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FACTORS INFLUENCING LEVEL OF IMPULSIVE BUYING

Factors Influencing Level of Impulsive Buying

By

Sardar Muhammad Nawaz

Institute of Business Management

Submitted to

Dr. Fayyaz Ahmed

Karachi, Pakistan

December 2020
FACTORS INFLUENCING LEVEL OF IMPULSIVE BUYING

ACKNOWLEDGEMENT

Praise to Allah for the strength to initiate and complete the study. I want to express my
heartfelt gratitude to Dr. Sayed Fayaz Ahmed, Assistant Professor, IoBM. Who is the
supervisor for this study and supported me in a best manner. His support and guidance has
made my study of quality.

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FACTORS INFLUENCING LEVEL OF IMPULSIVE BUYING

ABSTRACT

Purpose: For years previous studies has investigated and looked for the clear understanding

of the impulsive buying behavior. Researchers has given a significant time on researching the

factors to increase the volume of sales. This is era, is the era of technology and is the fasts

competitive era. This study finds the influencing factors of the impulse buying. Therefore, the

researcher has taken 3 variables consisting of environmental factors, Situational factor and

online factors on the Karachi population

Design/methodology/approach: Data were collected through a quantitative study (n=93)

involving a questionnaire and were analyzed using Spss.

Findings: The research findings conclude that out of these factors, environmental and

situational factors play a key role in impacting the level of impulsive buying of customers

whereas online factors have no impact.

Keywords: Impulsive Buying, Environmental Factors, Situational Factors, Online Factors

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Contents
Abstract............................................................................................................................................II
List of Tables...................................................................................................................................IV
List of Figures..................................................................................................................................IV
CHAPTER 1: INTRODUCTION.............................................................................................................5
1.1. Background of the Study........................................................................................................5
1.2. Objective of the Study...........................................................................................................6
1.3. Problem statement................................................................................................................7
1.4. Research Question.................................................................................................................7
1.5. Hypothesis.............................................................................................................................7
chapter 2: literature review..............................................................................................................8
chapter 3 : research methodology..................................................................................................13
3.1. Data.....................................................................................................................................13
3.2. Variables..............................................................................................................................13
3.3. Inclusion Criteria..................................................................................................................13
3.4. Sample and Sampling Technique.........................................................................................14
3.5. Statistical Technique............................................................................................................14
Chapter 4 : results and discussions.................................................................................................15
4.1. Descriptive Statistics............................................................................................................15
4.2. Reliability Analysis...............................................................................................................16
4.3. Regression Analysis..............................................................................................................16
4.4. Discussion............................................................................................................................18
Chapter 5 : Conclusion, Limitaitons and recommentdation............................................................20
5.1. Conclusion..........................................................................................................................20
5.2. Limitations...........................................................................................................................20
5.3. Recommendations...............................................................................................................21
References......................................................................................................................................22

Banyte, J., 2008. “Conceptions and methods of marketing within dynamic b usiness
environment”. Inzinerine
Ekonomika-Engineering Economics(1): 7-8.
Banyte, J., 2008. “Conceptions and methods of marketing within dynamic b usiness
environment”. Inzinerine
Ekonomika-Engineering Economics(1): 7-8.

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FACTORS INFLUENCING LEVEL OF IMPULSIVE BUYING

Banyte, J., 2008. “Conceptions and methods of marketing within dynamic b usiness
environment”. Inzinerine
Ekonomika-Engineering Economics(1): 7-8.
The most of consumers are being exaggerated by internal environmental factors
in
Impulsive attitude of consumer. Impulse buying of consumers is generally formed by
“the stimulus”
The most of consumers are being exaggerated by internal environmental factors
in
Impulsive attitude of consumer. Impulse buying of consumers is generally formed by
“the stimulusINTR”

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LIST OF TABLES

S.N Table Page


o
1 Demographics (frequencies & percentages) 14
2 Descriptive statistics 14
3 Reliability testing 14
4 Correlation 14
5 Coefficients 14
6 Regression Analysis 14
7 ANNOVA 14
8 Backward Regression 15

LIST OF FIGURES

S.No Figure Page


1 Conceptual framework 11

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CHAPTER 1: INTRODUCTION

1.1. Background of the Study

The impulsive buying behavior, a subject that has been focus of study for over number of

years for the researchers (Pandey & Bhartiy, 2019). After number years of study and research the

phenomenon of impulse buying has number of factors that has effect on it. These factors such as

environmental factor has significantly influenced the desirability of the customer for an instant

purchasing behavior. In the presence of these factors leading to impulse buying, Marketers

intends to make the most of it and turning the situation in their favor (Miao et al., 2019).

