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Research Topic:
“Effects of customer knowledge and trust in online shopping in Pakistan”
Abstract:
Internet has developed in new delivery channels electronic transactions are
increasing rapidly. This need has arisen to understand how they perceive directly to
buy consumers. Most of the people who use the internet to purchase goods online,
but that there are still some reasons for which consumers are reluctant to buy
online. The attitudes of people toward the purchase online are different in Pakistan.The purpose of this study is to review the factors felt reservation of consumers in
online shopping.
The main objective of this research is to study, especially what are factors affecting
the consumers directly for online shopping. To this end, a survey was conducted
and the 1! "uestionnaires were distributed among the students of different
universities and the general public. The replies have been analy#ed by means of
fre"uency distribution, average and chart analysis.
The results of the survey analysis has shown that most of the people already
shopping online and prefer to make their purchases online, but there are some
factors such as psychological factors, social factors emotional factors, and the
privacy factors which affect the buyer attitudes of online purchases. The protection
of privacy and security are major problems that affect the behavior of the
population to buy online. $arious attitudes of consumers toward online shopping
are not in rest in the study which reveals that the purchase online is easy,
comfortable and better that conventional shopping due to various factors.
Price, the trust, the convenience and the recommendations have been identified as
important factors. Price was considered to be the most fascinating and affecting
factor for the majority of students and the general public. Most of the consumers
hesitate not to do shopping online, because of the insecure payment and
transactions systems.
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INTRODUCTION:
The main objective of study is to e%amine the consumer behavior of purchasing
goods in Pakistan with the help of internet &online shopping'. This e%ploration is to
recogni#e and get knowledge into shopper conduct towards online shopping
regarding Pakistan, distinguish components which impact internet shopping and
customer conduct to purchase in the Pakistan, to find the e%planation for of less
thought of online buyer towards web shopping in Pakistan. The result would
analy#e to give a guidance that which factor is affecting online consumers for that
purpose, different previous researches is use to direct the direction and to support
this study. The relationship of independent and dependent variables that will be
part of this study, observed through the literature review.
To study the consumer performance of online shopper in Pakistan in array to gain
insights into their behavior and preferences, decision(making frame work, attribute
for store mi%ture and life styles encourage online shopping. The objective
inhabitants for this study consists of the urban consumers who are knowledgeable
and belong to )pper and upper(middle socio(economic classes &*+ - and *+ '
who can be divided into two broad segment, first having ages from 1/(0 and
second with age 0 years and more than. The first stated fragment is the major
fragment and insights about its behavior towards online shopping can provide a
sound basis for further research.
- significant si#e of this segment comprises of students. -n effective presence on
social medium websites is necessary and used as a channel to draw more traffic
which is another reason for youth segment for being the majority of consumers.
*ince this manufacturing is still in its immaturity in Pakistan, the innovators and
early adopters who are in bulk at this time mostly belong to the e%planation above.
This consumer segment is e%perience an enlarge in spend power which is mostly
consumed by purchases of clothing and accessories, food and electronic
commodities such as cameras, cell phones, tablets, computer or computer related
stuff. Thus we see a similarity among these products and the product lines of major
online shopping sites.The second section consists of working professionals or
business men who have enough returns to purchase products online. Their
purchases are less both in fre"uency and "uantity as compared to the previous
segment.
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)2T3I+* like India and Pakistan have e%perienced a slower growth of e(
commerce. 4eveloping countries do have the potential of developing an e(
commerce base5 however it will take time because internet penetration in these
countries is still lower in comparison to developed countries. -ll this suggests that
online retail competition is e%pected to increase in the near future. -ccording to aglobal consumer report of -. 2ielson published in 6ebruary !!7, Pakistan was
ranked the world8s second slowest adopter of e(commerce. The low adoption rate
of e(commerce and slow IT growth in Pakistan might be due to factors like high
cost of computers, unavailability of the internet, low computer and internet
education etc. 9owever, the trend has shifted and there has been a rise in online
shoppers in Pakistan in recent years, especially in the commercial capital. *tatistics
show that in !1, e(tailing in :arachi increased by 1;.
The main reason was terrorism in the city that discouraged citi#ens to go out and
shop. *hoppers decided it was safer to be at home and risk online security as
compared to going out and risk their lives. +%amples of some fast growing e(
commerce websites in Pakistan include <=, 4ara#.pk, *ymbios, >arehouse.pk,
ishopping.pk, *hophive, :aymu and many more. onsumers can buy a wide range
of items ranging from designer wear, smartphones, computers and accessories,
books, cosmetics, perfumes and home d?cor items from these online stores.
