Key factors influencing online shopping

Key factor outs influencing online snooppingThis look at is do as it is to assemble the MKT662, Industrial Training Report for final yr student of knight bachelor in Business Administration (Hons) Marketing from University Teknologi Mara (UiTM), Kota Kinabalu Campus. This follow aims to plunge preliminary assessment, evaluation and take c aring of the discern factors that driving or influencing consumers in Kota Kinabalu to fund through online. This battlefield in any case get out in any case class the characteristics between familiar and private servants in the context of online obtain overly allow reveal the correlation between demographic characteristics towards the key factors identified. This rent exit be a very practice sessionful for topical anesthetic business sectores to depress much(prenominal) nurture near the realistic marketplace trend in Kota Kinabalu before piquant into online businesses.1.2 BACKGROUND OF guinea pigThe importance of the forgetnet as an advertising middling has generated a lot of attention in sassy years where at that place ar a lot of businesses possess been development the net in their merchandise activities and somehow driving consumers all the modal value through the process and eventually persuading them to stock online (Goodwin, 1999) . Study on the acceptance of internet activities by consumers has been hold up by many lookers. For example field of force do by E-revolution (2000) Haque A. et al., (2006) and cabbage et al., (2007), these assume reported generally that internet activities argon increasing over the year and expected to continue ontogeny spherically. Besides these determine also reveals that businesses nowadays are ready teeming to bring their businesses operation online. Moreover, Zhou et al., (2007) also summarized that the ability of internet users to graze online has also signifi give the axetly improved from 16% to 32% since March 2001.As in Malaysia, agree to Lee (2000), the internet become a virtual places where people share their ideas, build communities, shape the future democratically, and promote a sunrise(prenominal) way of doing business. Moreover, the harness out stated that the web has become the worlds biggest stock mall that allows local anesthetic businesses to do their business with low appeal involved, simply yet covering global market. By looking back at the early stage of online activity in Malaysia, the year 1995 was considered as the scratch line of Internet age. Back to the year 2000, it is reported that whole 7% of the community was registered as Internet subscribers and only 701,000 units of total modus operandi of computer interchange (Lee, 2000).As the competition in e-commerce is increasing nowadays (Haque A., et al., 2006), it becomes to a greater extent primary(prenominal) for online retailers to understand consumer acceptance of online take a shit activities and what makes them to do so (Zhou, et al, 2007). Supported by Goodwin, (1999), Wu., (2003) Kolsaker, et al., (2004) Khatibi, et al., (2006), examining these factors are crucial as it has been suggested that they play an important part in determine the success or failure of online obtain business. Despite a host of studies on online shop, there is no specific rehunt d i on the discipline matter in Kota Kinabalu which contributes to omit understanding on the keys factors that run customer to shop online in the welkin.In short, this accept pass on analyse the keys factors that facilitate customer from Kota Kinabalu entrustingness to bargain for online and for the purpose of this subject area, few factors ordain be identify from the belles-lettres revue and however, only the most supreme factors will be go out.1.3 SCOPE OF STUDYThis paper will specifically examine and indentify the factors that directly and indirectly find out consumer the most specifically in Kota Kinabalu on purchasi ng decision through online. Researcher will also look into the demographic characteristic such as age, income aim, profession, ethnic etc- of online users to be related to the identified keys factors influencing customer to obtain online. The look for will be using data gather from selected samples which will include both(prenominal) life individual which includes both public and private servant in put together to bend of having bias data and brinytain quality of the data anyways to cooperates with eon constrains.1.4 PROBLEM STATEMENTAt its core, the mission of marketing is to realise and retain customers. To accomplish this goal, a traditional brick and mortar marketer uses innovation of marketing variables to satisfy current and new customers. As for online retailers, it is important for them to founder a commodity understanding of the marketplace for their outputs and their target customers before engaging themselves in online retailing. Previous detectives frame out that there is a quick rise in the number of PCs as well as branch in the proportion of PCs hooked up to the internet each year which contribute to the growth in e-commerce in Malaysia (Legard, 1998). Despite the gamy potency of online shopping in Malaysia, however, there is no specific research d atomic number 53 on the subject matter and its potential impact on local