1.

1Executive 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.

The online purchasing behavior of online shoppers and factor influencing online shopping
behavior and its future perspective. 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 product and service in order to stay ahead in highly competitive markets.

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

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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 customer. Although most of the revenue of online transactions
comes from B2B commerce, the practitioners of B2C 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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 CHAPTER-1
INTRODUCTION TO SUBJECT

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 1.2 Introduction

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. Companies also use the Internet to
convey communicates 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 the will receive if they purchase the product from a particular store. Many
experts are optimistic about the prospect of online business.

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

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1.3Theoretical Foundation

The Internet has developed an into a new distribution channel and online transaction 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 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.

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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.

1.3.1Online 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.

1.3.2Rising 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.

1.3.3Few 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

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 internet to satisfy their shopping desires.
1.3.5 Few Facts about Online Shopping

The figures from IAMAI show that the internet users in India will grow to 200 million
by 2011. 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.

1.3.5 Changing Attitude towards Online Shopping:

“Awareness, Future Demand Focus for Emerging Markets & Current Issues” Malls
springing up everywhere and yet people are E-shopping! And not in small numbers either.
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.

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 CHAPTER-2
Review of Literature

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2.1 Review of literature
Petrovic Dejan (2006) in his study on Analysis of consumer behavior online
explained that the most relevant behavioral 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
behavior 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

Shun &Yunjie (2006) in their 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 behavior
on the Internet users (Cotte, Chowdhury, Ratenshwar& Ricci, 2006), 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 interviewed for purpose of this research 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

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behavioral theory in a parallel fashion divided into two main research topics:

Information Retrieval and Search Patterns

Perception of Product Information Online These two areas is 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

Anders Hasslinger; Selma Hodzic; Claudio Opazo (2008-02-01) in

theirstudy they showed that developed into a new distribution channel and
online transactions are rapidly increasing. This has created a need to understand
how the consumer perceives online purchases. The purpose of this dissertation
was to examine if there are any particular factors that influence the online
consumer. Primary data was collected through a survey that was conducted on
students at the University of Kristianstad. Price, Trust and Convenience were
identified as important factors. Price was considered to be the most important
factor for a majority of the students. Furthermore, three segments were
identified, High Spenders, Price Easers and Bargain Seekers. Through these
segments we found a variation of the different factors importance and
established implications for online book stores.

Harris Interactive (2009) in their study of online customer experience.

The survey found that online customer experience reached an inflection point in
2009. The percent of consumers who have experienced problems when
conducting transactions online showed its first substantial decrease in five years
-- from approximately 87% in all previous Tealeaf surveys to 80% in 2009.
While the percent of consumers experiencing online transaction problems, at
80%, remains high (the potential online shopping dollars impacted by
transaction problems rings up at $47.6 billion), this improvement points to a

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growing business focus on delivering better customer experiences. The survey
sheds light on forces driving this accelerated online customer experience focus,
including the down economy and increased consumer power due to experience-
sharing via social media. It also examines consumer behavior when transacting
online, call center behavior related to online issues and mobile commerce.
Verticals represented in the findings include retail, insurance, travel and
financial services.

San Francisco, CA – 6th October 2009 - the leader in online

Customer Experience Management software (CEM), today announced the
results of the 5th annual survey of online consumer behavior, commissioned by
Tealeaf and conducted by Harris Interactive® [results available at
www.tealeaf.com/Harris]. The survey found that 48% of U.S. online adults say
that they are now conducting more online transactions than they did in the past
given the current economic climate. However, 80% of adults who have
conducted an online transaction in the past year experience problems when
doing so in 2009. Previous Tealeaf surveys have consistently shown that
approximately 87% were affected. This improvement over prior years may be
attributed to a growing business focus on delivering better online customer
experiences. While this reported decline in online transaction issues is good
news, online customer experience is still very much a work in progress. The
percentage of consumers affected by issues such as error messages (38%),

endless loops (19%) and login problems (28%) is still extremely high. 1 Further;
the resulting business impact is significant, as 32% of those who experience
issues when conducting transactions online.

Bikramjit Rishi (2010) in their study on online shopping is an innovative

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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.

