. These expectations influence their attitudes and intentions to shop at a certain Internet store, and consequently their decision-making processes and purchasing behavior. If expectations are met, customers achieve a high degree of satisfaction, which influences their online shopping attitudes, intentions, decisions, and purchasing activity positively.

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7. PROMOTIONAL STRATEGY FOR ONLINE SHOPPERS

Direct Mail and E-Mail marketing campaigns: These should be focused at capturing the minds of prospective non users of products or promoting repeat purchase by regular customers. The main target should be Generation Y who are pragmatic, clever, socially and environmentally aware, and open to new experiences. Since they are risk takers, new products and services should be tailor made to suit their needs and wants. It is of an utmost importance that companies take them into consideration when they define the main traits (product/service, price, place, promotion and so on) of their offer. Moreover, they are believed to bring an essential contribution to the technological progress through their constant interest in new media, (Curus, 2008).

Ducoffe found that Internet users have positive attitudes toward advertising and online advertising in particular as they described it as "informative" and "up to date." High usage interactive online gamers have positive attitudes toward both online advertising and the direct communications that lead them to those services (Jones 2007). Donthu and Garcia (1999) found that online shoppers had more positive attitudes toward direct marketing and advertising.

Direct mail and e-mail will be more effective in an environment of robust network which ensure deliverables are accurately provided to the target market. Spiros et al postulated that marketers should carefully consider their web site's attributes. For example, if marketers want consumers to have a positive experience with their sites, they may want to adorn their sites with pleasant and enjoyable stimuli to make them attractive. Inaddition, they should make their sites easy-to-use and easy-to-navigate. Furthermore, marketers should place extra emphasis on providing fast, accurate, and uncluttered information through their web sites. Finally, marketers rather than designing static web sites, they should design sites that interact with the consumers and adjust to their needs. Direct mail, e-mailing, web-pages and online advertising promotions should target the segment. Online shoppers tend to have more positive attitudes toward direct marketing and advertising as cyber-shopping provides opportunities to make more purchases. Donthu and Garcia (1999) found that online shoppers will have more positive attitudes toward shopping, advertising and direct marketing than non-shoppers.

Special promotions, price incentives and exclusive offers: E-managers can induce consumers to visit their sites more often. This objective can be achieved by different types of actions. For example, e-consumers can receive price incentives, exclusive offers, special promotions, and product/service advantages.

Word of Mouth (WOM) activities: Companies should reinforce WOM activities from satisfied customers. More specifically, companies could enhance its impact and effectiveness by facilitating or even rewarding such behavior. For instance, they can make available on their sites possibilities such as "tell a friend" e-mailing, "share your opinion" sections, "send a discount coupon to a friend" or "let a friend know about a special offer" actions, and "get a premium service for sending us a new customer".

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Influence of Advertisement and Attitude on online shopping

It is important however important to note that 35% of online shoppers perceive advertisements as deceptive hence they do not pay attention to them. Andrews and Boyle concluded that media reports, particularly television, "have made a significant, negative impact on the interviewees' affective perceptions of the risk involved". Brackett and Carr (2001) found that web advertising is "irritating, annoying or insulting to peoples' intelligence."

There is a correlation between attitude and online shopping as reflected by responses recorded from the online shoppers. Most respondents (76%) indicated that they enjoyed shopping which they regarded as fun. Attitudes toward shopping, direct marketing, and advertising are linked in the online world. Online shoppers, when in "the flow," traverse the Web seeking recreation and adventure (Hoffman and Novak 1997). To some, shopping is a recreational activity, and recreational shoppers tend to have more positive attitudes toward shopping. Donthu and Garcia (1999) found that online shoppers have more positive attitudes toward shopping, advertising and direct marketing.

Privacy of consumers is important in attracting and retaining online shoppers. Online shoppers indicated that they were more concerned with ethical issues vis-à-vis privacy, security, respect and responsibility. Privacy consists of "the rights of individuals and organizations to determine for themselves when, how, and to what extent information is to be transmitted by others". A significant 47% of the online respondents expressed strong reservations on phone solicitations and receipt of junk mail which they considered invasion of privacy and nuisance respectively.

Major learning from the assignment:34

a) There is growing appetite for new products or services by Generation. Since customers need a wide range of unique products to suit their needs it is an obvious reflection of the vast diversity of needs, values and life styles of the 3rd Wave Society.

b) Customers have dynamic preference and taste which change with quantum leaps in technology. In response to these trends, companies need to globalize their e-business to generate increased business value because a global virtual presence can be more feasible and less expensive than a physical presence.

c) Brand and Price consciousness is important in determining customer behaviour since it stimulates a desire to purchase a product.

d) Customers are sensitive and delicate with regard the marketing mix (product, price, place, promotion).

e) Most customers make a planned decision and avoid impulse behavior in making purchases.

