ONLINE SHOPPING: ITS EFFECTS TO THE STUDENTS OF

BACHELOR OF SCIENCE MAJOR IN BUSINESS

ADMINISTRATION (BSBA) OF POLYTECHNIC UNIVERSITY

OF THE PHILIPPINES

A research paper

Judyne Laman

Jessa Mae Paliza

Arlene Puchero

Eliza Mae Razon

Jamezel Anne Sipsip

Researchers

Mrs. Zaila Decin

Research Teacher
 Chapter I

The Problem and Its Setting

Introduction

The internet has played a significant role in our daily life in that people can talk through

the internet to one who is actually on the other side of the Earth, can send email around the

clock, can search information, can play game with others, and even can buy things online.

Meanwhile, Internet shopping has been widely accepted as a way of purchasing products and

services It has become a more popular means in the Internet world ((Bourlakis et al., 2008)). It

also provides consumer more information and choices to compare product and price, more

choice, convenience, easier to find anything online ((Butler and Peppard, 1998)). Online

shopping has been shown to provide more satisfaction to modern consumers seeking

convenience and speed ((Yu and Wu, 2007)). On the other hand, some consumers still feel

uncomfortable to buy online. Lack of trust, for instance, seems to be the major reason that

impedes consumers to buy online. Also, consumers may have a need to exam and feel the

products and to meet friends and get some more comments about the products before purchasing.

Such factors may have negative influence on consumer decision to shop online.

Online shopping is a growing area of technology. Establishing a store on the Internet,

allows for retailers to expand their market and reach out to consumers who may not otherwise

visit the physical store. The convenience of online shopping is the main attraction for the

consumers. Unique online payment systems offer easy and safe purchasing from other

individuals. Electronic consumers exhibit different buying behaviors such as; cart abandonment.

The benefits of shopping online also come with potential risks and dangers that consumers must
be aware of. In the future, we can expect online stores to improve their technology tremendously,

allowing for an easier and a more realistic shopping experience.

Consumers buy a variety of items from online stores. In fact, people can purchase just

about anything from companies that provide their products online. Books, clothing, household

appliances, toys, hardware, software, and health insurance are just some of the hundreds of

products consumers can buy from an online store.

Many people choose to conduct shopping online because of the convenience. For

example, when a person shops at a brick-and-mortar store, she has to drive to the store, find a

parking place, and walk throughout the store until she locates the products she needs. After

finding the items she wants to purchase, she may often need to stand in long lines at the cash

register.

In contrast, online shopping helps consumers avoid these disadvantages. With online

shopping, a person logs onto the Internet, visits the store's website, and chooses the items she

desires. The items are held in a virtual shopping cart until she is ready to make her purchase. The

shopper can remain in her pajamas as she does her shopping, and the process can be conducted in

the wee hours of the morning or late into the night. Online stores never close - they're open 24

hours a day.

Despite the convenience of online shopping, not everyone chooses to purchase items and

services online. Some people like the idea of physically going to a store and experiencing the

shopping process. They like to touch the merchandise, try on clothing, and be around other

people. Online shopping doesn't permit shoppers to touch products or have any social interaction.

It also doesn't allow them to take the merchandise home the same day they buy it.
 Other people may worry about shopping online because they fear their credit card

information will be compromised. Since it's necessary to provide credit card information when

purchasing products online, people worry they may become the victims of identity theft. This

discourages some consumers from participating in online shopping.

Another reason some consumers avoid shopping online is the fact that they worry that the

products they purchase are not accurately portrayed in the website's picture. They worry that the

picture of the item may appear one way, but the actual item may look completely different -

perhaps of lesser quality. It's also impossible to try on apparel when conducting online shopping.

A consumer has to rely on body measurements in order to make sure the clothing will fit

properly. If the clothing arrives in the mail and it's too small, the consumer has to return the item.

This is a potential inconvenience that some shoppers may not wish to face.

Background of the Study

Nowadays, the Internet is being widely used in daily life. The existence of the Internet

brought many advantages to individuals daily lives. With the help of the medium, people can

communicate, learn, entertain, buy products and get services. Of course the disadvantages of it

have long been discussed; as the virus threat, the risk of personal information theft, spamming

etc. However since the advantages outweigh the drawbacks, most of the people cannot resist

bringing it to the center of their lives.

Since the beginning of the Internet, individuals have shown interest to the Internet.

According to Internet World Stats' statistics (2012) today more than two billion people linked to

the Internet. This number shows that 30 percent of the world population uses the Internet.
Consequently, the Internet can be used for the competitive advantage by organizations and

actually it is a powerful source to use (Hamill, 1997; 300).

The Internet have been using for several different purposes. Besides that, it has also

brought a different dimension to commercial activities. The Internet has created a new market for

both customers and organizations, and has been an alternative market to the traditional market.

Web sites provide a chance to search information about products/services, place a comment or

give orders (Hoffman and Novak, 1996; 51). Therefore, the previous experiences of marketing

have turned into a different segment. Now organizations are taking consider to provide different

payment methods, different shipping alternatives and even different web interfaces for different

geographic.