Kamali and Loker (2002), in their study Internet retail sales represent a new
and increasingly vital commercial milieu. E-commerce or electronic commerce
saw sales revenues grow 12.1 percent in 2001 to $31.4 billion a figure expected
to reach $81.1 billion by 2006 (Kamali & Loker, 2002). While it is clear that
many more consumers are electing to shop online than in the past a shift in
behavior that may be due to the sense that online shopping is safer and more
secure than it was initially and to the adoption of alternative shopping avenues.
This essay will examine these issues, arguing that browsers become buyers in
cyberspace as perception of safety, product quality, and retailer reliability
increase an idea also advanced by Li, Luo, Lepkowaska-White and Russell .

Atanasov (2001) in their study it is anticipated that the worldwide market for
business-to-business and business-to-consumer e-commerce will total $3.1 trillion
in 2004 as compared to $350.4 billion in fiscal 2000-2001. Among the most
profitable products and services sold online are consumer goods such as books,
videos, music, computers and other tech products, and travel (Schmerken, 2001).
Other profitable sectors include investment transactions, which Schmerken (2001)
considers to have generated a wave of corporate spending on e-commerce. The
Internet and its myriad e-commerce or marketing sites, represents what researchers
believe to be the security concerns of online shoppers and potential shoppers. These

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researchers and others reported that online buyers are also concerned about security
issues when making online purchases. Though many consumer concerns regarding
the inherent safety of financial transactions online have been resolved through the
development of sophisticated encryption programs, many consumers require
additional assurance that their financial data will be held in confidence. Other
security issues that were identified by Mauldin and Arunachalam (2002) focus
on retailer disclosures, information risk, product risk, and familiarity with the
retailer and the product. Generally, Mauldin and Arunachalam (2002) found that
intent to purchase rather than merely browsing online increases in direct
association with a sense of security and comfort. Retailers who offer their
products online are therefore advised to emphasize product disclosure and
retailer disclosure and reduced information risk in their e-commerce sites.
Though most online retailers do provide clear descriptions of security
procedures, some Internet shoppers still avoid using credit cards online.
Overcoming resistance to this fear is one of the key tasks that must be under
taken.

Ogenyi Ejye Omar, Alan Hirst (2006) in their study they evaluates
women's attitude as an overall inclination towards apparel shopping online via e-
mail questionnaire. Its findings suggest that women generally show positive
attitudes towards shopping online for apparel. Women who shop for apparel online
are aware of some of the discouraging features of online shopping, but these
features do not deter them from buying online. The implication for online retailers
is that they should focus on making the experience of online shopping more
accommodating and more user -friendly. This is important because the positive
features of online shopping ('convenience', 'usefulness', 'ease of use', and
'efficiency') appear to be more important than the negative features ('lack of
security', 'privacy of information' and 'online fraud').

Ruiliang Yan, John Wang (2009) in their research it provides a useful

framework to help business marketers identify the effect of consumer online

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purchase costs on firm performances in online and traditional channel competition.
A game theory model is developed to determine the optimal strategies for online
and traditional retailers. We demonstrate that consumer online purchase costs
always have a valuable impact on firm profits, and further show that consumer
online purchase costs always have a much more valuable impact on firm profits
whenever the traditional retail transaction costs and the product web-fit change. We
also find that consumer online purchase costs have a greater impact on the retailer's
profits in a Stackel berg competitive system than in a Bertrand competitive system.
Based on our results, managerial implications are discussed and probable paths of
future research are identified.

Scott M. Smith, Chad R. Allred, William R. Swinyard (2008) in

their

research paper they discusses online shopping in context of diffusion of

innovation theory. It proposes that online shopping is a discontinuous
innovation whose adoption rate is influenced by several of Rogers' (2004)
diffusion deterrents. A new 12 -item 'Computer Competence Index' (CCI) is
proposed and tested using data from an internet - administered US probability
study of 1800 online users. EShoppers are profiled using a tertile split of the
CCI. Each tertile's demographics, computer activities, computer - oriented
lifestyles, and online purchase activities are reported. Evidence is presented that
concepts related to the diffusion of innovation may explain resistance in the
growth of online shopping.

