A MINOR PROJECT REPORT

CONSUMER BEHAVIOUR TOWARDS ONLINE

SHOPPING

Submitted in partial fulfillment for the award of Master

of Business Administration 2018-20

Submitted To: Submitted by:

Dr. Rekha Prasad Apoorv Pandey

Professor, MBA-IB 1st Semester

Institute of Management Studies, Roll No.: 18423BIB010

Banaras Hindu University

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 DECLARATION

I the undersigned solemnly declare that the report of the project work for the course
entitled “Study of consumer behaviour towards online shopping” is based on my own
work carried out during the course of study under the supervision of Professor Rekha
Prasad.
I assert that the statements made and the conclusions drawn are an outcome of the
project work.
I further declare to the best of my knowledge and belief that the project report does
not contain any part of any work which has been submitted for the award of any
other degree/diploma/certificate in this University or any other University.

(Signature of the Student)

Apoorv Pandey

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 CERTIFICATE BY GUIDE/SUPERVISOR

This is to certify that the project work done on “Study of consumer behaviour towards
online shopping” is a bonafide work carried out by Apoorv Pandey under my
supervision and guidance. The project report is submitted towards the project of
course of Minor Project for fulfilment of the two year, full time Master of Business
Administration (IB) Programme. This work has not been submitted anywhere else
for any other degree/diploma.

Prof Rekha Prasad

Assistant Professor,

Institute of Management Studies,

Banaras Hindu University

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 ACKNOWLEDGEMENT

I would like to acknowledge Institute of Management Studies, BHU for giving me

this opportunity to get an insight into the real world issues and cases by means of this
project.

I would like to extend my heartfelt gratitude towards Professor Rekha Prasad for her
guidance, right from the initiation to the completion of the project. The valuable
inputs and technical details helped me to get the core of the course.

Thanking you,

Apoorv Pandey

MBA (IB) I Semester

Roll No.: 18423BIB010

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 TABLE OF CONTENTS

1. Introduction………………………………………………………6
2. Literature Review…………………………………………………8
3. Research methodology……………………………………..…….11
 Research design
 Sample Design
 Data collection
 Tools for Analysis
4. Research objective……………………………………………......14
5. Data Analysis and Interpretation…………………………………15
6. Findings…………………………………………………………...23
7. Conclusion………………………………………………………..24
8. Limitations and Suggestions……………………………………...25
9. Bibliography………………………………………………………27

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 INTRODUCTION

In India, the shopping environment has been changed from the primitive or the
unorganized retail shops to the modern day’s online stores. It has been observed that
the consumer purchasing decision changes in the shopping environment. As the retail
environment is experiencing a huge change with the introduction of new formats and
the entry into online retail industry by the global investors there is a huge scope for
research and analysis and thus it is necessary to understand the buying decision of the
consumers in such an environment. The purpose of the present study was to
investigate the impulse purchase decision of the Indian shoppers when they visited
the online stores. The major objectives of this study are to find out factors that
influence buying decision of products through online. Data was collected using
questionnaire method from 175 online buyers living in Varanasi, Uttar Pradesh, India.
The results of this study provided an in-depth understanding of the online shopping
value and how the factors influenced the consumers. The findings also provided an
important understanding, the impact of factors (Personal, Cultural, Social,
Psychological, subjective, objective: Price, Product, Quality and Credibility) on
overall satisfaction of online buying. As this study is exploratory in nature, certain
limitations are identified and based on that suggestions are offered for future research.
Life consists of a series of decisions. Right decision helps individuals to identify and
choose alternatives based on the principles and preferences of the decision maker.
Decision Making is an essential part of life. Decision making seems to be a central
activity of people, government and organizations. Moreover, decisions are central to
the ordinary day to day existence. The field of “decision making theory” has
developed focusing on solution of the problems with contribution, investigating how
it is that individuals and groups come to decide on certain paths and enterprises over
others.
E-Shopping is a recent phenomenon in the field of E-Business. Most of the companies
are running their on-line portals to sell their products/services online. The potential

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growth of on-line shopping has triggered the idea of conducting a study on on-line
shopping in India. The internet revolution has brought about a paradigm shift in the
way things are done. In order to sell anything over the internet, they have to take into
account what consumers buy, why they buy, how they buy, who their customers are,
what their spending habits are like and the products and services they prefer.

