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THE EFFECTS OF ONLINE SHOPPING IN FINANCIAL PLANNING

OF SELECTED CONSUMERS IN QUEZON PROVINCE

An Undergraduate Thesis

Presented to the Faculty of the College of Business & Accountancy

Manuel S. Enverga University Foundation

Lucena City

In Partial Fulfillment of the Requirements

for the Degree of B. Sc. In Business Administration

by

Karen Paladan

Ferdinand Philip B. Gutierrez

Kurt Russel Malapitan

Gello Ongwico

John Michael Cabasa

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September 2021

Research Title: The effects of online shopping in Financial planning of

selected consumers in Quezon, Province.

Name of Researchers: Karen Paladan

Ferdinand Philip B. Gutierrez
Kurt Russel Malapitan
Gello Ongwico
John Michael Cabasa

Degree :Bachelor of Science in Business Administration

1. Abstract

2. Background

2.1 Rationale of the Research

The world is new and ever-changing, and in today’s digital world, the fast, simple

acquiring of goods and services is greatly desired. Meanwhile, Online shopping is

becoming a prominent medium in the world of the Internet, with more people using it

to buy items and services. The Internet's evolution has begun to give consumers

with a variety of information and alternatives for evaluating items, features, and

prices. It also provides numerous options for acquiring the necessary items from

various providers. Online shopping satisfies modern consumers looking for

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convenience and speed (Katawetawaraks and Wang, 2011). Purchasing necessities

online is quickly becoming the new normal. Brands must change and be adaptable

in order to satisfy shifting requirements. Technology has now transformed online

business purchases into a boundless marketplace, making it easier and more

effective for both customers and sellers. Because of the pandemic, this platform has

become critical. However, Online shopping affects the consumer behavior of one

person. According to Engel, Blackwell, and Mansard (2008) consumer behavior is

the actions and the decision processes of people who purchase and personal

consumption. The recent growth of online shopping has been explained by various

studies. According to previous researches, online shopping behaviour is not only

influenced by the demographic characteristics of customers such as age, gender,

and occupation, etc. (Baubonienė & Gulevičiūtė, 2015; Fang et al., 2016; Ganesan-

Lim et al., 2008; Yan & Dai, 2009), but also perceived benefit factors (Häubl & Trifts,

2000; Katawetawaraks & Wang, 2011; Lee et al., 2011; Masoud, 2013; Yan & Dai,

2009; Zhang et al., 2014).

There are many research papers analyzed the online shopping behavior of

consumers. However, most of the previous studies were carried out before the

spread of Covid-19, it is still a question of how this pandemic may impact consumer

behavior towards online shopping. Furthermore, the researchers, also aim to

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conduct this research to explore the situation of consumer behavior towards into

financial planning.

According to Jack Kapoor, Les Dlabay and Robert Hughes, (2012), personal

financial planning is the process of managing your money to achieve personal

economic satisfaction. This planning process allows you to control your financial

situation. Every person, family, or household has a unique financial position, and any

financial activity therefore must also be carefully planned to meet specific needs and

goals.

Personal financial planning is exercise according to the needs and wants of a

person. A person must know how to utilize his/her expenses wisely. Thus, it is

important to not just spend resources without considering the actual necessities that

must be prioritize by the individual and regarding the circumstances.

Personal financial planning helps an individual on determining their short- and

long-term financial goals. It is exercise according to the needs and wants of a

person. A person must know how to utilize his/her expenses wisely. Thus, it is

important to not just spend resources without considering the actual necessities that

must be prioritize by the individual and regarding the circumstances.

The researchers chose this study to elaborate the effects of online shopping on

financial planning because we believe that the common problems that impede an
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individual's finances are spending without realizing his/her limits, neither practicing

nor knowing how to save, not feeling satisfied, and failing to consider future financial

situation will likely put the individual at a disadvantage.

2.2 Purpose of the Research

This study aims to assess the effects of online shopping in financial planning of

selected consumers in Quezon Province.

The study sought to answer the following questions:

1. What is the profile of the Customer in terms of:

1.1 age;

1.2 gender;

1.3 employment status;

1.4 income status;

1.5 other sources of income.