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8. RESEARCH DESIGN AND DATA COLLECTION METHOD

8.1 Research method Our research regarding Consumer’s attitude towards online shopping is a descriptive research because we just want to draw a picture of our topic as what are the factors that influence consumers to shop online. In general two types of research methods are being used quantitative and qualitative. We would like to go for quantitative method in our research as it is a precise way. According to Creswell (1994) time is vital attribute for decision making while selecting research method. Saunders, Lewis, and Thornhil (2000) suggests that quantitative research can be faster as compare to qualitative as it is possible to forecast the time schedule, whereas qualitative can be relatively long in duration. Research projects normally done for academic reasons are limited to time as our research is also being done for academic purpose and is time limited so that is why we are going to prefer quantitative approach.

8.2 Research ModelThe research model shown in Figure is constructed by the writers on the basis of number of researches done in the area of consumer attitudes towards online shopping specifically and broadly on online shopping behavior. The diagram shown in figure depicts the factors influencing consumer to shop online.

The above model shows a relationship between dependent variable (DV) and independent variables (IDV). Consumer attitudes towards online shopping are perceived as dependent variable whereas convenience, time saving, website design/features and security are the independent variables that influence the consumers to shop online. The research model developed by the writers will serve as a basis for this research and it will help in analyzing and interpreting the empirical results.

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8.3 Data collection When it comes to data collection there are two methods in general used by researchers to collect data, primary and secondary method. If we talk about primary data it includes observation method, Interview/ questionnaire method, case study method, projective techniques and sociometery. Whereas, secondary data is one which is already collected by some other researcher not for the reason for particular study or research.

8.4 Sampling In general there are two types of sampling techniques probability sampling and non-probability sampling. In Probability sample there is a nonzero equal chance for each population element to be selected, Bryman and Bell (2007). There are four types of probability sampling as stated by Bryman and Bell (2007) simple random sample, systematic sample, stratified random sampling and multi stage cluster sampling. Whereas, in non-probability sampling there is no random sampling. As stated by Bryman and Bell (2007) there are three types of non-probability sampling i.e. Convenience Sampling, snowball sampling and quota sampling. Convenience sample is one that is conveniently available to the researcher with its goodness of accessibility. The problematic facet of this type of non-probability sampling is that it is impracticable to generalize the results but at the same time in words convenience sampling more remarkable role than supposed. And in business and management field this technique is more worthy as compare to sample based on probability sampling. By keeping in view the limitations of time, resources and population writers have decided to apply convenience sampling technique for the purpose of collecting empirical material. As time and resources are one the constraints faced by the researchers convenience sampling is helpful, and it seemed suitable for our research purpose as we are unaware of the online shoppers in Gotland and besides this we could not get the list of online shoppers as it was difficult to get the list from administration of Gotland University so we decided not to draw a random sample. We have decided to distribute our questionnaire among Gotland University students, in general library and higher secondary school in Gotland so convenience sampling would be helpful for the writers to approach the respondents and collect the data on time and also to avoid low response rate, as we are expecting at least 100% response rate.

8.5 Sample design As mentioned by Kent (2007) In particular research a procedure that is being followed for selecting a sampling unit is called sample design. The procedure that is being followed by the writers to select a sampling unit is a mixed process. A mixed process means distributing survey online as well as in person to online shoppers.

8.6 Questionnaire design The questionnaire is carefully designed to meet the requirements of the research. The questions are taken from previous literature on Consumer’s attitudes towards online shopping with a view to validate the research more and some of the questions are self-structured to cover the diversity of research problems. The questionnaire consists of two main parts and one sub part, first part is mainly focused on questions pertaining to factors that influence consumers to shop online. Second part of the questionnaire will cover one of our research question that is who are online shoppers in terms of demography and to see are there any difference in relation to factors that influence Gotland consumers to shop online.

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Part A: Factors influencing consumers to shop online First part of the questionnaire will cover the questions relating to factors influencing consumers to shop online, these factors are Convenience, Time Saving, Website Design/Features and Security. Convenience as one of the factor includes four questions, as mentioned above that questions are selected from previous literature and some of them are self-structured. There are total of five questions pertaining to Website design/Features, three questions related to Time saving factor and three questions related to Security.

Part B: DemographicsThis section includes personal and sensitive question regarding income so as there is a risk that respondent can terminate the survey at early stage. This section includes questions pertaining to Gender, Age, Income and Education.

