project report on consumer buying behavior on internet

Consumer Trends on Internet and Impact of Internet Advertising on Consumer Buying Behavior

Submitted by:Sadab AlamSwapnil BharadwajAnkit AgrawalRajat Kataria

Table of ContentsIntroduction:...............................................................................................................................................2

A Bubble, A fad or really effective:.............................................................................................................3

Objective of the study:................................................................................................................................3

Data Collection:...........................................................................................................................................4

Analysis of the data:....................................................................................................................................4

Analysis of the results:...............................................................................................................................11

Cross Tabulation........................................................................................................................................24

Conclusion.................................................................................................................................................26

Introduction: The Internet has today become more indispensable than any other technology products in the computer world. The internet users are on the rise world over. As a developing country occupying an important position in the BPO segment, India has built up great state of the art infrastructures like Communications, Internet and development centers. India has 13% of internet users in Asia and 7.36% that of the world. But the sorrowful fact is only 5.3% of people in India use internet. The reason of this is most of the people in India don’t know computer. 70% of people who know computer have used internet which is a healthy sign.

With rise in Internet penetration, the last decade has seen a very high growth in Internet advertising and Internet marketing. Internet marketing, also known as digital marketing, web marketing, online marketing, or e-marketing, is the marketing of products or services over the Internet. Online advertising is a form of promotion that uses the Internet and World Wide Web for the expressed purpose of delivering marketing messages to attract customers. Examples of online advertising include contextual ads on search engine results pages, banner ads, Rich Media Ads, Social network advertising, interstitial ads, online classified advertising, advertising networks and e-mail marketing, including e-mail spam.

One major benefit of online advertising is the immediate publishing of information and content that is not limited by geography or time. To that end, the emerging area of interactive advertising presents fresh challenges for advertisers who have hitherto adopted an interruptive strategy. Another benefit is the efficiency of advertiser's investment. Online advertising allows for the customization of advertisements, including content and posted websites. For example, AdWords, Yahoo! Search Marketing and Google AdSense enable ads to be shown on relevant web pages or alongside search results of related keywords.

As one of the fastest growing economies in the world, India presents a lucrative market to companies all over the globe. With over 700 million mobile users, and over 51 million internet users as per the World Bank, the Indian online advertising market is poised to bring in huge returns in the coming years.

Reports of the size of the Indian online advertising market vary, but by all estimates, it has witnessed 40-50% year on year growth for the past few years. A conservative estimate by Lintas Media group puts the market at Rs. 2500 crore (or approximately $550 million USD) by 2011. Further, with increasing internet penetration, more and more companies are jumping online and spending exorbitant amounts to get the attention of the Indian consumer. Today, you more likely to see a company put its website address alongside its phone number in a print ad in any Indian newspaper.

The growth in online advertising has coincided with the increasing use of credit cards and internet banking. Traditionally a financially conservative society that has savings rather than extravagance as its credo, Indians of late have taken a fancy to credit cards and consumerism. The new generation of Indians born after the economy was opened up in 1991 have disposable incomes which they don’t mind spending. The average Indian is much more comfortable spending money online than he was 5 years

ago. Of course, a range of safe, easy to use, and efficient e-commerce sites have facilitated this transformation.

Overall, the Indian online advertising space has witnessed tremendous growth – from $60 million in 2006-07 to an estimated $500-550 in 2011. In the years to come, this growth will only increase manifold, and so will the competition. It has never been easier than it is today to advertise online in India, with Companies offering SEO Services and Web Design that cater solely to the Indian audience. Internet advertising is poised to remain a bright spot in the ad space.

A Bubble, A fad or really effective:With such high numbers and bigger projections, marketers and companies are interested to know whether this whole hoopla about internet marketing and advertising is just a bubble or is it really something very effective, in which case no company could afford to ignore this vast growing market. Therefore, it is very important for companies and marketers to know and understand the impact of online advertising and internet marketing on consumers’ actual buying behavior. But the first question that everyone needs to ask and the answer for which everyone needs to seek is that whether there is any impact at all.