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 LITERATURE REVIEW

In India, the shopping environment has been changed from the primitive or the
unorganized retail shops to the modern day’s online stores. It has been observed that
the consumer purchasing decision changes in the shopping environment. As the retail
environment is experiencing a huge change with the introduction of new formats and
the entry into online retail industry by the global investors there is a huge scope for
research and analysis and thus it is necessary to understand the buying decision of the
consumers in such an environment. The purpose of the present study was to
investigate the impulse purchase decision of the Indian shoppers when they visited
the online stores. The major objectives of this study are to find out factors that
influence buying decision of products through online. Data was collected using
questionnaire method from 175 online buyers living in Varanasi, India. The results of
this study provided an in-depth understanding of the online shopping value and how
the factors influenced the consumers.
The findings also provided an important understanding the impact of factors
(Personal, Cultural, Social, Psychological, subjective, objective: Price, Product
Quality and Credibility) on overall satisfaction of online buying. As this study is
exploratory in nature, certain limitations are identified and based on that suggestions
are offered for future research.
Koyuncu & Bhattacharya, (2004) conducted the study on “The Impacts of Quickness,
Price, Payment Risk, and Delivery Issues on On-line Shopping” and the study found
that Individuals tend to purchase less through the Internet because the online payment
of Internet shopping involves some risk Thirdly, risk to privacy refers to the degree
to which a consumer may sacrifice their privacy when they are required to provide
confidential information to process an EC transaction. Internet and Mobile
Association of India (IAMAI, 2006) conducted the study in collaboration with cross
tab marketing services, clearly established the dominance of people-to-people (P2P)
reference in online shopping space, with 31% respondents finding such sites through
word of mouth. As much as 55% visitors to e-commerce sites have adopted internet
as a shopping medium, out of which 25% of regular shoppers are in the 18-25 age

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group, while 46% in the 26-35 age group and 18% in the 35-45 age group. Pooja
Mordani (2008) explored the study on investigation of consumers perception towards
internet based e-shopping and the study involved an experiment in which the
respondents were asked to go through the online shopping process and relate their
experiences. The study found that the positive experience with a website plays a vital
role in forming consumers trust while shopping online and if consumers trust the
website then they will perceive ease of use, perceive enjoyment and perceive the
website to be less risky which would finally culminate into an intention to transact
with the website. AC Nielsen (2009) conducted the study on covering 38 markets and
over 21,100 respondents across the globe have revealed that more Indians are taking
to shopping online. It suggested an upward trend in online shopping across the world.
A significant observation of this study was that India beat the global counterparts in
number of purchases per month, with a mean of 5.2 purchases against the global
average of 4.9. In India, books followed airline reservations closely, with 35% of
netizens buying them online. Nearly 24% have bought electronic items and more than
20% have purchased items such as apparel, music and electronic entertainment such
as movies, DVDs and games. Taweerat Jiradilok (2014) in their paper concluded that
the study is applicable for both types of internet users that are users with experience
in purchasing and users with no experience in purchasing. The experienced customers
will value appropriate pricing and website information Quality after assurance and
empathy while the inexperienced will depend on responsibility and reliability instead.
As a result, it is suggested that the shop vendors should include all of these variables;
assurance, empathy, responsibility, website information quality, and reliability, into
websites; however, the vendors can use diverse tactics to draw different groups of
customers by focusing on each attribute valued by the target customers. The results
show that variety, website system quality, and tangibility have no influence on
purchasing intention in customers’ decision even though the respondents were quite
satisfied with these dimensions. Shadi Altarifi et al. (2015) in their paper found that
the determinants of marketing have insignificant influence on the consumer
purchasing decision, while cultural and technological determinants had significant
influence on consumer buying decision. The researchers recommend protection
strategies in the adoption of preventive e-business networks, which are made through

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the Internet and an intensive awareness programs aimed to show the advantages
shopping services via the Internet.