8.7 Validity and reliability Writer’s research questions will help to prove the validity of research. Validity is if the statements that are designed in real terms measure what is actually meant to measure (Fisher 2007). As most of the research questions are being extracted from previous literature done in the area of Consumer attitude towards online shopping which proves the validity. The questionnaire is closely linked with the research questions as part A of the questionnaire deals with questions pertaining to each of the factor that can influence consumer to shop online. The questionnaire is constructed in a way that it does not alienate the respondent, as sensitive questions in nature such as income and age are asked at the later part of the questionnaire so to avoid from the risk that respondent can terminate the survey. Questionnaires are not distributed in a particular setting or a place as writers have distributed the questionnaire in Gotland University, Gotland Library as to get the diversified population from different demography. Questionnaires are only distributed to respondents who have previous online shopping experience.

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9. REVIEW OF LITERATURE

Petrovic Dejan (2006) in his study on Analysis of consumer behaviour online explained that the most relevant behavioural characteristics of online consumers and examine the ways they find, compare and evaluate product information. Comparison of the newly collected survey data with the existing consumer behaviour theory resulted in detection of a number of issues related to a specific consumer group. The purpose of this report is to translate these findings into a set of implementation activities on strategic and technological level. Execution of these recommendations will result in better conversion of visitors into customers and encourage customer loyalty and referrals.The focus group of this study will be young adults aged between eighteen and thirty-four interested in buying a mobile phone or a related product in the study showed that there are product types, which are more likely to be sold online such as software, books, electronics and music. Reason for this is that when purchasing these types of products, one does not require personal inspection and most, if not all features, can be outlined in the product description and images. Most products in the mobile phone family belong to this category. According to the recent research on consumer behaviour on the Internet users, there are four distinct consumer groups with different intentions and motivations:

Exploration

Entertainment

Shopping

Information

Music, Videos, Lyrics - Daily updated collection of music videos and lyrics. Majority of young adults tend to be active information seekers. A high level of technological confidence within this group tends to be an encouraging factor when it comes to product information research online. The following analysis presents both, focus group results and behavioural theory in a parallel fashion divided into two main research topics:

Information Retrieval and Search Patterns Perception of Product Information Online

These two areas are mutually dependent and particularly important in a market where consumers have the power to choose the right product from a number of competing suppliers. Well-structured product information that cannot be found easily online is as much of a problem as is having easily accessible information that does not meet the consumer's expectations.

Bikramjit Rishi (2010) in their study on Online shopping is an innovative option of distribution available in the hands of marketers. It is innovative and creative because marketers can experiment with it in form, content, visibility and availability. In India online shopping is considered as a relevant alternative channel for retailing and it is now an important part of the retail experience. This research study is an empirical study to find out the motivators and decisional influencers of online shopping. The sample has been selected from the youth population as this group of people actually use internet to buy online. The study highlights that reliability; accessibility and convenience are the major motivator factors which motivate the Indian consumer to buy online. Similarly, reluctance and preference are the two decisional factors which influence the decision.

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10. SCOPE OF THE STUDY AND METHODOLOGY

At any given time there are millions of people online and each of them is a potential customer for a company providing online sales. Due to the rapid development of the technologies surrounding the Internet, a company that is interested in selling products from its web site will constantly has to search for an edge in the fierce competition. Since there are so many potential consumers, it is of the out most importance to be able to understand what the consumer wants and needs. The importance of analyzing and identifying factors that influence the consumer when he or she decides to purchase on the Internet is vital. Since the Internet is a new medium for there have been new demands set by the consumer. That is why it is crucial for the online retailers to know what influences the online consumer.

Analyzing consumer behavior is not a new phenomenon. The renowned marketing expert Philip Kotler has published several works on the topic of consumer behavior theories. These theories have been used for many years not only to understand the consumer, but also create a marketing strategy that will attract the consumer efficiently Hence, understanding and identifying the consumer is closely related to the directions a company will take with their marketing strategy. These theories can also be applied to identify the online consumer and to create certain consumer segments. However, some distinctions must still be made when considering traditional consumer behavior and online consumer behavior.

Since online retailing is a new retailing medium and online consumer behavior is diverse from traditional consumer behavior, one must identify what influences the online consumer. Analyzing the process that the online consumer goes through when deciding and making a purchase over the Internet, shows some factors that consumers consider these factors need to be identified and taken into account by online retailers in order to satisfy consumer demands and compete in the online market.

10.1 Research ApproachThere are two most commonly used research approaches, the inductive and the deductive method. The inductive research method attempts to set up a theory by using collected data, while the deductive research approach attempts to find the theory first and then test it to the observed data. We chose a deductive research approach for our study as we would move from the more general to the specific.