This research aims to study the e(commerce trends in the international market and
tries to compare it to the Pakistani market. The study has e%plored the determinants
of e(commerce purchases throughout the world and has compared it to the
determinants in the Pakistani market. It has been observed that the online purchase
behavior of consumers is somewhat similar throughout the world. 6actors like
security, privacy, e(service "uality, product attributes, perceived benefits and risks
associated with shopping online etc. affect the online buying behavior of
consumers all around the globe. 9owever, where hedonic motivations and website
design are strong predictors of online buying behavior in some countries, they do
not affect online buying behavior of Pakistani consumers.
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Literature review:
>hile there are at present over ! million Pakistanis online figure which is growing
rapidly there is very slight certification or research on how the internet is being used in the
country. This online survey, conducted through .The +%press Tribune and +%press )rdu
websites meant to imprison a snapshot of the local internet user8s viewpoint. oth +nglish and
)rdu sites and their societal media accounts were used to promote the survey in
order to capture a wider, more miscellaneous audience. The survey was conducted over @uly
7(A, !1B. - total of 1,1!! respondents filled out the survey, of which 17(0
year olds make up over half of total respondents, followed by 0(B0 year olds. The survey
also highlighted a large gender inconsistency in respondents, with males dominating. This trend
has been highlighted in the past5 Pakistan8s 6acebook audience was C!; male, B!;
female as of -pril !1B.The vast majority of interviewee &AD;' are from urban areas, led by
:arachi, <ahore and Islamabad.
Trust as an Instrument to 4ecrease omplication -ccording to the social
psychologists trust is that what you e%pect from others behavior in transactions
&unker, 1AA0'. >e are still unable to find the virtual acceptable definition of trust.
-uthors and scholars agree that trust is very important in human transactions, but
most transactions are not held according to the definition of trust &9osmer, 1AA05
*itkin, 1AA75 9usted, 1AA7'. Psychologists describe trust as human specific
characteristics &3otter, 1AC1'. +conomists and psychologists are working hard to
reduce the tension and uncertainty in transaction by creating incentives
&>illiamson, 1AAB5 Eucker, 1A7/'.
-ccording to <uhmann &1A7A' trust is a mechanism which helps to lessen the
an%iety of human beings in the situation in which people faces ambiguity. In this
way trust plays vital role for customers involve in transactions. It decreases the
information comple%ity as well as reducing perceived risk in the transactions
&3ousseau, 1AA7'. Many authors and theorists describe that trust can be built by
personal relationships as there is electronic environment so the stages of trust alsoe%tended because in online markets personal trust is insufficient to decrease the
uncertainty. y functionally trust can be defined as economic framework.
-ccording to economic framework the trust is as cooperative behavior &3ipperger,
1AA7, p. D0'. Trust is simply defined as a one party e%pecting that the other one
will cooperate with him and would not take unnecessary advantage in the
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transaction. Trust must run smoothly either in social or other system according to
the point of view of the person who trusts. Trust can be developed by internal
e%pertise of trustees, his wish to trust, and trustees own e%perience as well as the
third party e%perience can play a vital role in developing the trust &3ousseau, 1AA7,
D!!'.
Trust can be rise in the presence of agreement on conditions5 the e%istence of trust
can only be made in uncertainty risky and unusual environment. There is no need
of trust in certain and risk free environment. The following conditions of online
shopping elaborates that uncertainty plays a basic role to determine the areas that
trust can be used as a mechanism in the reduction of comple%ity. -mbiguity as a
*imple Transaction Measurement 3elated to the *ignificance of Trust in +(
ommerce The flow of facts and information on online network face many threats
and problems that may be triggered due to serviceable errors and safety
complications in the communication and information structure or the involved
conduct of actors in electronic shopping can define this. *ystem 3eliant -mbiguity
*oopramanien and 3obertson &!!C' suggest that attitude towards online shopping
depends upon the view of the consumers regarding the activities carried out on the
internet as opposed to conventional shopping environments. *tudies have shown
that convenience and time saving are the main reasons that motivate consumers to
shop online. hen et al. &!1!' suggests that convenience denotes shopping
practices on the internet that can reduce time and effort of the consumers in the
buying process. *chaupp and ?langer &!!0' argue that +(commerce has made
finding merchants easier by cutting down on effort and time. 2a#ir et al. &!1'
and 3ehman and -shfa"8s &!11' research also demonstrated that online shopping
is better than conventional shopping due to convenience and ease of use, thus is
gaining more popularity in Pakistan.*imilar findings were reported in the research
of I"bal, 3ahman and 9unjra &!1' whose aim was to e%plore consumer
preference to shop online in countries like Pakistan. ne of the variables included
in the model was perceived advantages, and it was proved that perceived
advantages of online shopping significantly impacted consumer8s intention to
make online transactions.Thus, perceived advantages impact the online buying
intention and attitudes of consumers.