A.M. Sakkthivel (2009) in their research paper aims to identify the impact
of demographics on consumer buying behavior towards online purchase of
different products based on the involvement and investment (High, Medium and
Low). It attempts to unearth the impact of the demographics on online purchase
which is at present relatively limited. It would help the marketers to identify the
demographic profile of consumers which is otherwise not known due to the
intangible nature of internet. The findings would help the marketers to design their
offerings based on the demographic profile of online consumers and would help the

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online marketers to identify and segment the online consumers which will enhance
their focus and eventually leads to financial growth.

Jianwei Hou, Cesar Rego (2007) in their study in traditional auctions, it

is often assumed that bidders are a homogenous group. However, since most online
bidders are average consumers instead of professional bidders, we suspect that
online bidders are a heterogeneous group. The purpose of this paper is to explore
the types of online bidders based on their real bidding behaviour in the context of
consumer-to-consumer online auction market. A cluster analysis is employed and
four types of online bidders are finally identified in a private value auction, namely,
goal-driven bidders, experiential bidders, focused bidders, and opportunistic
bidders. The profile and performance of each group are also discussed.

Tomomi Hanai, Takashi Oguchi (2009) in their study to investigate

what kind of information contributes to trust formation in online shopping. Twenty-
seven female undergraduate students were recruited and asked to evaluate the
trustworthiness of 20 online shopping websites. All the online shopping websites
dealt with branded products where there is greater emphasis on the trustworthiness
of online shops or products. The results show that information described on the
websites was classified into two categories, firstly, information about the shop and
its procedures and services. Secondly, the concrete information necessary for the
consumption process, such as payment information and return information, which

heightens the reliability of these shops.The term “brand” originally refers to a

“description or trademark which indicates a type of product made by a particular
company.” However, in modern Japanese society it refers to those branded products
that are perceived to have a higher quality than other similar products. Thus, the
term “brand” authenticates that its products belong to a high-class, and the people
who possess these branded products are regarded as “exclusive people”
through the “basking-in-reflected glory process” (Cialdini, Borden, Thorne,
Walker, Freeman, & Sloan, 1976). The branded products interest female young
people and recently they have been more inclined to purchase them via online
shopping. However, they tend to refrain from purchasing these products via online

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shopping due to their distrust of it. Consequently, it becomes more and more
important to analyse what kind of information contributes to trust formation in
online shopping. Female Undergraduat Students‟ Attitudes toward Branded
Products First, we introduce several surveys for determining the attitude
towards, and ownership of, branded products among female young people,
especially female undergraduate students in Japan, who are the target group of
this study. Infoplant (2007) showed that nearly half of all people are interested
in some branded products. Although branded products generally attract the
attention of various kinds of people, young females are especially interested in
branded products. Infoplant (2007) revealed that more than 60% of females
under 20 years of age and nearly 80% of females in their twenties have
purchased some branded products. Furthermore, the percentage of people who
usually buy new branded products is about 20% among females under 20 years
of age and more than 10% in females in their twenties.

David Anderson (02 .02 .2006) in their research carried out by a consumer
behaviour researcher at Henley Management College has investigated what drives
people to search online. The findings reveal that convenience, time-efficiency and
personal control are the key drivers for consumers to search online, rather than
cost. It also shows that the relationship between traditional and online retailing
outlets needs to be more unified E-shopping has changed the face of retail, and
surfers are now looking for spring sale bargains. This is following a bumper e-
Christmas, where Internet shopping soared almost 50% during the 10- week run-up
to Christmas 2005 (IMRG). However, the new findings reveal that convenience
and personal control are the key drivers for consumers to search online. Dr
Susan Rose, from Henley Management College, said: “What motivates
online shoppers is the ability to shop, where, when and how they like.
Nowadays people can shop over their Shreddies in the morning. The research,
that analyses data from 304 electrical goods Internet shoppers, provides
businesses with a guide to getting the information highway buzzing with
potential customers. Big-ticket items such as digital TVs, cameras, or iPods
now feature on our e-shopping list. The Internet provides a rich source of
information about brands and retail channels that enable us to search and find
information to help us with our final purchase decision. For businesses there are

