Consumer Buying Behavior

THAKUR INSTITUTE OF MANAGEMENT STUDIES & RESEARCH

A Study on Impact of Online Advertising on consumer buying behavior for mobile phone

Presented To: Prof. Yesha Mehta

Batch: PGDM (Marketing) 2014-16

Submitted By:

TEAM MEMBERS ROLL NO

Vaibhav Patil 65

Mihir Shah 80

Roshan Shanbhag 85

Akruti Shewani 93

Amit Soni 99

ACKNOWLEDGEMENT

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Consumer Buying Behavior

We wish to express our sincere gratitude to Prof. Yesha Mehta for providing us to do project work on “A Study on Impact of Online Advertising on consumer buying behavior for mobile phone” and sincerely thanks for their guidance and encouragement in carrying out this project work.

We also wish to express our gratitude to the other faculty members who rendered their help during the period of our project work. And we like to extend a sincere thanks to the IT Laboratory staff for their assistance and support and providing updated software and running through whenever is needed.

Last but not the least; we thank Dr. Subhash Kulkarni, director of Thakur Institute of Management Studies and Research, for giving us the opportunity to embark upon this project.

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Consumer Buying Behavior

Executive Summary

The purpose of this research is to identify the factors affecting the buying behavior of consumers

towards buying mobile phones online and to study what factors they consider before buying

mobile phones online. In order to interpret the objectives, online survey was conducted and data

collected by primary sources. It was found that the young Indian consumers are very much tilted

towards buying mobile phones online. They feel that buying mobile phones online has several

benefits and it also acts as a one stop shop when compared to retail stores. Their preference is more

towards the choice of availability of colors. Flipkart being the most preferred site has to constantly

keep up on their reputation but Amazon.com has to work upon to get the potential consumer which

was seen to be 46%.

Limitation of the study:

The sample size taken is less and limited to familiarity behavior not random respondents. Sample size doesn’t exactly represent the population. The study is restricted only to online questionnaire The information of the study is on the basis of the information provided by the respondents. Lack of trained interviewer to clarify and probe can possibly lead to less reliable data.

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Consumer Buying Behavior

Table of Content

Particulars

1. Background of study

1.1 Introduction

1.2 Objectives

1.3 Literature Review

2. Methodology

2.1 Research Design

2.2 Sample Size

2.3 Data Collection

2.4 Data Analysis

3. Conclusion

4. Appendices

5. References

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INTRODUCTION

The introduction and implementation of internet technologies has created new market for manufacturers and service providers and also has provided new arena for innovative marketing strategies by the professionals. There are various reasons of shifting the customers buying patterns towards online retail shops. The facility of comparing your product with competitive products on the basis of price, color, size and quality is one of the biggest benefits of online shopping. Moreover the product remains at its place even you purchase it. It looks hilarious but this is also one of the most significant reasons reported by the online shoppers. The other popular names for online shopping are virtual store, e-shop, web-shop, internet shop, web-store and online storefront etc. These days Mobile commerce or m-commerce is also one of the popular means of shopping. The facilities of various coupon and discount scheme are also fascinating the customers in online shopping.

In our time, internet is acknowledged as noteworthy valuable communication channel taxing with the traditional ones, such as walkie-talkie, magazines, and small screen. From the past few years, on-line shopping is the prevalent way of doing dealings in the field of E-Business and is unquestionably going to be the future of shopping in the human race. The increasing consumer base, principally of youths, is playing a significant role in the online shopping. Through this means, the shopper can buy the product from wherever he wants. Because of wide communication network e-commerce has become the new mediator between the companies/manufacturers and their customers. The growth rate of India’s e-commerce industry is fascinating. It was reported as 88% in 2013 which is a clear contrast picture of the slower economic growth of India. The rising inflation rate in recent years has not slipped away the performance of online shopping industry in India. If one tries to identify the cause of this growth rate then it will not take many efforts to find the answer. The more innovative ways of online payment and increasing internet penetration has given a paradigm shift and push to this industry. The increase of internet technology in India has colossal potential. It will trim down the cost of product and service delivery and lengthen geographical boundaries in bringing buyers and sellers together. The boost in use of internet by the customers in younger age bracket in India has provided a promising outlook for online retailers. The majority of the companies are operating their on-line portals to put up for sale (of both products & services), to shrink marketing costs, and subsequently plummeting the prices of their products and services to continue their position in the future market.