businesses (Kota Kinabalu area). Knowing the concept of bringing line of descents to shoppers instead of shoppers to stores is not enough to be success in online businesses. Precise and deep understanding of key factors is searing to help online retailers and entrepreneurs to develop more effective and targeted online retail operations that will meet the requirements and expectations of their new online shopping customers.Therefore, this study aims to examine the key factors that settle current users of online shopping in Kota Kinabalu to shop online and in the same meter assessing, evaluating and underst and the characteristics of online shoppers in Kota Kinabalu.1.5 look OBJECTIVESThe objective of conducting this study includesTo identify the slender factors that would influencing customer to shop through online.To investigate the differences on the between public and private sector shopping online adoption.1.6 RESEARCH QUESTIONSIn site to name the objectives of this study, there are three (3) critical issues encountered. These issues are formed into interrogates that ask to be answered. These issues includingWhat would the factors act upon customers in Kota Kinabalu to shop online?What are the main characteristics of the customers who shop online?Are there any differences between public and private sectors employees in shopping online context?By having for the answer of these questions will help the local businesses to have correct understanding on characteristic of the online customer curiously factors benefits that make them buy outputs or services through online shopp ing, as well as their growths or services preferences bought from online stores. In general, by having these question answered, this study will reveal the trend of online shopping in Kota Kinabalu.1.7 IMPORTANCE OF STUDY1.6.1 Local BusinessesPlanning on expanding businesses is not an easy job to be done. There are a lot of parts and divisions a business have to take into account especially when a business considering to go online. Therefore, this study will help local businesses to have a better understanding on the customers attitudes, characteristics and preferences shopping online besides guiding the local businesses to use the animate advanced technologies in operating their business and go global.1.6.2 The ConsumersThis study can help consumers to have a better understanding on the advantages and disadvantages to shop online besides identifying a new way of shopping channel. This study also will provide instruction on harvest-times and services prefer to be purchased thro ugh online store which eventually will help consumer to make online purchases.1.6.3 The AcademiciansThis study will help to enhance researchers to conduct more study regarding the subject matter as it is more counseling on the factors that influencing customers to shop online instead of traditional way of shopping. This study will provide the academicians with new information of online shopping trend in Kota Kinabalu specifically besides fate to enhance other(a) researcher to do in depth check up on pertaining on the consumers attitudes towards adopting this new shopping channel.CHAPTER 2LITERATURE REVIEW AND theoretic FRAMEWORK2.1 LITERATURE REVIEWIn this chapter, relevant literature and research related to the scope of study will be reviewed and analysed to structure this study to present research findings in subsequent chapters. The current literature on consumer online purchasing decisions has mainly concentrated on identifying the factors which influence customer to engage in online shopping in rescript to truly ascertain what factors influence the online shopping activity adoption in Kota Kinabalu.Study done by Margherio (1998) mentioned about E-commerce which cover any commercial transaction that is effected via electronic means, including such means as facsimile, telex, electronic data interchange (EDI), the Internet, and the telephone. Inter Agency Task Force on Electronic Commerce, IATFEC (1997) on the other hand define E-Commerce as All form of business proceedings conducted over public and private computer networks. It is based on electronic processing and transmission of data, text, sound and video. E-Commerce includes proceedings within a global Information Economy such as electronic trading of technicals and services, online talking to of digital content, electronic funds transfer, electronic share trading, electronic bills of lading, commercial auctions, collaborative designs, engineering and manufacturing, online sourcing, public proc urement, direct consumer marketing and after sales service. It includes both products (consumer goods, specialised medical equipment) and services (information services, financial and legal services, traditional services) and new activities (virtual malls). It involves the application of multimedia technologies in the automation and redesign of transactions and workflow, aimed at increasing businesses competitivenessIn adopting the above definitions, it is involvement of acquaint to baptismal font communication between consumers (Internet users) and companies (Internet sellers) via computer networks to facilitate any amiable of commerce transaction (browsing or purchasing products or services) easier, faster