Environment factor is one the factors that impact the selection of stores or brand or product of

the customer. Detail decoration, theme, choice of colors, setting in short, the ambiance is the

element of attraction and motivation for the customers and convincing them for impulse buying

(Yarahmadi & Karbasivar, 2011). In this study, we studied the factors that has impact on the

level of impulse buying. For the development of theoretical model it starts by find the

independent and dependent variable that has a role of impacting the customer behavior to

increase impulse buying. Among the number of factors impacting impulse buying, as for an IV

for our study, we have chosen store environment and online characteristics. For the mediating

role over the DV situational factors are placed. Whereas impulse buying is the DV in our study.

Customers with high income level and power of purchase tend to incline toward sudden urge of

buying products on desires. The availability of money boost the thirst for spending on products

as and when they desire.

With the multiplication of online businesses, there is developing proof that online drive

purchasing is a rising marvel, which has been the focal point of specialists from multiple

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disciplines(Wells et al., 2011). Moreover the website quality from where the customers searches

also greatly impacts the urge of impulsive buying of the buyer (Ibid).

Analysts and Practitioners have been keen on the field of motivation purchasing for as far

back as sixty years. Several researches have been conducted to understand the phenomenon

behind that urge customer feels to instantly fulfil his need for a product(Pradhan, 2016). Also,

there is a contrast among male and female motivation purchasing conduct where female

purchasers will in general be more imprudent(Gudonavičienė, 2014). It is also discovered that

there are some items that shoppers regularly purchase impulsively, these items include personal

care products, groceries and accessories(Pradhan, 2016). However, a minor segment shows

impulsive purchasing of electronics and kitchenware, likely because these items are high

association items for purchasers and they require additional time, cash and data (Ibid).

Considering all these factors, marketers can capitalize on the experience of impulsive

buying of customers and make them spend more on the brands they want to.

1.2. Objective of the Study

The goal of this research is to characterize the how

 The level of impulse buying affect by the environment


 The level of impulse buying affect by the situational
 The level of impulse buying affect by the online factors
 Identify the factors affects more or less on the level of impulse buying.

This study will help marketers to understand consumer buying behavior & realise the areas

where they should focus and ignore their concentration.

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1.3. Problem statement

The present-day customers have unlimited choices available to them which have made

the competition really severe among brands. This is the reason that marketers do not want to

miss any effort that can make customers attracted towards their products. Things get more

interesting when it’s about impulsive buying of customers (Pradhan, 2016). With availability of

multiple alternatives and less time and effort given by customer to purchase a product, there must

be some factors that dominate customer’s impulsive buying behavior. Without identifying those

factors no brand can survive in this competitive scenario. Therefore, multiple factors have been

categorized under environmental, situational and online factors to be taken into consideration to

understand how they affect level of impulse buying in customers.(Miao et al., 2019)

1.4. Research Question

a) What is the effect of environmental factors on IB?

b) What is the effect of situational factors on IB?

c) What is the effect of online factors on IB?

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CHAPTER 2: LITERATURE REVIEW

2.1 Review of Literature

(Ahmed & Riaz, 2018) urged is their research that any unplanned buying behavior of

the customer is to be known as impulsive buying. Discounts and free products are the main

source of impulse buying. The impulsive buying generally depends upon the purchasing of the

products that arouse the desire the rather than the in advance planning. According to (stern,

1962) most purchases done by the purchasers are unintentional or were not needed (Ünsalan,

2016) adds further that mobile phones, accessories, electronics items, mobile gadgets, clothing

and jewelry are the items that stimulate impulsive buying.

