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Barriers To Online Shopping In Hyderabad Marketing Essay

INTRODUCTION

This proposal is based on Barriers to online shopping in Hyderabad, India. It focus on customers can do shopping online from there home and what problems they face while doing there shopping online.

Here there is a brief background of the study and a problem discussion of the area, leading to the specific research question, a review of literature related to the research question of the study. The Research Methodology adopted for this proposal which include the Research approach, Research purpose, Research strategy, Data collection method, Sample selection, Analysis of data, data collection and conclusion.

Problem Background

The Internet is the backbone for the new digital economy that is radically changing business models around the globe. These new business models have become differentiators that redefine market winners and losers. No one is safe from the changing tide. For some companies, the Internet revolution may have begun a new era of unrivaled prosperity. For others it has probably begun a descent toward extinction. This revolution, however, isn’t just about setting up shop on the World Wide Web. Instead, its about realigning business models around global, dynamic value chains by leveraging Net technologies to survive, to compete, and to succeed (Hoque, 2000:3-4).

According to an e-commerce study (March 7th, 2000 www.sellitontheweb.com) carried out by the Boston consulting group (BCG), Consumers who have had a satisfying first purchase experience online are likely to spend more time and money online. However, a number of consumers find shopping online offers convenience fraught with compromise. Among both new and experienced Internet consumers, anxiety over credit card security was the main barrier to purchasing online. Purchase process breakdowns were also a major irritant, as well as a deterrent to further online shopping. To help the mass market move online, BCG advises retailers to remove access barriers – better search engines, information entry systems and site navigation are all important in smoothing the shopping experience and paying the way for purchasing (Doole et.al 2005:30) Originally Adapted from (‘ Online shopping promises consumers more than it delivers’.)

1.2 Nature of Involvement

The level of involvement with a product varies by individual. Some individuals may be highly involved with the purchase of jeans because they associate the product with personal appearance and social acceptance. Others may not be as highly involved because they view jeans as just another piece of casual clothing with few personal associations. Thus, consumer involvement with a product can vary on a continuum from high to low. The position of the consumer on this continuum depends on several factors (Assael 2005:90). Generally, a consumer is more likely to be involved with a product when it:-

Is important to the consumer. A product is most likely to be important when

(a) The consumer’s self- image is tied to the product;

(b) It has symbolic meaning tied to consumer values;

(c) It is expensive

(d) It has some important functional role,

Has emotional appeal. Consumers do not seek only functional benefits in products. They often seek benefits that trigger an emotional response.

Is continually of interest to the consumer.

Entails significant risks, it would be the financial risk, the technological risk, the social risk, or the physical risk.

Is identified with the norms of a group. That ism the product has Sign or “badge value”.

These conditions are likely to result in complex decision making. As most brands lack significant self-identity, interest risk, emotion or badge value, it is not surprising that buying by inertia is more widespread than purchasing by complex decision-making (Assael 2005:90-91).

High – Involvement Products

The process by which consumers make purchasing decisions must be understood to develop strategic applications and it is not a single process. Deciding to buy a car is a more important and complex decision than deciding to buy toothpaste. In this, consumers evaluate brands in a detailed and comprehensive manner. More information is sought and more brands are evaluated than in other types of buying decisions (Assael 2005:30).

According to Assael (Assael 2005:30-31), Complex decision making is most likely when consumers are involved with the product; that is when the product is important to consumers. This means that it is most likely for

High-priced products

Products associated with performance risks (medical products, automobiles)

Complex products (compact disc players, personal computers)

Products associated with one’s ego (clothing, cosmetics)

The nature of the product is not the only condition for complex decision making. The most important is adequate time for extensive information search and processing. It will not occur if a decision must be made quickly (Beatty &Smith 1987:83-95).

A second condition for complex decision making is the availability of adequate information to evaluate alternative brands. A study by Greenleaf and Lehman found that consumers sometimes delay a decision because of insufficient or inaccurate information. The same study also found that decision making is delayed when there are too many product characteristics and features to consider. Such confusion means that complex decision making also requires a consumer’s ability to process information (Greenleaf & Lehmann 1995:186-199).