and cheaper electronically beyond traditional geographical boundary (Norazah M. S, et al., 1997) while the term online shopping according to Ton ita Perea y Monsuwe, et al., (2004) defined as the use of online stores by consumers up until the transactional stage of purchasin g and logistics.Study by Shwu-Ing Wu (2003) reported that a persons buying choices are influenced by four study psychological factors motivation, perception, reading and beliefs and attitude and through motivation, perception, and learning, attitudes are formed and consumers make decisions. Some researchers categorise influence factors into internal and international factors (Kaufman-Scarborough K, 2002 and Shwu-Ing Wu, 2003). ground on the idea, consumer purchase way is influenced strongly by cultural, social, personalised, and psychological characteristics (Bellman, et al., 1999). The internal factors are including beliefs and attitudes, learning, motives and subscribe tos, personality, perception, and values and the external influences upon consumer behavior includes demographic, economic, social, situational and technological factors (Shwu-Ing Wu, 2003).In Malaysia context, study on Internet users are in abundance (Ramayah and Jantan, 2003 Ismawati and Ainin, 2004). Howe ver, there have been few studies carried out to understand their online purchasing behavior for example Haque A., et al., (2006) Ainin S., et al., (2005) and Razinah H. et al., (2009). Thus, the main objective of this study is to examine the key factors that influencing online shopping in Kota Kinabalu specifically.Study done by Taylor Nelson Sofres, (2001) form that the penetration of Malaysians shopping online, i.e. people who bought or ordered goods and services online in 2000, 1% of the total adult population in Malaysia which according to the study is corresponded to 4% of the Internet users in the country at that time. There is high gear demand among Malaysians Internet users conducting online shopping due to Ecommerce provide enormous of consumers ecumenical potential benefits (Ainin S., et al., 2005) and study have shown that many consumers have started to shop their sought-after(a) after products online (Sefton, 2000). This shows that online shopping is highly accepted by the consumers (Swaminathan, et al., 1999 Rowley J., 2000 Ainin S., et al., 2005 Zhou, et al., 2007 ).Interestingly, in Malaysia context, Ainin S., et al., (2005) found that females were the prevailing Internet shopper than males which contradict to the study done by Adeline Chua, et al., (2006). While according to study done in different market by Gupta et al., (1995) Haque et al., (2007) and Zhou et al., (2007) on the basis of Stafford, et al., (2004) and Susskind (2004), these researchers found that man tend to make more purchases online compare to women. Zhou, et al., (2007) reported that consumer involved in online shopping are broadly speaking university graduates, aged 35 years old and downstairs, have full-time job, earning periodic personal income of between RM2000 RM5000 and mostly single. This supports the study done by Shwu-Ing Wu, (2003) and Ainin S., et al., (2005) on the demographic profiles of online shopper.Another issue on online shopping from the previ ous literature is the characteristic of products and services can be marketed online (Peterson, et al., 1997 Legard, 1998 Klein, 1998) which according to these researchers, there are two types of product and services marketed online and it is highly depends on the characteristics of the products and services to be able marketed online.We are now seeing the emergence of an important new intermediate for commerce (Ainin S., et al., 2005 Adeline Chua, et al., 2006 and Zhou, et al., 2007). However, in Malaysia especially, even though sales growth rate suggests that the number of online consumers is growing however most research findings do not conclusively determine which key factors that influence consumer the most to shop online ( Ramayah and Jantan, 2003 Ismawati and Ainin, 2004). Examining these factors is important as it has been suggested that they play an important part in determining the success or failure of online shopping business (Goodwin, 1999 Wu, 2003 Kolsaker, et al. , 2004 Khatibi, et al., 2006).Studies have been done to investigate consumer acceptance of online shopping from the perspectives of applied science acceptance whereby the perspective prescribes that beliefs about ease of use and usefulness of a technology predict attitudes towards the technology and subsequent acceptance and use, for example by Sejin Ha and Leslie S., (2008). Bruner and Kumar, (2005) however, suggests that beliefs on avow and enjoyment are among the key factors that influencing consumer acceptance of online shopping. While Hoffman and Novak, (1996) developed more abstract concept on the relevant context for example shopping values, quality of information, system quality, enjoyment, comprehend usefulness and ease of use- in order to improve predictions about purchase behavior.Factors that also influenced customer to shop online is product variety (Wolfinbarger, M. and Mary Gilly, 2001 Ainin Sulaiman, et al., 2005 Adeline Chua, et al., 2006) which categorized int o good plectron and wider availability of product choices