i.

Introduction
Goods and Services Tax (GST) is a consumption tax imposed on the sale of goods and services.
In some countries it is also called Value Added Tax (VAT). It is a new tax instrument
introduced by the Malaysian government. The introduction of GST in Malaysia has called
many arguments from various parties including academics, professionals and the nation (would
become the taxpayers) on how GST affect goods prices-increase or decrease.
The International Monetary Fund (IMF) has long recommended the introduction of GST as a
way of raising the efficiency of the Malaysian tax system and ultimately increase the tax
collection. Malaysia plans to introduce a 4% goods and services tax in 2012, in a bid to
diversify national revenues (IRBM Annual Report 2008). The GST is intended to compensate
with the direct tax collection –personal and corporate taxes. The Malaysian government felt
the introduction ofGST would provide the government with the opportunity to reduce
corporate and individual income tax rates.

It is generally perceived that the introduction of GST of 4% replacing the Sales and Service
tax would decrease the prices of goods (i.e. foods, fruits etc.) (because the rate is lower than
Sales and Service tax) subject to the willingness of business entities to lower the price after
excluding the sales and service tax element on those particular goods. However, can we
imagine what happen to the prices of goods if the business entities (retailers) refused to expel
the sales and service tax but at the same time surcharged the customers with the GST? Past
experiences had shown that Malaysian retailers are very reluctant to decrease the prices even
though the Government has announced to do so, and definitely the price of such goods would
increase by 4% at least. Moreover, will the government impose a 4% GST while the cost of
collecting GST itself is expected to be merely to 3% - producing only 1% net tax collection
for the government (Singh, 2010). Other developed countries implemented VAT (GST) at
17.5% (United Kingdom); 19% (France, Belgium and Germany) (Tait, 1998).
The consumers are worrying of the significant price increases on basic needs.

That’s is why the reasons where consumers spending rose sharply during last few weeks
before the implementation of GST. Consumers took advantage of retail offers in anticipation
of the price increase after implementation of the tax. It was also reported that prices of retail
goods, and service had been increasing gradually, partly due to the weaker Ringgit.

MRA reports that declining profitability points to the likes e-commerce websites (e.g
LAZADA) with dynamic on-line discounts”, precise delivering systems, and even “
moneyback guarantee” . Five years ago the view was that technology could not replace the
feel and touch experience of the “brick and mortar “retails outlets.

1
 ii. Enviromental factors that effect Business

Business, now-a-days is vitally affected by the economic, social, legal, technological and
political factors. These factors collectively form business environment. Business environment,
as such, is the total of all external forces, which affect the organization and operations of
business. The environment of an organization has got internal, operational and general lives
managers must be aware of these three environmental levels and their relationship and
importance.

The term 'business environment implies those external forces, factors and institutions that are
beyond the control of individual business organizations and their management and affect the
business enterprise. It implies all external forces within which a business enterprise operates.
Business environment influence the functioning of the business system. Thus, business
environment may be defined as all those conditions and forces which are external to the
business and are beyond the individual business unit, but it operates within it. These forces are
customer, creditors, competitors, government, socio-cultural organizations, political
parties national and international organizations etc. some of those forces affect the business
directly which some others have indirect effect on the business.

Business environment as such are classified into the following three major categories, they are:

 Internal environment
 Operational environment
 General/external environment

Both internal and operational environment are the creation of the enterprise itself. The factors
of external or general environment are broad in scope and least controlled and influenced by
the management of the enterprises.

Economic dimensions of environment

Economic environment refers to the aggregate of the nature of economic system of the
country, the structural anatomy of the economy to economic policies of the government the
organization of the capital market, the nature of factor endowment, business cycles, the socio-
economic infrastructure etc. The successful businessman visualizes the external factors
affecting the business, anticipating the prospective market situations and makes suitable to
get the maximum with minimize cost

Economic factors that affect the business environments are as under:

 Government economic policies
 rate of interest set by the centeral bank of any country
 Per capita Income which has a huge impact on business environment by changing their
consumption behavior
 Privatization policy by the government
 instablity in the economy due to bad political conditions in the county affects the
business environment
 Dumping
 Customs duty structure

2
  Airline air freight charges
 Foreign investment in the country

Generally speaking an environment includes the air we breathe, the water we drink, the
available business, social and educational infrastructure in the locality , state and country etc.
In the context of business the environment refers to the sum of internal and external forces
operating on an organization. The managers must perforce recognize the elements, severity
and impact of these forces on the organization. They must identify, evaluate and react to the
forces triggered by the external environment.

More often than not, these forces are beyond the control of an organization and its managers.
Accordingly, the factors of the environment will need to be considered as inputs in the
planning and forecasting models developed by an organization.

