What Factors Encourage Customers to Buy Products Online - Research Proposal Example

What Factors Encourage or Discourage Customers to Buy Products or Services Online? Name: Course: Tutor’s Name: Date: TIME SCALE 10 INTRODUCTION The contemporary consumer has a wider choice of avenues to use when purchasing products or services. The consumer can physically visit traditional brick and mortar stores, he or she can make orders through telephone or email and have them delivered at his or her doorstep, or better still the consumer can make online purchases. To the technologically well-informed consumer, the latter option is the ideal form of shopping since it is convenient, fast and allows for a wider selection of products and services. Yet, despite its advantages, it is notable that many consumers even in developed countries where electronic retailing has perpetuated the market environment, there are still some reservations that consumer have regarding online shopping. Research Objectives The proposed research seeks to: i. Find out the factors that encourage or discourage customers to adopt online shopping ii. Establish the impact of online shopping on customers iii. Identify ways through which online customer satisfaction can be measured Research Questions In order to attain the identified objectives, the research will specifically seek to answer the following three questions: i. What factors persuade or dissuade consumers from taking up online shopping? ii. How do consumers perceive the profitability (or lack thereof) of online shopping i.e. are there any advantages or disadvantages that consumers attach to online shopping? iii. What pointers can online retailers or researchers use to gauge the level of customer satisfaction or dissatisfaction? RESEARCH METHODOLOGY The proposed research will be based on a combination of methods. Specifically, the research will use a structured questionnaire, which will be administered to an online sample in order to acquire primary data. It will also review existing literature in order to attain secondary data. The proposed research will use both primary and secondary data in order to attain comprehensive survey findings. While the researcher specifically collects primary data for use in the study, he attains secondary data from other sources. According to Saunders et al. (2007), there are three subgroups of secondary data. They include survey, multiple source and documentary. Researchers collect data through primary methods, and avail them in table or forms to secondary users. Documentary data on the other hand is second-hand data available to researchers either in written or non-written form. Multiple-source data is contained in both survey and documentary forms. The main characteristic of the different secondary data forms is that they are in different formats from how the initial researcher first got them. Research philosophies According to Asunder, Lewis and Thornhill (2007), researchers who do not agree with the law-like generalisations adopt the interpretive approach. Such researchers stress that the world and individual human minds are too complex to be treated indiscriminately. This approach is unlike positivism, which is adopted by researchers who avoid affecting or being affected by the subject of their research. According to Saunders et al. (2007), using the positivism approach requires researchers to simplify the collected and analysed data based on existing theories. Such an approach is mainly scientific and requires the development and testing of hypotheses. Realism is a different research philosophy that stresses the notion that a reality exists beyond the knowledge contained in the human mind. The proposed research will adopt the positivistic approach, and will hence refrain from interfering or affecting the data collected during the research. LITERATURE REVIEW Online consumer behaviour is a subject that has been discussed extensively in literature. Fung and Lee (1999, pp. 517-519) for example argue that trust is an antecedent factor that affects just how far consumers are willing to adopt online shopping. Specifically, the authors argue that consumer’s ability to trust online stores as a safe place to reveal their credit or debit card details is among the vital factors that determine whether the consumer is willing to purchase items or services online. Jarvenpaa (1999) however argues that the ability to trust differs across cultures. Peng (2009, pp. 1-4) states that the presence of dishonest marketers and sellers on the online environment, combined with merchandise whose quality cannot be scrutinized, a credit evaluation system whose validity cannot be established, and dispute resolution mechanisms whose authenticity the consumers cannot verify, are all factors that affect the consumer’s trust level and/or their willingness to purchase. When deciding whether to make an online purchase, the secure nature of payments, and the perceived ability of an online retailer to refrain from sharing information that the consumer deems private are among key considerations that determine whether the online retailer can be trusted (Shen, 2006). Chen and Barnes (2007) on the other hand argue that the encounters that customers have with online shopping determine the trust levels they will have in future, and such experiences consequently shape their online buying behaviour. Gefen and Devine (2001, pp. 613-618) on the other hand observe that the quality of services offered by an online store determines whether a first time shopper will be willing to visit the same store or others in future. Most notably, the authors observe that a bad first time online shopping experience may give the impression that all online stores are not to be trusted. But not everything that affects a customer’s willingness to purchase product or services online are based on the online shopping experience. According to Ghani and Deshpande (1994, pp. 381), people’s ability to take up online shopping is often inhibited by personal shortcomings when interacting with the electronic gadgets they use, or the online channels where the desirable products or services are sold. Shen et al (2006) identify experimental uniqueness, customer service, convenience and informative capacity as the four online shopping channel dimensions which affect the customer’s willingness to make an online purchase. An online store’s appeal to consumers through attractive web design and informative web content also affect their willingness to purchase items availed therein (Grandon & Ranganathan 2001, p. 921). The perceived reliability, fulfilment, customer service, security and privacy also affect the customer’s willingness to purchase (Shergil and Chen, 2005, p. 80). Specifically, an online store has to be easy to navigate, clear about the product purchase and return policy, and has to assure customers that their payment methods are secure and hence unlikely to expose them to online fraudsters. Janiswzeki (1998, p. 300) holds a similar view and posits that the display characteristics in a web store affect customers’ willingness to take a closer look at the product or services offered. Once the potential customer’s curiosity about the products is aroused, Janiswzeki argues than an online ‘window shopper’ stands a higher chance of being converted into a buyer. Despite the above explanations, there is no denying that some factors affecting customers’ willingness to purchase online goods or services can be explained using the consumer behaviour theory. According to Katona (1968, p. 19), the traditional consumer behaviour theory is based on two propositions; “(1) the consumer chooses the best alternative among the conceivable courses of action open to him, and (2) the primary determinant of consumer expenditures, aside from tastes is income...”