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some steps to help them embrace the Internet revolution with success. A key
factor driving Internet use for „online window shopping‟ is its usefulness in our
personal lives. The Internet frees time and makes the information search
process, Research suggests that people search online for some goods, yet buy
from a traditional high street retailer, or look around for goods in shops, then
take their search online. In turn, it is essential for retailers who operate both on
and off line to ensure that they embrace a joined up process that appears
seamless to the customer. Some retailers have still to successfully unite the two
retailing methods - this is key to contemporary customer service. Factors such
as how much the medium challenges us mentally and our confidence to
navigate and understand the technology can turn us on or off the idea of
browsing online for products. A clear divide is appearing between the
occasional online shopper and the regular experienced user. Concerns about
how easy the system is to use have almost disappeared for online shopping
enthusiasts, but for occasional users e-tailing sites need to be easy to navigate.
Websites must be accessible and operate efficiently. The research found that the
expectation of getting a good financial deal is still a strong motivator to seek out
products online, but this is secondary to the importance but, many people steer
clear of electronic buying because of security worries. Only once online
retailers can reassure customers about fraud and privacy will the online
shopping curve really take off. Worries about the risk involved, in terms
of financial transaction and privacy remain. A move from „big brands‟
to „bargains‟ may only take place once.

Rajeev Kamineni (JAN 1999) in their study The World Wide Web
can changehuman behavior and human interactions to a very large extent. Web
based shopping behavior is one major example to point out the trends in this
direction. This study is of a very exploratory nature and it intends to establish
the differences between several web - based shoppers from different parts of the
world. Several critical factors associated with online shopping behavior will be
explored. A cross cultural data set will be collected and an illustrative
description of the shoppers will be provided. As a final step the cross cultural
differences between several shoppers will be explored. One question which will
run as a theme throughout the course of this paper is, “Will the traditional

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consumer behavior theory and research be altered by the advent of web based
shopping?”

There is a huge difference between a physical store and its electronic

counterpart. A help button on the home page of the web-shopping site replaces
the sales clerks‟ friendly advice and service. The familiar layout of the physical
store becomes a maze of pull down menus, product indices and search features.
Now more than ever, the promise of electronic commerce and online shopping
will depend to a great extent upon the interface and how people interact with the
computer. At the same time, there are some inherent difficulties in maintaining
an online inventory. In a regular store, the managers can pull out a product from
the shelf if they feel that it is not fast moving or has no demand. This is a
privilege that cannot be extended to the online retail store.

Anita desai (2003) in her sudy E-tailing is the practice of selling retail goods
on the internet. It is the abbreviated version of “electronic retailing” which
essentially constitutes business to consumer transaction. While the concept of
online retailing or e-tailing is no longer in its nascent stage; it continues to evolve,
as advanced e-commerce applications act as a potent catalyst in the development of
e-tailing.
The idea of online retailing or e-tailing which almost every net-savvy individual
is familiar with; offers a convenient mode of shopping online and the consumer
gets to choose from a diverse range of products and services as opposed to the
analogous physical shopping experience. Furthermore, online retailers or e-
tailers get to expose and sell their products to a global audience through their e-
stores.
The E-commerce industry plays a vital role in its growth and development. The
consumer or buyer is usually provided with detailed information and description
of the product which helps them make a judicious choice before making an
online purchase. For consumers who face a paucity of time or want a diverse
range of products to choose from, e-tailing proves to be an ideal option. Every
e-tailer wants his/her share of domain amidst the vast World Wide Web galaxy.
Due to the intense competitory quotient involved, every e-tailer out there wants

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to offer their customer/buyer a smooth and pleasant shopping experience.
Therefore, e-tailing is just not restricted to putting up products for sale for
consumers to buy. As consumers today are well-informed, it is understood that
they would make a well informed decision as well. This involves a fair amount
of product research, price comparison and checking the credibility of the e-
store.

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 CHAPTER-3
NEED, OBJECTIVES, SCOPE &
METHODOLOGY

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3.1 Need
The need of this research is to identify and get insight into what main factors the online
consumer takes into consideration when most he buy products on internet what affects their
shopping behavior, basic need of this research is to find out what are the main factors affect
the online consumer when considering and making a purchase over Internet.

3.2 Objective of the study

 To study the online shopping behavior of customers

 To study the factors influencing online shoppers and consumers
 To study the customer’s level of satisfaction with regard to online shopping
 To examine whether customers prefer online shopping to physical stores.

