ONLINE SHOPPING: ITS EFFECTS TO THE STUDENTS OF BACHELOR OF SCIENCE MAJOR IN BUSINESS ADMINISTRATION (BSBA) OF POLYTECHNIC UNIVERSITY OF THE PHILIPPINES A research paper Judyne Laman Jessa Mae Paliza Arlene Puchero Eliza Mae Razon Jamezel Anne Sipsip Researchers Mrs. Zaila Decin Research Teacher Chapter I The Problem and Its Setting Introduction The internet has played a significant role in our daily life in that people can talk through the internet to one who is actually on the other side of the Earth, can send email around the clock, can search information, can play game with others, and even can buy things online. Meanwhile, Internet shopping has been widely accepted as a way of purchasing products and services It has become a more popular means in the Internet world ((Bourlakis et al., 2008)). It also provides consumer more information and choices to compare product and price, more choice, convenience, easier to find anything online ((Butler and Peppard, 1998)). Online shopping has been shown to provide more satisfaction to modern consumers seeking convenience and speed ((Yu and Wu, 2007)). On the other hand, some consumers still feel uncomfortable to buy online. Lack of trust, for instance, seems to be the major reason that impedes consumers to buy online. Also, consumers may have a need to exam and feel the products and to meet friends and get some more comments about the products before purchasing. Such factors may have negative influence on consumer decision to shop online. Online shopping is a growing area of technology. Establishing a store on the Internet, allows for retailers to expand their market and reach out to consumers who may not otherwise visit the physical store. The convenience of online shopping is the main attraction for the consumers. Unique online payment systems offer easy and safe purchasing from other individuals. Electronic consumer’s exhibit different buying behaviors such as; cart abandonment. The benefits of shopping online also come with potential risks and dangers that consumers must be aware of. In the future, we can expect online stores to improve their technology tremendously, allowing for an easier and a more realistic shopping experience. Consumers buy a variety of items from online stores. In fact, people can purchase just about anything from companies that provide their products online. Books, clothing, household appliances, toys, hardware, software, and health insurance are just some of the hundreds of products consumers can buy from an online store. Many people choose to conduct shopping online because of the convenience. For example, when a person shops at a brick-and-mortar store, she has to drive to the store, find a parking place, and walk throughout the store until she locates the products she needs. After finding the items she wants to purchase, she may often need to stand in long lines at the cash register. In contrast, online shopping helps consumers avoid these disadvantages. With online shopping, a person logs onto the Internet, visits the store's website, and chooses the items she desires. The items are held in a virtual shopping cart until she is ready to make her purchase. The shopper can remain in her pajamas as she does her shopping, and the process can be conducted in the wee hours of the morning or late into the night. Online stores never close - they're open 24 hours a day. Despite the convenience of online shopping, not everyone chooses to purchase items and services online. Some people like the idea of physically going to a store and experiencing the shopping process. They like to touch the merchandise, try on clothing, and be around other people. Online shopping doesn't permit shoppers to touch products or have any social interaction. It also doesn't allow them to take the merchandise home the same day they buy it. Other people may worry about shopping online because they fear their credit card information will be compromised. Since it's necessary to provide credit card information when purchasing products online, people worry they may become the victims of identity theft. This discourages some consumers from participating in online shopping. Another reason some consumers avoid shopping online is the fact that they worry that the products they purchase are not accurately portrayed in the website's picture. They worry that the picture of the item may appear one way, but the actual item may look completely different perhaps of lesser quality. It's also impossible to try on apparel when conducting online shopping. A consumer has to rely on body measurements in order to make sure the clothing will fit properly. If the clothing arrives in the mail and it's too small, the consumer has to return the item. This is a potential inconvenience that some shoppers may not wish to face. Background of the Study Nowadays, the Internet is being widely used in daily life. The existence of the Internet brought many advantages to individuals’ daily lives. With the help of the medium, people can communicate, learn, entertain, buy products and get services. Of course the disadvantages of it have long been discussed; as the virus threat, the risk of personal information theft, spamming etc. However since the advantages outweigh the drawbacks, most of the people cannot resist bringing it to the center of their lives. Since the beginning of the Internet, individuals have shown interest to the Internet. According to Internet World Stats' statistics (2012) today more than two billion people linked to the Internet. This number shows that 30 percent of the world population uses the Internet. Consequently, the Internet can be used for the competitive advantage by organizations and actually it is a powerful source to use (Hamill, 1997; 300). The Internet have been using for several different purposes. Besides that, it has also brought a different dimension to commercial activities. The Internet has created a new market for both customers and organizations, and has been an alternative market to the traditional market. Web sites provide a chance to search information about products/services, place a comment or give orders (Hoffman and Novak, 1996; 51). Therefore, the previous experiences of marketing have turned into a different segment. Now organizations are taking consider to provide different payment methods, different shipping alternatives and even different web interfaces for different geographic. Today, with the rise of the technology, significant portion of commercial activities take place over the Internet. Since commercial