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nline shopping is going most trendy and widespread in Pakistan these days. It is
a novel trend in Pakistan but it seems that suddenly the trend for online shopping
has been augmented between Pakistani.
It is receiving very universal in Pakistan however it is still not as common as in
>estern countries, the e"uipment times 3eported.
Internet has prepared the world a international community. community of Pakistan
are adopting online shopping trend because of the e%istence of many online
shopping websites in Pakistan.people of pakistan are now mostly aware of online
shoping and mostly wants to do online shoping as well as saving time and
e%penses.
Mostly people of Pakistan purchase goods from their local stores and face
different problems like distance, long line care parking and weather problems.
2ow due to innovation in technology the method of shopping is going to be
changed, introduction of online stores change the shopping trend, the way of
shopping is "uickly. Mostly all ompanies are now offering online shopping
facilities to their customers but customers are hesitating while having online
shopping or mostly not doing online purchasing.
In Pakistan >eb shopping model begin by transfering blooms, blessing cakes on
fresh years and birthday occasion. The population of Pakistan does withdraw from
putting their budgetary information for e%ample bank data and Masterard8s data
to escape fakes and captivating character. conse"uently observing in mind the end
goal to stay away from this threat and falter to send cash online sooner than
physical investigation. ne more reason is that the bank sustain and other
beneficial framework like PayPal that is not accessible, because of this, industry
people are bringing up the rear !; to 0; industry.
• Timing of delivery of product directly has impact on customer trust.
• >ord(of(mouth &bu## marketing' play role in building customers trust.
• ustomer knowledge gives confidence to the customer while having
online shopping.
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• +ffect of digital advertisement on customer buying behavior
Hypothesis:
The literature review has led to the development of the following hypothesisF
9!F There may no impact of customer trust on online shopping
91: There may positive impact of ustomer trust on online shopping
9. Product service "uality affects the trust of individual in online shopping.
9B. Personal ability to operate the hardware and software effects trust in online
shopping.
9D. Information of willingness and ability of seller and technical linkage effects
trust.
Theoretical framewor :
ased on the previous researches, a theoretical framework was developed to
scrutini#e the relationship of perceived advantages, perceived risks, hedonic
motivations, psychological factors and website design with online buying behavior
of Pakistani consumers.
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!uestio""aire
Trust 1' Product "uality matters to create trust in online shopping. ' y providing
the "uality product trust of consumers can be increased in online shopping. '
ustomers hesitate to shop online because there is a difference in "uality when the product reaches to the customer.
Product G *ervice Huality B' nline shopping can be enhanced by providing the
"uality products. D' Product "uality doesn8t matter in online shopping. 0'
ompanies must provide "uality products to build customer trust in online
shopping.
Person8s -bility /' 6unctioning of hardware and software also matter indeveloping trust in consumer. C' If a consumer thinks that there is a fault in the + (
commerce structure, he wouldn8t shop online. 7' ustomer must aware of using
hardware and software. A' ustomer must authori#e to check the security of his
transaction. 1!' ompanies must have to develop such a technical linkage that is
convenient to customers.
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Information 11' The good will of intermediary affects customer trust. 1' -
company must have awareness of customer willingness to shop online. 1B' The
good relationship of seller and intermediary can increase the trust of consumer in
online shopping. 1D' Intermediaries and bank play a significant role in creating a
trust of consumers. 10' ompanies must aware of consumer online behavior. 1/'Privacy issues discourage to customers to shop online. 1C' 9ackers are always
there so consumers hesitate to trust in online shopping.
Research !uestio"s:
What is an impact of customer t rust in online shopping?
6or the calculation of the effect of trust in online shopping in Pakistan use
"uestionnaires, surveys and sampling to find out the result that there is a effect of
trust on online shopping in Pakistan or not.
How customer trusts develop for the online shopping?
If customer have low interest in online shopping than find out what are the main
factors that affect the customer trust in online shopping and how can improve the
trust in the online shopping by overcoming the factors that are effecting the trust.
Research Desi#":
This section includes that how researcher will be conducted and reach to the end of
the research, and it also e%plain which type of methodology used.
$etho%olo#y:
Huantitative method and primary data collection method in our research is used. To
test the validity of hypotheses which are generated, study the trust level of
individual on online shopping. In order to perform surveys, the educated people
who are aware of the internet are selected. *ample si#e of 0! respondents selected
and we focus the university area because there are educated people who are aware
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of online shopping. >e conduct the survey and met the individuals face to face to
achieve the highest reliability in the data collection. The interviews are conducted
by three investigators and also ask from respondent to mention their major online
companies from where they use to shop online. ecause by keeping in mind the
major brands they can answer the "uestions effectively.