To understand this and also to understand the internet behavior of Consumers, we conducted an online survey and tried to understand the impact and gauge the answers.

Objective of the study:The objective of our research is to understand and analyze consumer trends on Internet and to find the impact of online advertising on consumer buying behavior. Through this research, we wanted to answer the question that is baffling every company and every marketer i.e. “Do online advertising and marketing has any impact on consumers and if yes then whether the impact is only temporary or does that reflect in an actual buy”.

Data Collection:To collect data for the survey, we collected data from a sample of 150 respondents that was done on a random sampling method. We designed a questionnaire and we collected our responses through online methods. (The questionnaire has been attached as an annexure).

Analysis of the data:

Age Group

Profession

Male 79 53%

Female 70 47%

15-25 27 18%

25-35 86 58%

35-45 23 15%

45 and above 13 9%

Student 2818%

Self-Employed 1913%

Services - IT / ITES 4832%

Banking & Financial Services / Academics / Doctors / Engineers ( Non-IT)

4328%

Other 14 9%

Income Bracket (Rs)

How frequently do you use Internet?

What is your purpose for browsing the Internet?

10000 28 19%

10000 - 20000 13 9%

20000-35000 31 20%

35000-50000 40 27%

>50000 37 25%

Daily 90 60%

2-3 Times in a Week 38 26%

Once in a Week 14 9%

2-3 Times in a Month 4 3%

Rarely 3 2%

Research 80 54%

Entertainment 114 77%

Education 83 56%

Communication 117 79%

Paying Bills 88 59%

Buying Railway and Flight Tickets

104 70%

Other 11 7%

Which of the following websites do you often visit on the Internet ?

How often does the internet replace anyone of the following activities or pastimes for you ? - Watching TV

How often does the internet replace anyone of the following activities or pastimes for you? - Reading Magazines / Newspapers

Advertising 29 19%

e-Commerce 48 32%

Social Networking 126 85%

Mail Services 141 95%

Matrimonial Sites 17 11%

Corporate Sites 73 49%

Other 15 10%

Never 35 22%

Rarely 39 25%

Time to Time 41 26%

Often 25 16%

Always 9 6%

In your opinion, using Internet as compared to use of Conventional documents is: - More Useful

In your opinion, using Internet as compared to use of Conventional documents is: - Time Saving

How would you describe your online buying behavior ?

Never 28 18%

Rarely 41 26%

Time to Time 30 19%

Often 41 26%

Always 9 6%

Agree 139 89%

Disagree 10 6%

Agree 146 93%

Disagree 3 2%

Never Buy 3926%

Used to buy but stopped due to some reason (dropout) 149%

Have just started buying (Newbie) 3725%

Have been buying online for more than a year (Steadfast) 6040%

If you never buy anything online or have stopped buying online, can you tell us why? Select all that apply.

Do you click on online advertisements?

If you never click online advertisements, can you tell us why?

Don’t trust online sellers 2013%

Need to see things physically before I buy 3624%

Have to wait for delivery 12 8%

Had a bad experience 6 4%

Don’t have the facility to buy online (no credit card, PayPal, etc.)

4 3%

Not Applicable 9161%

Other 7 5%

Yes 70 47%

No 79 53%

What things do you purchase online?

Ads are not interesting enough 15 10%

Worried about malware 42 28%

Worried that advertising company will track me and send me mailers

35 23%

Distracts from main purpose 38 26%

Not Applicable 79 53%

Other 4 3%

Music / Movies 3020%

Travel Products (rail tickets, air tickets, hotel bookings etc.)

10772%

Software / Electronics 4430%

Clothes and Accessories 4027%

e books 2718%

Not Applicable 2819%

Other 5 3%

What is your preferred payment method online?

Which of the following ads have you clicked on at some point in time?

Credit Card 70 47%

Debit Card 53 36%

Netbanking 78 52%

Paypal 11 7%

Cash on Delivery 19 13%

Not Applicable 23 15%

Other 0 0%

Ads on trusted sites (rediff, yahoo, indiatimes, etc.)