2. To what extent do the respondents assess themselves in dealing financial planning in

terms of:

2.1 Defining and agreeing financial objectives and goals;

2.2 Gathering financial and personal information;

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2.3 Analyzing financial and personal information;

2.4 Development and presentation of the financial plan;

2.5 Implementation and review of the financial plan.

3. To determine the principles of consumer behavior in terms of:

3.1 Reciprocity;

3.2 Commitment

3.3 Consensus

3.4 Authority

3.5 Liking

3.6 Scarcity

4. Based on findings, what learning materials can be recommended?

2.3 Theoretical Framework

The consumer behavior plays an important role in marketing. This is influenced

by various factors. In the changing global scenario we find that consumers needs and

wants to buy a product also changes with it. Muthuvelayutham (2012) The Study of

Consumer Brand Loyalty - Consumers typically go through seven major stages when

making purchase decisions viz. need recognition, search for information, pre-purchase

evaluation, purchase, consumption, post-consumption evaluation, and divestment. If a

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consumer decided to purchase a product in evaluation stage he would make five

purchase decisions, such as brand, vendor, quantity, timing and payment method.

Purchase of all products do not involve all of these decisions. It depends on the cost,

life, frequency of the product. In case of high cost and infrequently purchased products

like television, all these decisions take place and there is no concept of trial purchase

because these products can be purchased for a considerable period. In case of low cost

and frequently purchased items like toilet soaps, food products etc. called Fast Moving

Consumer Goods (FMCGs) may not involve all decisions like payment method. True

brand loyalty includes the above, but replaces inertia with a psychological process

resulting in brand commitment. Next, let's turn to various definitions proposed by

different authors and thinkers to get a better insight towards the term brand loyalty.

Brand loyalty is a topic of much concern to all marketers. Every company seeks to have

a steady group of unwavering customers for its product or service. Because research

suggests that an increase in market share is related to improved brand loyalty,

marketers are understandably concerned with this element. Thus, brands that seek to

improve their market positions have to be successful both in getting brand users and in

increasing their loyalty.

We also introduce how marketing as a discipline came about, and why

understanding consumer behaviour is at the heart of effective marketing.

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Jane Priest (2013) A central goal of marketing is to satisfy customer needs, so

marketers must have a good understanding of what their customers’ needs are if they

are to satisfy them better than the competition. A thorough understanding of why and

how people buy things helps marketers identify appropriate people to target and design

and communicate attractive offerings. In other words, every element of the marketing

plan benefits from an understanding of the customer and, with the rapid pace of change

in consumer markets today, this is only going to become more important. It is also worth

making a distinction at this stage between consumer buying behaviour and

organisational buying behaviour, as some important differences exist between the two.

For instance, people within governments and businesses who are responsible for

buying goods and services tend to work closely with colleagues to make collec- tive

decisions. The much-used term consumer behaviour includes all of the examples we

have been looking at. That is, it would involve the buyers or customers of products, as

well as the people who actually use them. It deals with the buying decision itself and far

beyond.

Reciprocity in Consumer Behavior

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Marketing as a discipline has failed to adequately incorporate the concept of

reciprocity in any theory of customer relationships. As we can see by this approach, the

focus of reciprocity is on cooperation, a concept that is definitely related to, but not the

same as, reciprocity. In a consumer-retailer exchange, Dahl, Honea and Manchanda

(2005) find that consumers may experience guilt if they are not able to reciprocate the

social interaction (through a purchase). Subsequently, they are more likely to return and

purchase from that salesperson to assuage the feeling of guilt. - Reciprocity is first

conceptualized as a component of discrete transactions. It conceptualized as a

multidimensional element of ongoing exchange relationships. Marketing as a discipline

has failed to adequately incorporate the concept of reciprocity in any theory of customer

relationships. The term reciprocity appears in much of the marketing literature,

especially those streams focusing on relationship, however very few researchers have

attempted to conceptualize or measure reciprocity at all. - Miller and Kean (1997) find

that when local business owners exhibit interpersonal reciprocity (defined as

emphasizing concern for others or strong attachment to others), rural consumers are

more likely to behave reciprocally by purchasing locally. As we can see by this

approach, the focus of reciprocity is on cooperation, a concept that is definitely related

to, but not the same as, reciprocity. - Cialdini and Rhoads (2001) review a large quantity

of past research which investigates the role of reciprocity in the process of social
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influence. The authors suggest that reciprocity is one of six psychological principles

(also including scarcity, authority, consistency, liking, and consensus) that impacts

persuasion, citing research on the granting of concessions to individuals in order to

increase participation in research (e.g., reducing the expected survey duration to 20

minutes from an hour, etc.).