It is quite possible that some large organizations themselves constitute a greater part of the
business environment e.g. Public Sector Oil Companies in Malaysia.
An organization operates within the larger framework of the external environment that shapes
opportunities and poses threats to the organization. The external environment is a set of
complex, rapidly changing and significant interacting institutions and forces that affect the
organization's ability to serve its customers. External forces are not controlled by an
organization, but they may be influenced or affected by that organization. It is necessary for
organizations to understand the environmental conditions because they interact with strategy
decisions. The external environment has a major impact on the determination of marketing
decisions. Successful organizations scan their external environment so that they can respond
profitably to unmet needs and trends in the targeted markets.
The Organization as a System

Internally, an organization can be viewed as a resource conversion machine that takes inputs
(labor, money, materials and equipment) from the external environment (i.e., the world
outside the boundaries of the organization), converts them into useful products, goods, and
services, and makes them available to customers as outputs. The organization must
continuously monitor and adapt to the environment if it is to survive and prosper.
Disturbances in the environment may spell profound threats or new opportunities. The
successful organization will identify, appraise, and respond to the various opportunities and
threats in its environment.

External Macro environment

The external macro environment consists of all the outside institutions and forces that have an
actual or potential interest or impact on the organization's ability to achieve its objectives:
competitive, economic, technological, political, legal, demographic, cultural, and ecosystem.
Though noncontrollable, these forces require a response in order to keep positive actions with
the targeted markets. An organization with an environmental management perspective takes
aggressive actions to affect the forces in its marketing environment rather than simply
watching and reacting to it.

1. Economic Environment
The economic environment consists of factors that affect consumer purchasing power and
spending patterns. Economic factors include business cycles, inflation, unemployment,
interest rates, and income. Changes in major economic variables have a significant impact on
the marketplace. For example, income affects consumer spending which affects sales for

3
organizations. According to Engel's Laws, as income rises, the percentage of income spent on
food decreases, while the percentage spent on housing remains constant.

2. Technological Environment
The technological environment refers to new technologies, which create new product and
market opportunities. Technological developments are the most manageable uncontrollable
force faced by marketers. Organizations need to be aware of new technologies in order to turn
these advances into opportunities and a competitive edge. Technology has a tremendous
effect on life-styles, consumption patterns, and the economy. Advances in technology can
start new industries, radically alter or destroy existing industries, and stimulate entirely
separate markets. The rapid rate at which technology changes has forced organizations to
quickly adapt in terms of how they develop, price, distribute, and promote their products.

3. Political and Legal Environment

Organizations must operate within a framework of governmental regulation and legislation.
Government relationships with organizations encompass subsidies, tariffs, import quotas, and
deregulation of industries.
The political environment includes governmental and special interest groups that influence
and limit various organizations and individuals in a given society. Organizations hire
lobbyists to influence legislation and run advocacy ads that state their point of view on public
issues. Special interest groups have grown in number and power over the last three decades,
putting more constraints on marketers. The public expects organizations to be ethical and
responsible. An example of response by marketers to special interests is green marketing, the
use of recyclable or biodegradable packing materials as part of marketing strategy.
The major purposes of business legislation include protection of companies from unfair
competition, protection of consumers from unfair business practices and protection of the
interests of society from unbridled business behavior. The legal environment becomes more
complicated as organizations expand globally and face governmental structures quite
different from those within the United States.

4. Demographic Environment
Demographics tell marketers who current and potential customers are; where they are; and
how many are likely to buy what the marketer is selling. Demography is the study of human
populations in terms of size, density, location, age, sex, race, occupation, and other statistics.
Changes in the demographic environment can result in significant opportunities and threats
presenting themselves to the organization. Major trends for marketers in the demographic
environment include worldwide explosive population growth; a changing age, ethnic and
educational mix; new types of households; and geographical shifts in population.

5. Social / Cultural Environment

Social/cultural forces are the most difficult uncontrollable variables to predict. It is important
for marketers to understand and appreciate the cultural values of the environment in which
they operate. The cultural environment is made up of forces that affect society's basic values,
perceptions, preferences, and behaviors. U.S. values and beliefs include equality,
achievement, youthfulness, efficiency, practicality, self-actualization, freedom,
humanitarianism, mastery over the environment, patriotism, individualism, religious and
moral orientation, progress, materialism, social interaction, conformity, courage, and
acceptance of responsibility. Changes in social/cultural environment affect customer
behavior, which affects sales of products. Trends in the cultural environment include
individuals changing their views of themselves, others, and the world around them and

4
movement toward self-fulfillment, immediate gratification, and secularism.
6. Ecosystem Environment
The ecosystem refers to natural systems and its resources that are needed as inputs by
marketers or that are affected by marketing activities. Green marketing or environmental
concern about the physical environment has intensified in recent years. To avoid shortages in
raw materials, organizations can use renewable resources (such as forests) and alternatives
(such as solar and wind energy) for nonrenewable resources (such as oil and coal).
Organizations can limit their energy usage by increasing efficiency. Goodwill can be built by
voluntarily engaging in pollution prevention activities and natural resource.

