Consumer BehaviorTopic: Influence of internet marketing on Consumer behavior in online shopping Submitted to: Dr. Asir Ajmal By: Irfan Ghafoor (810-MBA-11)
INFLUENCE OF INTERNET MARKETING ON CONSUMER BEHAVIOR IN ONLINE SHOPPINGAbstractInternet has a significant role on E-marketing. The accessibility of the Internet and lower costsof doing transactions has given rise in customers bargaining power and intense globalcompetition. In this study we try to explore the factors which that are affecting the consumerbehavior and how internet marketing is helping the marketers to influence consumers for onlineshopping. It also addresses the fundamental factors of E- marketing that how to attract and winover the customers in highly competitive marketplace. Hence, this study also aims to understandthe relationships between consumer behavior and internet marketing programs.IntroductionInternet offers multiple features (capacity, speed, precision and convenience) that help to attracta large number of potential customers. Consumer uses the Internet for different reasons rangingfrom only gathering information to purchasing product online. Buying over the Internet is morefun, safer, quicker and they were more confident about their ability to buy online. Although,purchasing online is still a small portion of Internet usages, most analysts expect it to increasetremendously once customers feel satisfaction and safe about their purchases and protection oftheir privacy.Internet has changed the communication way of people. The emergence of Internet, particularlythe World Wide Web, as a digital medium of business offers various opportunities to companiesto adopt the e marketing as their alternative marketing tools. The consumers’ buying behaviorhas been always an important marketing topic, extensively studied and debated and discussed incontemporary textbooks.Online shopping is defined as the process whereby consumers buy products directly from a sellerin no time without any intermediary involve on the internet. Online shopping starts withsearching the online shop that sells different type of products they are tend to buy. Then they goto online shop and select the product that suits to their needs. After that the shop confirm theorder via email and elaborate the details that how to pay. They offer payment process via creditcard, pay pal, visa and any other kind of payment. But some consumers feel curious about theproviding the information of their financial cards. Trust plays a critical role in order to purchasesover the Internet.This literature review presents the results of the review of 10 academic papers selected fromlarge pool of articles on internet marketing, consumer behavior and online shopping. The
criterion for the paper selection was the focus on studying the effects of the influencing factorson the online shopping.Internet MarketingInternet marketing is known as the process of creating and handling customer relationshipsthrough online activities in order to share ideas, products, and services that satisfy the goals ofboth buyers and sellers.The advent and development of Internet has brought new opportunities for marketers to makebetter current marketing programs. Internet marketing depends on a large extent on thecharacteristics of the products and services being marketed. Internet marketing can be a cost andtime-saving tool to marketer in the corporate marketing strategy. Since, Internet marketing is thetool of marketing that deals with the pricing, planning, promotion and distribution of productsand services onlineThe fundamental benefit of the Internet marketing is the number of alternatives that becomeavailable to customers within a specific product category. Due to low searching costs on theInternet, customers have a chance to consider a numerous alternatives, which are not present intraditional shopping. Internet marketing is capturing marketers’ attention and becoming moreimportant strategy for the sellers to promote advertises and interact more customer online.Internet marketing can significantly reduce the costs for searching, widened the selection ofvendors, deliver lower priced products, and increase comfort, providing greater control overproducts offered. This reduction in cost has encouraged marketers’ to expand informationservices and new competitors to enter in the market. It is essential for sellers to understandcustomers’ adoption behavior, their investment decisions in technology infrastructure should bedriven by consumer acceptance and long-term profitability.The nature of Internet marketing is likely to take shape around several key factors: Enable direct communication between buyers and sellers. Provide thousands of alternatives to customers as well as sellers. Enables storing large amount of information at relatively low costs, provides interaction between buyers and sellers and gives the opportunity of customization to customers. Providing strong and inexpensive ways to search, manage, and distribute such information. Providing enrichments (e.g., 3D image and video preview); Serve as a digital medium for some products as well as a physical medium for certain goods. Enable presence at relatively low costs.
