Impact of E-shopping Facilities on Saudi Consumer Decision in Purchasing Behavior - Research Proposal Example

Running Head: SAUDI CD AND E-SHOPPING Impact of e-shopping Facilities on Saudi Consumer Decision in Purchasing Behavior Impact of e-shopping Facilities on Saudi Consumer Decision in Purchasing Behavior In Saudi Arabia, there has been a boom of internet usage recently. The internet penetration rate was 25.1% as of March, 2008. In the population of almost 29 million, 7.2 million residents are using the internet. If we compare these figures to the year 2000, there were only 200,000 internet users in 2000 which was less than one percent of the total population. With this speed of internet penetration, the users of the internet have demanded many facilities on the internet. Many businesses have been shifted to the internet for reaching out their consumers. E-shopping facilities that are provided to the Saudi consumes have modified the decision in purchasing behavior. There has been an interesting impact on the Saudi consumer decision in purchasing behavior of the e-shopping facilities. The purpose of this paper is to highlight the changes in the purchasing behavior of Saudi consumer due to the e-shopping facilities. The goal of the paper is to discover the different types of changes in the Saudi consumer purchase decisions. Introduction In the Saudi countries, in the last 10 years, there has been a large increase in the use of ATM cards and plastic money. More than 90 % of the total consumer payments in the USA are done with the use of debit cards, credit cards, cash cards and ATM cards. Saudi countries are now not so much different from the USA as they are following similar trends. Electronic payment systems and the advent of e-shopping have enabled the consumers to make payments through the internet and make purchases online rather than physically visiting a store. Saudi Arabia is the center of Islamic world and generates major revenues from the export of crude oil and oil related products. Per capita income of the country in 2009 has been 18, 855 US$. A significant portion of the total population is comprised of foreign expatriates and workers. Most of these workers are low paid workers and unskilled labor; therefore we can assume that most of the users of the internet are the local residents. Saudi Arabia is the center of the Islamic world since many years and is the largest Arab economy. The taxation rates in the country are very low which encourages many multinationals to locate their offices in the Saudi land. The population mainly comprises of youth with high per capita income. Saudi is also the largest IT center in the region. Research Problems and Questions The problems that will be faced in the research are that the Saudi culture does not allow the women to participate in these types of activities. In Saudi society, the males are the dominant individuals of the family who make most of the purchasing decisions for the family. The women are also involved in the purchasing decision but are limited to household items such as appliances, clothes of children and furniture. Daily usage items and household consumables are also purchased by the women. The culture is also a hindrance for the researchers to reach the women in the households. These are the women who make most of the orders for products online using e-shopping facilities. The questions will not ask about the family details of the individuals as this is not entertained in the Saudi world. 75% of the population is not using the internet, therefore only the 25% using the internet is the choice for the researchers. In the internet using population, only the males would be available for research questions as the society does not line if women answer their personal questions to the researchers. One of the other major problems in the research process is unavailability of historic data. There is no historic data for the consumers' shopping as it has never been recorded. Hence there will be no base to make the comparisons. Most of the research questions are intended to be kept closed ended questions. This would make it easier to quantify the information that is gathered and allow graphical representations. First of all the name and the gender of the respondent should be inquired as this is an important part of a consumer survey. Then he should be asked if he is an internet user or not and also the frequency of internet usage should be asked. If the respondent is not an internet user, his survey will end here as the rest of the questions will be about e-shopping. The type of items that the respondent prefers to purchase online should be inquired. This question will also be a closed question and will give the respondent a list of items to choose from. The recent three purchases should also be asked from the user and this question will be open ended question as the user will be required to fill it himself. Research Objectives The main objective of the research is to find out the shopping preferences of the Saudi people who are using the internet. This will help in finding out the shift in the consumer behavior in selecting the products and the type of products over the internet in comparison to the traditional shopping. The research will also enable to find the age range of the consumers who are placing their orders on the internet. Another objective of the research is to measure and predict the effects of e-shopping on the physiological choices of the consumers. The research will measure the deviance of the consumer decision in internet shopping from traditional shopping. The expectations of the consumers about the products and services will be deduced from the research. The perception of the value of the products bought from the internet is not the same for each and every consumer. Every consumer thinks differently and every consumer does not believe that the products bought over the internet are of the same quality and value. The research will also enable to find out the trend of using plastic money such as credit cards, cash cards and debit cards in the Saudi population. Research Importance Online shopping is now no longer a purchase and requisition process that was previously only followed by business to make online purchases. It is now no longer a weird process of doing shopping and has taken the world into a different paradigm altogether. The feature of e-shopping which is basically shopping of a product over the internet is attracting a lot of consumers and internet users around the globe. This great facility and service allows the consumers to do shopping sitting at their homes or offices and making payments online through plastic money. These trends have been very attractive for the Saudis, who have a high income per capital and are willing to pay higher cost online. Finding out the trends in the population is important for the economy as more businesses can step up into the category of e-shopping. The research would also enable the government to find out the new shopping trends in the consumers and hence invest and encourage the use of internet in the population. Literature Review The trade barriers of the country are going down because of which the environment of E-shopping businesses is becoming more favorable. The government has installed many systems for responsive services for the citizens which are very convenient. These systems allow the residents to become more and more adapted to the use of internet in their daily activities and for solving issues. The residents have understood that the use in internet to make purchases reduces the personal costs and costs of conducting business as well. Although the country is progressing towards an economy which is more dependent