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 RESEARCH METHODOLOGY

Research methodology is a way to systematically solve the research problem,

it not only takes the research methods but also consider the logic behind the
methods. The study of research methodology for developing the project gives
us the necessary training in gathering materials and arranging them,
participation in the field work when required, and provides training in
techniques for the collection of data appropriate to particular problems.

Research Design

The study is mainly based on the Primary Data, collected using a structured
questionnaire from 175 respondents who purchase a product Online in Varanasi. The
Secondary Data were collected from books, journals and web sites.
Research methodology is a way to systematically solve the research problem. The
type of research is exploratory. Samples are collected and statistics are calculated
from the samples so that one can make inferences or extrapolations from the sample
to the population. Convenient Sampling Technique was used for this study.
The sample of 175 respondents makes it difficult to generalize the results. The data
were obtained through questionnaire and it has its own limitations. Some of the
respondents might not have presented the accurate data.

Research methodology

Exploratory method

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 Data collection

Primary Data: Questionnaire Interview

Sample Design

Sample: While deciding about the sample of research, it is required from the
Researcher’s point to pay attention to these under mentioned points:

i) Sample Units: A decision has to be taken concerning a sampling unit before

selecting a sample, sampling unit may be a geographical one such as state,
district, village, area etc. In this research sampling unit is “RESIDENTS OF
VARANASI “.
ii) Source of Data: Data required for the study was collected through primary
sources i.e. Questionnaire.
iii) Sampling Size: This refers to the no. of items to be selected from the universe
to constitute a sample. This is a major problem before the researcher. The size
of sample should neither be excessively large not too small, it should be
optimum. Sample size in this research is 175.

Instrument used

Primary data collected through self-administered questionnaire.

Method of data collection

Actually data is of two kinds which are following-

i) Primary Data: primary data are those, which are afresh and for the first time and n
this happen to be original in character.

ii) Secondary Data: secondary data are those data which have already been collected
by someone else and which have already been used as per required.

There are basically two sources to collect secondary data

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a) Internally: provided by company/organization

b) Externally: various publication of central, state and local government, Books,

magazines, newspapers, Internet.

Tools for Analysis:

For data analysis, percentage analysis, simple charting and tabulation tools are used
to understand the behaviour of the respondents for online shopping.

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 RESEARCH OBJECTIVE

The objective of this project is;

1. To study the consumer purchasing decision towards Online Shopping in Varanasi.
2. To find out factors that influence buying decision of products online.

Problem statement

Perception of consumer’s behaviour towards online shopping

Research gap and need for the study:

Many studies have been conducted in the field of Bricks and mortar shopping in
various countries focusing on conceptual aspects. In India, particularly in Uttar
Pradesh, Very limited studies are conducted relating to online shopping, consumer
behaviour towards online shopping. But there are no studies found in the context of
consumers‟ purchasing decision towards online shopping in Varanasi. This study
fulfils the Gap of such a research and also gives scope for the need of research. An
attempt is made to explore various dimensions which influence the consumers to shop
online.

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 DATA TABULATION AND ANALYSIS

Age

Age is considered as an important factor as it affects the buying habits of

customers, preferences of young differs from preferences of old
customers.