82 55%

Ads on facebook 53 36%

Ads in your e-mail 43 29%

Sponsored ads on google search 29 19%

Other 30 20%

Do you read reviews online before purchasing services or products?

Do you ever use internet sites or advertisements purely as research to purchase offline? For example, checking makemytrip to find the lowest possible price so that you can bargain with your travel agent.

For which of the following products have you used the internet for research on pricing, quality, etc.

Yes 117 79%

No 32 21%

Yes 94 63%

No 55 37%

Mobile Phones 106 71%

Consumer Durables 55 37%

Computers and other hardware 73 49%

Travel related items 104 70%

Location of stores in the city 78 52%

Financial products 53 36%

Never Searched such sites. 16 11%

These graphs show the demographic as well as behavior pattern of the sample data. These data showed us that definitely Internet as a medium of communication and networking has grown to become a bigger force. However, when the same assumption was applied to marketing and advertising impact, the sample exhibited very mixed responses. Therefore, to understand our sample in a better way, we ran Two-step cluster in SPSS. We took the following six as our categorical variables:

1. Gender2. Age 3. Profession4. Income5. Duration of Internet usage6. Frequency of Internet usage

Analysis of the results:Our first continuous variable was “Do you look the Internet for Product information”. After running the two step cluster in SPSS, we obtained the following output:

Cluster Distribution

N% of

Combined % of TotalCluster 1 33 22.3% 22.3%

2 42 28.4% 28.4%3 23 15.5% 15.5%4 50 33.8% 33.8%Combined 148 100.0% 100.0%

Total 148 100.0%

Cluster ProfilesCentroids

Do you look the Internet for product or company

information ? [Product Information]

Mean Std. DeviationCluster 1 3.30 1.311

2 3.05 .8823 2.52 1.1234 3.60 1.125Combined 3.21 1.156

FrequenciesSex

Male Female

Frequency Percent Frequency PercentCluster 1 18 22.5% 15 22.1%

2 5 6.3% 37 54.4%3 10 12.5% 13 19.1%4 47 58.8% 3 4.4%Combined 80 100.0% 68 100.0%

Age Group

15-25 25-35 35-45 45 and above

Frequency Percent Frequency Percent Frequency Percent Frequency PercentCluster 1 13 48.1% 15 17.9% 3 13.0% 2 14.3%

2 13 48.1% 25 29.8% 4 17.4% 0 .0%3 1 3.7% 1 1.2% 11 47.8% 10 71.4%4 0 .0% 43 51.2% 5 21.7% 2 14.3%Combined 27 100.0% 84 100.0% 23 100.0% 14 100.0%

Profession

Student Self-Employed Services - IT / ITES Banking & Financial Other

Services / Academics /

Doctors / Engineer

Frequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentCluster 1 25 100.0% 0 .0% 0 .0% 0 .0% 8 44.4% 2 0 .0% 1 5.3% 29 61.7% 8 20.5% 4 22.2% 3 0 .0% 11 57.9% 0 .0% 12 30.8% 0 .0% 4 0 .0% 7 36.8% 18 38.3% 19 48.7% 6 33.3% Combine

d25 100.0% 19 100.0% 47 100.0% 39 100.0% 18 100.0%

Income Bracket (Rs)

<10000 10000 - 20000 20000-35000 35000-50000 >50000

Frequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentCluster 1 28 100.0% 0 .0% 0 .0% 3 7.5% 2 5.3% 2 0 .0% 8 61.5% 17 58.6% 15 37.5% 2 5.3% 3 0 .0% 2 15.4% 3 10.3% 8 20.0% 10 26.3% 4 0 .0% 3 23.1% 9 31.0% 14 35.0% 24 63.2% Combine

d28 100.0% 13 100.0% 29 100.0% 40 100.0% 38 100.0%

For how long have you been using the internet ?

less than 6 months 6 mths to 1 yr 1 yr to 2 yr more than 2 yrs

Frequency Percent Frequency Percent Frequency Percent Frequency PercentCluster 1 3 75.0% 3 60.0% 3 37.5% 24 18.3% 2 0 .0% 1 20.0% 0 .0% 41 31.3% 3 1 25.0% 1 20.0% 5 62.5% 16 12.2% 4 0 .0% 0 .0% 0 .0% 50 38.2% Combined 4 100.0% 5 100.0% 8 100.0% 131 100.0%

