Online Shopping consumer behaviour

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BEHAVIOUR OF ONLINE AND NON - ONLINE SHOPPERS TABLE OF CONTENTS 1. Introduction.....3 2. Online shoppers: products and services...4 3. Reasons for not shopping online: non-online shoppers...4 4. Demographic profile: Online shoppers..5 5. Demographic profile: Non-online shoppers.....16 6. Psychographic profiles: Online shoppers.....25 7. Psychographic profiles: Non-online shoppers... .31 8. Promotional strategy: Online shoppers....37 9. Recommendations based on the study..39 10. References 41 11. List of Figures Demographic profile of Online shoppers.5 Figure.1 Products and services mostly shopped by online shoppers...4 Figure.2 Influence of Age and Gender on online shopping5 Figure.3 Influence of Marital status and Household size on online shopping.....9 Figure.4 Influence of Education and Occupation on online shopping..10 Figure.5 Influence of Designation and Income on online shopping .12 Figure.6 Effect of Computer ownership and Years of using Internet on online shopping.14 Figure.7 Influence of internet usage on online shopping ..15 Demographic profile of Non-Online shoppers..16 Figure.8 Influence of Age and Gender on online shopping..17 Figure.9 Influence of Marital status and Household size on online shopping..19 Figure.10 Influence of Education and Occupation on online shopping20 Figure.11 Influence of Designation on online shopping....20 Figure.12 Influence of Income on online shopping...21 Figure.13 Influence of Computer ownership and Years of internet usage on online shopping23 Figure.14 Influence of Internet usage and number of online Non-shoppers24 Psychographic profile of Online shoppers....24 1

BEHAVIOUR OF ONLINE AND NON - ONLINE SHOPPERS Figure.15 Influence of Risk and Innovation on online shopping..25 Figure.16 Influence of Brand and Price consciousness on online shopping.27 Figure.17 Influence of Convenience and Variety seeking on online shopping.29 Figure.18 Effect of Impulse buying on online shopping...31 Psychographic profile of Online Non-shoppers32 Figure.19 Influence of Risk and Innovation on online shopping..32 Figure.20 Influence of Brand and Price consciousness on online shopping.33 Figure.21 Effect of Convenience and Variety seeking on online shopping..35 Figure.22 Effect of Impulse buying on online shopping...36 Promotional Strategy for Online shoppers...37 Figure.23 Influence of Advertisement and Attitude on online shopping.39 List of Annexure 1. Attached copies of questionnaires filled by online shoppers 2. Attached copies of questionnaires filled by online non-shoppers Introduction A random sample was undertaken to ascertain the behavior of online and non-online shoppers. The sampling method applied guarantees equal chance of selection for each observation in a population. The assumption is that the population is relatively homogeneous with respect to the random variable under study, Trevor Wegner (1999, pg 172). This research combines aspects of both formative and summative evaluation (Fox, Bartholomae, and Lee 2005) and relies on data from quantitative and qualitative methods. Quantitative data from General Questionnaire section create the bones of the story to be told from participants' background and experiences in this research, while qualitative data from Specific Questionnaire section help to put flesh on the bones. Hypothesis testing and estimation are the two key elements of inferential statistics that will be applied in analyzing sample data. Questionnaires were randomly distributed to prospective respondents in Harare, Zimbabwe where many people of diverse demographic features are domicile. We recognize that the sample population may not be representative of the Online shopping population since we confined our study to an urban 2

BEHAVIOUR OF ONLINE AND NON - ONLINE SHOPPERS set up, geographical location. We are cognizant of the technology gap between rural and urban areas with more information, communication and technology (ICT) infrastructure confined to the major cities and towns. Despite this issue, we maintain that the sample is of interest from a research perspective as results will be salvaged by fair proportions of rural to urban migration, urbanization. The study will hence produce useful information that may reflect the behavior of both online and non-online shoppers. 1. Products and services shopped by Online shoppers:Product 1 2 3 4 5 6 7 8 9 10 Clothing Cars and car parts Furniture Cosmetics Groceries Books CDs Music, Movies Electrical gadgets Medicines-Drugs Cell phones Service Hotel bookings News-business, sport Tutorials Music downloads Banking-wire transfers E-books Entertainment-golf, chess Online phone book Utility bill payments Health and Beauty therapy