. Put into the online shopping context, the consumer behaviour theory could be interpreted to mean that a consumer deliberates on whether the online channel serves his shopping interests better than brick-and-mortar shopping does, and whether he or she has the economic capacity to purchase identified online items. Regarding consumer characteristics, McMahan, Hovland and McMillan (2009, p. 61) posit that factors such as gender and personality of consumers also affect their willingness to engage in online purchases. Specifically, McMahan et al. (2009, p. 61-76) observe that female consumers are more likely to explore the internet more, and online marketers are therefore more inclined to market to such an audience compared to the male audience. They however do not rule out computer savvy men who have considerable spending power as potential online shoppers. It is also worth noting that McMahan et al. (2009, p. 68) observe that personal characteristics affect the customer’s perception or expectations about an online store. Notably, the McMillan, Hwang and Lee (2003, p. 400) also note that the online interactive environment can determine whether a customer makes an online purchase. For example, human-to-human interaction may have more convincing power towards the customer when compared to human-to-computer interaction, or human-to-content interaction. The success rate of such interactions is however dependent on various variables which include consumer needs, spending power, trust levels, and personal preferences. In addition, the marketing practices used by online marketers play a role in affecting the customers’ willingness to make online purchases (Constantinides, 2004; Koivumaki, 2001; Kim and Moon, 2000; Lee and Park, 2001). While online shopping motivations are many, Kannan and Kopalle (2001, p. 64) note that online shoppers just like the brick-and-mortar counterparts look for good bargains, quality products and good customer service. As such, and depending on whether the consumer perceives online pricing as fair and dynamic, he may opt make a purchase or refrain from the same. Noting a slight difference between services and product shoppers, Keen et al (2000, p. 31) observe that the former are more willing to purchase a service based on its pricing, mode of delivery, and the time within which the service will be offered, while product shoppers are concerned about the quality, price, mode of delivery and the return policy. Khalifa and Liu (2001, pp. 601) also observe that the question about satisfaction and getting value for money is always emerging among potential online service shoppers. After conducting a survey among consumer-to-consumer online shoppers, Xu, Lin and Shao (2010) found out that the customer’s risk attitudes, product type, product price, and the seller’s reputation were all factors that affected the customer’s willingness to make a purchase. It is worth noting that scholars and researchers agree that the factors affecting customers’ willingness to purchase products or services on an online environment are divergent and extensive. They range from personal issues such as perceived usefulness, perceived risk, or perceived ease of use, to product- or seller-related factors such as the product appeal, characteristics, perceived worth and value (Gefen, Karahanna & Straub, 2002; Pavlou and Fygenson, 2006; Pavlou and Gefen, 2004). Kotler (2003) sums the divergent factors affecting customer’s willingness to make online purchases by grouping the factors into uncontrollable personal and environmental factors; the potential buyer’s experience on the web; marketing stimuli (marketing mix); consumer’s decision process, and finally the buying decision. Purchase timing, dealer choice, brand choice, and/or product/service choice are all factors that affect the purchase decision of the online consumer (Kotler 2003; Tamimi et al., 2003) ANTICIPATED METHODS OF ANALYSIS AND FINDINGS The proposed research seeks to attain quantitative results, which the researcher will turn into graphs and charts. In order to make the data more comprehensive to other people interested in the research findings, the data will be analysed accordingly. Specifically, the researcher intends to acquire quantitative data, which is defined as quantifiable and verifiable statistics, which are open to statistical manipulation (Web Finance, 2011). The research will target a homogenous segment in the society. The targeted respondents will have similar needs, or behavioural features. For the results of the proposed research to be valid and reliable, the researcher intends to get responses from more than 300 respondents. The responses will then be analysed using thematic analysis, which Buetow (2010, p.123) defines as an analytic technique that reveals “core consistencies and meanings in a text by identifying and analysing themes, which are large, abstract categories of meaningful data segments”. As such, certain coded words will be checked for recurrence in all responses, and such will be identified as having more weight to the respondents. ETHICAL CONSIDERATIONS The proposed research intends to use quantitative data as much as possible. According to Creswell (1994, pp. 87-88), quantitative data is measurable and can be attained from a research sample without the researcher intruding on people’s privacy or morals. The ethics of the proposed research will be enhanced further by involving a voluntary sample for the exercise. As such, the respondents will not be coerced in any way, and will be duly informed of the research procedures, time commitments or any risks that they may be exposed to during the research After receiving an informed consent from the respondents, the researcher will be ethically obliged to respect the any anonymity or confidentiality requests made by specific respondents. Should any disclosure of the respondent’s identity be needed, the researcher will have to seek the direct approval of the respondent. TIME SCALE Scoping the project will take two weeks, while the set up phase, which will include preparing the questionnaire, identifying respondents and approaching them for consent will take 4 weeks. The actual research will be conducted in four weeks, while the analysis (which may include revisiting some of the answers in order to confirm or clarify some answers) will take two weeks. The researcher will then take 2 weeks to write the final report (see the graph below). REFERENCES Buetow, S. (2010) ‘Thematic analysis and its reconceptualization as a saliency analysis,’ J Health Serv Res Policy, vol. 15, pp. 123-125. Chen, Y., Barnes, S. (2007) ‘Initial trust and online buyer behaviour,’ Industrial Management & Data Systems, vol. 107, no.1, pp.21-36. Constantinides, E (2004) ‘Influencing the online consumer’s behaviour: The web experience,’ Internet Research, vol. 14, no.2, pp. 111-126. Creswell, J. W (1994) Research design: Qualitative & quantitative approaches. Thousand Oaks, CA: Sage. Fung, R.K.K., & Lee, M.K.O. 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