How frequently do you use Internet ?

daily2 - 3 times in a

week once in a week2 -3 times in a

month Rarely

Frequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentCluster 1 23 25.8% 6 15.8% 0 .0% 1 25.0% 3 75.0% 2 17 19.1% 20 52.6% 5 38.5% 0 .0% 0 .0% 3 2 2.2% 9 23.7% 8 61.5% 3 75.0% 1 25.0% 4 47 52.8% 3 7.9% 0 .0% 0 .0% 0 .0% Combine

d89 100.0% 38 100.0% 13 100.0% 4 100.0% 4 100.0%

Interpretation:

Clusters 4 and Cluster 1 are the two clusters that mostly looks the Internet for product information. Cluster 1 comprises of mostly students in the age group of less than 25 and with an income of less than 10000 per month. This may be a good cluster for companies which are targeting this particular segment, for example- mobile phone companies. However, cluster 4 is the cluster that would interest the companies more. This cluster, which has 50 respondents falling under it i.e. about 1/3 rd of the sample, is mostly in the age group of 25-35, working in IT/ITES or Non-IT services industries, with an income of more than 35000 per month, has been using internet for more than 2 years and uses internet daily. Thus, from this clustering we conclude that Internet plays an important role when someone is looking to search for product information. This may be a good starting point for the companies and the marketers.

To analyze the data further and to arrive at some more concrete conclusion, we ran the two stage cluster again. Our second continuous variable was “How would you describe your online buying behavior”. After running the two step cluster in SPSS, we obtained the following output:


N% of


2 44 29.7% 29.7%3 31 20.9% 20.9%4 27 18.2% 18.2%Combined 148 100.0% 100.0%

Total 148 100.0%


How would you describe your online buying

behavior ?

Mean Std. DeviationCluster 1 3.61 .856

2 2.55 1.1903 2.10 1.1934 2.59 1.118Combined 2.79 1.219

FrequenciesSex

Male Female


2 8 10.0% 36 52.9%3 10 12.5% 21 30.9%4 17 21.3% 10 14.7%Combined 80 100.0% 68 100.0%

Age Group

15-25 25-35 35-45 45 and above

Frequency Percent Frequency Percent Frequency Percent Frequency PercentCluster 1 0 .0% 39 46.4% 5 21.7% 2 14.3%

2 12 44.4% 31 36.9% 1 4.3% 0 .0%3 2 7.4% 1 1.2% 16 69.6% 12 85.7%4 13 48.1% 13 15.5% 1 4.3% 0 .0%Combined 27 100.0% 84 100.0% 23 100.0% 14 100.0%

Profession

Student Self-EmployedServices - IT /

ITES

Banking & Financial Services /

Academics / Doctors / Enginee Other

Frequency

Percent

Frequency

Percent

Frequency

Percent

Frequency

Percent

Frequency

Percent

Cluster

1 1 4.0% 7 36.8% 15 31.9% 19 48.7% 4 22.2%2 0 .0% 1 5.3% 31 66.0% 6 15.4% 6 33.3%3 0 .0% 11 57.9% 1 2.1% 14 35.9% 5 27.8%4 24 96.0% 0 .0% 0 .0% 0 .0% 3 16.7%Combined

25100.0

%19

100.0%

47100.0

%39

100.0%

18100.0

%

Income Bracket (Rs)

<10000 10000 - 20000 20000-35000 35000-50000 >50000Freque

ncy PercentFreque

ncy PercentFreque

ncy PercentFreque

ncy PercentFreque

ncy PercentCluster

1 0 .0% 3 23.1% 8 27.6% 12 30.0% 23 60.5%2 0 .0% 8 61.5% 17 58.6% 14 35.0% 5 13.2%3 4 14.3% 2 15.4% 4 13.8% 11 27.5% 10 26.3%4 24 85.7% 0 .0% 0 .0% 3 7.5% 0 .0%Combined

28 100.0% 13 100.0% 29 100.0% 40 100.0% 38 100.0%



Interpretation:

From this, it is clearly evident is Cluster 1 is the one which has buys online mostly. This cluster comprises of mostly male in the age group of 25-45, working in the IT-ITES or Non-IT services like banking, has income of more than 20000, has been using internet for more than 2 years and uses internet daily. Thus, we clearly see the difference between the first result and this. Despite many people looking for information online, actual online buy is highly restricted to a certain profile.

