How E Commerce Is Changing Consumer Buying Behaviour Marketing Essay

How E Commerce Is Changing Consumer Buying Behaviour Marketing Essay In Electronic Commerce, online purchasing is the process consumers go through when they decide to shop on the internet. Therefore, the internet has developed to a highly competitive market, where the competition over the consumer is fierce. In order to have an impact on and retain consumers, in a competitive market, Constantinides (2004) stated that the first step is to identify certain influencing aspects when purchasing online, these can be regarded as factors. The purpose of the research is primarily to identify and get insight into what main factors the online consumer takes into consideration when purchasing books online, as books are the most commonly bought product on the internet (Arbeitsgemeinschaft Online-Forschung e.V. [AGOF e.V.], 2007). Concise Review of the Related Literature This research suggests that consumers attitude toward Internet shopping first depends on the direct effects of relevant online shopping features (Davis, 1993). The core constructs of our framework are adapted from the Technology Acceptance Model (TAM) by Davis (1989), an influential research model in the information systems field. Although this model is specifically tailored to understand the adoption of computer-based technologies on the job or in the workplace, it has proven to be suitable as a theoretical foundation for the adoption of e-commerce as well (Chen et al., 2002). Therefore, the TAM structures are employed as a foundation for our research framework. Online shopping features can be either consumers perceptions of functional and utilitarian dimensions, like ease of use and usefulness, or their perceptions of emotional and hedonic dimensions like enjoyment (Menon and Kahn, 2002). The internet has developed into a new distribution channel (Hollensen, 2004) and the evolution of this channel, e-commerce, has been identified by Smith and Rupp (2003) to be the most significant contribution of the information revolution. The number of internet users is constantly increasing which also signifies that online purchasing is increasing (Joines, et al., 2003). The rapid increase is explained by the growth in the use of broadband technology combined with a change in consumer behaviour (Oppenheim Ward, 2006). Using the internet to shop online has become one of the primary reasons to use the internet, combined with searching for products and finding information about them (Joines et al., 2003). Smith and Rupp (2003) also state that the consumers have never had access to so many suppliers and product/service opinions. By integrating Fishbeins attitudinal theoretical model (Fishbein 1967) and the expectation-confirmation model (Oliver 1980), we attempt to associate the three elements together and form a base model Model of Intention, Adoption, and Continuance (MIAC) (as depicted in Figure 2) for the development of an online consumer behaviour framework. (Purpose) (Implementation) (Persistence) Consumer Online Purchase Consumer Online Repurchase Consumer Online Purchase Intention Figure 2: Model of Purpose, Implementation, and Persistence Fishbeins attitudinal model has been widely used in the marketing context (Lilien et al 1992) and this paradigm provides researchers with a useful lens for examining the factors explaining consumer purchasing intention and adoption. According to this model, behaviour is predominantly determined by intention. Other factors like attitudes, subjective norms, and perceived behavioural control are also shown to be related to an appropriate set of salient behavioural, normative, and control beliefs about the behaviour. However, Fishbeins model stops at the adoption level and does not capture other important factors that explain and predict consumer continuance behaviour (repurchase). The expectation-confirmation model (Oliver 1980), on the other hand, focuses on the post-purchase behaviour. It is a widely used model in the consumer behaviour literature, particularly in explaining consumer satisfaction and repeat purchase. Satisfaction is the central notion of this model and it is formed by the gap between expectation and perceived performance (Oliver 1980). The expectation-confirmation theory suggests that if the perceived performance meets ones expectation, confirmation is formed and consumers are satisfied. Bhattacherjee (2001) stated that satisfied users are more likely to continue the IS use. Thus, we point that adoption and