External Microenvironment
The external microenvironment consists of forces that are part of an organization's marketing
process but are external to the organization. These micro environmental forces include the
organization's market, its producer-suppliers, and its marketing intermediaries. While these
are external, the organization is capable of exerting more influence over these than forces in
the macro environment.

1. The Market
Organizations closely monitor their customer markets in order to adjust to changing tastes
and preferences. A market is people or organizations with wants to satisfy, money to spend,
and the willingness to spend it. Each target market has distinct needs, which need to be
monitored. It is imperative for an organization to know their customers, how to reach them
and when customers' needs change in order to adjust its marketing efforts accordingly. The
market is the focal point for all marketing decisions in an organization.

2. Suppliers
Suppliers are organizations and individuals that provide the resources needed to produce
goods and services. They are critical to an organization's marketing success and an important
link in its value delivery system.

3. Marketing Intermediaries
Like suppliers, marketing intermediaries are an important part of the system used to deliver
value to customers. Marketing intermediaries are independent organizations that aid in the
flow of products from the marketing organization to its markets. The intermediaries between
an organization and its markets constitute a channel of distribution. These include middlemen
(wholesalers and retailers who buy and resell merchandise). Physical distribution firms help
the organization to stock and move products from their points of origin to their destinations.
Warehouses store and protect the goods before they move to the next destination. Marketing
service agencies help the organization target and promote its products and include marketing
research firms, advertising agencies, and media firms. Financial intermediaries help finance
transactions and insure against risks and include banks, credit unions, and insurance
companies.

Importance of understanding the environment

The managers job cannot be accomplished in a vacuum within the organization. There are a
number of factors both internal as well as external which jointly affect managerial decision-
making. It is therefore very important for the manager to understand and evaluate the impact
of the business environment due to the following reasons :

5
a)Businesses may be doomed to be non starters due to restrictive business environment which
may take the form of rigid government laws ( no polluting industry can ever be located in
around 50 Km radius of the Taj) , state of competition ( Car manufacturing capacity presently
in the country is far in excess of demand) etc.

b)The present and future viability of an enterprise is impacted by the environment For eg no
TV manufacturer can be expected to survive by making only B&W television sets when
consumer preference has clearly shifted to colour television sets.

c)The cost of capital and the cost of borrowing - two key financial drivers of any enterprise
are impacted by the external environment . For eg the ability of a business to fund its
expansion plan by raising money from the stock markets depends on the prevalent public
mood towards investment in stock markets.

d)The availability of all key inputs like skilled labour , trained managers , raw materials ,
electricity , transportation , fuel etc are a factor of the business environment.

e)Increasing public awareness of the negative aspects of certain industries like hand woven
carpets ( use of child labour ) , pesticides (damage to environment in the form of chemical
residues in groundwater), plastic bags (choking of sewer lines) have resulted in the slow
decline of some industries.

f)Finally , the environment offers the opportunities for growth and profits . For eg when the
insurance and aviation industry was thrown open to the private sector , the new entrant could
easily build on the expectations of the public.

6
 iii. E-MARKETING STRATEGIES

(Relevant Examples on Amazon.com Report)

The use of the internet is increasing in the global market; so the number of people using
online stores to buy products or services has risen rapidly. Now almost every business is
connected to the internet whether their intention is to collect information regarding customers
buying behaviour for marketing purposes or use for selling products and services. The way of
selling goods online and the pattern of buying have changed. The purpose of this research is
to find what factors and characteristics have influenced and motivated customers to buy
online.

1. INTRODUCTION, BACKGROUND AND RATIONALE

The growing affluence, population size and changing life pattern of busy customers create high
demand for goods and services.In response to this pressureapart from traditional shopping,
virtual shopping has emerged and by now online covers all types of businesses, customers and
trade. In recent online news the Daily Mail(March 16, 2014) announced that Next fashion
retailer was able to earn significant profit due to online selling compared with its rival M&S
who later re-launched its own website containing video promotions. It also reported that Next
online store directory catalogue has attracted more customers to buy online changing their
shopping way and attitudes on shopping. It is necessary for marketers to know about the online
behaviour of customers to serve through the internet. According to Cambridge Online
Marketing Dictionary(n. d.) customer behaviour is the decisions of people about whether to
buy products or not and what factors persuade their decisions on buying. Customers’ attitude
and perception about e-store areinfluenced and changed. According to the graph below, users
of the internet worldwidemassively surged from 16 million to 3 billion within 18 years. This
means that at the same time the number of online buyers are also increasing which impacts
theconsumer buying behaviour.

