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Proposal Final[1]

Proposal Final[1]

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A Study of Consumer Buying Behavior and Market Approach towards Online Retail Business in Faisalabad

The Internet and the World Wide Web have become the most important new communication media since television, and ones that are fundamentally reshaping contemporary understanding of sales and marketing. Another strong signal that the Internet is becoming more entrenched in daily life is the increase in time spent online(Lipsey, 2007). Marketing on the Internet for the foreseeable future will remain principally about getting the right information to the customer, at the right time, and in just the form that will enable the customer to move one step further along in the purchase consideration process(Clarke, 2005).

Literature Review
The emergence of the Internet, Web and related technologies has allowed businesses to transmit and receive data in an inexpensive, simple and easy manner(Clarke, 2005). Aside from supplying needed information, companies can also market and sell products and services more easily. At the same time, electronic commerce carries an underlying promise of being a great equalizer exposing small enterprises to a number of novel and cost-effective ways to promote their goods and services on a global level(Gao, 2004). Organizations currently using the Internet for their marketing activities, collaboration, and competitor research are already using e-commerce tools. After the initial pioneering experience most are now interested in reassessing their Internet, Extranet, and Web strategy as an integral part of their electronic commerce activities(Reynolds et al., 2004 ).


The prospect of a seamless, interconnected global marketplace of goods and services is stimulating unprecedented interest in the business community as well as among various national governments(Lipsey, 2007). Consumer Trust in Internet Retailer Trust can be defined in the Internet store as a consumer’s willingness to rely on the seller and take action in circumstances where such action makes the consumer vulnerable to the seller. The definition emphasizes the cognitive dimensions of trust and views trust as a rationale choice process(Castaldo, 2007 ). The cognitive view is a narrow treatment of trust excluding the affective and social dimensions and research proposed a model of antecedents of organizational trust based on a dyad of trustor and trustee.(De Mooij, 2003) The antecedent of trusting behavior is, trusting intention, or the willingness to be dependent on another person. Trusting intention is in turn influenced by a trustor’s propensity to trust, the trustor’s perceived characteristics of a trustee (e.g., trustworthiness of trustee based on his or her integrity, benevolence, and ability), and indirectly the trustor’s observations of the trustee’s behavior(Castaldo, 2007) Security and Data Privacy It is important to realize that until the problem of transaction security is completely solved and solid, companies and consumers will be uneasy about performing financial or other confidential transactions on-line and reluctant to use the Internet and public networks for conducting business. Business transactions must be completely reliable and secure(Khosrow-Pour, 2006). One of the interesting phenomena of the digital age is the fact that data is quickly becoming the only asset and needs to be well protected. Therefore, it would be shortsighted not to build security into the core of electronic commerce(Psaila, 2008). Finally, both user and provider must consider the problem of confirming that the other person is who he or she claims to be. Just as a cyberspace retailer wants to confirm that persons ordering a product or service are who they claim to be, users need to confirm the sites to which they send sensitive information(Evanschitzky et al., 2007 ). 2

Data Privacy and Lawful Interception The issue of data privacy is often dismissed as one that may not matter much. However, more and more technologically aware customers that rely on E-commerce tools realize that sending messages over a network makes them subject to eavesdropping. And once stored in a file or a database, the data is subject to perusal months or even years later(Dennis et al., 2004 ). Broad Problem Area / Background The online businesses through Internet marketing make consumers better informed about available products, product quality and prices, which mitigates problems of asymmetric information(Khosrow-Pour, 2006). The entry of new retailers is facilitated, competition and economic efficiency is boosted and the market powers of consumers improved. Retailers need to respond strategically by using augmented product and price differentiation(Reynolds et al., 2004 ). There will also be substantial changes in the division of tasks between retailers and customers. However, important obstacles to these developments like, Technological vulnerability, Quality problems in the information on the Internet, cognitive limitations of individuals, and weaknesses in distribution channels(Tan, 2003). Instead of traditional, brick-and mortar model for retailing, companies are recognizing that online retailing is now a sine qua non and are moving assertively into the channel, and they are optimistic about the future of multi-channel retailing(Dennis et al., 2004). In addition, because of the interactivity afforded by the medium, the marketers can tailor individual advertising and formulate advertising messages adaptively(Clarke, 2005) through o Email Marketing  The promotion of products or services through email(Bidgoli, n.d.)