continuance are connected to each other through several mediating and moderating factors such as trust and satisfaction. The research articles appear in a variety of journals and conference proceedings in the fields of information systems, marketing, management, and psychology. A review of these articles indicates that researchers mostly draw theories from classical consumer behaviour research, such as behavioural learning (Skinner, 1938), personality research (Folkes 1988), information processing (Bettman 1979), and attitude models (Fishbein 1967). There are still significant differences between offline and online consumer behaviour that warrant a distinguishing conceptualization. For example, Vijayasarathy (2001) integrated the web specific factors (online shopping aid) into the theory of reasoned action (TRA) to better explain consumer online shopping behaviour. Song and Zahedi (2001) built on the model of the theory of planned behaviour (TPB) and examined the effects of website design on the adoption of Internet shopping. Donal Rogan (2007) explains the relationship between consumer behaviour and marketing strategy and states that strategy is about increasing the probability and frequency of buyer behaviour. Requirements for succeeding in doing this are to know the consumer and understand the consumers needs and wants. Chisnall (1995) points out that human needs and motives are inextricably linked and that the relationship between them is so very close that it becomes difficult to identify the precise difference which may characterize them. Buyers characteristics are important theories from Kotler and Armstrong (2007) and it explains the way that the consumer interprets and receives stimuli from advertisements. The decisions of consumers are influenced by a number of individual characteristics that are linked to the consumers specific needs. (Kotler Armstrong, 2007) A review of online consumer research reveals that the scope of published studies is rather broad, the studies appear relatively fragmented with contradictory results, and only very few prior studies (e.g., Jarvenpaa and Todd 1996, Koufaris et al 2001) have attempted to systematically review and develop a framework for the research of this important research area. Aims and Objectives of Study To develop a valid and reliable measure of motivations and costs associated with online information search and purchase behaviour; To provide a systematic and exhaustive review of online consumer behaviour research; To test the ability of the measure to identify the impact that specific motivations and costs have on apparel search and purchase decisions among Internet shoppers worldwide; To identify important constructs that are specific to the context of online purchasing; to propose an integrated framework that enhances our understanding of the underlying driving factors of online consumer behaviour; To evaluate the potential of the Internet as an efficient and effective medium to disseminate information to enhance brand/product awareness, evaluations, and purchase intentions in the global marketplace; To provide directions for future research in this area. Research Questions How does the level of computer and Internet experience of the target group relate to the level of Internet purchases? What main factors affect the online consumer when considering and making a purchase over the internet? How do these factors influence the consumer when purchasing books online? What kind of segments can be found within the identified consumers when purchasing books online? What is the connection with the identified factors and consumer segment groups? A Structured Research Approach Prior literature provides us with a rich foundation on which to build a research framework for the study of online consumer behaviour. As suggested by Douglas et al. (1994), strong theoretical and conceptual frameworks can be developed through an integration of constructs from different research traditions and disciplines. In the current study, we review the prior literature of online consumer behaviour and analyze the theories and the underpinning factors. A systematic and structured approach in search and review is strongly recommended in writing sound IS literature reviews (Webster and Watson 2002). In this study, we conducted an exhaustive and systematic electronic search using ProQuest, Social Science Citation Index, IEEE Xplore, and other bibliographic sources with keywords such as online shopping, Internet shopping and online consumer purchasing behaviour. In