Figure: 1

Source: History of Online Retail (open.edu, 2013)

7
Amazon.com is an online retail company founded in 1994 running businesses in mainly two
geographic segments: North America and other countries. Though the business was started
from selling books online, it has now become one of the largest e-stores in the world.
Amazon.com has developed its website in such a way that other third parties can also sell their
products through the Amazon.com, adding more ranges of products to Amazon.com. For the
easyaccess from all the internet connected devices, Amazon designed a website, mobile
application and disseminates its link to other web portals through which customers can easily
log on to Amazon.com. Availability of products’ information and testimonials, quality of
website and its excellent service has attracted 144 million active customers and 2 million active
sellers worldwide as taken from official Amzon.com website 2014 (Inside Amazon,
Amazon.com, n. d.).

The number of online users is growing. The graph below shows that the revenue of online retail
sales in Britain was the highest of all developed countries in 2011 and also forecast to be the
highest for 2016. In terms of time, cost and convenience for buying things, online shopping is
ahead of offline, but still there are customers who do not like to shop through the internet. Some
customers have positive point of view and others think online buying is just source of
entertainment and not suitable place to shop. These differences between customers buying
behaviour which are impacted by Amazon.com and its services are investigated in this study
using methods and techniques for the research and studying different literatures, journals,
books and articles.

Figure: 2

Source: TheEmporium Strikes Back (economist.com, 2013)

The number of population is growing at the same time the customers shopping through online
are also increasing. This growing trend of e-shopping has changed the buying behaviour of
customers. The graph below shows the results of a research on 100 online traders of individual
nationson the basis of share size and depicts the ranking of online retailsharesin which
UK’s2013was 12.1% and for 2014 assumed to be 13.5%is the highest among other most
developed countries. This means, online businesses in the UK are growing and so is the number
of customers buying from online stores.
Figure: 3
8
Source: Centre for Retail Research (retailresearch.org,n.d.)
There are factors and features of e-stores which influence and motivate customers. In contrast,
there are also different risks and issues which reduce customershopping online. Dickson (2000,
p.119) stated the unique capability of the internet, “We are not only starting to gain an
understanding of the potential strategic impact of its search and navigation capabilities on
global consumption and production. Within the near future, simple yet extraordinarily powerful
price-and-quality search engines and services are likely to have a significant impact on
consumer behaviour.” In fact, this statement seems to match with the current market figure
where customer buying online is increasing. According to Solomon et al. (2006, p.6),
“consumer behaviour is the study of the processes involved when individuals or groups select,
purchase, use or dispose of products, services, ideas or experiences to satisfy need and desires.”
Similarly Schiffman and Kanuk,(2007, p.3) defined consumer behaviour as “the behaviour that
consumers display in searching for, purchasing, using, evaluating and disposing of products
and services that they expect will satisfy their needs.” However the five steps of consumer
buying decision process have been identified (problem identification, looking for information,
assessing alternatives, buying and after purchase evaluation)and widely applied. This customer
buying decision is positively or negatively impacted bysituational, psychological and social
influences (Pride, Hughes and Kapoor, 2011, p.355).

Moon (2004) suggested that the abundant information available in the website increases the
more chance of customers searching for the products. Quick access, website design, more
customer friendly website structure and latest update have more potential to increase customers
shopping through the internet. Customer purchases were also determined by the product types
and classification, quality, price and the speed of the purchase, payment, and delivery process.
A study of Greek customers also found that customer’ characteristics determining online
buying behaviour depend upon and vary according to the categorisation of the products based
on types(Keisidou et al., 2011). Likewise Elia (2008-9) argued that designing factors and
features of the website not only gives a competitive advantage to the businesses, but also
increases the trust, commitment and loyalty of customers when they are fully satisfied from the
given services.
Shareef et al (2013) studied the factors of consumer online buying behaviour and found that if
e-commerce is able to fulfil the commitment on products, price, process, delivery, security,
policies of customers then there is formation of trust and enhancement of online shopping

9
behaviour. Additionally Priyadarshi, et al. (2010-11) found that if online retailers make the site
more accessible and easy to use will minimise problems whileshoppingonline. It was also
identified that whatever is promised regarding quality of products should be provided in order
to reduce increasing fraud schemes and decreasing the rate of online buying.
The major trends of e-business have helped customers to go online buying. Faster service, self
service, availability of more products choices and finally standing as integrated solutions in
terms of time and cost help to build customer loyalty (Kalakota and Robinson, 2001, p.38-43).
From empirical research Petrovic, (n.d.) found that theinternet helps customers in research to
get all the relevant information regarding quality and reviews to make an evaluation for the
buying decision. Online buying helped in saving time and cost. Supporting Petrovic finding,
the combined empirical research in UK and China on buying books (Zheng, 2006) suggested
that the information provided about products was the most crucial factor in online shopping.
Moreover it was also found that customers were interested on the status of the online brand.
Chen (2012) found that comments and recommendation in the website enhanced the shopping
experience which eventually helped to build positive attitudes in customers to buy more
through the internet. The similar reasons for the final results was also shown (Bashir, 2013) in
his research done in Pakistan on consumers buying electronics online that the most important
factors influencing online customers were time, price and convenience where testimonials
helping in the buying decision.
According to Zappala and Gray (2006, p.223), the number of the internet users were increasing,
however, the number of online shoppers was kept lower bysecurity concerns and the risks
associated with technology. A similar result was found (Chandra and Sinha, 2013) from 100
questionnaires surveyed in India that there were customers afraid of receiving poor quality
ofpromised items and unsatisfactory level ofprivacy.