activities' main goal is to sale, sale can be realized by the purchase of a different party, as we know customers. Therefore, for electronic commercial activities, it is important to analyze online customers' behavior. Furthermore, in order to develop and apply effective marketing strategies the factors that affect consumer behaviors should be investigated. Online retailers can better understand customer needs and wants by directly analyzing the interaction between a customer and the online shop. Analyzing consumer behavior is not a new phenomenon for scholars. Philip Cotler, marketing expert, have studied on this topic. Theories about consumer behavior have been used to develop an effective marketing strategy. Moreover, it is impossible to think marketing without the Internet in today's world. Online marketing is the topic that have been researched and made applications many times by researcher from past to nowadays. Studies on online shopping investigated the factors that influence online shopping as well as motives for, value of and antecedents of online buying behavior. As a result, the academic researchers and the business world started to focus on the consumer side of the online purchasing behavior and a lot of researches and articles were prepared to make guidance for the development of online shopping. Theoretical Framework The process of making decision are very similar whether the consumer is offline or online. But one some major differences are shopping environment and marketing communication. According to traditional consumer decision model, Consumer purchase decision typically starts with need awareness, then information search, alternative evaluations, deciding to purchase and finally, post-purchasing behavior. In terms of online communication, when customers see banner ads or online promotion, these advertisements may attract customers’ attention and stimulate their interesting particular products. Before they decide to purchase, they will need additional information to help them out. If they do not have enough information, they will search through online channels, e.g., online catalogs, websites, or search engines ((Laudon and Traver, 2009)). When customers have enough information, they will need to compare those choices of products or services. In the search stage, they might look for the product reviews or customer comments. They will find out which brand or company offers them the best fit to their expectation. During this stage, well-organized web site structure and the attractive design are important things to persuade consumers to be interested in buying product and service ((Koo et al., 2008)). Moreover, the information sources’ nature may influence buyer behavior ((Bigné-Alcañiz et al., 2008)). The most useful characteristic of internet is that it supports the pre-purchase stage ((Maignan and Lukas, 1997)) as it helps customers compare different options ((Dickson, 2000)). During the purchasing stage, product assortment, sale services and information quality seem to be the most important point to help consumers decide what product they should select, or what seller they should buy from ((Koo et al., 2008)). Post-purchase behavior will become more important after their online purchase. Consumers sometimes have a problem or concern about the product, or they might want to change or return the product that they have bought. Thus, return and exchange services become more important at this stage (Liang and Lai, 2002). All five stages described above are affected by external factors of risks and trusts (Comegys et al., 2009). The search process is a significant component of customer’s online shopping behavior (Seock and Norton, 2007). The source risk comes in the stage of information search and evaluation because the information in the web sites might contain some mistakes. Some websites require customers to register before searching their website. As such, in addition to product risk, consumers also face the risk of information security (Comegys et al., 2009; Wang et al., 2005). Because of the nature of online purchasing, customers take the risk as they are not able to examine the product before purchasing. They also take the risk in the payment process because they may need to provide personal information including their credit card number. Security problem does not stop at the purchase stage but continues to the post-purchase stage because their personal information might be misused. Conceptual Framework This study made use of the following research paradigm: Independent Variables: Quality Shipping charge Satisfaction Security Dependent variables: Effects to the students of Bachelor of Science Major in Business Administration (BSBA) Figure 1 shows the variables used by the researchers. Independent variables consist of quality, shipping charge, satisfaction and security which attributes to the change in the dependent variable which is the students of Bachelor of Science Major in Business Administration (BSBA) Hypothesis For this study, the researchers assumed the followings: 1. Consumers are generally satisfied with online purchasing; 2. Prices of products positively affects the consumers‘ online purchasing behavior; 3. There is a relation between perceived risk and consumers‘ online purchasing behavior; 4. There is a positive influence of trust on consumers‘ online purchasing behavior; 5. Consumers‘ future buying behavior is affected by web design, delivery time, and last experience; 6. There is a relation between consumers‘ satisfaction and their intentions to buy in the future 7. Satisfaction of consumers is affected by convenience and quality offered. Statement of the Problem This research generally aimed to discuss the effects of online shopping to the BSBA students. Specifically, the researchers seek to find the answers to the following question: 1. What is the profile of the respondents in terms of a. Age b. Gender c. Social status 2. How do these factors affect the buying power of consumers online in terms of: a. Availability of desired product b. Quality of product c. Promotion d. Price e. Demand simulation Scope and Limitation The study aims to know and ensure if the respondents, BSBA students, are affected by what factors and what the respondents think may result to that as it affect the their perception about online shopping. The researchers are trying to show what factor has the greatest contribution on engaging into online shopping. Significance of the Study This study is significant to the following: To students who had engage in online