Consumer BehaviorThe consumers’ buying behavior has been always an important marketing topic; extensivelystudies and every textbook have covered this discussion. The predominant approach, explainingthe fundamentals of consumer behavior, describes the consumer buying process as learning,information-processing and decision-making activity divided in several consequent steps:(1) Problem identification.(2) Information search.(3) Alternatives evaluation.(4) Purchasing decision.(5) Post-purchase behaviorThe difference is frequently made between high and low involvement purchasing, implying thatin practice the actual buying activity can be more or less consistent with this model. It dependson the buyer’s perceived purchasing risks. High or low level of involvement is also a question ofbuyer experience; products purchased for the first time, in general, require more involvementthan frequently purchased products.Most researchers agree that demographic, economic, social, psychological, cultural and otherpersonal factors, largely beyond the control and influence of the marketer, have a major effect oncustomers’ behavior and purchasing decisions. The types of activities conducted on the Internetindicate the level of perceived. Users, who are merely information seekers deal with less riskcompared to users who purchase product online.To compete in the virtual marketplace, the marketers need to understand the key mechanism ofvirtual shopping and the behavior of the online consumer.
Motivations of consumers to engage in online shopping:UsefulnessUsefulness is the perception that customers will feel comfortable while using the newtechnology. Usefulness refers to ease to use, because the easier is the technology to use the moreuseful will be the technology. Customers expect that the new technology will be effort less. Ifcustomers find online shopping ease to use, this perception leads to more growth in this field.
Enjoyment Enjoyment is the intrinsic motivation factor that customers appreciate of an experience for theirown sake. Enjoyment is the strong and consistent force towards the online shopping. In casecustomers finds the enjoyment in online shopping then they will have strong attitude towardsonline shopping that will leads to adoption of internet as shopping medium.Consumer TraitsConsumers’ traits play an important role in online shopping; these traits depend on fourdemographic factors that are age, gender, education, and income. These traits have a significanteffect on the relationship between basic forces “usefulness” and “enjoyment”.Old consumers may perceive the benefits of online shopping less than the traditional approach.Females that do prefer to shop on the internet, shop frequently rather than male. Higher educatedconsumers prefer online shopping rather than traditional. Incomes are positively correlated withpossession of computers, internet access and higher education levels of consumers. Somepersonality characteristics also influence the online shopping like self-efficiency and need ofinteraction.Situational FactorsA wide variety of situational factors also moderate the relationship between online shopping andconsumer behavior. These are time pressure, geographical distance, lack of mobilization, needfor special items and attractiveness of alternatives.Product CharacteristicsConsumers decision that whether to shop online or not also influenced by the product types andcharacteristics. It is because of some product categories are more suitable for online shopping i.e.books, magazines, videotapes, CDs, groceries, flowers. On the other hand personal care productslike perfume and lotions are most likely need personal experience and knowledge are consideredto less likely for online shopping.Trust in online shoppingLack of trust is one of the most frequently cited reasons for consumers not shopping on theInternet. Since this shopping medium is relatively new and most of them have only littleexperience with it, online shopping provides a challenge to many customers. Customers cannotphysically check the quality of a product or monitor the safety and security of sending sensitivepersonal and financial information while shopping on the Internet. Contextual factors likesecurity and privacy have a great impact on consumer trust in shopping on the Internet.
Social MediaToday’s customers are considered louder. The customer’s loud voice can be heard everywhere,including, blogs, complaint and review of website, YouTube videos, Facebook, tweets, and othersocial media websites. Therefore every company has to pay attention because social media ischanging the way customers do business. This power of loudness is influencing the entire buyingprocess. If a company doesn’t pay attention, they have a strong rick of losing customers andgetting upstaged by their once small and powerless competition.References The influence of online product recommendations on Consumers’ online choices by Sylvain Senecal, Jacques Nantel Influencing the online consumer’s behavior: the Web experience by Efthymios Constantinides Internet Marketing: An Overview by Jianwei Hou and César Rego Consumers’ behavior towards Internet technology and Internet marketing tools by Noor R. Ab Hamid Factors Determinate Customer Shopping Behavior Through Internet by Ahasanul Haque, Ali Khatibi and Shameem Al Mahmud Digital Influence Index (DII) - a study designed to track and measure the influence and impact of the internet on consumer behavior and decisions by Fleishman-Hillard How social media influences consumer behavior by David Smith Consumer Behavior and decision making process (Wikipedia.org) Internet Marketing (Wikipedia.org)