In fact, privacy and security concerns had negative correlation with the frequency of online
shopping. Customers were discouraged by the online social interactions and want one to one
personal marketing (Swaminathan et al, n.d.). Whereas Katawetawaraks, et al. (2011)
summarisedthat obstructive elements as late delivery, unsafe payment, spam emails and
technology itself sometimes prevent shopping online. Furthermore, (Hasslinger, 2007 and
Nazir et al, 2012) also found the same negative aspects of online from the research done on
books buying online. These weakening factors were safety and security on payment and
privacy of personal details. They also mean that convenience and trust were valued less than
price.
It is found from the literature quoted above that there is at least one aspect of online buying
that attracts each customer. There are common factors which are not liked by most of the
customers. Customers have at least one factor which has influenced and motivated them to buy
from online storesotherwise most of the research and reports mentioned above in the literature
reviews have more than one factor to influence customer buying behaviour.

10
 1. RESEARCH QUESTION

The proposed title of this research is:

Howhas growing use of theinternet for online shopping impacted the UK consumers buying
behaviour with particular reference to buying from Amazon.com?
The purpose of this report is to show the impacts of online shopping on UK customers’ buying
behaviour. The aim is to find the usefulness of online buying for all customers. Likewise the
objective are: to critically evaluate the use ofthe internet for online shopping, analyse the
factors affecting customers' behaviour and identify the issues and outcomes ofonline shopping.
This research tries to explore whether online shopping is favourable for students and teachers
in the UK. Are there any potential and existing hurdles that causes problem to customers in
making buying decision? What influence and distract customers’ buying online? Nonetheless
the research may not be reliable because the survey was only done to very limited people in
specific area, but this gives a glimpse of an idea to marketer on making decision about the
behaviour of customers buying over the internet.
The other major questions included in the research questionnaire were the most frequently
bought goods or services which attracted customers to buy online. Timing and frequency of
purchases were also asked for the analysis of quantitative research purpose. Respondents were
asked whether they agree with the statement that “Amazon is a very good online company.”
This helped the researcher to explore the Amazon.com brand image.
Customers’ experiences, feelings and opinions were collected from both open and close-ended
questions in order to understand perception and attitudes on Amazon.com services and any
future improvements.

2. RESEARCH METHODOLOGY

This research is based on a deductive approach, according to Crowther and Lancaster (2008,
p.23) enables research to test and assess the validity of theories and hypothesis. These theories
or hypotheses can be formed in many ways such as ideas from previous experiences. Deductive
approach tries to bring valid conclusion providing support for prior theories but not proof
(Hammond and Wellington, 2013, pp.40-42).
The questionnaire for this research focuses on consumer online buying behaviour. This
research has 20 different questions out of which three questions were open-ended which tried
to get the subjective information from respondents. Here both methods of research were used
for data collection. The objective of the primary research was to find the influencing elements
of online buying and attitude of participated customers with their feedbacks. This method of
research includes questionnaires which gives the empirical data for the analysis.The objective
of secondary research was to find information and data related to online shopping from
different published sources as, journals, books, articles, different online sites and relevant data
presented on graphs and table withinformation.
Before the final draft of the questionnaires, a pilot test was conducted in a class among the
students and a subject teacher. After the pilot test, the final questionnaires were designed and