To further understand this anomaly, we again ran the two step cluster on a different continuous variable. Our third continuous variable was “Do you click on Online advertisements”. After running the two step cluster in SPSS, we obtained the following output:


N% of


2 20 13.5% 13.5%3 30 20.3% 20.3%4 49 33.1% 33.1%Combined 148 100.0% 100.0%

Total 148 100.0%




2 1.60 .5033 1.57 .504



month Rarely

Freque

ncyPerce

ntFreque

ncyPerce

ntFreque

ncyPerce

ntFreque

ncyPerce

ntFreque

ncy PercentCluster

146 51.7% 0 .0% 0 .0% 0 .0% 0 .0%

2 19 21.3% 23 60.5% 2 15.4% 0 .0% 0 .0% 3

3 3.4% 9 23.7% 11 84.6% 4100.0

%4 100.0%

4 21 23.6% 6 15.8% 0 .0% 0 .0% 0 .0% Combi

ned89

100.0%

38100.0

%13

100.0%

4100.0

%4 100.0%

less than 6 months 6 mths to 1 yr 1 yr to 2 yr more than 2 yrsFrequenc

y PercentFrequenc

y PercentFrequenc

y PercentFrequenc

y PercentCluster 1 0 .0% 0 .0% 0 .0% 46 35.1%

2 0 .0% 1 20.0% 1 12.5% 42 32.1%3 4 100.0% 1 20.0% 6 75.0% 20 15.3%4 0 .0% 3 60.0% 1 12.5% 23 17.6%Combined

4 100.0% 5 100.0% 8 100.0% 131 100.0%

4 1.51 .505Combined 1.54 .500

FrequenciesSex

Male Female


2 6 7.5% 14 20.6%3 20 25.0% 10 14.7%4 45 56.3% 4 5.9%Combined 80 100.0% 68 100.0%

Age Group

15-25 25-35 35-45 45 and above

Frequency Percent Frequency Percent Frequency Percent Frequency PercentCluster 1 10 37.0% 29 34.5% 8 34.8% 2 14.3%

2 1 3.7% 0 .0% 9 39.1% 10 71.4%3 16 59.3% 13 15.5% 1 4.3% 0 .0%4 0 .0% 42 50.0% 5 21.7% 2 14.3%Combined 27 100.0% 84 100.0% 23 100.0% 14 100.0%

Profession


ITES



Frequency Percent

Frequency Percent

Frequency Percent

Frequency Percent

Frequency Percent

Cluster

1 0 .0% 6 31.6% 27 57.4% 10 25.6% 6 33.3%

2 0 .0% 6 31.6% 0 .0% 10 25.6% 4 22.2%3 24 96.0% 0 .0% 3 6.4% 0 .0% 3 16.7%4 1 4.0% 7 36.8% 17 36.2% 19 48.7% 5 27.8%Combined

25 100.0% 19 100.0% 47 100.0% 39 100.0% 18 100.0%

Income Bracket (Rs)

<10000 10000 - 20000 20000-35000 35000-50000 >50000Frequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentCluster

1 0 .0% 5 38.5% 18 62.1% 24 60.0% 2 5.3%

2 4 14.3% 2 15.4% 3 10.3% 1 2.5% 10 26.3%3 24 85.7% 3 23.1% 0 .0% 3 7.5% 0 .0%4 0 .0% 3 23.1% 8 27.6% 12 30.0% 26 68.4%