addition to the search for referred journal articles, we included three IS-related conference proceedings (AMCIS, HICSS, ICIS) in our literature search and analysis. Research Methodology To answer the purpose of the thesis, both primary and secondary data had to be collected. Primary data is data collected especially to answer the purpose and research questions of the current research. This data must be gathered by the researcher of the research at hand and can be done by observation, interviews or questionnaires. Secondary data is data that has been collected earlier, to fulfil the purpose of some other research. This data can be gathered from books, articles, reports and many others sources. (Saunders et al., 2007) Direct Observation Observation is a research technique that is often implicit in the data-gathering approach and observation is something we cannot fail to do as people, we are all expert observers (Hackley, 2003). Furthermore, participant observation will be chosen as it puts the researcher where the action is enabling them to experience the lives of informants, one option is to observe consumers behaviour and their purchase decision in online store (Meiselman et al., 2000). An observational approach provides a clearer representation of the decision process that consumers proceed through rather than the consumers perceptions of that process (Douglas and Wind, 1978), thus providing the researcher with the ability to uncover unconscious consumer actions. Survey The greatest use of questionnaire is made by survey as strategy. However, both experiment and case studies research strategies can make use of these techniques (Oppenheim, 1992). Some authors reserve it exclusively for surveys where the person answering the question actually records their own answers and other authors use it as a more general term to inclusively for survey interview hat administered either face to face or by telephone. (Kervin 1999) In addition, questionnaire can be used as a general term to include all techniques of data collection in which each person is asked to respond to the same set of questions in a predetermined order. (DeVaus, 1996) Interview An interview is a purposeful discussion between two or more people (Kahn and Cannel 1957). The use of interviews can help to gather valid and reliable data that relevant to the research questions and objectives. Sampling Sampling techniques provides arrange of methods that enable to reduce the amount of data need to collect by considering only data from a sub groups rather than all possible cases or elements. Sampling also save times and give over view of population. Researcher Kervin (1999) argues that using sampling enables a higher overall accuracy than a census. Methods of Data Analysis During the dissertation both the quantitative and qualitative data will require analysis. In order to analyze the data collected through the survey and the focus group, several strategies were used. The aim was to give a descriptive analysis of the consumer behaviour in online shopping. The tables, charts and pie charts were interpreted as made up the foundation for the focus group discussion. The method of analysis to be followed is that proposed by Dey, Miles and Huberman: Comprehend and manage it. Merge related data drawn from different transcript and notes. Identify key themes or pattern from it for further exploration. Develop and / or test hypotheses based on these apparent patterns or relationships. Draw and verify conclusions. (Dey, 1993; Miles and Huberman, 1994) Moral Issue of Research Consumers were firstly observed without interruption, allowing their natural behaviour will be recorded. Only once they complete their actual purchase decision, the researcher will approach them. Those shoppers who will picked up a product to purchase were intercepted as they walk away from the cabinet and will be asked to answer a few short questions regarding their purchase choice. Research Timetable Weeks 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Internet Research Literature Review Research Design Methodology Data Sources Data Collection Data Analysis Writing up Draft Editing Final Document Binding Document References Arbeitsgemeinschaft Online-Forschung e.V. [AGOF e.V.], 2007. Bettman, J. R. (1979) An information Processing Theory of Consumer Choice, Reading, Mass.: Addison-Wesley. Bhattacherjee, A. (2001) Understanding Information Systems Continuance: An Expectation Confirmation Model, MIS Quarterly, vol. 25, no. 3, pp. 351-370. Chen, L., Gillenson, M.L. and