11
distributed to all among the students, teachers and college staff during a seminar which was
held in college by level 7 in the previous semester 2013. Participants totalled 40. The data and
information collected from the surveyed questionnaires were used infurther writing the
assignment.
Moreover this research used the discipline of research methodology that is mixed method of
research. When researcher used number of method for studying research then it is termed as
mixed-methods review where quantitative and qualitative data collection approaches are
employed together (Courtney and McCutcheon, 2010, p.35). The two research tool comes
under mixed research are qualitative and quantitative research. So in this research, for the
qualitative research open-ended questions were asked and for the quantitative research closed-
ended questions were asked.
This research includes tables and graphical analysis topresent number such as calculation of
age and occupation which is useful for quantitative purpose. In order to get this numerical data
a Likert scale style of closed-ended questions were used.
Questions designed to get qualitative information from customers such as their perception,
preference, feelings, opinions, attitudes, influential factors and experiences about the online
shopping wereasked. Three open-ended questions asked in the questionnairehelp to get the
purpose of qualitative research. (Wild and Diggines, 2009, p.85) “Qualitative research is the
collection, analysis and interpretation of data that cannot be meaningfully quantified, that is,
summarised in the form of numbers.”
McMurray (2004, p. 263) writes that triangulation uses anumber of techniques and methods of
data collection on the same particular issue with assessments from different perspectivewhich
adds in-depth linksof knowledge to the study. The results gained from the different collections
were assessed with various tools and framework to meet the standard and highly qualified. So
for this reason, researcher in this research used different sources of research and research
methodology.A limited form of triangulation was used through the inclusion of open-ended
questions which allowed respondents to express their own opinion rather than simply
responding on a Likert scale to pre-determined questions.
Validity becomes the crucial factor of a research to be valid. In qualitative and quantitative
research validity is a basic requirement (Cohen et al., 2011, p.179). The findings of this research
is more based on quantitative and possesses some aspects of qualitative researchas well. In
order to obtain the valid qualitative research, researcher tries to avoid the bias of respondents
making them clear of the online buying store Amazon.com and research purpose before the
starting of a seminar. The researcher has also gone through in-depth study to get a better
understanding of online buying. This helped the researcher in assessing the feedbacks of
respondents and the research itself. For the quantitative research, all the sampled 40
respondents completed questionnaires were properly countedand studied to check that the
findings and analysis of the replied questionnaires were valid.

12
 3. ANALYSIS AND FINDINGS

Note:Appendices for the down below table and graph are given in the appendix section
following with the figure’s heading respectively. Please see the appendix for the further
information of these table and graph.
Demographic factors in research play significant role in determining the results of the chosen
marketing topic. Some of these elements are given in figure 4, this consists of age and
occupation of students, teachers and household in which the age group 25-34 were the largest
Amazon.com shoppers and people from age 35-49 found to shop less online. This age group
buyless online where security for payment was a primary reason along with lack of usage of
the online store.
The fact in figure 4 showed that 72% of students were familiar with the Amazon.com services.
Although the rest of the respondents still thought that Amazon.com can be used for online
shopping. The results depict that the positive perception of Amazon.com seems to be growing
amongstrespondents because the smaller group less familiar with Amazon.com still thought
that online store is easy for shopping due to wide ranges of items easily available in
Amazon.com.

Figure: 4 (Appendix A)

Factors Categories Count Total Percentage

Age 18-24 13 40 32.5
25-34 22 55
35-49 4 10
50-Above 1 2.5
Occupation Student 29 40 72.5
Teacher 4 10
Household 3 7.5
Other 4 10

In the figure 5, the most popular purchasing on Amazon.com was books with 40%. The second
largest group of purchasing was electronics items and related accessories. There were lots of
other items bought through Amazon.com. Respondents also mentioned that the same products
were sold at higher prices in offline storesas well as sometimes in other online storeslike e-bay.
The best price is one of the top factors making customers loyal to Amazon.com.
Figure: 5 (Appendix B)

13
 The Most Bought Product(s)

Books
Other(s)

Results in figure 6 below show that the information given in Amazon.com was effective and
beneficial to customers. Satisfaction from the purchased products was high as customers were
influenced from the given reviews and recommendation in the website. However there were
some respondents who were not contented with the products they bought, though respondents
thought that Amazon.com is good place for searching goods and information.

Figure: 6 (Appendix C)
Experience of Customers on Buying from Amazon.com

18
16
14
12 Products information
10 regarding all the
8 available products?
6 Level of satisfaction
4 from the bought
2 products or services
0

From the figure 7, respondents were happy with the services and commitment promised, but
there were some respondents who do not like and trust other third parties’advertisement in
Amazon.com website. Nonethless there were respondents who thought that third parties’
involvement in selling through Amazon.com gives more choice of products and services.
Figure: 7 (Appendix D)
Perception of Customers on Amazon.com

14
 30

20 "Amazon is a Very Good

Online Company"
10
Third parties pop-up
0 advertisement is
acceptable

Easy and short buying process and system of Amazon.com have motivated customers to buy
online. In this research, the figure 8 shows that Amazon.com has influenced customers to
buyonline, however, the majority of respondents’ experience on using website for shopping
was less convenient.