suffered by online stores. Online retailers are able to provide a wide area and assortments of products as compared to traditional channels simply because there is no physiologic space limit on the number of products that online retailers can display on their online storefronts (Delafrooz et al., 2009). Furthermore, the number of online stores that consumers are able to visit online compared to far physical stores, thus, exceeds the number of providing them with a wider choice of products to choose from (Harn et al., 2006).A survey by Ernst and new(a) (2000) also reported that one of the reasons why consumers use the internet is because of good product selection. Hyo-Joo Han, et al., (2006) found that product variety and quality of product pictures were spy to more important. Indeed, easy access to an abundance of current and detailed information on products and services facilitates comparison shopping, aid in product selection and enables consumers to make more informed decisions (Adeline Chua, et al., 2006). Furthermore, the Internet users could receive more inviting sales promotional offers from Internet sellers and also through individual e- trip accounts (Norazah M. S. et al., 2002)Consumer willingness to spend online also influence by loneliness factor whereby online consumers are unwilling to reveal personal information over the web, despite assurances abandoned by online merchants (Wolfinbarger, Mary and Mary Gilly, 2001 Ainin Sulaiman, et al., 2005). To most of the consumers, the issue of security and concealment over the internet is the most overwhelming barrier facing the online shopping adoption process that caused them not to make any purchase on the Internet (Norazah et al., 2002 Janice Tsai et al., 2007). Smith, et al., (1996) outlined four dimensions of screen concerns for organizational practices which include disposition of personal information, unauthorized secondary us e of personal information, errors in personal information, and improper access to personal information.According to Malhotra, et al., (2004), the dimensions of concern refer to the line of battle of personal information, the control over the use of personal data, and the awareness of privacy practices and uses of personal information. Janes et al., 1997 reported that consumers tend to be more comfortable providing clear information in a realm where they can see with whom they are dealing, revisit the physical mending of the business if necessary, and thus, exert a perceived amount of control over the situation besides want to be assured that their communication and transactions will remain secured and private (Hoffman et al., 1999 Ainin Sulaiman, et al., 2005). Janice Tsai et al., (2007) in their study found that, people will tend to purchase from merchants that offer more privacy protection and people even willing to hold for a premium to purchase from such merchants.Kargaonkar and Smith (1986) Swaminathan, et al., (1999) Bellman, et al., (1999) Elliot and Fowell (2001) Eastin (2002), found that consumers who are primarily motivated by gadget are more possible to make purchases online. These authors proposed those consumers who have interface with the net and who are more time-constrained tend to buy online more frequently. According to Bellman, et al., (1999), wired lifestyle consumers are consumers that use the internet as a turning tool to receive and head emails, to do their work, to read news, to search for information or for recreational purposes. Their routine use of the Internet for other purposes leads them to naturally use it as a shopping channels as well (Bellman, et al., 1999). Similarly, McGann (2004) also reported that the main reason why consumers shop online is because it is convenience. It is said to be the major factors that motivates consumers to shop online. Charles D., et al., (2002) also found that Internet shopping is conve nient however it is neer replace actual shops.For years, information search has been one of the main marketing research topics (Kulviwat et al., 2004). Information is an important resource for consumers shop online especially for purposeful fashion type of consumer (Wolfinbarger, M. and Mary Gilly, 2001). According to the study, the availability of information is one of the reasons that many buyers view search and purchase online as a utile activity and it is consistent with the finding by Ainin Sulaiman et al., (2005). As noted by Bakos (1997) Internet search enables consumers to reduce imperfect information about products. The study also supported by Rha (2002) where it were stated that consumers can easily find information about other consumers experiences of products through internet.The internet is a medium to search for product specification and product sets as well. In improver to product information, price was a piece of information that was ordinarily sought by consum ers (Wolfinbarger, Mary and Mary Gilly, 2001). Brynjolfsson and Smith (1999) found that prices online are 8 to 15 percent begin than the prices for comparable products in traditional retail outlets. According to McGann (2004), Ainin Sulaiman et al. (2005), Adeline Chua et al., (2006), competitive prices and deals offered by online retailers are one of the plethoric factors that influence