Impulsive buying have four types (Hashmi et al., 2019) A customer buying product without any

intention of purchase and companies advertising their product on periodically to stimulate the

product around the customer mind. These two types are known as pure impulsive buying and

reminder impulsive buying respectively. The study further describes the other two remaining

types as suggestive impulsive buying and planned impulsive buying. The suggestive impulsive

buying is where the customer sees a product and craves for the product for its internal

satisfaction. Whereas, planned impulsive buying directs that the customer has an intentionally

decided to buying the product.

2.2. Conceptual Framework

Impulsive buying
Impulsive buying depends upon number of factors. This study has taken one dependent variable

and the 3 Independent variables for the research purpose. To elaborate in detail, the 3

Independent Variables are as follows the environmental factors, the situational factors (Mattila &

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Wirtz, 2008; Mohan, Sivakumaran, & Sharma, 2013; Park, Iyer, & Smith, 2002) and Online

factors.

Environmental factor

The first factor, Environmental factor consisting of ambience, design of store and shelf spacing.

For the second factor, Situational factor comprises of availability of time and money, mood of

shoppers and discounts. And for the last IV of the study, Online factor includes ease of use,

visual appeal, and perceived enjoyment.

Design of store
According to (Miao et al., 2019) the store has two displays internal and external. These displays

are a connecting bridge between the customer and the brand. The display of the store

interconnects with the customers or the audience are motivated towards the impulsive buying.

(Chang et al., 2011) Previous studies has shown a positive relationship between the store design

and impulsive buying behavior of the customer (Tendai & Crispen, 2009)& (Merugu & Vaddadi,

2017)Previous studies shows that the products displayed physically on the point of sales

activates the mode of impulsive buying (Muruganantham & Bhakat, 2013) For example the

super market places products such as ice cream, chocolates, snakes and confecneries items.

Which pushes the customer towards impulsive buying.

Shelf spacing/ Ambience


Shelf spacing is one of the most difficult art of placement of the products in any retail stores. The

proper product shelf spacing with result in the positive relationship in attracting more buyers.

According to (Karampatsa et al., 2017). The shelf space of the product has significant

importance when choosing the allocation. These allocation aims to implement the quick decision

making process.

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In order to improve the sales of the products and making the buyer incline towards impulsive

buying, retailers uses two main streams. Assortment strategies and well-organized allocation of

shelf space. It is obvious that well-organized allocation of discounted, promotional activities and

other will engage the impulsive buying customers.(Grewal et al., 2016)

As per (Wang et al., 2020) among the number of factors that has greatest influence the level of

impulsive buying amount the customers is environmental factors with a highly low pricing

strategy. The researcher recommended to implement promotional campaigns and well organized

allocation of the merchandize in order to fascinate the customers and motivate them to impulsive

buying.

H1 Environmental factors have no impact on impulse buying.

Situational factors
Availability of time and money
Factors which are situational of the outside variables originating from the purchase condition

when purchasers come into make contact with specific image boosts (items or progression)

which create the impromptu purchase. Right after and there customer can realize an abrupt

requirement to buy a specific item that has pulled by individual consideration.(Anitha &

Krishnan, 2020)and (Muruganantham & Bhakat, 2013).

Money availability can be defined as all funds which a person feels to spend on that day. Money

availability is an important factor in the process of impulsive buying (Beatty & Ferrell, 1998). A

customer’s planned shopping pattern can be changed if he/she has more money. It increases the

purchasing power (Foroughi et al., 2012). There is a positive association between impulsive

purchase and money availability of generation Y. (Husnain et al., 2019) stated that credit card

availability has relationship with impulse buying behavior. Further, stated that situation factors

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(money and credit card available) and demographic factors (income) influence impulse buying

behavior of generation Y. Past studies reported that income has significant impact on impulsive

buying behavior in Pakistan (Awan & Abbas, 2015). Thus, it is considered as more money

availability will have a significant positive relationship with impulsive buying behavior (Husnain

et al., 2019)As previously mentioned some situations can influence a consumer's purchasing

tendencies. Among such factors include time availability. There is a close relationship between

time availability and compulsive shopping. In other words, the more time available to an

individual in buying situations, the greater will be the likelihood of the person to make impulse

purchases (Shibli, 2019).