Figure: 8 (Appendix E)
Attitude of Customers on Amazon.com

Strongly Agree

Agree
Online made buying
Indifferent process quick and effective
Online buying is
Disagree convenient

Strongly Disagree

0 10 20

Efficient services on Amazon.com has increased the number of customers shopping online.
They also mentioned that due to better and easy delivery process and policy of refunding helps
to increase the amount of spending on online products. So the figure 9 shows the results of this
research on these two areas that fast and reliable delivery can increase the purchasing trend of
online customers.
Figure: 9 (Appendix F)
Belief of Customers on Amazon.com

15
 20
15
10
5 Buying at any time is
0 successful
Buying at any time is…
Delivery is on time

It is not always that customers will have good experiences and learning with the internet
shopping, so respondents had also bad feelings and disappointment. Here about 23% never
bought from the third parties when sold through Amazon website. Respondents thought that
these third parties were not trustworthy. Nonetheless 20% had never bought through the
internet because they were concern about insecure and unsafe transaction. (Please see figure
10)
Figure: 10 (Appendix G)
How many customers are aware of internet shopping?

Modules Never Occasionally Sometimes Frequently Quite Often

Item(s) bought from third
parties sold from Amazon.com 9 12 10 3 6
Number of times bought over
the internet 8 10 14 5 3

In this research,38% were influenced by convenient and accessible route to the search products
where quick services, easy and catchy website design encouraged customers to shop from
Amazon.com (please see figure 11). There were various factors to bring customers to shop but
more than 60% used Amzon.com because they already preferred to shop online. Family and
friends played a less significant role where users themselves surf the internet and find goods
and services (please see figure 12). Quality of website design also determined the buying. They
feel happy and praise the retailer highly when they find the services easy and faster (Dabholkar,
1996). Similarly Zhang and von Dran (2001) studies show that website design quality can play
a determinant factor (‘hygiene and motivator’) for the satisfaction and dissatisfaction of online
buying.
Figure: 11 (Appendix H)
Which area of online store influence customers to shop online?

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 16
14
12
10
8
6
4
2
0
Website Design Convenient Prompt Other(s)
Service
What influence customers to go for online buying?

Figure: 12 (Appendix I)
What brings customers to shop on Amazon.com?

25
20
15
10
5
0
Internet Friend Family Other(s)
What brings customer to shop online (Amazon)?

Open-ended Questions
From the open-ended questions, a large number of respondents were assured about security on
payments and individual privacy. This means respondents’perception on Amazon.com was
gaining positive impact. On the other hand, there were a few people who did not feel secure
and thought that personal information would be passed on to the third parties, they said, “a bit
risky” and “not secure enough” that they“did not feel confident”. Results from recommendation
to others showed that nearly the majority of would be pleased to tell family and friends to buy
from Amazon.com. They also added that referring might only happen if products are
exclusively made available and sold from Amazon’s website.
From the opinions, comments and feedbacks, the number of shoppers who buy at any or leisure
time and at night were large. A large number of customers were buying at night where all other
physical stores were closed and some products would not be available in offline-stores.

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 iv. Our Marketing Startegy for Online Business
Marketing an online business is, in some ways, similar to marketing any other business because
you must understand your customers and what the customer is looking for that your online
business can provide. In addition, you must develop an appreciation for the best ways to reach
out to that customer and “speak his or her language.” Successful online businesses tend to
utilize a variety of marketing strategies, each of which makes the most of virtual technology
while also balancing the technology with a traditional focus on the customer’s needs.

Website

A website is a must-have for any online business, particularly if the online business has no
brick-and-mortar storefront. When this is the case, the website becomes the location of the
business, and the owner must invest in a site that is user friendly and welcoming to
customers. Savvy business owners hire web design services to create a website to feature the
company, its message effectively and provide easy-to-locate customer service options for
those visiting the site. Any business website should provide an intuitive “Contact Us” link
and should have search engine optimization, so that potential customers find the site quickly
when using search engines, such as Google or Yahoo!.
Social Networking

Social networking is increasingly popular with business for several reasons, the chief of
which might be cost and ease of use. Most social networking sites–such as Wordpress,
Blogger, Facebook, Twitter, YouTube–offer free accounts for getting started. In addition,
social networking sites make it easy to post immediate messages about business activities,
including special sales, markdowns and new products.

Online Advertising
Advertising is a must-do for any business, but choosing the best type of advertising can be
challenging. For an online business with a large budget, advertising with services such as
Yahoo! can be a great way to ensure that the company name reaches as many people as
possible. For others, Google AdWords provides pay-per-click ads on search pages and allows
businesses to pay as little or as much for the ads as they can afford. In addition, businesses can
opt for online advertisements in relevant magazines or on relevant websites or discussion
forums. This type of advertising can be more costly--depending on the site--but it does
guarantee that the right audience sees the ads.

Podcasts
Podcasting provides an option similar to social networking but with an extra texture of human
contact: the sound of a voice providing information. Creating a podcast is as simple as using a
microphone and digital recorder and uploading the message(s) online with editing software.
The recorded message is available for customers to play whenever they want. Depending on

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the type of business you offer–and particularly those whose business is focused more on
information or includes instructional opportunities–the element of voice can be an excellent
way to reach out to customers.