10.2 Research Strategy When collecting data to approach the purpose of a research there are two ways in which the data can be collected. In order to acquire a General knowledge about the topic, secondary data is primarily used and is one of the ways by which data can be collected. The second way to collect data is the primary data collection. Usually when a study is conducted, secondary data is not sufficient enough and needs to be completed with primary data which is collected by the research.

Primary dataWhen collecting primary data one can choose to do interviews, observations, experiments, and questionnaires. Due to the purpose of our research, only the questionnaire method would be able to approach the topic and be able to collect the answers in a satisfactory manner.In our research the primary data is mainly concerned with analyzing the respondent in order to later on classify the respondent. Further on, the primary data will be used to analyze the factors and how these are related to the

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respondent. The primary data is conducted in a manner to be able to approach our research and solve our research questions.

Secondary DataSecondary data can be classified into three different subgroups: documentary, multiple source, and survey. Documentary second hand data comes in both written and non written form. It is the data that can be collected from sources such as journals, databases, transcripts etc. This form of data is dependent on the access the researcher has to it. Survey based secondary data is the data that is collected through the survey and is available as data table forms. Multiple source secondary data is data that has been compiled into documentary or survey form; the main characteristics of this type of data is that it has been changed into a different form before the researcher is assessing the data.

We have mainly used documentary secondary data combined with multiple source data. Documentary secondary data has been the data collected through different types of research conducted within the topic, articles, and books that are written on consumer behaviour and ecommerce. This type of data has been the fundamental source for gaining knowledge within the topic in order for us to be able approach the research problem. The secondary data that we used for our research is data that has also lead to the conclusion of which factors that will be examined.

The multiple source data that we have used has been in order to choose which product we would use for our research in order to be able to find the product that is most widely bought over the Internet.

10.3 Sample Design The factors that we intended to examine can be applied to and investigated at any population that uses the Internet and buys online products Online. Since there are time and resource restraints, a specific Population had to be identified in order to generalize and create relevant segments. Convenience sampling involves using samples that are the easiest to Obtain and is continued until the sampling size that is need is reached.

10.4 Research Methodology The type of research was both exploratory as well as Descriptive. We will attempt to find the main factors that influence the online consumer when making an online purchase. In order to broaden our own understanding of the subject we conducted our initial research in literature on consumer behaviour and e-commerce. We reviewed studies that had similar aims and paid particular attention to their results.

This study started out as an exploratory study but developed into an explanatory study since we start out with first gaining knowledge about consumer behaviour to further being able to gain knowledge about online consumer behaviour. Having this knowledge we continue to identify specific factors that are of importance when the online consumer is making online purchases.

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11. BARRIERS TO GROWTH OF ONLINE MARKET

Consumer Bias Consumers often display a bias for brands that they know well and have had a good experience in the past. Thus products of brands with a favorable bias will score over the products of less popular brands. A few would risk buying expensive jewelry from an unknown jeweler online.

Lack of ‘Touch –Feel-Try’ Experience The customer is not sure of the quality of the product unless it is delivered to him and post delivery of the product, it is sometimes a lengthy process to get a faulty or the unsuitable product changed. Thus, unless the deliverables are as per the customer’s expectations, it is hard to infuse more credibility in the e-Tailing market.

Mounting Competitive Pressures To attract customers, the competing online players are adopting all means to provide products and services at the lowest prices. This has resulted in making the consumers choice-spoilt, who in turn surf various websites to spot the lowest price for the product. Thus, although the number of transactions is increasing, the value of the products sold is continuously falling owning to high competition and leaner margins.

Seasonality E-Commerce Market is faced by seasonal fluctuations. As told by an Industry player, ―August to February is the peak seasons for sale, while March to July is the dry seasons for sale‖. During the peak season, occasions that drive the sales are Diwali, Rakhi, Valentine’s Day, New Year, Christmas, Mother‘s Day, Friendship Day etc. are. On these occasions younger generations prefers buying and sending gifts online.

Credibility in Payment System Online frauds and breach are the biggest barriers to online sales. As a result, prospective buyers prefer staying away from revealing their credit card and bank details.

Untimely Delivery of Products It might take a few minutes to search, book and pay for products and services online, but the delivery of the product may take unreasonable time.

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12. AN INTEGRATED FRAMEWORK OF ONLINE CONSUMER BEHAVIOUR

As demonstrated in the previous section, the prevalence of the Internet has aroused enormous interest in the study of consumer-based electronic commerce in recent years. In particular, the focus of these studies was on investigating factors affecting the intention and adoption of consumer online purchase.

Early studies in online consumer behavior largely sought to explore how consumers adopt and use online purchase. Specifically, the emphasis was on the antecedents of consumer online purchasing intention and adoption. Companies, however, have started to realize that in the digital economy, competitors are just a click away. Initial adoption by consumers is only the first step towards overall success, and companies that succeed in their e-business initiatives are adept at creating and maintaining a long-term sustainable relationship with loyal customers. Thus, research in the consumer continuance behavior (repurchase) becomes increasingly salient.