consumers to shop online. Rowley (2000) reported that the Internet is the most powerful search medium for products, services, and most other types of information because it lowers both search cost and search time.Therefore, by referring to the available literature, factors that might influence customer to shop online can be conclude as widespread of product choices or product variety (Delhagen, 1997 Wolfinbarger, Mary and Mary Gilly, 2001 Ainin Sulaiman, et al., 2005 Adeline Chua, et al., 2006) enjoyment factors (Wolfinbarger, Mary and Mary Gilly, 2001 Bruner and Kumar, 2005) privacy factor (W olfinbarger, M. and Mary Gilly, 2001 Norazah et al., 2002 Ainin Sulaiman, et al., 2005 Janice Tsai et al., 2007) which become one of the main concern to shop online convenience factors (Kargaonkar and Smith, 1986 Swaminathan, et al., 1999 Bellman, et al., 1999 Elliot and Fowell 2001 Eastin, 2002 Chen and Chang, 2003 McKinney, 2004) product information factor (Wolfinbarger, M. and Mary Gilly, 2001 Rha, 2002 Ainin Sulaiman et al., 2005 ) and prices factor (Margherio, 1998 Strauss and ice, 1999 Rowley, 2000 McGann, 2004 Ainin Sulaiman et al., 2005).As stated in Delafrooz et al., (2009), consumers who value the convenience, prices and wider selection of Internet shopping tend to purchase more online and more often. Even though wider selection or product variety also mentioned as one of the major factors, for the purpose of this study, as regards to the time constraint, researcher will only focus on two most dominant factors from all the factors identified which are the con venience factor and price factors. Thus, these two (2) factors are further discussed belowCONVENIENCEBy referring to the studies done before, the main factors customer shop online is that it is more convenient than to shop in-store which also supported in current study by Delafrooz et al., (2009). public convenience reflects ease access of information about product, planning of in-depth information, ease of ordering product, potential for silver saving, and timely delivery. (Mathieson 1991 Bruner Hensel, 1996 Turban et al., 2002 Gurvinder and Zhaobin, 2005 Hui et al., 2006). Convenience is the most prominent factor that motivates consumers to shop through the internet.In this study, convenience which refer to 24-hour availability of online storefront (time saving) and accessibility from almost any location (less moving) have been found to be real explanatory factors for Internet shopping adoption (Karayanni, 2003) and also provides consumers with a powerful alternative chan nel for make purchases (Delafrooz et al., 2009). These factors (time saving and less moving) will be taken into account as part of convenience factor.As contradict to the studies saying that convenience is the most prominent factor that motivates consumers to shop through the internet, study done by Razinah H. et al., (2009) reported that although the net offer convenience in shopping, online shopping, assurance in payment and lots of information, some group of online users are still antipathetical to shop online even though these group of online users have limited time allocated for shopping due to their hectic daily life.PRICEPrice in this study refers to the market value, or agreed exchange value, that will purchase a definite quantity, weight, or other measure of a good or service. Price of product offered online is one of the major factor that influencing customer to engage in online shopping and this supported by the finding in McGann, 2004. The idea is the simplest reason f or consumers to buy through the internet is to save money from the cheaper prices offered by online retailers compared to traditional retailers. Contradict to the study by Brynjolfsson and Smith (1999), study by Lee (1997) and Bailey (1998) found that products are sold at higher(prenominal) prices in the Internet channel compared to physical channels. Clay, K. et al., (2001) reported it may be due to unobserved quality variation.Rowley (2000) stated in his study that, online retailers usually are able to offer cheaper prices because of the shrinking cost of information processing, lower operating cost and global reach provided by Internet. In addition, Strauss and Frost (1999) also identified the ease of comparing price as one of the most important factors to online shopping. To some extent, according to Clay, K., et al., (2001) price of online product has peremptory relationship with the availability and widespread of information.Conventionally, shoppers will make comparisons and always go for the best value for price products (Ainin Sulaiman et al., 2005). Hanson (1999) reported the main reason that cheaper prices are offered to online shoppers is because of competitive pressure, especially from new online retailers. Study by John P. and Jackie L. (2001) found that even though more than half respondents mentioned price of the product or service as the primary factor when they consider buying on the Internet, however to some extend it would cost more to buy from online store than purchasing it from physical retail store.Customer expressed concern associated with high shipping cost, high pricing, lack of opportunity to examine the product earlier to purchase, confidentiality of credit card and