The impulsive buying behavior is superior for those who can afford it. The income level

do positive enforcement on impulsive buying behavior. The consumer who wants to buy

products is dependent on his/her income. The consumers with high income level can do more

shopping and more likely to involve into impulsive purchase because consumers with higher

income are less sensitive than consumers with lower income (Kacen et al., 2012)

Consumers attract to price level such as discounted price and free of products 'buy one

get one free'. The credit card are used by consumers according to (Karbasivar & Yarahmadi,

2011) impulsive buying actions will develop the usage of credit cards. According to (Simbolon

et al., 2020) the cheaper prices give positive impact on consumers impulsive buying behavior.

H2 Situational factors have no impact on impulse buying.

Online factors
Visual appeal
It is the method of organizing object in perfect order for highlighting products

availability. It is also called visual presentations. It aims to. Communicate consumer about the

existence of the products like quality, value and separate identity in consumers.it creates an
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attraction to the consumers making them faithful to the brand so that consumers can make

purchase (Merugu & Vaddadi, 2017) and (Grewal et al., 2016)

According to (Ittaqullah et al., 2020), the survey was conducted which indicated a major

relationship from mood-relevant cues through perceived playfulness to impulse purchase

intention. Apparel companies should construct their online website in differential environmental

cues which contributes to the experiential value with their customer. Additionally great design

and easy to use website can increase perceived playfulness.

H3 Online factors have no impact on impulse buying.

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Initial Conceptual Model

SHELF
AMBIENCE DESIGN
SPACE

SALES AVAILABILITY
PROMOTION OF TIME

STORE

ENVIROMENT

SITUATIONAL IMPULSE BUYING

FACTORS

ONLINE

CHARACTERISTICS
AVAILABILITY
MOOD OF
OF MONEY
SHOPPER
AMBIENCE

PERCIEVED VISUAL
EASE OF USE
ENJOYMENT APPEAL

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CHAPTER 3 : RESEARCH METHODOLOGY

3.1. Data

This is a causal research which aims to know effect of three independent variables on one

dependent variable. For this research, we have collected primary data through questionnaire from

93 respondents who belong to different age groups, marital status, genders, employment status

and income groups. The questionnaire was adapted in a way which initially covered the

demographical information of respondents. Then they were asked multiple questions about

different factors that affect level of impulsive buying.

3.2. Variables

The dependent variable in this research is level of impulse buying of customer while the

independent variables are categorized into three types of factors including environmental,

situational and online factors. Each category covers multiple variables as mentioned below

(Hashmi et al., 2019)

a) Environmental factors (ambience and design of store, shelf spacing)(Yarahmadi &

Karbasivar, 2011).

b) Situational factors (Discounts, availability of time and money, mood of shopper)(Akyuz,

2018).

c) Online factors (Ease of use, visual appeal, perceived enjoyment)(Gudonavičienė, 2014).

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This research is aimed to know how the dependent variable is affected by these

independent variables.

3.3. Inclusion Criteria

This research is based on elements that belong to both genders, different marital statuses,

different age groups starting from 16, and different income groups starting from lower than

25,000 till above PKR 100,000.

3.4. Sample and Sampling Technique

Since all the elements of our population are not known and accessible therefore non

probability sampling has been adopted in which we have used convenience sampling technique

(Etikan, et al., 2016).

3.5. Statistical Technique

Since this research aims to find out cause and effect relationship between variables, we

have applied regression analysis for analyzing collected data. (Miao et al., 2019)

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CHAPTER 4 : RESULTS AND DISCUSSIONS

The following results and discussions are figured out after analyzing collected data.

4.1. Descriptive Statistics

Frequenc
Demographics Category Percentage
y
Gender Male 52 20%
Female 41 80%
Age 16-25 75 42.7%
26-35 18 41.8%
36-45 0 10.0%
Above 45 0 5.5%
Marital status Single 89 55%
Married 4 45%
Employment status Employed 43 59.5%
Unemployed 50 40.5%
Monthly income Less than 25000 47 34.5%
25001-50000 22 27.3%
50001-75000 11 15.5%
75001-100000 5 9.1%
Above 100000 8 13.6%
Table 1 Demographic profiles of the respondents

The values of mean, standard deviation, skewness and kurtosis are as follow.