Commitment in Consumer Behaviour

When commitment is viewed in this light, it is both positive and inspiring. The

second definition, however, paints a very different picture. Here commitment is viewed

as an obligation and a limitation. Something that “restricts freedom of action”. Affective

commitment inspires more than just loyalty – it creates brand advocates. - According to

John Meyer and Natalie Allen (2018), consumers that are committed to a brand in this

way are almost completely insulated from competitive offerings because their feelings

for the brand make them very difficult to lure away. Continuance commitments are built

on customer satisfaction which is created by meeting a customer’s needs and

expectations. Exceeding these expectations creates an affective commitment and failing

to satisfy will result in a normative commitment. In this way, continuance commitments

represent the middle ground –  a customer relationship that could be better but could

definitely be worse.
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2.4 Literature Survey

2.5 Significance of the Study.

The researchers believe that the result of this study will be beneficial to the

customers especially in addressing the effects of having a habit regarding online

shopping towards financial planning. Additionally, It can provides awareness and

enlightenment about the importance of financial planning and consider it as a key

factor in effecting change within their financial behavior. Thus, the findings of this

study aimed to contribute on the following:

To the consumer, as the main participants of the study, it will help them to be

more knowledgeable regarding the allocation of their finances. This will raise their

awareness on how the way they handling money. Furthermore, this study provides

financial knowledge which they can use in everyday life and in the future.

To the community, This, study will help in improving the awareness of the public

concerning their financial matters.

To the administrators, It will serve as a guide on what is the best practices to

emphasize by the instructors in business school’s curriculum to prepare students in

current business operations.

To the future researchers, this study will serve as basis and useful reference

material to other research related to this study.

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2.6 Definition of terms

For a better understanding of the concepts and terms in this study, the following

words were defined operationally and conceptually.

Online Shopping - is a type of electronic commerce in which consumers may buy

products or services directly from a vendor through the Internet using a web browser or

a mobile app.

Financial Planning – Financial planning is a process, not a product. It is the long-term

method of wisely managing your finances so you can achieve your goals and dreams,

while at the same time negotiating the financial barriers that inevitably arise in every

stage of life.

Financial Goals – are goals you set that revolve around finances or money. Financial

goals are targets, usually driven by specific future financial needs. Some financial goals

you might set as an individual include saving for a comfortable retirement, saving to

send your children to college, or managing your finances to enable a home purchase.

Alternative - a choice limited to one of two or more possibilities, as of things,

propositions, or courses of action, the selection of which precludes any other possibility.

Personal finance - it is defined of having to do with areas such as saving, spending,

credit, debt, investing, mortgages, insurance, budgeting, and retirement.

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Income – Income is money (or some equivalent value) that an individual or business

receives, usually in exchange for providing a good or service or through investing

capital. Income is used to fund day-to-day expenditures. Investments, pensions,

and Social Security are primary sources of income for retirees. For individuals, income

is most often received in the form of wages or salary.

E-commerce (electronic commerce) - is the purchasing and selling of products and

services, as well as the transmission of cash or data, through an electronic network,

most notably the internet.

Effect - a change which is a result or consequence of an action or other cause.

Consumer behavior - the study of consumers and the processes they use to choose,

use (consume), and dispose of products and services, including consumers’ emotional,

mental, and behavioral responses.

Financial Situation – The economic situation one can have. (the money he has against

the money he owes).

2.9 Scope and Limitation of the Study

The scope of this study was included one hundred (100) selected Consumer

from Quezon, Province.

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The research was conducted during the 1st semester of the school year

2021-2022. This study focuses on the effects of online shopping in financial planning

using the principles of consumer behavior: Reciprocity, Commitment, Consensus,

Authority, Liking, and Scarcity. In that case, respondents were given time to freely

answer the questionnaire for days.