shopping; To parents who gave consent to their child; To teachers who guide and as the second parent of their students; and To researchers who are interested regarding this topic. Definition of Terms The following terms used in this study are defined theoretically and operationally. Consumer - an individual who buys products or services for personal use and not for manufacture or resale. (www.investorwords.com/1055/consumer.html#ixzz4Y4OeYmUW) Demand - an economic principle that describes a consumer's desire and willingness to pay a price for a specific good or service. (www.investopedia.com/terms/d/demand.asp) Merchandise - the manufactured goods bought and sold in any business. (http://www.dictionary.com/browse/merchandise) Online shopping - The act of purchasing products or services over the Internet. (www.businessdictionary.com/definition/online-shopping.html) Promotion - refers to raising customer awareness of a product or brand, generating sales, and creating brand loyalty. (https://en.wikipedia.org/wiki/Promotion_(marketing)) Chapter II Review of Related Literatures and Studies The review of the literature for this study focuses on procedures used to identify teaching strategy and learning styles. The chapter begins with a definition of learning styles, teaching strategy followed by the findings of researchers using various instruments to measure learning style and teaching strategy. The research outcomes germane to learning styles and teaching strategy are discussed. Related Literature The typical Internet user of the twentieth century is young, professional, and affluent with higher levels of income and higher education (Palumbo and Herbig, 1998). They value time more than money which automatically makes the working population and dual-income or singleparent households with time constraints better candidates to be targeted by non-store retailers (Burke, 1997). Actually, both demographics and personality variables such as opinion leadership or risk aversiveness are very important factors that are considered in studies trying to determine the antecedents of Internet purchases (Kwak et al., 2002). Confirmatory work shows that income and purchasing power have consistently been found to affect consumers’ propensity to shift from brick-and-mortar to virtual shops (Co-mor, 2000). Internet usage history and intensity also affect online shopping potential. Consumers with longer histories of Internet usage, educated and equipped with better skills and perceptions of the Web environment have significantly higher intensities of online shopping experiences and are better candidates to be captured in the wellknown concept of flow in the cyber world (Sisk, 2000; Hoffman and Novak, 1996; Liao and Cheung, 2001). Those consumers using the Internet for a longer time from various locations and for a higher variety of ser-vices are considered to be more active users (Emmanouilides and Hammond, 2000). As Bellman et al. (1999) mention, demographics are not so important in determining online purchasing potential. Whether the consumer has a wired lifestyle and the time constraints the person has are much more influential. Risk taking 14 propensity is also a powerful factor. Eshoppers have higher risk taking tendencies. Consumers with high levels of privacy and security concerns have lower purchasing rates in online markets but they balance this characteristic with their quest for making use of the information advantage of the environment (Kwak et al., 2002; Miyazaki and Fernandez, 2001). These educated individuals, as more confident decision makers, are much more demanding and have greater control over the purchasing process from initiation to completion (Rao et al., 1998). Related Studies Many studies frequently mention that there is a vast amount of window shopping taking place online but the number or the rate of surfers who turn into purchasers or regular buyers are very low (Mayer, 2002; Betts, 2001; Oliver, 1999). This might happen because of the lack of consumer intention to purchase an offering from the online environment at the outset. It might also happen 15 because of various problems that arise during online shopping driving the consumer to abandon the task in the middle. Therefore, while one stream of research should identify the reasons behind the purchase reluctance of consumers, another area of concentration should be why people abandon their shopping carts and stop the purchasing process in the middle. Such attempts can help to understand how to turn surfers into interactors, purchasers, and finally, repeat purchases by making them enter into continuous interaction with this environment (Berthon, 1996). Common reasons for purchase reluctance are the difficulties and costs of distance shipping, inadequate amount of purchase related information, troubles experienced after the purchase such as delivery or refund problems, general security fear, and various perceived risks such as financial, product-related or psychological risks (Mayer, 2002; Chen and He, 2003). On the other hand, the reasons of abandoning purchases are much more technical such as unexpected shipping costs or transaction complexity (Harvard Business Review, 2000). In other words, some consumers accept to shop from the Internet in principle but technical complexities or ineffective systems discourage them. Regardless of the pessimistic state of events, marketers should not be hopeless about the future. Once the risks consumers perceive about shopping through the Web are reduced, the environment still promises a high potential for selected consumer segments. Studies show that consumers who search for product related information through the Web have stronger intentions to make purchases online (Shim et al., 2001). Therefore, building on the information advantage can be expected to pay off in the future. Constructing effective decision support systems and assisting consumers with interactive decision tools are also successful attempts that need to be developed further (O’Keefe and McEachern, 1998; Barber, 2001). However, investing on the pre-purchase stages of the decision making process is not adequate. Developing and testing the effectiveness of specific “selling” strategies and tactics for the cyber market are also crucial. Studies that focus on currently unavailable but possible tools of cyber shopping in the future, such as the use of artificial shopping agents that work on behalf of consumers in the online market (Redmond, 2002), are also very valuable efforts enlightening the road for future studies.