o Permission Marketing


Marketing centered on obtaining customer consent to receive information from a company(Bidgoli, n.d.)

o Search Engine Advertising  Search engine marketing is both an art and a science. Its goal is to optimize a site's ability to be found on Internet search engines and directories by employing relevant keywords, key phrases, and design. This column will help you understand the basics of optimizing your site for better positioning in search databases and will update you on search industry trends (Clikz Network, 2004) Problem Statement Albeit the momentous benefits of technological innovation, the rapid development of online-retailing and marketing means carries implications disguising problems as well as benefits & opportunities and it is important that these implications are recognized and managed by retailers in a prudent manner. These developments encourage me to conduct an overture research of: A Study of Consumer Buying Behavior and Market Approach towards Online Retail Business in Faisalabad This research will assess and analyze the consumer buying behavior and market approaches associated with retailing in the context of Faisalabad. Centering the problem statement, study will describe the following aspects: • • Postulates of existing online business strategies and retailing issues The Internet business and Online retailing increases retailers’ dependence on information technology, thereby increasing the technical complexity of many operational and security issues. • • Conception of new business model for the Internet business suited to online retailing in Faisalabad The importance of security controls, customer authentication techniques, data protection, audit trail procedures, and customer privacy standards.


• •

Techniques to mitigate external threats to online retailing systems. Comparative potential opportunities for consumers, marketers and retailers associated with online-trade in relation to technology, human resource, and customer support management.

Rational Of the Study • This research will serve as a secondary source of information on consumer buying behavior, online retail business sand related issues in contemporary scenario for those who are interested in being familiar and upgraded to internet business system for retailing in Faisalabad • • This study provides a comprehensive metaphoric analysis of implications of the Internet business for retailing and consumers’ concerns. This study will also help the students who want to do research further on the Internet business for retailing and consumer buying behavior and market approach. • As study covers, every consumer related issues for online-marketing, retailing and shopping, consumers can benefit from key aspects of the subject. Theoretical Framework The research analyze the multifaceted preferences of online users considering internet marketing, internet retailing and e commerce aspects including relevance of ads, Trust of customers, Security of system, Privacy, Value delivered, Confidence, Website design and model, Value drivers for online retailing. Objectives of the Study • • • To analyze the current business models of online-retailing business To find out the appropriate techniques to alleviate external threats to onlineretailing systems To assess the consumer approach towards online retailing businesses in Faisalabad. 5

To establish the importance of security controls, customer authentication techniques, data protection, and customer privacy standards for online- retailing and marketing.

To find out the proportional potential opportunities for marketers, consumers and retailers associated with online-trade in relation to technology, human resource, customer support, management.

Significance of Study • This research will serve as a secondary source of information on the online business and related issues in contemporary scenario for those who are interested in being familiar and upgraded to consumer buying behavior for retailing in Faisalabad • This study will provide a comprehensive metaphoric analysis of implications of internet business for retailing and associating models addressing the strategic, reputational and consumers concern • • This study will also help the students who want to do research further on internet business systems for retailing As study covers, every consumer related issues for online-marketing, retailing and shopping, consumers can benefit from key aspects of the subject. Motivation for Study Empirical evaluation and real time multifaceted implications of the online business for retailing and consumers buying behavior in Faisalabad are the real source of motivation. As researcher will assess the current systems and will evolve the new suggested internet business models fitting in retailing organizations in Faisalabad to benefit from and to comply with the latest technology to resolve the issues to improve the customer compliance and online-retailing functions.


Limitation of Study • • • • The scope of study is limited to the online business, consumers buying behavior and its prospects in retailing in Faisalabad In Faisalabad, online-retailing system is a newfangled genesis that further bounds the scope of study. Constraints of time, financial and human resources are also a limit for study. Having no or little technical and related knowledge for the internet marketing, ecommerce, and online shopping of respondents is also a limitation to the study. Sources of Literature Review • Print Sources:    Technical Business Reports of selected retail stores Technical Online Retailing Business Reports Journals on the Internet business, marketing, retailing and ecommerce   • Books on Internet business, marketing, retailing and e-commerce Magazines on cyber crimes