1.2.2 Low – Involvement Products

Should low involvement products be sold on the web? According to Assael (2005:556), some marketers suggest that the Web may be the ideal vehicle for selling low involvement products for several reasons.

First, consumers are reluctant to spend time and energy buying these products. By providing timesaving convenience consumers may see the Web as an efficient vehicle for purchasing items. Second, the risk of purchasing on the Web is minimal since most low-involvement items are standardized and consumers know exactly what they will be getting. Third, many low-involvement products possess strong brand equity that can be easily transferred to the web. Procter & Gamble’s brands like Charmin, Tide and Crest are known commodities on the web as well as on store shelves. Forth, if companies like P& G and Unilever have a constellation of products that consumers typically buy together and often, selling on the web makes more sense (Assael, 2005:565).

But the drawbacks of selling low-involvement products on the web may outweigh the advantages. Companies such as Webvan, Pets.com and e Toys went bankrupt in their attempt at selling online. These companies underestimated the costs of attracting and retaining consumers to their sites. Less than 1 percent of supermarket items are purchased on the web. Another problem is that even though these companies were selling online, this did not eliminate the need for a distribution infrastructure to store and deliver products, with all its attendant costs. Establishing Internet sales facilities bypasses a company’s retailers and wholesalers, a process known as disintermediation. Consumers simply have not accepted the advantages of web-based relative to in-store purchasing for such products. It is probably going to be a long time (if ever) before consumers see low-involvement products sold on the web (Assael, 2005:565).

1.3 Customer Management

Organizations exist because of their ability to supply goods, services and ideas to customers. While it may seem quite obvious to us as customers what we need and want, in practice organizations often get it wrong. In the fast-moving, competitive environment it is vital organizations to provide customer satisfaction otherwise they risk losing customers to competitors (Doole et.al 2005: 5).

The first stage of good customer care online begins during customer acquisition and relationship building. In fact, at this point in the sales process customer care should be the top priority. Later, once customers have made a purchase, it is essential to continue to provide only the best and most attentive service. A consumer’s decision about whether to become a repeat customer is based a great deal on her first and last impressions of the site’s service (Hoque, 2000:70).

1.4 Customer Interaction

According to Melmon et.al, as referred in Hoque 2000, Used in conjunction with the telephone and face-to-face communications, the Net can strengthen e-Tailers relationships with customers like never before. From the user’s point of view, the dialogues will integrate four basic elements:

Personalization:

I want it my way, with my particular needs driving the system’s responses to me (Melmon et.al, as referred in Hoque, 2000)

This is the secret of success – listen to customers and give them the products they want. Richard Branson has made a virtue of this. He has successfully entered a diverse number of well-established markets with redesigned products that meet customers’ needs more closely than competitors. (Doole et.at, 2005).

Self – service:

I want to explore on my own, select on my own, and troubleshoot on my own (Melmon et.al, as referred in Hoque, 2000).

Customer care applications not only improve customer service while reducing costs; they also place the customers in control by allowing them to answer their own questions through customer self-service (Melmon et.al, as referred in Hoque, 2000).

Intimacy

I want it to feel like a two way process; I want to know that my actions are being used by the company to learn what I want; I want my feedback to register with the company; and I want tangible evidence that I ‘m in the Loop (Melmon et.al, as referred in Hoque, 2000).

Immediacy

If a company accepts that to achieve a sustainable competitive advantage it needs to be more customer-oriented than its peers, if it also agrees that this can be best delivered by having, and acting upon, a better knowledge and understanding of the customer through a continuous system of information collection (Doole et.al, 2005).

Research Objective

Hyderabad is the Fifth Largest City and the fastest growing city in India, on the basis of economic growth. It is obvious that Food and culture still reminisces the past History. Biryani is one such delicacy patronized by everyone, that it has attained the status of being labeled “Hyderabad Biryani”. It is a dish made from Basmati rice, spices with pieces of lamb, chicken or vegetables.