Today, with the rise of the technology, significant portion of commercial activities take

place over the Internet. Since commercial activities' main goal is to sale, sale can be realized by

the purchase of a different party, as we know customers. Therefore, for electronic commercial

activities, it is important to analyze online customers' behavior. Furthermore, in order to develop

and apply effective marketing strategies the factors that affect consumer behaviors should be

investigated. Online retailers can better understand customer needs and wants by directly

analyzing the interaction between a customer and the online shop. Analyzing consumer behavior

is not a new phenomenon for scholars. Philip Cotler, marketing expert, have studied on this

topic. Theories about consumer behavior have been used to develop an effective marketing

strategy. Moreover, it is impossible to think marketing without the Internet in today's world.

Online marketing is the topic that have been researched and made applications many times by

researcher from past to nowadays. Studies on online shopping investigated the factors that

influence online shopping as well as motives for, value of and antecedents of online buying
behavior. As a result, the academic researchers and the business world started to focus on the

consumer side of the online purchasing behavior and a lot of researches and articles were

prepared to make guidance for the development of online shopping.

Theoretical Framework

The process of making decision are very similar whether the consumer is offline or

online. But one some major differences are shopping environment and marketing

communication. According to traditional consumer decision model, Consumer purchase decision

typically starts with need awareness, then information search, alternative evaluations, deciding to

purchase and finally, post-purchasing behavior.

In terms of online communication, when customers see banner ads or online promotion,

these advertisements may attract customers attention and stimulate their interesting particular

products. Before they decide to purchase, they will need additional information to help them out.

If they do not have enough information, they will search through online channels, e.g., online

catalogs, websites, or search engines ((Laudon and Traver, 2009)). When customers have enough

information, they will need to compare those choices of products or services. In the search stage,

they might look for the product reviews or customer comments. They will find out which brand

or company offers them the best fit to their expectation. During this stage, well-organized web

site structure and the attractive design are important things to persuade consumers to be

interested in buying product and service ((Koo et al., 2008)). Moreover, the information sources

nature may influence buyer behavior ((Bign-Alcaiz et al., 2008)). The most useful

characteristic of internet is that it supports the pre-purchase stage ((Maignan and Lukas, 1997))

as it helps customers compare different options ((Dickson, 2000)). During the purchasing stage,

product assortment, sale services and information quality seem to be the most important point to
help consumers decide what product they should select, or what seller they should buy from

((Koo et al., 2008)). Post-purchase behavior will become more important after their online

purchase. Consumers sometimes have a problem or concern about the product, or they might

want to change or return the product that they have bought. Thus, return and exchange services

become more important at this stage (Liang and Lai, 2002).

All five stages described above are affected by external factors of risks and trusts

(Comegys et al., 2009). The search process is a significant component of customers online

shopping behavior (Seock and Norton, 2007). The source risk comes in the stage of information

search and evaluation because the information in the web sites might contain some mistakes.

Some websites require customers to register before searching their website. As such, in addition

to product risk, consumers also face the risk of information security (Comegys et al., 2009; Wang

et al., 2005). Because of the nature of online purchasing, customers take the risk as they are not

able to examine the product before purchasing. They also take the risk in the payment process

because they may need to provide personal information including their credit card number.

Security problem does not stop at the purchase stage but continues to the post-purchase stage

because their personal information might be misused.

Conceptual Framework

This study made use of the following research paradigm:

 Independent Variables: Dependent variables:

Quality Effects to the students of

Shipping charge Bachelor of Science Major in
Satisfaction Business Administration
Security (BSBA)

Figure 1 shows the variables used by the researchers. Independent variables

consist of quality, shipping charge, satisfaction and security which attributes to the

change in the dependent variable which is the students of Bachelor of Science Major in

Business Administration (BSBA)

Hypothesis

For this study, the researchers assumed the followings:

1. Consumers are generally satisfied with online purchasing;

2. Prices of products positively affects the consumers online purchasing behavior;
3. There is a relation between perceived risk and consumers online purchasing behavior;
4. There is a positive influence of trust on consumers online purchasing behavior;
5. Consumers future buying behavior is affected by web design, delivery time, and last

experience;
6. There is a relation between consumers satisfaction and their intentions to buy in the

future
7. Satisfaction of consumers is affected by convenience and quality offered.

Statement of the Problem

 This research generally aimed to discuss the effects of online shopping to the BSBA

students.

Specifically, the researchers seek to find the answers to the following question:

1. What is the profile of the respondents in terms of

a. Age
b. Gender
c. Social status
2. How do these factors affect the buying power of consumers online in terms of:
a. Availability of desired product
b. Quality of product
c. Promotion
d. Price
e. Demand simulation

Scope and Limitation

The study aims to know and ensure if the respondents, BSBA students, are affected by

what factors and what the respondents think may result to that as it affect the their perception

about online shopping. The researchers are trying to show what factor has the greatest

contribution on engaging into online shopping.

Significance of the Study

This study is significant to the following:

To students who had engage in online shopping;

To parents who gave consent to their child;
To teachers who guide and as the second parent of their students; and
To researchers who are interested regarding this topic.