Earlier the Indian customers were more attracted towards electronic gadgets and mobile phones for online shopping but now the products indicative of lifestyle, viz., watches, apparels, perfumes, beauty products are also in high demand through the medium of online shopping. The market is also developing for books, jewellery, home appliances and kitchen appliances etc. The following

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Consumer Buying Behavior

facts can help the academicians and researchers to understand the size and performance of Indian e-commerce industry.

• In 2013, the size of the market was $ 16 billion which was $ 8.5 billion in 2012.

• The growth rate in metro cities of India is expected to be much higher than the other cities of the country.

• The e-commerce industry is expected to be of $56 billion by 2023. But contradict to it, another forecast supported by IANS, the e-commerce market is expected to grow by $ 50-70 billion by 2020.

Companies are using the internet to put across and commune the information. Simultaneously it helps the companies to give an idea about their products and instantly getting the feedback of customer’s fulfillment to get stimulated turnover for future. In India the growth of the e-commerce industry is tremendous. Considering the latest updates from IBN 7, the number of on line shopping have crossed 600 in the year 2013 which was counted as only 100 in 2012.

If the Internet is anything to go by, India's technological and economic growth has moved into the top gear.

With more India's online shopping registering a phenomenal 100 per cent annual growth, many retail chains and consumer durable companies are joining the Web bandwagon to tap the e-shopping market.

The online shopping industry in India is fast catching on, not just in the larger metros but also in the smaller cities. At present the market is estimated at Rs.46, 000 crore and is growing at 100 per cent per year. According to Google, India has more than 100 million Internet users, out of which around half opt for online purchases and the number is growing every year. With such a large market size, companies, right from retail shops to consumer goods, are entering the Web space to attract potential customers.

Even traditional retailers like Shoppers Stop, Westside and Pantaloons are looking at the online shopping space for growth.

According to the Associated Chambers of Commerce and Industry of India (ASSOCHAM), the size of the online retail industry is expected to touch Rs.7, 000 crore by 2016, up from Rs.2, 000 crore now, at an annual growth rate of 35 per cent.

According to industry leaders, portals offering daily deals and discount offers with good delivery services attract the largest number of online shoppers.

The companies that provide daily deals or discount offers are doing brisk business. People are looking for value shopping that saves their money as well as time. The company's Synergy discount cards offer 15-90 per cent discounts on deals from about 2,000 dining, movie and retail

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Consumer Buying Behavior

chains in various cities - for movie tickets, dining, and hospital bills or for shopping for local brands.

The customer behavior is changing dramatically. People are not only using the Web to book air tickets and movie tickets but also do not hesitate in placing orders for mobiles, laptops and other consumer electronics and home appliances.

Seeing this bold consumer behavior, more companies are collaborating with such daily deal and discount sites. All the top consumer electronics and home appliances companies are listed with different ecommerce sites such as amazon.com and flipkart. In the growing competition space companies with good delivery services score points over others.

Keeping in mind these growing potential, not just large brands but even general retail chains are upgrading their sites for ecommerce, making it more convenient for customers to place online purchase orders.

According to eBay, Indian online shoppers remain brand savvy, even when they are shopping online. The eBay India Census has found that brands such as Sony, Nokia, Samsung, Apple and Reebok continue to top buyers' charts.

Category-wise lifestyle products, such as cosmetics, jewellery, watches, fashion products and fitness equipment contribute over 45 per cent to eBay's sales in India.