Sherrell, D.L. (2002), Enticing online consumers: an extended technology acceptance perspective, Information Management, Vol. 39 No. 8, pp. 705-19. Chisnall, M. P. (1995) Consumer Behaviour, 3rd Edition, Maidenhead, McGraw Hill Companies. Constantinides, E. (2004) Influencing the online consumers behaviour: the Web experience, Internet Research 14: 2, 111-126. Davis, F.D. (1989), Perceived usefulness, perceived ease of use, and user acceptance of information technology, MIS Quarterly, Vol. 13 No. 3, pp. 319-40. Davis, F.D. (1993), User acceptance of information technology: system characteristics, user perceptions and behavioural impacts, International Journal of Man-Machine Studies, Vol. 38 No. 3, pp. 475-87. Devaus, D. A. (1996) Surveys in Social Research, 4th edition, London, UCL Press. Dey, I. (1993) Qualitative Data Analysis, London, Routledge. Donal Rogan, FH Joanneum Graz, 28 May 1 June 2007, International Consumer Behaviour. Douglas, S. P., Wind, Y. (1978) Examining family role and authority patterns: two methodological issues, Journal of Marriage and the Family, Vol. 3 pp.35-47. Fishbein, M. (1967) Attitude and Prediction of Behaviour, in M. Fishbein, ed., Readings in Attitude Theory and Measurement, New York: John Wiley, pp. 477-492. Fishbein, M. (1967) Attitude and Prediction of Behaviour, in M. Fishbein, ed., Readings in Attitude Theory and Measurement, New York: John Wiley, pp. 477-492. Folkes, V. S. (1988) Recent Attribution Research in Consumer Behaviour: A Review and New Directions, Journal of Consumer Research, vol. 14, pp. 548-565. Hackley, C. E. (2003) Doing Research Projects in Marketing, Management and Consumer Research, Routledge, London. Hollensen S. (2004) Global marketing A Decision Iriented Approach, 3rd Edition, Edinburgh Gate, Pearson Higher Education. Jarvenpaa, S. L., and Todd, P. A. (1996) Consumer reactions to electronic shopping on the World Wide Web, International Journal of Electronic Commerce, vol. 1, no. 2, pp. 59-88. Joines, L. J., Scherer, W. C., and Scheufele A. D. (2003) Exploring motivations for consumer Web use and their implications for e-commerce, Journal of Consumer Marketing, 20: 2, 90 108. Kervin, J. B. (1999) Methods for Business research, 2nd edition, Reading, Addison Wiley. Khan, R. and Cannell, C. (1957) The Dynamics of interviewing, New York, Wiley. Kotler, P. Armstrong, G. (2007) Principles of Marketing, 12th Edition, Upper Saddle River, Prentice Hall. Koufaris, M., Kambil, A., and Labarbera P. A. (2001) Consumer Behaviour in Web-Based Commerce: An Empirical Research, International Journal of Electronic Commerce, vol. 6, no. 2, pp. 115-138. Lilien, G. L., Philip K., and Sridhar M. K. (1992) Marketing Models, New Jersey: Prentice Hall. Meiselman, H. J., Johnson, J. L., Reeve, W., Crouch, J. E. (2000) Demonstration of the influence of the eating environment on food acceptance, Appetite, Vol. 35 pp .231-7. Menon, S. and Kahn, B. (2002), Cross-category effects of induced arousal and pleasure on the Internet shopping experience, Journal of Retailing, Vol. 78 No. 1, pp. 31-40. Miles, M.B. and Huberman, A. M. (1994) Qualitative Data Analysis (2nd edition), Thousand Oaks, California, Sage. Oliver, R. L. (1980) A Cognitive Model for the Antecedents and Consequences of Satisfaction, Journal of Marketing Research, no. 17, pp. 460-469. Oppenheim, A. N. ( 1992) Questionnaire Design, New edition , London , Printer. Oppenheim, C. and Ward, L. (2006) Evaluation of web sites for B2C e-commerce, Aslib Proceedings: New Information Perspectives 58: 3, 237-260. Saunders, M. N. K., Thornhill, A., Lewis, P. (2007) Research Methods for Business Students. London: Pearson Higher Education. Skinner, B. F. (1938) The Behaviour of Organisms: An Experimental Analysis, New York: Appleton Century Crofts. Smith, D. A., and Rupp, T. W. (2003) Strategic online customer decision making: leveraging the transformational power of the Internet, Online Information Review 27: 6, 418 432. Song J., and Zahedi, F. M. (2001) Web Design In E-Commerce: A Theory And Empirical Analysis, Proceedings of the International Conference of Information Systems 2001, pp. 205-220. Vijayasarathy, L. R. (2001) The Impact of Shopping Orientations, Product Types, and Shopping Aids on Attitude and Intention to Use Online Shopping, Quarterly Journal of Electronic Commerce, vol. 2, no. 2, pp. 99-113. Webster J., and Watson R. T. (2002) Analyzing the Past to Prepare for the Future: Writing a Literature Review (pp. xiii-xxiii), MIS Quarterly, vol. 26, no. 2, pp. xiii-xxiii (13-23).