Definition of Terms

The following terms used in this study are defined theoretically and operationally.
 Consumer - an individual who buys products or services for personal use and not for

manufacture or resale.

(www.investorwords.com/1055/consumer.html#ixzz4Y4OeYmUW)
Demand - an economic principle that describes a consumer's desire and willingness to

pay a price for a specific good or service. (www.investopedia.com/terms/d/demand.asp)

Merchandise - the manufactured goods bought and sold in any business.

(http://www.dictionary.com/browse/merchandise)
Online shopping - The act of purchasing products or services over the Internet.

(www.businessdictionary.com/definition/online-shopping.html)

Promotion - refers to raising customer awareness of a product or brand, generating sales,

and creating brand loyalty. (https://en.wikipedia.org/wiki/Promotion_(marketing))

Chapter II

Review of Related Literatures and Studies

The review of the literature for this study focuses on procedures used to identify teaching

strategy and learning styles. The chapter begins with a definition of learning styles, teaching

strategy followed by the findings of researchers using various instruments to measure learning

style and teaching strategy. The research outcomes germane to learning styles and teaching

strategy are discussed.

Related Literature

The typical Internet user of the twentieth century is young, professional, and affluent with

higher levels of income and higher education (Palumbo and Herbig, 1998). They value time

more than money which automatically makes the working population and dual-income or single-

parent households with time constraints better candidates to be targeted by non-store retailers

(Burke, 1997). Actually, both demographics and personality variables such as opinion leadership

or risk aversiveness are very important factors that are considered in studies trying to determine

the antecedents of Internet purchases (Kwak et al., 2002). Confirmatory work shows that income

and purchasing power have consistently been found to affect consumers propensity to shift from

brick-and-mortar to virtual shops (Co-mor, 2000).

Internet usage history and intensity also affect online shopping potential. Consumers with

longer histories of Internet usage, educated and equipped with better skills and perceptions of the

Web environment have significantly higher intensities of online shopping experiences and are

better candidates to be captured in the wellknown concept of flow in the cyber world (Sisk,

2000; Hoffman and Novak, 1996; Liao and Cheung, 2001). Those consumers using the Internet

for a longer time from various locations and for a higher variety of ser-vices are considered to be

more active users (Emmanouilides and Hammond, 2000).

As Bellman et al. (1999) mention, demographics are not so important in determining

online purchasing potential. Whether the consumer has a wired lifestyle and the time constraints

the person has are much more influential. Risk taking 14 propensity is also a powerful factor. E-

shoppers have higher risk taking tendencies. Consumers with high levels of privacy and security

concerns have lower purchasing rates in online markets but they balance this characteristic with
their quest for making use of the information advantage of the environment (Kwak et al., 2002;

Miyazaki and Fernandez, 2001). These educated individuals, as more confident decision makers,

are much more demanding and have greater control over the purchasing process from initiation

to completion (Rao et al., 1998).

Related Studies

Many studies frequently mention that there is a vast amount of window shopping taking

place online but the number or the rate of surfers who turn into purchasers or regular buyers are

very low (Mayer, 2002; Betts, 2001; Oliver, 1999). This might happen because of the lack of

consumer intention to purchase an offering from the online environment at the outset. It might

also happen 15 because of various problems that arise during online shopping driving the

consumer to abandon the task in the middle. Therefore, while one stream of research should

identify the reasons behind the purchase reluctance of consumers, another area of concentration

should be why people abandon their shopping carts and stop the purchasing process in the

middle. Such attempts can help to understand how to turn surfers into interactors, purchasers,

and finally, repeat purchases by making them enter into continuous interaction with this

environment (Berthon, 1996).

Common reasons for purchase reluctance are the difficulties and costs of distance

shipping, inadequate amount of purchase related information, troubles experienced after the

purchase such as delivery or refund problems, general security fear, and various perceived risks

such as financial, product-related or psychological risks (Mayer, 2002; Chen and He, 2003). On

the other hand, the reasons of abandoning purchases are much more technical such as unexpected

shipping costs or transaction complexity (Harvard Business Review, 2000). In other words, some
consumers accept to shop from the Internet in principle but technical complexities or ineffective

systems discourage them.

Regardless of the pessimistic state of events, marketers should not be hopeless about the

future. Once the risks consumers perceive about shopping through the Web are reduced, the

environment still promises a high potential for selected consumer segments. Studies show that

consumers who search for product related information through the Web have stronger intentions

to make purchases online (Shim et al., 2001). Therefore, building on the information advantage

can be expected to pay off in the future. Constructing effective decision support systems and

assisting consumers with interactive decision tools are also successful attempts that need to be

developed further (OKeefe and McEachern, 1998; Barber, 2001). However, investing on the

pre-purchase stages of the decision making process is not adequate. Developing and testing the

effectiveness of specific selling strategies and tactics for the cyber market are also crucial.

Studies that focus on currently unavailable but possible tools of cyber shopping in the future,

such as the use of artificial shopping agents that work on behalf of consumers in the online

market (Redmond, 2002), are also very valuable efforts enlightening the road for future studies.