Leading Online Portals to buy mobile phones in India:

Flipkart.com

Amazon.com

Snapdeal.com

Junglee.com

E-Bay

Company’s own websites (Samsung.co.in, Mi.com and so on)

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OBJECTIVES

Research Objective:

1. To identify the factors affecting the online purchase behavior of the consumers.2. To study the consumers attitude and behavior towards mobile phone.3. To study the consumer perceptions about online buying of mobile phone.

REVIEW OF LITERATURE

Compared to physical stores online stores have many advantages: They are convenient and time saving and no more travelling and waiting in lines is needed. They are open 24x7 and accessible anytime and anywhere. These stores provide customers with free and rich information about product and services. They also have some online tools to help customers compare and make purchase decisions among various products & services. Hoffman and Novak (1996) indicated that interactivity is the key distinguishing feature between marketing communication on the Internet and traditional mass media. Today online consumers have more control and bargaining power than consumers of physical stores because the Internet offers more interactivities between consumers and product/service providers as well as greater availability of information about products and services. Geissler and Zinkhan (1998) claimed that the Internet shifted the balance of power in favor of consumers as it became very easy for them to make shopping comparisons and evaluate alternatives without being pressured by salespeople. Online stores reduce transaction costs and have advantage for both consumers and vendors. However, online stores also have disadvantages compare to brick-and-mortar stores. In online stores customers can’t have any sense about the product they see in the internet (seeing, touching, tasting, smelling, and hearing) as they search for and purchase products. In online stores, consumers may develop low trust and perceive elevated risk highly because of the lack of face-to-face communication. Although this difficulty can be reduced by using certain software tools available in the marketplace. Norazah Suki and Norbayah Suki (2009) conducted a study on ‘Cellular Phone Users’ Willingness to Shop Online’. The study suggested that marketers should propose more on attractive promotion such as advertisements or discounts through the web.

Chowdhury and Ahmad (2011) conducted a study on ‘factors affecting consumer participation in online shopping in Malaysia’. The major focus of the study was to describe the relationship between independent variables and dependent variable using Pearson’s correlation method. The limitation of this study was that it only used four variables (ability, benevolence, integrity, and trust) in explaining the consumer participation but did not take other important variables into account (e.g., cost switching vendors and the presence of third party. The study provides a useful insight on the significant role of trust in students for online shopping. Yulihasri, Islam and Daud (2011) conducted a study on ‘Factors that Influence Customer’s Buying Intention on Shopping Online’. The variables that were tested included usefulness of internet shopping, ease of use, compatibility, privacy, security, normative beliefs, self-efficacy, attitude and student’s buying intention. Pearson correlation analysis provided statistical information about the relationship of each independent variable with dependent variables. It was studied that web advertising favorably influences the purchasing of a company’s products. Karim (2013) conducted a study on online

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Consumer Buying Behavior

shopping behavior of customers and documented that online vendors can assure their consumers for transaction security and avoid long delays in completing online orders and the hassle of returning goods for better online shopping experience. Morris (2013) conducted a study on ‘More Consumers Prefer Online Shopping’ Shoppers increasingly want what’s called a “seamless omnichannel experience,” meaning one in which retailers allow them to combine online and brick and mortar browsing, shopping, ordering and returning in whatever combo they would like.With the increasing size, more demand by youth and change in the behavior of youth towards shopping has clearly indicated a huge market is available to the incumbents and existing performers. And at this stage it is important to understand the buying behavior of Indian customers towards online shopping which is mandatory for a great marketing strategy by the players in this industry. The size and growth rate of this industry was never like this before. And considering all this, the present study has made an attempt to understand the online shopping behavior of Indian customers.

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Consumer Buying Behavior

METHODOLOGY:RESEARCH DESIGN

A research design is the "blue print" of the study. The design of a study defines the study type (descriptive, co relational, semi-experimental, and experimental, review, meta-analytic) and sub-type (e.g., descriptive-longitudinal case study), research question, hypotheses, independent and dependent variables, experimental design, and, if applicable, data collection methods and a statistical analysis plan. Research design is the framework that has been created to seek answers to research questions.