Figure1. Products and services shopped by On-line shoppers 2. Common reasons given by non-online shoppers for not shopping online: No access to internet Perception of high costs associated with online shopping Risk aversion emanating from fear of Cyber fraud/terrorism Prospective customers lack awareness on availability of online shopping facility Intermittent internet connectivity challenges faced by internet service providers discourage online shopping

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BEHAVIOUR OF ONLINE AND NON - ONLINE SHOPPERS Failure by local banks to provide VISA and Master cards making online shopping not practical. Inadequate Information Communication and Technology (ICT) infrastructure suppressing online shopping desire 3. DEMOGRAPHIC PROFILE ONLINE SHOPPERS Demographics exude the different characteristics of shoppers on the market producing essential information for formulation of an appropriate marketing mix. The target market which comprises of homogenous clusters of similar tastes and preferences will undoubtedly influence the type of strategy to implement. Marketing objectives of profit maximization, customer satisfaction and increased market share will be achieved once we understand customer expectations and manage to deliver goods and services. Responses from the sample were recorded accordingly on Questionnaires before any data analysis and derivation of information. The following are the noted mutually exclusive demographic profiles of Online and Non-Online shoppers:(a) Online ShoppersInfluence Of Gender On On-line Shopping Influence Of Age On On-line Shopping 13 12 11 10 9 8 7 6 5 4 3 2 1 0

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Number Of People

5

3 5%

6 5%

1 023-32 33-39 39-44 45-54 Male Female

Age (years)

Figure 2: Influence of Age and Gender on On-line shopping

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BEHAVIOUR OF ONLINE AND NON - ONLINE SHOPPERS Analysis: A sample of 34 people who were interviewed indicated that 65% (11out of 17) of the seventeen online shoppers were Generation Y. Generation Y is a grouping of people of ages that vary from 14-32 years, represented by 11 of respondents interviewed as indicated in Fig 2 above. It is composed of people who are innovative, celebrate diversity, rewrite the rules, assume technology and reflect optimism. The grouping is also more-skilled and multi-tasking, agile in making decisions, evaluating risks and managing dilemmas, flexible and persistent in the face of change, highly skilled in social networking and team activities. Spiro, (2006) referred to this grouping as comprised of optimists, educated, having collaborative abilities, open-mindedness drive .The group was referred to as "the first generation of digital natives" by Sarbu (2008) . Studies by (Club It&C, Anon., 2008a) revealed that there was a heavy influence and rising interest by Generation Y towards new services and technologies, and greater media flexibility. On the other hand Generation X (33-44years) is pragmatic, individualistic and rejects rules. They represent 29% (5 out of 17) of the seventeen online shoppers. Baby boomers (45-54years) constitute 6% (1 out of 17) of the seventeen online shoppers. They are idealistic, conform to rules and consider diversity as a cause. The work of Grewal, Levy (2010,p123) concluded that there are five distinct age groups in a population vis--vis Tweens, Generation Y, Generation X, Baby boomers and Seniors. Conclusion: The survey under review showed that Generation Y, Generation X and Baby Boomers actively take part in online shopping. Age is a very important determinant of online shopping as perceptions, tastes and preferences are intrinsic at particular stages of human growth and development. Jasper and Lan (1992) found that as age increases, tendency to catalog shop also increases. Generation Y is composed of people who are technology savvy and risk takers. As marketers redefine their marketing mix and strategies, emphasis should be particularly focused on this grouping since they rewrite the rules, assume technology and reflect optimism. Results obtained reflect that basically online shoppers are younger in conformity with research work of (Zhang, Prybutok, and Strutton 2007). Allred, Smith, and Swinyard 2006 also confided that online shoppers are younger, possess greater wealth, are better educated, and spend considerably more time on the Internet. 5

BEHAVIOUR OF ONLINE AND NON - ONLINE SHOPPERS Since societies are digitized with constant quantum leaps in technology, there is need to create awareness among all age groups on the advantages of technology initiatives. Gamble et al., 2007 concluded that organizations should adapt their strategies accordingly and acknowledge their online consumers' constantly shifting needs and expectations. Baby boomers and Seniors should also be targeted in marketing efforts although younger cohorts are the "computer generations" and will be more likely to purchase online than older consumers. Online shoppers are younger, possess greater wealth, are better educated, and spend considerably more time on the Internet (Allred, Smith, and Swinyard 2006; Swinyard and Smith 2003). A recent study by Nicoleta-Dorina Racolta-Paina (2010, pg. 85) indicated the products tha