Combined

28 100.0% 13 100.0% 29 100.0% 40 100.0% 38 100.0%



y PercentFrequenc

y PercentFrequenc

y PercentFrequenc

y PercentCluster 1 0 .0% 2 40.0% 0 .0% 47 35.9%

2 4 100.0% 0 .0% 6 75.0% 10 7.6%3 0 .0% 3 60.0% 1 12.5% 26 19.8%4 0 .0% 0 .0% 1 12.5% 48 36.6%Combined 4 100.0% 5 100.0% 8 100.0% 131 100.0%




month RarelyFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentCluster

1 17 19.1% 23 60.5% 9 69.2% 0 .0% 0 .0%

2 1 1.1% 7 18.4% 4 30.8% 4 100.0% 4 100.0%3 22 24.7% 8 21.1% 0 .0% 0 .0% 0 .0%

4 49 55.1% 0 .0% 0 .0% 0 .0% 0 .0%

Combined

89 100.0% 38 100.0% 13 100.0% 4 100.0% 4 100.0%

Interpretation:

Thus, we see that all the 4 clusters do actually click on online advertisements at one time or the other. The clusters are divided mostly on the Profession. However, this doesn’t reflect in an online buy on most occasions. From this we conclude that online advertisement is effective in catching the attention of the consumers but not so much in converting that to an actual online purchase. Could this be because most of the people prefer to buy through traditional methods?

Therefore we ran the two step cluster again to understand the consumer behavior further. Our fourth continuous variable was “Do you read reviews online before purchasing services or products”. After running the two step cluster in SPSS, we obtained the following output:


N% of


2 46 31.1% 31.1%3 43 29.1% 29.1%4 29 19.6% 19.6%Combined 148 100.0% 100.0%

Total 148 100.0%

Cluster Profiles

Centroids

Do you read reviews online before purchasing services

or products?


2 1.13 .3413 1.14 .3514 1.14 .351Combined 1.23 .422

Frequencies

Sex

Male Female


2 8 10.0% 38 55.9%

3 43 53.8% 0 .0%4 17 21.3% 12 17.6%Combined 80 100.0% 68 100.0%

Age Group

15-25 25-35 35-45 45 and aboveFrequenc

y PercentFrequenc

y PercentFrequenc

y PercentFrequenc

y PercentCluster 1 1 3.7% 1 1.2% 14 60.9% 14 100.0%

2 12 44.4% 31 36.9% 3 13.0% 0 .0%3 0 .0% 38 45.2% 5 21.7% 0 .0%4 14 51.9% 14 16.7% 1 4.3% 0 .0%Combined

27 100.0% 84 100.0% 23 100.0% 14 100.0%

Profession


ITES



Frequency

Percent

Frequency

Percent

Frequency

Percent

Frequency

Percent

Frequency

Percent

Cluster

1 0 .0% 11 57.9% 0 .0% 12 30.8% 7 38.9%

2 0 .0% 2 10.5% 32 68.1% 8 20.5% 4 22.2%3 1 4.0% 6 31.6% 15 31.9% 19 48.7% 2 11.1%4 24 96.0% 0 .0% 0 .0% 0 .0% 5 27.8%Combined

25 100.0% 19 100.0% 47 100.0% 39 100.0% 18 100.0%

Income Bracket (Rs)

<10000 10000 - 20000 20000-35000 35000-50000 >50000Frequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentCluster

1 4 14.3% 2 15.4% 3 10.3% 9 22.5% 12 31.6%

2 0 .0% 8 61.5% 17 58.6% 16 40.0% 5 13.2%3 0 .0% 3 23.1% 8 27.6% 12 30.0% 20 52.6%4 24 85.7% 0 .0% 1 3.4% 3 7.5% 1 2.6%Combined

28 100.0% 13 100.0% 29 100.0% 40 100.0% 38 100.0%



y PercentFrequenc

y PercentFrequenc

y PercentFrequenc


2 0 .0% 0 .0% 0 .0% 46 35.1%3 0 .0% 0 .0% 0 .0% 43 32.8%4 0 .0% 4 80.0% 2 25.0% 23 17.6%Combined 4 100.0% 5 100.0% 8 100.0% 131 100.0%

How frequently do you use Internet?