The research design we have selected is exploratory research design. Exploratory research design is defined as “Investigation into a problem or situation which provides insights to the researcher. The research is meant to provide details where a small amount of information exists. It may use a variety of methods such as trial studies, interviews, group discussions, experiments, or other tactics for the purpose of gaining information”.

Sample Unit:

Sample in the study are mostly youth as can be seen from the data that cumulatively 90 % of the respondent are in the age bracket of 15 to 30. Convenience samples are drawn from Kandivali (East). Our definition of convenience samples includes only one dimension that is easy access to the sample units otherwise it was random selection of individuals. This segment of population was selected due to their adoption of online buying.

The questionnaire had the following dimensions:

Demographics of the respondent such as gender and age. Behavior of visiting online sites such as frequency of visits, preferred e-commerce sites. Factors affecting selection of e-commerce website. Various attributes for consumer such as availability of colors, quality, potential shipment

problems, security for credit/debit card, retailer return policies, shipping costs, potential loss of privacy, retailers name and online reviews.

Sample Size:

Since it is an exploratory study, a sample size of 100 thought to be an adequate one. Accordingly 100 respondents from the target population were approached to fill in the online questionnaire which was created with the help of qualtrics.com.

Data Collection:

Data is collected by primary sources. A well-structured questionnaire prepared to collect data from respondents related to demographic, behavior and factors affecting for selection of fast food.

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Consumer Buying Behavior

DATA ANALYSIS:

How many hours in a week do you spend on the internet?

Findings: The percentage of consumers consuming spending more than 16 hours in a week is the

highest; i.e.53%. This reveals that people generally spend most number of hours on the internet &

people spending the least time (i.e.; 1 to 5 hours) follow them.

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Consumer Buying Behavior

What are the purposes for which you use the internet?

# Answer Response %1 Browsing 71 70%

2Social Networking

83 81%

3Information gathering

71 70%

4 Shopping 39 38%

5Others (Please Specify)

7 7%

Findings: We found out that maximum numbers of people use the internet for social networking

and browsing and information gathering follows it. The social networking sites such as Facebook

are very much used by the people.

To you mobile phone is (the most important/close to you) [Any 1]…………………………

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Consumer Buying Behavior

Findings: The major finding was that for 50% of sample size the mobile phone is just a

technology and 24% people are addicted towards mobile phones. 13% of people find the mobile

phone as a leisure instrument. Only 8% of people feel that for them mobile phone is just a

corporate companion.

From where do you buy mobile phone?

Findings: People prefer buying from offline mode ie; 69% of the sample. Whereas 32% people preferred buying from online stores and the third option given to them was others and we made them to specify it and we got responses in the form of Brand outlet, Authentic Seller, Village shop, Magnet and Vijay Sales

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Consumer Buying Behavior

How important are the following factors for you while buying Mobile / phone online? / (On the below parameters…

Statistic Availability of Colors

Quality

Potential Shipment Problems

Security for Credit/Debit

Card

Retailer return policies

Shipping costs

Potential loss of

privacy

Retailers Name

Online reviews

Min Value 1 1 1 1 1 1 1 1 1

Max Value

5 5 5 5 5 5 5 5 5

Mean 3.37 4.52 3.41 3.97 3.98 3.34 3.81 3.23 3.92

Variance 1.54 0.96 1.63 1.85 1.66 2.15 1.58 2.04 1.34

Standard Deviation

1.24 0.98 1.28 1.36 1.29 1.47 1.26 1.43 1.16

Total Responses

102 102 102 102 102 102 102 102 102

Findings: The most important factor while purchasing a mobile phone online was found to be quality followed by retailer returns policies and rest parameters following it closely. Also the retailers name played the least important role for a consumer to buy online.