purchased information also mentioned in the study by Razina H. et al., (2009) on the basis of study done by Goldstein and Oconner, (2000).2.2 THEORITICAL FRAMEWORKBased on the existing literature connected directly to the scope of this study, there are few factors iden tified to have significant effect towards online shopping namely convenience, price, product variety, widespread of product information and etc. However, only two the most dominant factors will be the ultimate key that will used to aid and examine the key factors that influencing consumers to engage in online shopping.CONVENIENCEONLINE SHOPPINGPRICE2.3 SUMMARYBased on the review on the related literature review, researcher found few dominant factors why consumer do engage in shopping online is generally influence by the factors of feeling of convenience, product prices sold online is relatively lower than existing retail stores, the widespread of information availability and also variety of product offered online.Moreover, this study will also look into the characteristic of customer especially in name of profession, as regard to meet the objective to investigate the differences on the between public and private sector shopping online adoption.In summary, consumer purchasing behavi our through online can be examine in different model and generally, the factors that influence them to engage in online activities may be vary. However, for the purpose of this study, researcher will only look into the most significant factors convenience factors which include the time saving and less moving, and also the price factor on the basis of key factors that influencing customer to shop online in Kota Kinabalu.CHAPTER 3RESEARCH METHODOLOGY3.1 METHODOLOGYA organise questionnaire will be used to collect the necessary data. It will be designed to specific information of the respondents. It serves as primary data to answer the research questions and objectives pertaining to online shopping in Kota Kinabalu. The survey questionnaire consists of few distinct sections, each of which contains questions which lead to answer the research question of the study. In view of time and cost constraints as well as the large population of Internet users in the country, random sampling was used to collect data from the consumer from Kota Kinabalu area. Even though the sampling method adopted might have limitations in terms of generalisibility compared to other sampling methods it is assumed that the sample represents the whole population of consumer in Kota Kinabalu.3.2 SOURCES OF DATAThis study will be based on both primary and secondary data. The primary data will be from the structured questionnaires which will be distributed to the appropriate sample to collect necessary information regarding the subject matter. The secondary data will be gathered by reviewing web sites, business magazines, journals, publications and other relevant document related to the subject matter.3.3 INSTRUMENTSample dataThe sample in this study will be selected from different groups of people including non-executive, executive, students, and housewife in order to avoid collecting bias data.Mode of administration of surveyFace to face and video call interview may be used in this study to ga ther appropriate information. This study will also be conducted by a constructed questionnaires with consumer selected as sample and all participants will be voluntarily.Nature of QuestionnairesThe questionnaires consist of 20 questions. Both open ended and fixed-response-alternative question will be used. Fixed-response-alternative question include multiple choice and also dichotomous. The questionnaire was self-administered, where it contains simple question with detailed instructions. The questionnaires were collected back after the respondents finished them. A copy of the questionnaire is provided in the appendices.Scope of the Study300 questionnaires will be distributes by hand to the random sample of consumer in Kota Kinabalu area which will include both female and male from all groups plan.3.4 RESEARCH APPROACHA descriptive research is being proposed to perform this study. precedent literature provides with a rich foundation on which to build a research framework for the st udy. As suggested by previous researcher, strong hypothetical and conceptual framework can be developed through an integration of constructs from different research traditions and disciplines.In this study, the literature search was based on the keywords such as Internet Shopping, Internet Marketing and Online Shopping. Each obligate was reviewed and screened to eliminate the articles that were not pertinent to the study.3.5 LIMITATION OF RESEARCHIn order to conduct the research, the researcher is confronted this problemtime constrainBasically, research need to be done in longer period of time, unfortunately this study might only have few months given to complete be completed. Ample of time is needed to complete this study properly. Thus researcher only focus on two factors to be examined in this study.lack of expertiseAs beginner in the marketing research, the researcher level of competency and sophistication not is compared with experienced researcher. Researcher will have to re fer on several books and seek guidance