Electronic Sources:   The Internet Business related TV channels like Bloomberg Television

Research Methodology Type of Study The study utilizes the descriptive techniques, because the main objective is “what exists” and “what is” about a certain existing situation. The method ascertainments are prevailing conditions in a particular setting and experience. This kind of study is most significant as, a researcher seeks direct responses from those who are associated with the area of interest. This method has been adopted as an essential technique of qualitative description


of the answer to the question regarding the real facts relating to the ubiquitous environment. Research Instruments • • One to one interviews to the owners, top management and decision makers of large retail stores in Faisalabad. Survey Questionnaires to the Target Audience

Interviews and Questionnaires are the efficient data collection mechanisms when researcher knows exactly what is required and how to measure the variables. Respondents of Study • • The owners, decision makers, and top management of large retail stores which are using or intend to use online business and market to any extent, in Faisalabad Consumers having awareness and/or exposure and / or real time experience of online shopping Sampling Procedure • • A random sample of 100 respondents from Faisalabad, One on one interview will be conducted to the selected major retail storeowners from Faisalabad

City Profile of Faisalabad
The city of Faisalabad is not more than a century old. Just hundred years back this region was the center of keeping livestock. This city was irrigated in 1892 when Jhang & Gogera branches were supplied water. The foundation of first ever-residential area was laid in 1895. Its main purpose was the construction of a market. During those days, the area across the river Chenab was called “Sandal Bar”. Before the establishment of Lyallpur City the ancient residential area was called “Pakka Marri” now known as “Pakki Marri”.The caravans used to stay at this place while traveling from Jhang to Lahore. The English travelers of those times wanted to convert this area into a city. In the beginning


the small establishment was called “Chenab Canal Colony” which was later named “Lyallpur” after the name of Governor of Punjab Lt. General Sir James B Lyall. The foundation of Lyallpur was laid in 1896. Its famous clock tower was built on a well. It was completed in 1906. The construction of this clock tower was completed under the supervision of Ghulab Khan who belonged to the family who built Taj Mahal in Agra. The clock was brought from Bombay (India). It is believed that the clock tower was built in the memory of Queen Victoria after her death. By the time this tower was built the eight bazaars were already operational. The map of Faisalabad is just the copy of British flag Union jack designed by an architect Desmond Yong. However, the real design on which this city is planned was of Sir Ganga Ram, who was a famous town planner of his time. The total area of 110 sq. acres was used to build eight bazaars & clock tower in a round shape. All these eight bazaars are connected with each other through another bazaar, which is called Goal Bazaar. In 1910, the famous and oldest Chenab Club was constructed. There, British rulers used to spend their evenings to entertain themselves with drinks & music. In 1908, Punjab Agricultural College and Khalsa School were opened. Later Khalsa School was upgraded as Khalsa College, which is now called Municipafl Degree College. The first railway started in 1910. The first residential area was Douglas Pura established in 1920. Industrialization was started in 1930. The project of “Lyallpur Cotton Mills” was completed in 1934. With the establishment of Pakistan as the population increased the city also expanded. When Pakistan came into being the area of this city was 3 sq. miles. Now it is more than 10 sq. miles. New residential areas were established like Peoples colony, Ghulam Muhammadabad, Lahore colony, Afghanabad, Jail road etc. In 1961, the population of the city was 0.43 million which was increased to 0.83 million in 1972. By 1981, it went up to 1.1 million. Now demographically, Faisalabad is the third biggest city of Pakistan after Karachi & Lahore. Because of this in 1972 Municipal Committee was upgraded to Municipal Corporation. In July 1982 Faisalabad was


upgraded as the Capital of Division. Along with these changes the name of the city was changed to Faisalabad after the name of Saudi King Shah Faisal. Today, Faisalabad is the biggest industrial city of Pakistan. Due to its emphasis on textile products, It is also known as the Manchester of Pakistan. It is the third biggest industrial & trade center of Pakistan. When Pakistan came into being there were two dozen factories in Faisalabad, which increased to 43 by 1948. Now the industrial units are more than one thousand. It is the biggest textile center of Pakistan. Apart from textile unit there are Flour, Oil, Artificial Fertilizers, Art Silk, Agricultural Equipment & Wood industries in this city. It is believed that Faisalabad is the second biggest revenue-generating city of Pakistan. Asia’s biggest and the only Agricultural University is in this city. It also has a Textile College, which is the only one of its kind in the Country. Major Retail Stores in Faisalabad Following are the major retail stores in Faisalabad city; Metro Cash and Carry Warid Mobilink Emart Bambino SB store Ufone Zong Sony Home Appliances Pizza Hut KFC