Age of Frequency of Percentage of

respondants respondants respondants
Less than 18 32 18.5
years
18-22 38 21.3
22-28 98 55.7
28-40 6 3.4
Above 40 2 1.1

Gender

Gender Number of Percentage of

respondents respondents
Male 108 61.7
Female 67 38.3

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 Occupation

Experience of using internet

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 Purpose of using internet

Searching product information

Internet surfing

Messaging and chatting

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Research a topic

Looking for a job

Shopping

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Variety of goods and services shopped online

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Reasons for shopping online

Saves time

Huge discounts

Wide variety of products

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Modes of payment

Medium for using internet

Security in online shopping

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Satisfaction level

Future purchase

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 FINDINGS

The findings that we gained in this study are as follows:

1. Ratio of male consumers is very high in online shopping (61.7%)

2. Max. people have an experience of more than 4 years of using internet (70.9%)

3. People using internet for shopping (45%) is comparatively low than people using
internet for messaging (66.3%)

4. Majority of the respondents preferred in online ticket booking (66.3%) and

purchase of electronic gadgets (64%)

5. Majority of the respondents agreed that online shopping saves time (60.9%)

6. 57.4% respondents agreed that online shopping saves money.

10. Most of the respondents feel that there is no risk in online shopping (89.7%)

11. 58.9% people preferred “cash on delivery” option among other payment options

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 CONCLUSION

The current study is exploratory in nature and it has made an attempt to understand the
behaviour of Indian consumers towards online shopping. This research shows that
online shopping is having very bright future in India. Perception towards online
shopping is getting better in India. The generalized results obtained through data
analysis have given close indication of increasing significance of online stores in the
life of Indian people and their online shopping behaviour. The e-stores are frequently
visited by the shoppers. The ease and convenience provided by these stores for 24X7
has made very easy shopping for consumers. With the use of internet consumer can
shop anywhere, anything and anytime with easy and safe payment option. Consumers
can do comparison shopping between products as well as online stores by saving time
and money.

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 Limitations

1. The study is limited to Varanasi city only.

2. The sample size does not give clear representation of the total universe.
3. Sample size is small.

Suggestions
1. More awareness towards online shopping:

We find through this study that the demographical issues like age, education and
income were agreed for online shopping but the rate is higher when the respondents are
young, when the education is higher the respondents agreed for the same and the higher
income group respondents strongly agree for the same. It means an awareness program
for online shopping is very much necessary. The retail online shoppers should
be planned for awareness towards online shopping through different ways.

2. Varied payment options:

In order to attract more and more customers, online shoppers have to increase the
payment options as there are only small section of people in India who have credit
cards so this also hampers some who are willing to shop online. More options like
Cash-on-delivery, money transfer, cheques or demand drafts, end-to-end
payment should be made available to the customer who can adopt the best suited
method.

3. Awareness regarding security measures

Security issues still continue to be a major drawback and trends like AVS (Address
Verification System), PIN for credit cards, smart cards, digital signatures, e-cards, and
easier infra-and inter-bank transactions online need to be made more prominent.
Teaching consumers to transact only on secure internet connections is also necessary.

4. Highlight the benefit of shopping at home

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Potential customers should be convinced of the benefits of shopping from home
without having the pain of going out in the crowded placed.

5. Make the prices more competitive

The price offered for online shopping should be made more competitive as compared to
the prices of the goods available in the local shops then only the customers will feel
motivated to buy online.

6. Stress on the special offers

Customers should be made aware about the varied sales promotion schemes, which will
make this online buying more attractive and popular among the buyer.

7. Emphasis on after sale service

As the biggest hindrance in the path of online shopping becoming more popular is the
question “who is to blame” If the product is not functioning well? Therefore, there
should be more stress on the quality of products and the durability of the products,
which are offered for sales and along with that assurance for after sales service.

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 Bibliography

1. Marketing Management, Philip Kotler

2. Website - https://hbr.org/2018/01/research-how-customers-decide-whether-to-buy-from-
your-website
3. Journal – Consumer Behaviour in Online Shopping: A Study on Aizawal (Amit Kumar Singh,
Mizoram University, Jan 2014)
4. Consumer Behaviour – Buying, Having & Being by Michael R. Solomon

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