12.1 Base ModelOur literature review revealed that no prior study has attempted to link the three key concepts of intention, adoption, and continuance and investigate the process of online consumer purchase as a whole. By integrating attitudinal theoretical model and the expectation-confirmation model, we attempt to associate the three elements together and form a base model – Model of Intention, Adoption, and Continuance (MIAC) for the development of an online consumer behavior framework.

Model of Intention, Adoption, and Continuance (MIAC)

Attitudinal model has been widely used in the marketing context and this paradigm provides researchers with a useful lens for examining the factors explaining consumer purchasing intention and adoption. According to this model, behavior is predominantly determined by intention. Other factors like attitudes, subjective norms, and perceived behavioral control are also shown to be related to an appropriate set of salient behavioral, normative, and control beliefs about the behavior. However, model stops at the adoption level and does not capture other important factors that explain and predict consumer continuance behavior (repurchase).

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The expectation-confirmation model, on the other hand, focuses on the post-purchase behavior. It is a widely used model in the consumer behavior literature, particularly in explaining consumer satisfaction and repeat purchase. Satisfaction is the central notion of this model and it is formed by the gap between expectation and perceived performance (Oliver 1980). The expectation-confirmation theory suggests that if the perceived performance meets one’s expectation, confirmation is formed and consumers are satisfied.

12.2 Framework for Online Consumer BehaviorOur analysis shows that online consumer behavior is still fragmented. For example, researchers such as Goldsmith and Limayem found that personal innovativeness is a key personality trait that explains consumer online purchase intention. The effects of presentation mode, search engines, and navigation structure of product items on the adoption of Internet shopping. Trust in an Internet store is a salient determinant of online shopping. Finally, Lee focused on online repurchase and contended that consumer trust and consumer satisfaction was the key antecedents of continued purchase.

In order to capture the important factors explaining online behavior, we propose a unifying framework that could eventually guide research in this area. Through a close examination of the existing literature, five major domain areas including individual/consumer characteristics, environmental influences, product/service characteristics, medium characteristics, and online merchant and intermediary characteristics were identified.

Individual/Consumer CharacteristicsThe impact of Individual/Consumer characteristics on the adoption of IS/IT is a dominant research perspective in the IS literature. In the current study, individual/consumer characteristics refers to the factors specific to the consumer such as demographics, personality, value, lifestyle, attitude, consumer resources, consumer psychological factors (flow, satisfaction, trust), behavioral characteristics (looking for product information, access location, duration, and frequency of usage), motivation, and experience.

Environmental InfluencesIn addition to personal characteristics, marketing scholars such as Engel et al (2001) contend that environmental factors like culture, social influence, peer influence, and mass media play an important role in affecting consumer purchasing decisions. We believe that these factors are also relevant in the context of online consumer behavior and therefore include them in our framework.

Product/Service CharacteristicsPrice, quality, and product type are the three key elements in shaping consumers’ perception. In suggested fragmentation, product/service characteristics mainly refer to knowledge about the product, product type, and frequency of purchase, tangibility, differentiation and price.

Medium CharacteristicsCharacteristics of systems have been extensively studied in the IS literature. Traditional IS attributes such as ease of use, quality, security and reliability are included in the study of electronic commerce systems. Additionally, web specific factors such as ease of navigation, interface and network speed are also considered in the current study.

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Online Merchants and Intermediaries CharacteristicsA broad classification of Internet retail stores as well as the key attributes and features of online stores. These studies provided us with a better insight into the study of online merchant and intermediary characteristics. In the current study, we included factors like service quality, privacy and security control, brand/reputation, delivery/logistic, after sales services and incentive in our framework of online consumer behavior.

Framework of Online Consumer Behavior

12.3 Online Consumer Purchase Intention, Adoption, and ContinuanceIntention, adoption, and continuance are the key building blocks of our proposed framework of online consumer behavior. In the following section, we implicitly investigated the three key elements by mapping prior literature into the five domains. The extent to which each one of the factors was related to one of the three main building blocks. For example, the impact of age on intention was investigated by one study and the impact of age on adoption was investigated by seven studies. However, no study explored the link between age and continuance.