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Consumer Buying Behavior

From which e-commerce site are you likely to buy the mobile phone?

# Answer Response %1 Flipkart 58 57%

2 Amazon.in 22 22%

3 Snapdeal 7 7%

4Company's Own Website

8 8%

5Others (Please specify)

7 7%

Total 102 100%

Findings: More than half of the people i.e.; 57% preferred to buy mobile phone from Flipkart

followed by Amazon which is 22%.

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Consumer Buying Behavior

How likely are you to buy a mobile phone online in future?

Findings: People who are likely to buy in the future are 24% where as 12% of population is very

sure that they wouldn’t be purchasing mobile phones online in future. The people who are in doubt

(i.e.; 46%) are the potential customers for the e-commerce sites selling the mobile phones.

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CONCLUSION

As per our findings we come to a conclusion that in India there are many people who are still

prefer to buy through offline mediums. But also we could find out that there are 45% of people

who can be the potential buyers of mobile phones online in the future and this major chunk of

population belongs to the age group of 18-30. While coming to the most important attribute that

makes a consumer choose a mobile phone to buy online are quality, security of credit/debit cards,

retailer return policies and so on. As per the research consumers usually spend more than 15 hours

a week on the internet and the major purpose was found out to be social networking and

information gathering. The most preferred site is flipkart (which is more than 50%) for buying

mobile phone online.

A Study on Impact of Online Advertising on consumer buying behavior for mobile phoneDear friends we seek your response for a research study on consumer perception about fast food in India that we are working on it. Your time and co-operation through expressing your opinion is crucial for successful completion of the study.

CBB regarding online purchases for Mobile

Q1 Personal Details

NameAge

Q Email Id

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Consumer Buying Behavior

Q2 Gender

Male Female

Q3 How many hours in a week do you spend on internet?

Q4 what are the purposes for which you use the internet?

Browsing Social Networking Information gathering Shopping Others (Please Specify) ____________________

Q5 how many times have you used the web to purchase a product?

Q6 to you mobile phone is (The most important/close to you) (Any 1)

Addiction Technology Leisure Instrument Corporate Companion Others (Please Specify) ____________________

Q7 from where do you buy mobile phone?

Online Offline Others (Please Specify) ____________________

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Consumer Buying Behavior

Q8 How Important are the following factors for you while buying Mobile phone online? <Div> (On the below scale 1 is the least important and 5 is the most important) </div>

1 2 3 4 5

Availability of Colors

Quality

Potential Shipment Problems

Security for Credit/Debit Card

Retailer return policies

Shipping costs

Potential loss of privacy

Retailers Name

Online reviews

Q9 from which e-commerce site are you likely to buy the product?

Flipkart Amazon.in Snapdeal Company's Own Website Others (Please specify) ____________________

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Consumer Buying Behavior

Q10 How likely are you to buy a mobile phone online in future?

Very Unlikely Unlikely Somewhat Likely Likely

REFRENCES

www.qualtrics.com www.google.com www.search.proquest.com IBM SPSS Software Dion global insight

Online buying behaviour of customers: A case study of northern India (Mehta, Versha; Kumar, Vinod. Pranjana 15.1  (Jan-June 2012)

Online advertising and its impact on consumer buying behaviour. (Gaurav Bakshi & Dr. Surendra Gupta)

Valuable Internet Advertising and Customer Satisfaction Cycle (IJCSI International Journal of Computer Science Issues, Vol. 9, Issue 1, No 2, January 2012 ISSN (Online): 1694-0814)

The Impact of Advertisement and Consumer Perception on Consumer Buying Behaviour (International Review of Social Sciences and Humanities Vol. 6, No. 2 (2014), pp. 55-64 www.irssh.com ISSN 2248-9010 (Online)).

Impact of Online and Conventional Advertisement on Consumer Buying Behaviour of Branded Garments. (Asian Journal of Management Sciences & Education Vol. 4(1) January 2015).

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