3.3 Scope of the Study and Methodology

3.3.1 Scope of the study

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.

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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.

3.3.2Research Methodology

Data for this study was collected by means of a Survey conducted in Chennai city. The
sample size was 200.The Questionnaire (shown in Annexure) was used Mainly to test the
model proposed for Attitude towards online shopping. The type of research was both
exploratory as well as Descriptive. Likert five point scales ranging from Strongly
Agree to strongly disagree was used as a basis of Questions. We took around eleven
different factors by studying the existing models of consumer attitudes that play an
important role in online purchase, and then proposed a model leading to online
shopping. This model was then tested in our research by the percentage analysis in ms-
excel.

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3.3.3Research 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.

3.3.4 Descriptive Research Method

We will conduct our research in order to collect primary data and reach the objective of the
Dissertation. We will also be discussing which different types of Methodologies that were
used. Since our research is of descriptive character our primary intention was to collect
primary data and analyze it. By doing so we found the factors Price, Trust and
Convenience. We then collected primary data through a survey. The main purpose of the
survey was to collect data about Online Consumer Behavior and the significance of the
established factors, Price, Trust, and Convenience In order to be able to find and establish
Online Consumer Segments, Consumer Traits and Online Behavior had to be identified..

3.4 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. We decided that the sample size should contain over 200
respondents and we collected answers from 200 respondents. The populations for this
research are professionals & students at Chennai city. The city was chosen on a
convenience basis. Convenience sampling involves using samples that are the easiest to
obtain and is continued until the sampling size that is need is reached.

We will attempt to collect as many respondents as possible but since we will be

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studying students & professionals we assume that there will be little variation in the
population making it more approved to generalize the response rates.

Type of Research:

Descriptive Research Sample

Size:-200.

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 CHAPTER- 4
DATA ANALYSIS

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 Q1. To know the age of the respondents?

Figure 1.1

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.

Table 1.1

Age %of respondents

15-20 31
20-25 48
25-30 14
30& above 7

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Q2 To know the gender of the respondent

Figure 2.2

INTERPRETATION

As our respondents are mostly from the students and professional in chennai city who uses
cards. I use to get more data from males as they were ready to give their experiences, it
this 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%.

Table 2.2

Gender Respondents
Male 86
Female 14

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 Q3 TO KNOW THE DEMOGRAPHY WHETER RESPONDENT LIVE IN
RURAL OR URBAN AREA

Figure 3.3

INTERPRETATION

The above diagram is showing the percentage of demography of respondents and what is
the percentage of respondents who lives in rural or urban region, the above diagram is
showing that 76% of the respondents are from urban areas and 24% of the respondents are
from rural area.

Table 3.3

Address Respondents

Rural 24
Urban 76

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Q4 TO KNOW THE OCCUPATION OF THE RESPONDENTS

Figure 4.4

INTERPRETATION

This graph help us to know the occupation of the respondents, this is to know that which
segment of people are buying more products on the internet whether they are the segment
of students government employees or professional, the above graph shows that the
segment of the students i.e. 90% of the students are using internet and use to buy online
products.

Table 4.4

Occupation No of respondents

Student 90
Professional 4
Govt.employee Nil
Self employed 5
Others 1

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 Q5. TO KNOW THE MONTHLY INCOME OF THE REPONDENTS?

Figure 5.5

INTERPRETATION

This above graph shows the percentage of monthly income of the different respondents,
and it show that less than 10000 income respondents have buyed more online products
because most of them are students and they use to buy music Cds, gadgets, laptops.

Table 5.5

Income %of respondents

Less than 10000 60
10000-20000 22
30000-40000 15
30000-40000 3
40000 & above 0

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 Q6 TO KNOW WHETHER RESPONDENTS HAVE THEIR OWN
INTERNET CONNECTION

Figure 6.6

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 own internet connection.

Table 6.6

Internet connection % respondents having internet

Connection
Yes 65
No 35

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Q7 TO KNOW WHAT MOTIVATES PEOPLE TO DO ONLINE SHOPPING

Figure 7.7

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.