month RarelyFreque

ncyPercen

tFreque

ncyPercen

tFreque

ncyPercen

tFreque

ncyPercen

tFreque

ncyPercen

tCluster

1 4 4.5% 9 23.7% 9 69.2% 4 100.0% 4 100.0%

2 20 22.5% 22 57.9% 4 30.8% 0 .0% 0 .0%3 43 48.3% 0 .0% 0 .0% 0 .0% 0 .0%

4 22 24.7% 7 18.4% 0 .0% 0 .0% 0 .0%

Combined

89 100.0% 38 100.0% 13 100.0% 4 100.0% 4 100.0%

Interpretation –Apart from cluster 1, rest all 3 clusters mostly read the reviews online before purchasing the products. These clusters mostly fall into the age group of 25-35 yrs, has a fair representation of male and female, works in IT/ITES and Non-IT Services, has a income of above Rs. 20000, has been using internet for more than 2 yrs and uses internet almost daily.

Finally, to understand the data further, we ran a two step cluster on a combination of two continuous variables:

How would you describe your online buying behavior ? andDo you read reviews online before purchasing services or products.

We got the following results:


N% of


2 47 31.8% 31.8%3 53 35.8% 35.8%4 17 11.5% 11.5%Combined 148 100.0% 100.0%

Total 148 100.0%

Cluster Profiles

Centroids

How would you describe your online buying

behavior?

Do you read reviews online before purchasing services

or products?

Mean Std. Deviation Mean Std. DeviationCluster 1 1.81 1.046 1.61 .495

2 3.62 .848 1.17 .3803 2.68 1.189 1.13 .3424 2.65 .996 1.00 .000Combined 2.79 1.219 1.23 .422

Frequencies

Sex

Male Female


2 46 57.5% 1 1.5%3 8 10.0% 45 66.2%4 15 18.8% 2 2.9%Combined 80 100.0% 68 100.0%

Age Group

15-25 25-35 35-45 45 and aboveFrequenc

y PercentFrequenc

y PercentFrequenc

y PercentFrequenc


2 0 .0% 39 46.4% 6 26.1% 2 14.3%3 15 55.6% 33 39.3% 4 17.4% 1 7.1%4 6 22.2% 11 13.1% 0 .0% 0 .0%Combined 27 100.0% 84 100.0% 23 100.0% 14 100.0%

Profession


ITES

Banking & Financial Services

/ Academics / Doctors / Enginee Other

Frequency Percent

Frequency Percent

Frequency Percent

Frequency Percent

Frequency Percent

Cluster

1 4 16.0% 10 52.6% 0 .0% 11 28.2% 6 33.3%

2 1 4.0% 7 36.8% 15 31.9% 20 51.3% 4 22.2%3 4 16.0% 2 10.5% 32 68.1% 8 20.5% 7 38.9%4 16 64.0% 0 .0% 0 .0% 0 .0% 1 5.6%Combined

25 100.0% 19 100.0% 47 100.0% 39 100.0% 18 100.0%

Income Bracket (Rs)

<10000 10000 - 20000 20000-35000 35000-50000 >50000Freque

ncy PercentFreque

ncy PercentFrequen

cy PercentFreque

ncy PercentFreque

ncy PercentCluster

1 8 28.6% 2 15.4% 4 13.8% 8 20.0% 9 23.7%

2 0 .0% 3 23.1% 8 27.6% 12 30.0% 24 63.2%3 3 10.7% 8 61.5% 17 58.6% 20 50.0% 5 13.2%

4 17 60.7% 0 .0% 0 .0% 0 .0% 0 .0%

Combined

28 100.0% 13 100.0% 29 100.0% 40 100.0% 38 100.0%



y PercentFrequenc

y PercentFrequenc

y PercentFrequenc


2 0 .0% 0 .0% 0 .0% 47 35.9%3 0 .0% 0 .0% 1 12.5% 52 39.7%4 0 .0% 1 20.0% 0 .0% 16 12.2%Combined 4 100.0% 5 100.0% 8 100.0% 131 100.0%




month RarelyFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentFrequen

cy PercentCluster

1 1 1.1% 13 34.2% 9 69.2% 4 100.0% 4 100.0%

2 46 51.7% 1 2.6% 0 .0% 0 .0% 0 .0%3 27 30.3% 22 57.9% 4 30.8% 0 .0% 0 .0%4 15 16.9% 2 5.3% 0 .0% 0 .0% 0 .0%Combined