Impulsive Environmenta Situational Online


Buying l Factors Factors Factors

Mean 2.97 3.42 3.53 3.44


Standard
0.71 0.74 0.65 0.79
Deviation
Kurtosis 0.19 0.29 -0.68 -0.06
Skewness -0.21 -0.34 -0.16 -0.18
Table 2 Descriptive Statistics

The mean of situational factors is highest among all variables (3.53) and mean of

environmental factors is lowest among all variables (3.42) which indicate that influence of

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situational factors is most whereas influence of environmental factors is least. Situational factors

has lowest standard deviation (0.65) & online factors have greatest (0.79), which indicate that

respondents’ answers are less deviated in situational factors items and more deviated in online

factors.

All independent variables (environmental factors, situational factors and online factors)

and dependent variable (level of impulse buying) are negatively skewed indicating that the data

concentration is in later stage.

Kurtosis of all variables is less than 1 which indicates that the date of all variables have

flat platykurtic distribution with thinner tails.

4.2. Reliability Analysis

Name of construct Cronbach’s Alpha No. of items


Impulsive Buying 0.54 5
Environmental factors 0.75 5
Situational factors 0.58 5
Online factors 0.84 5
Table 3 Reliability Testing
From the reliability testing of the questionnaire it was found that all the items of the

constructs are reliable since it is found that the Cronbach’s alpha value is either greater or

approx. equal to 0.6 for each variable.

Variable Correlation
Environmental factors correlation with Impulse Buying 0.49
Situational factors correlation with Impulse Buying 0.42
Online factors correlation with Impulse Buying 0.39
Table 4 Correlation

Correlation of environmental factors with impulsive buying is strongest (0.49) and

correlation of online factors with impulsive buying is weakest (0.39) among all variables.

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4.3. Regression Analysis

Lowe Uppe
Uppe r r
Coefficient Standar Lowe r 95.0 95.0
  s d Error t Stat P-value r 95% 95% % %
Intercept 0.60 0.39 1.52 0.13 -0.18 1.38 -0.18 1.38
Environmental
0.34 0.10 3.42 0.00 0.14 0.54 0.14 0.54
Factors
Situational Factors 0.27 0.11 2.41 0.02 0.05 0.50 0.05 0.50
Online Factors 0.07 0.10 0.70 0.49 -0.13 0.27 -0.13 0.27
Table 5 Coefficients
As per the table above of the regression model, following equation is made of chosen variables.

Impulsive buying = b0 + b1 environmental factors + b2 situational factors + B3 online factors

Putting coefficients in the equation

Impulsive buying = 0.60 + 0.34 environmental factors + 0.27 situational factors + 0.07 online factors

Values of coefficients reflect that the slopes of all independent variables are positive

which indicate that all of them have positive relationship with impulsive buying. It means that if

we increase any of the situational, environmental or online factors, there will be an increase in

level of impulsive buying.

Regression Statistics
Multiple R 56%
R Square 31%
Adjusted R Square 29%
Standard Error 0.60
Observations 93.00
Table 6 Regression Statistics

Multiple R and R2 values are called coefficient of determination. If we look at the

Multiple R value from the table which represents multiple regression results, it is 56% which is a

fair positive relationship between variables (Impulsive buying with environmental, situational

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and online factors). But when we look at R2 which exclude outliers and filters other unimportant

factors, the value drops to 31%. This value means that data doesn’t lie very close to regression

line. This also tells that 29% of variation in impulsive buying is caused by environmental,

situational and online factors. Rest of the constituents of variation are not the part of this

regression analysis.

ANOVA
  Df SS MS F Significance F
Regression 3 14.28 4.76 13.28 0
Residual 89 31.90 0.36
Total 92 46.18
Coefficient
  s Standard Error t Stat P-value
Intercept 0.60 0.39 1.52 0.13
Environmental Factors 0.34 0.10 3.42 0.00
Situational Factors 0.27 0.11 2.41 0.02
Online Factors 0.07 0.10 0.70 0.49
Table 7 ANNOVA
Referring to the tables above, it is evident that the P-value of environmental and

situational factors is less than alpha value i.e. 0.05 and their t stat values are also greater than 2,

however P-value of online factors is greater than alpha value and its t stat value is also less than

2. Therefore, we would run backward regression by eliminating online factors.

ANOVA
  Df SS MS F Significance F
Regression 2 14.10 7.05 19.78 0.00
Residual 90 32.08 0.36
Total 92 46.18      

Coefficient
Standard Error t Stat P-value
  s
Intercept 0.63 0.39 1.62 0.11
Environmental Factors 0.37 0.09 4.12 0.00
Situational Factors 0.30 0.10 2.92 0.00

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Table 8 Backward Regression


By running backward regression, it is found that online factors retain null hypothesis.