The study targets the sample population of consumers drawn from <ahore who
have or don8t have any previous e%perience of online shopping but all of them have
awareness regarding it. *ample si#e for the study is B0! and it employs
convenience sampling techni"ue. 4ata was collected primarily using "uestionnaire
techni"ue. There are five sections in the research "uestionnaire. *ection one
includes "uestions related to demographic profile of respondents such as gender,
age, relationship status, education etc. *ection two consists of "uestions that relate
to internet usage pattern of respondents. *ection three asks respondents about their
previous online shopping e%perience if any. *ection four focuses on "uestions
regarding their previous online shopping e%perience. In the end, section five
consisting of five point <ickert(type scale assists in knowing the opinion of people
regarding barriers to online shopping who have or have not shopped online. >e
distributed our "uestionnaire to respondents who are aged 17 years or above.
efore administering the research "uestionnaire to all respondents, a pre(test was
conducted. That pre(test was conducted on a random sample of B0 respondents in
order to ensure that the "uestion statements are understandable by respondents.
The methodology use in this research is triangulation and deductive in nature.Triangulation research also called mi% research which deal with both "ualitative
and "uantitative. *urveys &"uestionnaires and interviews' are conduct online and
tested by the *P** !.! tool to get analysis
Descriptive Research:
4escriptive research is used to describe the variables, characteristic of population,
and phenomenon under study. In descriptive research researcher mostly find cause
and effects among the variables and mostly concern with the what and how
"uestions.
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4escriptive is research is based on "ualitative data and "uantitative data.
Huantitative data analy#ed "uantitatively by using statistical tools. 4escriptive
studies report summari#ed data such as measuring central tendency including
mean, median, and deviance from the mean, variation, percentage, mode and
correlation between the variables
Respo"%e"ts a"% &ey I"formatio":
In this study the main respondent of the research are customers who purchase
goods online. In research secondary data is collected from internet, articles, books
and journals. Primary data is collect throw the "uestionnaire, surveys, interviews
and sampling.
I"strume"ts' Resources a"% Research Tools:
omputer
Internet
M* ffice
*P** !.!
*amples &cluster sampling'
Huestionnaires &mi%ed'
Interviews &structured and unstructured'
6or secondary data main source is internet, books and articles and for primary data
researcher use different tools like surveys, "uestionnaires, interviews and sampling.
3esearcher develop new "uestionnaire which contain both open ended "uestionsand close ended "uestions for their research and take interviews from the selected
sample. Ma%imum si#e of sampling is D!
Research (roce%ure:
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4ata of research is collected from the two main source primary data and secondary
data, use instruments and tools to finali#e the data, after using tools analy#e the
data
3esearcher use secondary data but more focus on primary data colleting from
"uestionnaires, interviews and sampling
Mostly interviews and "uestionnaire are taken through the internet online. In
sampling, researcher use cluster sampling from the population of Islamabad,
3awalpindi, <ahore and Multan. In population researcher select sample of D! to D0
who use internet and purchase goods through online.
)thical Implicatio"s:
The data collected from "uestionnaires, surveys and sampling will be used
according to the research ethics and the data from secondary resource would be
given proper references according to the rule of -P- citation style.
A"alysis:
The end results, which researcher get from the using of different instruments and
tool, analy#e the data and find out the final results that trust have impact on online
shopping or have no impact on online shopping.
&ey Rea%i"# for Research Desi#":
*ocial science research, principles, method and practices yF -nol hattiacherjeeJ
3esearch Methods for usiness *tudents fifth edition
yF Mark *aunders, Philip <ewis and -drian
Thornhil.J
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Locatio":
-s the research is descriptive and triangulation mostly based on primary data,
researcher conducts their primary data from online surveys and for secondary data
researcher collect data from internet, journals and articles related this topic.
&ey Rea%i"#s:
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•
ellenger, 4anny +., 3obertson, 4an 9., and Lreenburg, arnett -. &1ACC',K*hopping enter Patronage Motives,K @ournal of 3etailing, 0B, A(B7.
• hatnagar, -., Misra, *., and 3ao, 9.3., !!!, n 3isk, onvenience, and
Internet
• rassington, 6. G Pettitt, *. &!!!', Principles of Marketing, nd +d.
+dinburgh Late, Pearson +ducation <td
• rown, M. and Muchira, 3. !!D. Investigating the 3elationship between
Internet Privacy oncerns and nline Purchase ehavior. @ournal of
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