89 100.0% 38 100.0% 13 100.0% 4 100.0% 4 100.0%

Interpretation –This 2 step cluster clearly shows that the people in cluster 2 are the most frequent online buyers and they also read reviews online on a frequent basis. Whereas, people in cluster 3 and 4 do hardly buy online but read reviews online. Cluster 1 neither bothers to read online nor tends to purchase for same.

Cross TabulationAs the last step to our analysis, we cross tabulated our sample data by taking online buying behavior as a constant parameter and cross tabulating with 4 different behavior patterns.

Case Processing Summary

Cases

Valid Missing Total

N Percent N Percent N PercentHow would you describe your online buying behavior ? * Do you click on online advertisements?

148 100.0% 0 .0% 148 100.0%

How would you describe your online buying behavior ? * Do you read reviews online before purchasing services or products?

148 100.0% 0 .0% 148 100.0%

How would you describe your online buying behavior ? * Do you look the Internet for product or company information ? [Product Information]

148 100.0% 0 .0% 148 100.0%

How would you describe your online buying behavior ? * Do you ever use internet sites or advertisements purely as research to purchase offline? For example, checking makemytrip to find the lowest possible price so that you can bargain with your travel agent.

148 100.0% 0 .0% 148 100.0%

How would you describe your online buying behavior ? * Do you click on online advertisements? Cross-tabulation

Count


TotalYes NoHow would you describe your online buying behavior ?

Never Buy 10 28 38Drop Out 5 9 14NewBie 23 14 37SteadFast 30 29 59

Total 68 80 148

Here we see that, SteadFast people generally click on advertisements and purchase. We also see a Never Buy category of people who do not click on advertisements and they do not tend to buy,

How would you describe your online buying behavior ? * Do you read reviews online before purchasing services or products? Cross-tabulation

Count

Do you read reviews online before purchasing

services or products?

TotalYes NoHow would you describe your online buying behavior ?


Total 114 34 148

Here we see that, 50% of people who never buy online read reviews. There are some category of people who mostly read reviews and then purchase from internet.

How would you describe your online buying behavior ? * Do you look the Internet for product or company information ? [Product Information] Cross-tabulation

Count

Do you look the Internet for product or company information ? [Product Information]

TotalNever Rarely Sometimes Often AlwaysHow would you describe your online buying behavior ?

Never Buy 10 13 8 4 3 38Drop Out 0 0 5 6 3 14NewBie 1 8 16 8 4 37SteadFast 1 5 24 15 14 59

Total 12 26 53 33 24 148

Here we see that NewBie and SteadFast are the people who mostly look internet for product or company information. Their frequency of online buying is comparatively higher that Drop Outs and Never Buy category of people.How would you describe your online buying behavior ? * Do you ever use internet sites or advertisements purely as research to purchase offline? For example, checking makemytrip to find the lowest possible price so that you can bargain with your travel agent. Cross-tabulation

Count

Do you ever use internet sites or advertisements purely as research to

purchase offline?

TotalYes No

How would you describe your online buying behavior ?


Total 93 55 148

Here we see that, Never Buy category of people use internet sites or advertisements purely as research to purchase offline. But in SteadFast and NewBie case, most of the people use internet sites or advertisements purely as research and purchase offline.

Conclusion So, finally we can conclude that people who use internet quite frequently (daily or 2-3 times a week) and are working in IT/ITES and non-IT domain (Banking, Financial and other services) and in the age group of 25-35 years falls into the category of NewBie and SteadFast. They frequently read reviews online to purchase the items as well as they go for offline purchases. These are the people who generally click on online advertisements and then tend to purchase those items. These categories of people also look internet for product and company information.

Output Files

project report on consumer buying behavior on internet

Documents