Clarke, Irvine and Flaherty, Theresa(2005)Advances in electronic marketing. USA: Idea Group Inc. Castaldo, Sandro(2007) Trust in Market Relationships. USA: Edward Elgar Publishing Evanschitzky, Heiner et al. (2007) E-services Opportunities and Threats.USA:Springer Lipsey, Chrystal (2007) Economics. New York: Oxford University Press Gao, yuan(2004) Web systems design and online consumer behavior. USA: IGI Khosrow-Pour, Mehdi(2006) Emerging Trends And Challenges in Information Technology Management. illustrated. USA: Idea Group Inc. Bidgoli, Hossein(n.d.) The Internet encyclopedia. Calafornia:John Weiley & Sons Inc. Psaila, Giuseppe and Wagner, Roland (2008) E-Commerce and Web Technologies: 9th International Conference, EC-Web 2008 Turin, Italy, September 3-4, 2008, Proceedings: Springer De Mooij, Marieke(2003) Consumer behavior and culture: SAGE Reynolds, Jonathan et al. (2004) Retail strategy: the view from the bridge:Butterworth-Heinemann Dennis, Charles et al. (2004) E-retailing. New York: Routledge Tan, Patrick (2003) Success with Online Retailing. New York:iUniverse Inc.


Consumer Preference Survey Form A Study of Consumer Buying Behavior and Market Approach towards Online Retail Business in Faisalabad School of Technology and Management (STM) is one of the UK’s leading academic and research institution. Moreover, STM has an established role in education, skills, and leadership, research and development functions to burgeon the professionalism and societal development nationwide. By joining this survey, you will help us in analyzing A Study of Consumer Behavior and Market Approach towards Online Retail Business in Faisalabad based on your preferences. Your inputs will be kept confidential and will be used purely for research purpose only. Name: Sex: Single/Married Education: Profession: Residential Area: Up to Metric Graduation Intermediate Master M / F Marital Status:

Family Size: _______ Members

How much time would you estimate that you personally use the Web? Over 40 hours a week Over 20 and up to 40 hours a week


Over 10 and up to 20 hours a week Over 5 and up to 10 hours a week Over 1 and up to 5 hours a week One hour a week and less Are you interested in shopping online? Yes Have you ever purchased any thing online? A. Yes B. No B. No

Do you think that transaction is safe on the internet? A. Yes B. No C. Not Sure

I‘d like to shop online because: A. Saves time C. It is exciting and unique What kind of trade would you like online? Retail products Trade How would you like to pay online? Credit Card Bank Draft B. Debit Card C. Paypal E. Other (Please Specify) ____________________ B. Wholesale products trade B. Saves money D. It is accessible

Shipping cost should be compensated by: Consumer D. Government B. Retailer C. Manufacturer E. Other_________________________

Shipping time for retail merchandise with in country should be: 13

A. Up to 2 days D. 10 days

B. 5 days E. 14 days

C. 7 days F. __________days

Do you like to receive unsolicited direct emails about products information in you inbox? A. Rare B. Some times C. Often D. Always

How would you rate these variables on total marks of 10? Security and Privacy Pre-Purchase Assistance Post-Purchase Service Shipping Cost Shipping Time Return Policy _________________ 10 What type of online advertisements appeal you most? A. Banners C. Newsletters E. Catalogues G. Emails B. Pop ups D. Multimedia ads F. Brochures H. Other___________________________

What source do you prefer most to find any information about products, ideas or companies? A. Search engines C. Relevant groups E. Companies’ sites G. Chat rooms I. B. Directories D. Blogs F. Databases H. Yellow pages


What types of products would you intend to shop more confidently? 14

A. Branded established products C. Non-branded products

B. Branded new products D. Heavily advertised products

Do you think that Internet marketing helps in finding and choosing the desired products? A. Yes B. No C. Not Sure

Thank you for your co-operation.


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