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Consumer Online Purchase IntentionBased on the theory of reasoned action and other related theories in this research area, the key factors of attitude, subjective norm, and perceived behavior control are largely postulated as the determinants of consumer online purchase intention. Similarly, perceived ease of use and perceived usefulness stemming from technology acceptance model (TAM), have also received enormous attention. Trust and perceived risk have been widely investigated in the study of consumer online purchase intention. Some recent studies focused primarily on the trust formation process in the context of Internet shopping. In terms of product/service characteristics, are the key research topics are product type and price. For instance, products like CDs, books or canned food which do not require a physical examination before being purchased are easier to sell on the Internet. Brand/reputation and service quality are also important in affecting online purchase intentions.

Consumer Online Purchase (Adoption)As is the case for consumer online purchase intention, researchers extensively employed attitudinal theoretical models in the study of consumer online purchase and thoroughly investigated the antecedent factors like intention, attitude, subjective norm, perceived behavior control, ease of use, and perceived usefulness.

Moreover, we observed a significant number of empirical studies that proposed and tested factors affecting consumer online purchase. Compared to the study of intention, the studies of consumer online purchase are quite fragmented and widely dispersed in the five main categories. For examples, demographics have been widely considered in the study of online consumer behavior. Researchers primarily investigated factors such as age, gender, income, education, and the like in determining consumer online purchase. In terms of medium characteristics, a number of web specific factors including navigation, interface, security, accessibility, social presence and online shopping aid have been widely investigated in these prior studies. In terms of merchant and intermediary characteristics, factors like privacy and security protection and brand/reputation are frequently studied in consumer online purchase adoption.

Consumer Online Repurchase (Continuance)Research on continuance is in its infancy. A recent study is one of the very first attempts to explain consumer online repurchasing behavior. His proposed model was formulated on the basis of Expectation and Confirmation Theory (ECT), and postulated satisfaction, confirmation, and loyalty incentives as salient factors affecting consumer online repurchasing.

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13. DATA ANALYSIS AND DISCUSSION

One of the important steps is to analyze the data and discuss the findings. In this chapter researchers will discuss the empirical findings from this study.

Q1. TO KNOW THE AGE OF THE REPONDENTS?

INTERPRETATION The above diagram shows us the percentage in the age of respondents. As it shows that from age 15-20 the number of respondents are31 % and from age of 20-25 it is 48 % and from 25-30 it is 14% this is the above data which is shown by the this pie chart.

Q2. TO KNOW THE GENDER OF THE RESPONDENTS?

INTERPRETATIONThis graph itself is showing more percentage of males rather than females, the percentage of male respondents is 86% and percentage of female respondents is only 14%.

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Q3. TO KNOW WHETHER THEY HAVE THEIR OWN INTERNET CONNECTION?

INTERPRETATION This graph show us the percentage of respondents who have their own internet connections, its shows that 65% of respondents have their own internet connections and 35% people don‟t have their internet connection.

Q4. TO KNOW WHAT MOTIVATES PEOPLE TO DO ONLINE SHOPPING?

INTERPRETATION This graph shows us what motivates the people to buy internet, as from above result we found out that no travel to shop is the main thing which motivates the people to buy products online.

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Q5. TO KNOW WHETHER CONSUMERS ARE GETTING COMPETITIVE PRICE?

INTERPRETATION This diagram shows us that whether online marketers are giving competitive price or not and result which is came is that most of the people thought that online marketers are providing competitive prices than physical stores. And result shows 67% of people say that it provides competitive prices and only 27% people says no.

Q6. Effect of Computer ownership and Years of using Internet on online shopping?

Years of UsingInternet

Percentage

<1year 6

1-2years 12

2-3years 0

3-4years 17

4years< 65

49

Percentage0

5

10

15

20

25

30

35

40

45

50

Employer'sOwnedCyber Café

Years of using Internet analysis:

The table above indicates that 65% of respondents have more than four years’ experience in using the internet. In terms of ability to use the internet in online shopping, most respondents expressed satisfaction. However, inherent risk and costs associated with online shopping inhibit the full utilization of the service. There is need to perfect on security issues and improve on connectivity as consumers desire the best service. A significant number of online shoppers saw low costs and substantial benefits associated with e-shopping.

Conclusion:

Internet shoppers display higher levels of internet and e-mail usage. We noted that more ISPs are entering the lucrative market competing extensively in offering the best service at affordable prices to customers. Internet surfing charges have effectively diminished as the competition intensifies. Improvements in technology have also seen internet applying not only to computers and laptops but to cell phones. The trend of committing more time to online shopping is fast approaching as ISP strive to provide tailor made ICT oriented products and service. Consumers are set to benefit immensely from removal of Customs duty on all imported IT hardware and software material. The number of online users will increase as ISPs also extend their services. If consumers own the computer resource and have internet access, then the environment will be more conducive to online shopping.

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Q7. FREQUENCY OF ONLINE SHOPPING?