Customers throng from various corners of the city to the select popular joints throughout the day juggling through the traffic to reach the popular joints. The most common complaints of consumers are that the joints close down by 11 PM at nights as per the regulations laid down by the local authorities causing them inconvenience.

The Objective of this thesis is to find out the Obstacles faced by customers in Hyderabad in order to buy Biryani online. This leads to the research question:

What are the barriers to shopping online for Biryani?

This leads to examine the following factors in this thesis:

Product characteristics

Consumer traits

Trust

Customer service

Search

Situational factors

Previous online shopping experience

Methodology

The aim of this section is to discuss, expound, introduce, data analysis methods and credibility of research finding of the following:-

Research Purpose

As a researcher, I had been curious to know about the thousands of customers buying biryani everyday,

Why don’t they buy biryani online?

Can’t they save time by ordering online?

Can’t they avoid traffic hassles by ordering from comfort of home?

Also, they can order a biryani online 24/7 at any point of time in day or night unlike in a Biryani joint.

Descriptive research

The objective of descriptive research is “To portray an accurate profile of persons, events or situations” (Robson, 1993). In academic research, descriptive research is more rigid than exploratory research. When conducting a business or management research, it seeks to describe users of a product or service. As opposed to exploratory research, descriptive research should define questions, people surveyed, and the method of analysis prior to data collection. In other words who, what, where, when, why and How aspects of the research should be defined. Such preparation allows one the opportunity to make any changes before

the process of data collection has begun. However, descriptive research should be thought of as a means to an end rather than an end itself (Saunders, Lewis and Thorn hill, 2000)

My research purpose and research question reveal that this study is primarily descriptive. Large-scale survey studies are conducted on the aspect of barriers to online shopping.

Research Approach

Qualitative research

Yin (1994) states that qualitative methods are often related to case studies, where the aim is to receive thorough information and thereby obtain a deep understanding of research problem. Qualitative research is softer, and explores why people act or think the way they do, and is most effective when ‘open ended’ as in focus groups or in-depth interviews.

Quantitative research

A quantitative approach implies the search for knowledge that will measure, describe and explain the phenomenon of our reality (Patel & Tebelius, 1987). Quantitative research is often formalized and well structured. Quantitative research is concerned with measurement of numbers, such as the number of people who would buy a particular product, the percentage of people who agree with a certain statement, or the satisfaction levels of your customers.

I m interested to know more about barriers to online shopping’. These ambitions may indicate that we should use quantitative methods and address a larger population in order to compare similarities and differences across different customer groups in different geographic location. As this thesis involves understanding of online customer perception phenomenon, quantitative approach is more suitable.

3.3 Research strategy

Research strategy will be a general plan of how you will go about answering the research question you have set (the importance of clearly defining the research question cannot be over-emphasized) (Saunders et al. 2000). If you are not only interested in theoretical matters, you must select a suitable empirical research strategy.

Yin (1994) compares the case study with experiments, surveys, histories and the analysis of archival information. Each strategy has peculiar advantages and disadvantages, depending on three conditions:

(1) The type of research question

(2) The control an investigator has over actual behavioral events

(3) The focus on contemporary as opposed to historical phenomena

Since the aim of this study is to collect the answers from an online auction user and formulate the best possible answers of the investigated problems we have mainly chosen the survey research strategy. This choice is also partly determined by our research approach, which to most extent is of quantitative nature.

3.3.1 Survey

Survey is a popular and common strategy in Business and Management research. Surveys allow the collection of a large amount of data from a sizeable population in a highly economic way (Saunders et.al, 2003). This thesis involves study among a large population in Hyderabad. Survey Research strategy is most appropriate in the study.

The survey strategy is usually associated with the deductive approach. In this, the data obtained by using questionnaire is standardized and allows easy comparison. Using a survey strategy gives more control over the research process (Saunders 2003).

In addition, people perceive the survey strategy as authoritative in general. This is because it is easily understood (Saunders et.al, 2003). This is one of the reasons that survey is chosen as research strategy for this thesis.

