Chapter 1

The Problem and Its Background

This chapter includes the introduction, significance of the study,

theoretical/conceptual framework, statement of the problem, hypothesis of

the study, operational definition of variables, scope and delimitation of the

study.

Introduction

In the past decade, the way people shop has dramatically changed.

Besides shopping at physical stores, with the benefit of information and

communication technologies (ICT), consumers can shop via Internet. This

new type of shopping mode frees the consumer to personally visit physical

stores and is anticipated to greatly change people’s everyday lives.

A high anticipation towards online shopping has motivated countless

studies on this topic. Most of the existing literature has focuses on the

advantages and disadvantages of online marketing. Moreover, most if them

have concerned consumers’ attitude, satisfaction, intention, etc., towards

online shopping. They mostly highlight the psychological ideas that control

consumers’ online shopping behavior and try to correlate these ideas by

formulating empirical models based on behavioral theories. Some of these

widely used theories include the theory of reasoned action (TRA), the

technology acceptance model (TAM), the theory of planned behavior

has been widely adopted in the marketing areas.

Relatively, insufficient existing literature has concerned about how

consumers make the choice between online shopping versus in-store

shopping. One of the reasons for this may be recognized to the complex

nature of the shopping activity. It has been broadly recognized that

shopping activity is conducted for the goal of goods attainment. The appeal

of in-store shopping is diverse including entertainment, social interaction and

movement. Much of the appeal cannot be easily displaced by online

shopping making the in-store shopping still competitive over online

shopping.

For online shopping activities, two fragments of time are further

studied. First, online shopping frees consumer from having to go to the in-

store shopping place which results them to save their travel time. Second,

online shopping requires consumers to wait for the delivery of their online

purchases, as a result, it generates waiting time for delivery. Since online

shopping can lead consumers to alter their time and money resources, it is

important to explore how much consumers are willing to pay for the travel

time and delivery time. The balance between the relationship of time and

money becomes one of the main concerns of this study.

consistent ability to deliver quality, value and satisfaction. Some go for

offline shopping, some for online and many go for both kind of shopping.

The focus of the study is on the consumer’s choice to shop on internet and

at the traditional stores at the information gaining period.

Significance of the Study

The consumers in today’s era have a wide variety of channels to

choose from. With the continuous increase in the competition among

channels, the understanding of what pushes consumers to purchase from

one channel rather than another becomes progressively important channel

design and management.

In recent years, studies investigated why consumers shop through

stores, catalogs or the Internet. The study contributes to the current

marketing literature by comparing the offline and online channel side-by-

side. This study also provides a better understanding of the consumers’

behavior, particularly to the mode of shopping they choose.

This study will also explain the factors that affect the preference of the

consumers’ mode of shopping and the satisfaction they get in return. It will

analyze the behavior of the consumers through the choice they make.
 This research investigates the importance of the consumer’s situation

as an important driver of online retail sales. The consumer’s situation is

taken to include access issue, demographic issue, product availability,

technological familiarity, experience, trust, and brand and customer service.

Clarification of the discussion as to whether it is the product attributes or the

consumer’s situation that primarily drives the online purchases decision

process will provide to a better understanding of the consumer’s behavior.

The outcome of this study will help retailers to understand why consumers

search and evaluate products online and then buy them offline and vice

versa.

Theoretical/Conceptual Framework

An attitude is defined here as a subjective evaluation of a behavior,

which disposes a person to behave in a certain way towards it. A crucial step

in the history of attitude theory has been the development of the Theory of

Reasoned Action (TRA) and its successor, the Theory of Planned Behaviour

(TPB) (Armitage & Conner, 2001). Both theories are based on the idea that

behaviors depend jointly on motivation (intention) and ability (behavioral

control). However, empirically, the TRA states that intention intermediates

between behavior and the attitude towards the behavior. Intention depends

not only on attitudes, but also on the perceived social pressure exerted by
important others, such as parents and good friends, to perform or not to

perform a behavior. The TPB (Ajzen, 1991) extended the TRA by including

two behavioral control variables. Perceived behavioral control stands for the

confidence an individual has to undertake a particular behavior in a

particular situation. It is assumed to have a direct impact on intention and

behavior Actual behavior control, which refers to the availability of requisite

opportunities and resources such as time, money, and the cooperation of

others, has a direct impact on behavior. It is often assumed that perceived

and actual behavioral control are correlated. However, little attention has

been given in empirical research to the operationalization of external factors

that could act as constraints on behavior. In the course of time, several

researchers have sought to extend the TPB by introducing new predictors of

intentions and, in turn, behavior. One extension is the incorporation of habit.

A habit is a learned act that becomes an automatic response to a situation

and can be functional in obtaining certain goals or end-states. Another

important extension is the addition of goals. These can vary from concrete

goals, such as buying clothes, to higher level ends, such as a feeling of

wellbeing acquired by wearing new clothes. This short overview of attitude

theories brings us to a simplified version of another theory which is related

to TPB, but is incorporated with habit, which could be used for choices in

shopping modes.

Statement of the Problem

shopping and the factors that affect their decision. Specifically, the following

questions will be answered:

1. What is the profile of the consumers?

1.1 Gender

1.2 Age

1.3 Occupation

1.4 Status

1.5 Monthly Income

2. What mode of shopping do they prefer?

3. What are the factors affecting the choice of the consumers’ mode of

shopping?

4. What satisfaction do the consumers’ get through their mode of

shopping?

Hypothesis of the Study

H1. The consumers prefer online shopping rather than offline

shopping.

H2. The consumers prefer offline shopping rather than online shopping

Operational Definition of Variables

Online Shopping. An act of purchasing products or services over the

Internet.
Offline Shopping. A traditional way of purchasing products or services by

directly visiting to the store/shop.

Shopping. An activity in which a consumer browses available goods and

services offered by one or more retailers.

Mode of Payment. refers to the various methods of payment by which the

consumer can settle or pay his/her bills.

Shopping Website. a website that sells goods to and allows the consumer

to shop and purchase.

Shopping Store. a place that offers various goods and services to the

consumers.

Scope and Delimitation of the Study

The main purpose of the study is to compare the preference of the

consumers between online and offline shopping and the factors that lead

them to their decision, as well as the satisfaction they get from their

purchase. The study considers the consumer’s personal information such as

their name (optional), gender, age, occupation, status and monthly income.

The researcher limited the study to only 90 male and female

consumers. The respondents were given a questionnaire to answer. The

respondents are selected randomly where the researcher is. The researcher

aims to see how the consumers end up choosing their mode of shopping.