You are on page 1of 15

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 ).

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)
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
• 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 online-
retailing systems
• To assess the consumer approach towards online retailing businesses in

• 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
• 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, e-
commerce, 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 e-
 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
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
SB store
Sony Home Appliances
Pizza Hut

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.

Sex: M / F Marital Status:
Education: Up to Metric Intermediate
Graduation Master
Profession: Family Size: _______ Members
Residential Area:

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 B. No

Have you ever purchased any thing online?

A. Yes 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 B. Saves money
C. It is exciting and unique D. It is accessible

What kind of trade would you like online?

Retail products Trade B. Wholesale products trade

How would you like to pay online?

Credit Card B. Debit Card C. Paypal
Bank Draft E. Other (Please Specify) ____________________

Shipping cost should be compensated by:

Consumer B. Retailer C. Manufacturer
D. Government E. Other_________________________

Shipping time for retail merchandise with in country should be:

A. Up to 2 days B. 5 days C. 7 days
D. 10 days E. 14 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 _________________

What type of online advertisements appeal you most?

A. Banners B. Pop ups
C. Newsletters D. Multimedia ads
E. Catalogues F. Brochures
G. Emails H. Other___________________________

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

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

A. Branded established products B. Branded new products
C. Non-branded 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.