After eliminating them, the two variables that are environmental and situational factors reject

null hypotheses.

4.4. Discussion

In this literature (Hussain, 2018)accounts technology as key factor of on the impulse buying

behavior of the customer during online buying but researchers data analysis indicate that among the

independent variables, level of impulse buying is dependent on environmental and situational

factors. However, online factors do not have any impact on it. Among the two influencing

factors, this research covers ambience and design of store and shelf spacing in environmental

factors and discounts, availability of money/time and mood of shopper in situational factors.

Through this analysis we can say that to influence customers and to motivate their

impulsive buying, sellers can use the situational and environmental factors in their favor. For

environmental factors, the sellers can focus on areas like ambience and design of store and shelf

spacing techniques. They can improve the feel of store through effective lighting, décor,

fragrance and colors. They can use shelf spacing techniques like keeping the products at

prominent positions on shelves to create impulsion for that product. This is further supported by

(Ahmed, Parmar, & Amin, 1450)that in Pakistan the FMCG's good are very favorable consumer's impulse

buying behavior. are more attract when they see free product and discounts offers by store. For

example in Pakistan Unilever is constantly using social media marketing for their FMCG's products, they

are selling face wash on social media on discounted prices, especially in lock down. Impulsive buying is

dependent because it is dependent on independent variables.

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Sellers can use situational factors too to create urge for their products. They can offer

discounts with prominent signs like ‘Get One Buy One Free’ or ‘50% Off’ to create instant

desire in customers to purchase that products. They can offer extended hours so that customers

can spend more time and buy more through their impulsion. They can treat customers is a way

which delight them and make their mood happy so that customers would be inclined to buy

more.

CHAPTER 5 : CONCLUSION, LIMITAITONS AND

RECOMMENTDATION

5.1. Conclusion

As this research was aimed at determining the influence of environmental, situational

and online factors on the level of impulsive buying. This gave a new understanding and point of

view to the literature which was focused on online buying impacts (Butkevi et al., 2008). This study

contributes to the research world that among the two influencing factors, ambience and design of

store and shelf spacing in environmental factors and discounts, availability of money/time and

mood of shopper in situational factors has a significant influence on the impulse buying.

We can conclude that their impulsive buying is positively influenced by environmental

and situational factors. However online factors do not play a significant role in impulsive buying

of customers.

Therefore, based on our findings, we are unable to accept the null hypothesis for environmental

and situational factors while fail to reject the null hypothesis for online factors.

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5.2. Limitations

Although the objective of this research has been met successfully, there are still a few limitations

that were part of the study. The results we derived from our data were based on the respondents

the majority of whom were no older than 35 years, mostly single and have an income bracket of

less than Rs 25000 rupees. Also, these respondents only belonged to the city of Karachi not

entire country. The results may contradict if the same survey is conducted in a different

geographic region. Moreover, the constructs that this study has acknowledged and tested can be

improved by future research for testing in other regions, income group and age segments. As

most of the literature on impulse buying focuses on big shopping malls (Khan et al., 2015;

Khuong & Tran, 2015)

Another limitation to this study can be the lack of authenticity or biased answers provided

by the respondents due to lack of time or other reasons. The findings of this research are based

on the assumption that the respondents would have thoughtfully given the responses to the

questions in the questionnaire.

5.3. Recommendations

The results on how the environmental and situational factors affect the level of impulsive

buying of buyers can be used to influence customers in future. Future research can also be

conducted taking other independent variables into consideration that may have greater impact on

the impulsive buying of customers that have not been included in this research either in the same

demographics or different.

These findings can help the marketers to increase impulsive buying behavior of

customers and increase their sales. This research will help them to get a better understanding of

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their customers in the real world and focus on the areas through which they can get better results

and spend less effort or time on least important factor.

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