Close to 90% of respondents to this online survey bought products online over the last 12 months. The online shoppers were grouped into two categories, frequent online shoppers and occasional online shoppers. A frequent online shopper shops at least once a month online, whereas an occasional online shopper uses the online mode less often – for this study an occasional online shopper was defined as making purchases online less than once a month, but did buy online at least once during the last 12 months.

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Q8. PAYMENT METHODS

The results of this survey indicate that several payment methods could be considered as dominant modes when shopping online. On average, 45% of online shoppers use a credit or charge card. However a closer look into the data suggests that this average is somewhat misleading, as a credit or charge card is the most common payment method India.

PAYMENT METHODS used for your online purchases

Online payment systems, such as Paypal, Smart2pay, Webmoney, Giropay or iDEAL were used by a little more than one-third of all online shoppers. Almost the same proportion of online shoppers used the bank or credit transfer option. It is uncommon in India to use mobile phone or cheques to pay when shopping online.

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SUMMARY The three segments that were found show a significant difference in the primary factor of concern. The general distribution showed that the factor price was the primary factor for the entire population sample, and that second factor was trust was closely followed by convenience. When we segmenting the respondents through the different variables we found that segment one were mainly trust oriented and the respondents had a high positive attitude towards purchasing books online. Other segment was mainly price and convenience oriented therefore took the most consideration to the opinions and experiences of the Reference groups. As they low disposable income and were somewhat convenience oriented when acquiring information about low prices, we chose to label them price easers. We found that most of the time youngster who are from the age of 20-25 shops a lot on the net rather than other age limits. People used to do online shopping because of its convenience rather than its pricing, But the main thing which is very common in the most of the people about online shopping is its risk of privacy i.e. hacking of account number getting passwords and all.

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LIMITATIONS OF THE STUDY

Limitation of the study is the selection of the existing studies. Owing to time limitation, I only searched a few number of journals. This may leave some other prominent empirical studies out. In addition, owing to the multidisciplinary nature of online shopping, it would be very interesting to compare IS literature to other disciplines that study online shopping attitudes and behavior.

A Survey by Indian research organization Juxtconsult found that more and more Indian Internet users are opening their wallets online. While such hurdles as limited broadband access and security concerns remain, the report finds there are currently more than 10 million shoppers online in India. While current trends point to increased e-commerce growth in India, the online marketplace in the country of more than 1 billion people is still relatively small. Juxtconsult's survey found that 40 percent of all urban Internet usersbuy online, while 42 percent of the sales originate through just five percent of consumers. The survey was conducted in April 2007 and sampled more than 30,000 users. "This section of buyers spends 5,000 rupees or more per month on the net," states the report. "It is interesting to note that two out of every three heavy spenders are also 'netholics,' those who are on the net for more than three hours per day...Of all those who buy online, only 25 percent are spending more than 1,000 rupees per month while the (remaining) 75 percent bill less than 1,000 rupees per month." (1,000 Indian rupees is currently equal to approximately $23 US.)

The report also found that buying and search patterns among Indians differ between genders. "While 43 percent of male users buy online, only 31 percent of urban female users are consumers as well. Women tend to search more. Defying their more common attitude towards shopping, women are more guarded when it comes to the online market," says Juxtconsult. "Depending on the product type, nine percent to 25 percent are buying online, whereas 33 to 47 percent are searching the net for product information," it says.

Security Fears Persist Juxtconsult says the motivation for Indian users to make purchases online varies, but users fear compromised personal information is still a great risk when it comes to e-commerce. "The single biggest motivation for buying online for net users is saving time. Thirty-two percent of them look to shop online with this purpose. Convenience of shopping '24x7' and home delivery are other major incentives," says the report. "However, the concern of possible misuse of credit card or personal information is extremely significant among online buyers, with almost 55 percent of them voicing their concern. Clearly, tackling and countering the issue of online safety figures as an imminent challenge for net marketers."

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RECOMMENDATIONS & CONCLUSION

The role of the external environment, demographics, online shopping decision making, and consumer satisfaction are less well represented in the proposed model. Any number of factors, including vender/service/product characteristics, website quality, attitude towards online shopping, intention to online shopping, online shopping decision making, and online purchasing, may influence consumer’s satisfaction. More importantly, the extent to which customers are satisfied is directly related to attitudes toward online shopping or toward specific Internet stores.The relative importance of this factor in determining such consumer behavior as repeat purchases suggests that further research on consumer satisfaction with online shopping needs to be conducted.

As we came to know after researching on this topic we recommend that, the online sellers have to make their payment transparent, and as people are coming on their sites and they are buying their products , so retailers have to give more discounts to their customers so that they can visit again and again to their site , and it also helps to make people more aware about the low rick shopping of the net, and one more thing is that there should be transaction of money is very slow they have to make it fast so that customer don‟t have to face much problem to pay for the product, if customer is going to face some problem he is not going to visit our site and buy product .

