Consumer Behavior

Topic: 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 SHOPPING

Abstract
Internet has a significant role on E-marketing. The accessibility of the Internet and lower costs of doing transactions has given rise in customers bargaining power and intense global competition. In this study we try to explore the factors which that are affecting the consumer behavior and how internet marketing is helping the marketers to influence consumers for online shopping. It also addresses the fundamental factors of E- marketing that how to attract and win over the customers in highly competitive marketplace. Hence, this study also aims to understand the relationships between consumer behavior and internet marketing programs.

Introduction
Internet offers multiple features (capacity, speed, precision and convenience) that help to attract a large number of potential customers. Consumer uses the Internet for different reasons ranging from only gathering information to purchasing product online. Buying over the Internet is more fun, 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 increase tremendously once customers feel satisfaction and safe about their purchases and protection of their privacy. Internet has changed the communication way of people. The emergence of Internet, particularly the World Wide Web, as a digital medium of business offers various opportunities to companies to adopt the e marketing as their alternative marketing tools. The consumers’ buying behavior has been always an important marketing topic, extensively studied and debated and discussed in contemporary textbooks. Online shopping is defined as the process whereby consumers buy products directly from a seller in no time without any intermediary involve on the internet. Online shopping starts with searching the online shop that sells different type of products they are tend to buy. Then they go to online shop and select the product that suits to their needs. After that the shop confirm the order via email and elaborate the details that how to pay. They offer payment process via credit card, pay pal, visa and any other kind of payment. But some consumers feel curious about the providing the information of their financial cards. Trust plays a critical role in order to purchases over the Internet. This literature review presents the results of the review of 10 academic papers selected from large 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 factors on the online shopping.

Internet Marketing
Internet marketing is known as the process of creating and handling customer relationships through online activities in order to share ideas, products, and services that satisfy the goals of both buyers and sellers. The advent and development of Internet has brought new opportunities for marketers to make better current marketing programs. Internet marketing depends on a large extent on the characteristics of the products and services being marketed. Internet marketing can be a cost and time-saving tool to marketer in the corporate marketing strategy. Since, Internet marketing is the tool of marketing that deals with the pricing, planning, promotion and distribution of products and services online The fundamental benefit of the Internet marketing is the number of alternatives that become available to customers within a specific product category. Due to low searching costs on the Internet, customers have a chance to consider a numerous alternatives, which are not present in traditional shopping. Internet marketing is capturing marketers’ attention and becoming more important strategy for the sellers to promote advertises and interact more customer online. Internet marketing can significantly reduce the costs for searching, widened the selection of vendors, deliver lower priced products, and increase comfort, providing greater control over products offered. This reduction in cost has encouraged marketers’ to expand information services and new competitors to enter in the market. It is essential for sellers to understand customers’ adoption behavior, their investment decisions in technology infrastructure should be driven 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 Behavior
The consumers’ buying behavior has been always an important marketing topic; extensively studies and every textbook have covered this discussion. The predominant approach, explaining the 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 behavior The difference is frequently made between high and low involvement purchasing, implying that in practice the actual buying activity can be more or less consistent with this model. It depends on the buyer’s perceived purchasing risks. High or low level of involvement is also a question of buyer experience; products purchased for the first time, in general, require more involvement than frequently purchased products. Most researchers agree that demographic, economic, social, psychological, cultural and other personal factors, largely beyond the control and influence of the marketer, have a major effect on customers’ behavior and purchasing decisions. The types of activities conducted on the Internet indicate the level of perceived. Users, who are merely information seekers deal with less risk compared to users who purchase product online. To compete in the virtual marketplace, the marketers need to understand the key mechanism of virtual shopping and the behavior of the online consumer.

Motivations of consumers to engage in online shopping:
Usefulness Usefulness is the perception that customers will feel comfortable while using the new technology. Usefulness refers to ease to use, because the easier is the technology to use the more useful will be the technology. Customers expect that the new technology will be effort less. If customers 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 their own sake. Enjoyment is the strong and consistent force towards the online shopping. In case customers finds the enjoyment in online shopping then they will have strong attitude towards online shopping that will leads to adoption of internet as shopping medium. Consumer Traits Consumers’ traits play an important role in online shopping; these traits depend on four demographic factors that are age, gender, education, and income. These traits have a significant effect 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 educated consumers prefer online shopping rather than traditional. Incomes are positively correlated with possession of computers, internet access and higher education levels of consumers. Some personality characteristics also influence the online shopping like self-efficiency and need of interaction. Situational Factors A wide variety of situational factors also moderate the relationship between online shopping and consumer behavior. These are time pressure, geographical distance, lack of mobilization, need for special items and attractiveness of alternatives. Product Characteristics Consumers decision that whether to shop online or not also influenced by the product types and characteristics. 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 products like perfume and lotions are most likely need personal experience and knowledge are considered to less likely for online shopping. Trust in online shopping Lack of trust is one of the most frequently cited reasons for consumers not shopping on the Internet. Since this shopping medium is relatively new and most of them have only little experience with it, online shopping provides a challenge to many customers. Customers cannot physically check the quality of a product or monitor the safety and security of sending sensitive personal and financial information while shopping on the Internet. Contextual factors like security and privacy have a great impact on consumer trust in shopping on the Internet.

Social Media Today’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 other social media websites. Therefore every company has to pay attention because social media is changing the way customers do business. This power of loudness is influencing the entire buying process. If a company doesn’t pay attention, they have a strong rick of losing customers and getting 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)