upon the use of internet and e-commerce, but this process faces many weaknesses and threats. There is a lack of local IT professionals in the region, adequate and inexpensive facilities for education and training of the local Saudis. The access cost of the internet is very high because of which the 75 percent of the population is still not literate with using internet. There has been a cultural backlash towards the internet because of the low level of education of the families. According to the Arab News, there has been a major increase in the number of orders that are being placed online by the Saudis in the past three months (Humaidan, 2009). Most of these shops where orders are placed have been US based shops. Saudi Post has officially started a new service called My Address in America. This service is for online Saudi shoppers who are interested in making purchases from stores in the United States. The vice president of Saudi Post, Sami Al-Owaidi, has commented that now there has been a 200 percent rise in the number of Saudi customers who are seeking the facilities of e-shopping from USA Since the third month of the year 2009. With this facility that has been introduced by the Saudi Post, the Saudi e-shoppers who buy anything from US, they will get their purchases directly delivered to the address in Saudi Arabia. This facility is available for all the Wasel subscribers who are provided with a personal address for use in the USA. Research Hypothesis The hypothesis for the research is that the Saudi consumers, who are increasingly making use of the internet for shopping, are shopping from American websites at a greater than ever rate. In this year since the month of March, the online orders on American sites from Saudis have increased up to 300%. Another factor is that the women are participating in the process of shopping in Saudi Arab more than ever through the use of internet to place their orders. The Saudi land is becoming an emerging market for both the international and the domestic retailers and online sellers. We are predicting that the consumers are demanding more expensive items and consumer electronic items. These items are available in branded pockets and excellent quality in US; therefore the Saudis are approaching the US e-shopping websites to place their orders (Experiment-Resource.com). Research Variables The family life cycle variables are important in such type of research (Research Methods Knowledge Base). The amount of money that the youngsters receive by their parents is one on the variables in this research. This is because most of the orders are placed on the internet by the younger generation as it is more comfortable to the use of internet than the older generation. The income of the families who are using the internet for e-shopping is another variable that needs to be measured (Research Methods Knowledge Base). The customers will be segmented according to the income group that they are in. The research will focus on the shifts in the consumer demand of the products therefore the income group to which the individual belongs is necessary. The education level of the individual is another variable which needs to be measured in the research. The lifecycle of purchases will be a further variable which will compute the average time lag that is between two consecutive purchases. The traditional time lag between two successive purchases will also be measured and compared to it (Research Methods Knowledge Base). Data Required and Sources The primary data that is needed in the research will be collected using the survey forms and individual interviews from the consumers. A lot of secondary data is required in this research and will be found from a variety of resources. The main source for the secondary data collection will be journal articles from Proquest Database. The data required is the purchasing behavior that was prevalent in the Saudi population before the boom of e-shopping facilities. In the year 2000, the internet penetration rate was below 1 % of the total population. Hence all the Saudi consumer information before the year 2000 will be relevant. The main data required will be the list of the types of products that were previously purchased according to the preferences of the consumers. The average income of each type of product and the family lifecycle will also be required. Research Design and Research Method All the historic data that is mentioned above will be extracted from the online sources and the main sources will be websites and Proquest Database. This data will be quantified and will be presented with diagrams according to the need of the research paper. The primary data will be collected directly from the Saudi consumers using the survey forms and personal interviews. The personal interviews will have the same questions that the survey forms will have. The survey forms will be advertised on the main e-shopping sites that are used in the Saudi Arabia such as Barnes and Noble, EBay, Dell and Amazon.com. The consumer will be given a promised incentive to fill out the form in the shape of gift voucher or cash card. This would help the researchers to obtain relevant and true information. The response rate will also be higher because of the inventive that the consumer is given. The personal interviews will be conducted by a team of interviewers who will be visiting the major shopping malls and shopping centers. These people will also give incentive to the consumers who give answers to the questions as the interview will be detailed and thorough. Sampling and Data Collection A sample of 1500 individuals will be used to find out the results using the internet survey forms. The response rate of survey forms on the internet is very low because of which such a high number of individuals are selected for the sample. The sample will be chosen with random sampling because we do not have any information about any of the consumers who visit the websites (CustomInsight.com). The sample for interviews will be 30. This is a small number because the response rate is almost 100 percent and even if someone refuses to answer the questions, another individual con be approached. The combination of primary and secondary data will give the researchers a strong base to continue on their work (Brent.tvu.ac.uk). First of all, each data element that is collected will be converted in to measurable form. This would make it easier to compare the results of the historic data with the data collected from the primary sources. Bar charts representations, timeline and scatter diagrams will be very useful to compare the data and come to the conclusion. The data from the primary sources, the interviews and the survey forms will be now collected and transformed into tabular form. The tabular form will allow the researchers to develop charts and comparison diagrams as many as they want. References Humaidan, M. (2009, August 4). More Saudis are Shopping Online. Retrieved November 8, 2009, from http://www.arabnews.com/page=1§ion=0&article=125140&d=4&m=8&y=2009 CustomInsight.com. Random Sampling Overview. Retrieved November 9, 2009, from http://www.custominsight.com/articles/random-sampling.asp Brent.tvu.ac.uk. Primary Data Collection Methods. Retrieved November 9, 2009, from http://brent.tvu.ac.uk/dissguide/hm1u3/hm1u3text3.htm Research Methods Knowledge Base. Variables. Retrieved November 9, 2009, from http://www.socialresearchmethods.net/kb/variable.php Experiment-Resource.com. Research Hypothesis. Retrieved November 9, 2009, from http://www.experiment-resources.com/research-hypothesis.html Cvgs.k12.va.us. Research Hypothesis. Retrieved November 9, 2009, from http://www.cvgs.k12.va.us/research/PAPER/defining/research_hypothesis.htm Read More