Email Newsletters
Email newsletters are the paper-free option of the 21st century, enabling businesses to stay in
contact with customers or even potential customers, by letting them know about company
news, promotional advertising or other company events. An email newsletter should be
professional in appearance, including a company template or letterhead with a predictable
format and it should be shorter than a standard newsletter. The average user is not going to
want to sit and read a long email, but a quick newsletter–sent out weekly or every other week–
that provides an overview of relevant information can be a great marketing strategy.

INTERNET BUSINESS & MODEL

Advertising Revenue

In the advertising model, you create content and companies pay you to place advertisements
on your website. The advertisements are typically banner advertisements, but companies may
also pay for link advertisements or reviews as well. You can ask companies to pay on a
yearly or monthly basis.
Product Sales

If you have a physical product that your company produces, you can increase your sales by
offering a website where customers can purchase online. This allows you to sell your
products all over the world instead of in your local area.

Affiliate Marketing

Affiliate marketing is similar to the ad-based business model. However, instead of seeking
you out, you choose companies that you think match your readers' needs. The company does
not pay you to display the ad--it pays you when someone clicks on your ad and makes a
purchase. You receive a percentage of the sale.
Information Sales

Many people come to the Internet looking for information and if you have the information
that people want, they may pay you for that. You can create an ebook that explains the topic
in detail, then sell it to those who need the information.
Service Sales

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You can also use the Internet to offer services to businesses or individuals. For example, you
could offer legal or business consulting, computer programming, website design or secretarial
skills.
Membership Website

In a membership website, individuals pay you a monthly fee to access the information that
you provide. You set it up as you would a regular website except that you make it password
protected so that only certain people can view the content.

Impact on Our New Online Business Strategies

Consumers Search Online

Today's consumers turn to the Internet to find local businesses, research product information
and compare services of different companies. Businesses that operate robust search engine-
optimized websites appear at the top of search results when online users key in specific
keywords or phrases. Both business-to-business and business-to-customer ventures benefit
from marketing strategies that boost search engine rankings. Online marketing isn't just for
online businesses but also boosts sales for bricks-and-mortar establishments. As more people
access the Internet through smartphones, mobile-optimized websites increase walk-in local
traffic.
Establish Authority

A business website is the central component of e-marketing. Large and small businesses
establish solid reputations in their fields with attractive, useful and easy-to-navigate websites.
Important features include an "About Us" page as well as information on products, services,
company news, activities and location or contact details. Articles on relevant subject matter
and a regularly updated blog are excellent marketing tools to establish authority and
expertise.
Inbound Marketing

E-marketing is an effective tool for businesses because it draws prequalified sales leads.
When someone arrives at your site or finds your Facebook business page, he has keyed in a
word or phrase indicating he is searching for something your site offers. Analyzing this
inbound website traffic provides valuable data about your target market and gives you the
chance to collect email addresses to increase your database of sales leads. Popular inbound
marketing techniques include offering a coupon, free report or newsletter by email, giving
businesses a way to contact potential customers.

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Great Relationship Building

Relationship building is a marketing strategy built on establishing a long-term and mutually

beneficial relationship between businesses and customers. Using e-marketing through social
media allows ongoing two-way communication. Google+, LinkedIn, Facebook, Twitter,
YouTube and Pinterest are social media platforms that businesses use to build relationships
and communities around their brands. Social media allows businesses of all sizes to address
public relations and customer service issues quickly, announce time-limited offers and
promotions, and give customers a chance to share their product-related stories and images.
Big businesses are changing marketing strategies to include e-marketing and relationship-
building techniques. CNN reports that as of early 2012, Nike reduced its print and media
advertising by 40 percent to focus on digital interaction and personalized communication
with customers online.

CONCLUSION

The growing affluence, population size and changing life pattern of busy customers create high
demand for goods and services.In response to this pressure apart from traditional shopping,
virtual shopping has emerged and by now online covers all types of businesses, customers and
trade. In recent that Next fashion retailer was able to earn significant profit due to online selling
compared with its rival M&S who later re-launched its own website containing video
promotions. It also reported that Next online store directory catalogue has attracted more
customers to buy online changing their shopping way and attitudes on shopping. It is necessary
for marketers to know about the online behaviour of customers to serve through the internet.
According to Cambridge Online Marketing Dictionary customer behaviour is the decisions of
people about whether to buy products or not and what factors persuade their decisions on
buying. Customers’ attitude and perception about e-store areinfluenced and changed.
According to the graph below, users of the internet worldwidemassively surged from 16 million
to 3 billion within 18 years. This means that at the same time the number of online buyers are
also increasing which impacts theconsumer buying behaviour.

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