Table 7.7

What motivates you to % of Respondents

Buy online
Easy payment 37
No hidden cost 5
Wide range of products 10
No travel to shop 47

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 Q8 TO KNOW WHETHER CONSUMERS ARE GETTING COMPETITIVE
PRICE

Figure8.8

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 says
that it provides competitive prices and only 27% people says no.

Table 8.8

Do you feel that the online marketers % respondents

Are providing competitive prices

Yes 67
No 27
Cant,say 6

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 Q9 What products do you buy online

Figure 9.9

INTERPRETATION

The above graphs gives result that most of time people use to buy books25% but the
margin with other things is very less as music Cds have percentage of 20 and mobile
23%So this graph shows us this useful data .

Table 9.9

What products you buy on internet % Respondents

Books 24
Music 25
t-shirts 12
Mobile 23
Laptop 20

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 Q10 DO YOU FEEL THAT ONLINE SHOPPING IS BETTER THAN SHOPPING
AT PHYSICAL STORE

Figure 10.1

INTERPRETATION

After analyzing the above graph shows that the people are in favour of that online shopping
is better than physical store, The percentage of people who says online shopping is better is
45% and the people who says it not good is 38 %. Still the percentage of people who says
yes is more than other who says no.

Table 10.1

Do you feel that online shopping is % Respondents

better than shopping at physical brick
mortar store
Yes 45
No 38
Cant ,say 12

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 Q11 WHICH OF THE FOLLOWING STORES HAVE YOU VISITED

Figure 11.1

INTERPRETATION

This graph shows that 35% people use to visit e-bay for online shopping,40% use to go at
amazon.com because % of people who buys books is more than any other products so
people mostly visits amazon.com, 16 % people do at yahoo shopping and for other people
use to visit at BestBuy and others.

Table 11.1

Which of the following stores have you % of Respondents

visited online
e-bay 35
Yahoo shopping 16
Amazon 40
Best buy 10
Others 4

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 Q12 WHAT FACTORS HELP YOU TO DECIDE WHICH SITE TO USE
FOR
ONLINE SHOPPING

Figure 12.1

INTERPRETATION

This diagram shows us what affects people to buy products on internet and it shows that
32% people came to know about shopping sites through online advertisements. And they
attracted towards it and start getting products from there. And 20% people decision is
affected by special offers by the offers and the discounts given by the sites.

Table 12.1

What factors help you to decide which % of respondents

site is use for online shopping
Search engine 18
Personal recomdations 10
Special offers on sites 20
Online advertising 32
TV advertising 17

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 Others 3
Q13 HOW YOU MAKE YOUR PAYMETS ON THE INTERNET

Figure 13.1

INTERPRETATION

This diagram shows that mostly people uses credit card to pay their payments 78% people
use to pay by credit/debit card and 5% through bank transfer and 15% through pay pal and
2 from paypal.

Table 13.1

How do you make your payments %of

online respondants
Credit card/ debit card 78
Bank transfer 5
Pay pal 15
Other 2

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 Q14 HAVE YOU FACE ANY PROBLEMS WHILE SHOPPING ONLINE

Figure 14.4

INTERPRETATION

This graph shows that whether people faces any problem while doing online shopping or
not and the result shows that 48% people says that they have faced problem while buying
online and 28% people says that they don’t face any problem and 14 says that we can’t say.

Table 14.4

Have you any problems while shopping % of

online respondents
Yes 48
No 28
cant say 14

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 CHAPTER 5
Findings Suggestions and Conclusion

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Findings

 Researcher 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.

 The three factors that were found show a significant in influencing online
shoppers and consumers. The general distribution showed that the price was the
primary factor for the entire sample population, and that second factor was trust
was closely followed by convenience.

 Researcher segments the respondents through different variables found that a

segment were mainly trust oriented and the respondents had a high positive attitude
towards purchasing books online.

 Other 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, chose to label them price easers.

 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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Suggestions

 As came to know after researching on this topic researcher 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.

 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.

 Transaction of money is very slow they have to make it fast so that customer dont
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 products.

 The online advertisement must made for products in other website must have
direct link for purchasing site.

 The retailers must make sure that their website is out of malwares and virus
attacks.

Following implications should be followed

 Discount price

 A transfer and reliable retailer

 Fast transactions

 Focus on customer satisfaction

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CONCLUSION

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 its 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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