Following implications should be followed: Discount prices

A transfer and reliable retailer

Fast transactions

Focus on customer satisfaction

Increased Internet penetration, a hassle free shopping environment and high levels of Net savings see more and more Indians shopping online. But at the same time the companies need to reduce the risks related to consumer incompetence by tactics such as making purchase websites easier to navigate, and introducing Internet kiosk, computers and other aids in stores. The goal is not to convert all shoppers to online purchasing, but to show them it’s an option. In addition to above, efforts need to be taken to educate the online buyers on the steps that need to be undertaken while making an online purchase. Moreover, the feedback of an online buyer should be captured to identify flaws in service delivery. This can be done through online communities and blogs that serve as advertising and marketing tools and a source of feedback for enterprises. I found that it is a challenge for E-marketers to convert low frequency online buyers into regular buyers through successful website design and by addressing concerns about reliable performance. Thus, the online retailing raises more issues than the benefits it currently offers. The quality of products offered online and procedures for service delivery are yet to be standardized. Till the same is done, the buyer is at a higher risk of frauds.

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BIBLIOGRAPHY

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action=record&rec_id=32383&prevQuery=&ps=10&m=or1m[12 may 2010] http://www.lotsofessays.com/viewpaper/1693412.html [11april 2010] http://www.inderscience.com/search/index.php?

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QUESTIONNAIRE

Q1. Name ___________________

Q2. Age 1) 15-20 [ ] 2) 20-25 [ ] 3) 25-30 [ ] 4) 30 above [ ]

Q3. Gender 1) Male [ ] 2) Female [ ]

Q4. Address 1) Rural [ ] 2) Urban [ ]

Q5. What is your occupation? a) Student [ ] b) Professional [ ] c) Govt. Employed [ ] d) Self Employed [ ] e) Other [ ]

Q6. What is your monthly income? a) Less than 10000[ ] b) 10000 to 20000 [ ] c) 20000 to 30000[ ] d) 30000 to 40000 [ ] e) More than 40000[ ]

Q7. Do you have your own internet connection?

a) Yes [ ] b) No [ ]

Q8. How frequently do you purchase online?

a) Once a week [ ] b) More than once a week [ ] c) once a month [ ] d) more than once in a month [ ]

Q9. What products you buy on internet?

a) Books [ ] b) Music CDs [ ] c) T-shirt [ ] d) Mobile [ ] e) laptop [ ]

Q10.How do you make your payments on internet? a) Credit card/Debit card [ ] b) Bank transfer [ ] c) PayPal [ ] d) any other____________

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EXECUTIVE SUMMARY

The growing use of Internet in India provides a developing prospect for online shopping. If E-marketers know the factors affecting online Indian behavior, and the relationships between these factors and the type of online buyers, then they can further develop their marketing strategies to convert potential customers into active ones, while retaining existing online customers.

This project is a part of study, and focuses on factors which online Indian buyers keep in mind while shopping online. This research found that information, perceived usefulness, ease of use; perceived enjoyment and security/privacy are the five dominant factors which influence consumer perceptions of Online purchasing. Consumer behavior is said to be an applied discipline as some decisions are significantly affected by their behavior or expected actions. The two perspectives that seek application of its knowledge are micro and societal perspectives.

Internet is changing the way consumers shop and buy goods and services, and has rapidly evolved into a global phenomenon. Many companies have started using the Internet with the aim of cutting marketing costs, thereby reducing the price of their products and services in order to stay ahead in highly competitive markets. The online purchasing behavior of online shoppers and factor influencing online shopping behavior and its future perspective.

Companies also use the Internet to convey, communicate and disseminate information, to sell the product, to take feedback and also to conduct satisfaction surveys with customers. Customers use the Internet not only to buy the product online, but also to compare prices, product features and after sale service facilities they will receive if they purchase the product from a particular store. Many experts are optimistic about the prospect of online business.

In addition to the tremendous potential of the E-commerce market, the Internet provides a unique opportunity for companies to more efficiently reach existing and potential customers. Although most of the revenue of online transactions comes from business-to-business commerce, the practitioners of business-to-consumer commerce should not lose confidence. It has been more than a decade since business-to-consumer E-commerce first evolved. Scholars and practitioners of electronic commerce constantly strive to gain an improved insight into consumer behavior in cyberspace. Along with the development of E-retailing, researchers continue to explain E-consumers‟ behavior from different perspectives. Many of their studies have factors or assumptions which are based on the traditional models of consumer behavior, and then examine their validity in the Internet context.

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