3.4 Population and Sample

Population of this study includes all consumers, over 18, in Hyderabad, India. This study will be based on a convenience sample of 300 consumers living in Hyderabad. Three Hundred self-administered questionnaires will be distributed in Hyderabad, using drop and collect method. Participants will be briefed about the purpose of the study, and given enough time to fill out the questionnaire.

3.4.1 Sample survey

For many research questions and objectives it will be impossible for researcher either to collect or to analyze all the data available due to the time, money and often access. Many researchers, E.g. Moster and Kalton (1986) and Henry (1990), argue that using sampling enables a higher overall accuracy than a census due to the time saving, designing.

Subject (Or element):

Either of these words is used to refer to whatever it is you re hoping to obtain information about or from.

E.g. Since a lot of sample surveys are conducted on human populations, the subject is often individual people. For a library loan survey, the subject is a book.

Sample:

This is the group of subjects from whom you actually intend to collect information by observing, interviewing or measuring etc.

Population:

It is the larger collection of all the subjects from which your sample was drawn, that you wish to apply (Statisticians use the word infer) your conclusions.

Target population and study population:

There are two populations that exist within your survey, and understanding how they relate to each other is the key to obtaining a sample which is representative of the population.

The target population is the population from which you would like to obtain a sample and to which you would like to apply your conclusions.

The study population simply consists of subjects whose characteristics are similar to those of the subjects in the sample. In other words, the sample is always representative of the study population.

In my thesis, the target population is Internet users in India. Out of which, a study population is chosen who are potential e commerce consumers.

3.4.2. Sample size

How big does my sample have to be? This is a question everyone designing a questionnaire must ask them selves. The answer is critical if you are making a quantitative study, less important if your investigation is qualitative.

There are two ways to approach the question of determining the sample size, either by using theory or considering the practicalities of various sample size possibilities. I will include both of these methods in my calculations.

The theoretical approach

Essentially, the sample size is connected to the level of accuracy you desire in your results. The greater the level of accuracy, the bigger the sample size.

The Practical approach

No matter how accurate your sample size collections are, you should still balance the need for accuracy with the costs involved in using a sample of that size. A common way of determining sample size is by including, as many subjects in the survey as cost/time will allow. For example, it may be obvious that only 10 subjects are not enough, but that 10,000 are totally unnecessary. You therefore need to find a number between these two figures that will provide enough information to give at least some validity to the results, but that is also within your time/budget constraints.

In my thesis the sample size chosen is a population of 300 people in Hyderabad, due to huge population choosing a sample population is a challenging task. This is a suitable sample size to achieve a reasonable accuracy as well as practical to achieve accurate data collection in time.

3.5 Data Analysis

The data analysis for the research questions will be carried out based on the responses received for the questionnaire. For analysis purpose, to the research question, the agreement scale will be regrouped into three categories as Disagree, Neutral and Agree.

The mean of the frequencies will be calculated with the research questions.

Depending on the outcome according to the mean, it would reflect the consumer’s acceptance or denial for each factor. For the analysis of the research question, Frequency distribution analysis will be used to examine the barriers to Online shopping in Hyderabad.

3.6 Gantt Chart

I have used a Gantt chart to plot my time line. In this schedule I have divided my work into various stages on the time which is mentioned in the Gantt chart below:-

Conclusion

This structure of my proposal makes me successful to find out the barriers for ordering Food online in Hyderabad, India. The results of the study have to reveal that none of the target consumers have previous experience of online shopping. Hoffman, Novak and Peralta (1999) argued that the reason more people have yet to shop online or even provide information to web providers in exchange for access to information is the fundamental lack of faith between most businesses and consumers on the web today.

This study has to find out the Barriers to Online shopping in the context of business-to-consumer food business. Results have to reveal that Product characteristics, Trust and Lack of Previous Online shopping experience as a major concern for consumers in Hyderabad. Situational factors are the most preferred reasons for online shopping. Obvious reason could be that Consumers want to avoid traffic hassles and use their traveling time for a productive use.

Hence, addressing these issues is very important to assure the customer that it is Safer, effective and secure to pursue online shopping.

Annexxure – II

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