Consumer Behaviour in Online Shopping, Study Guides, Projects, Research of Consumer Behaviour

Download Consumer Behaviour in Online Shopping and more Study Guides, Projects, Research Consumer Behaviour in PDF only on Docsity! & yl KRISTIANSTAD DEPARTMENT OF BUSINESS STUDIES Consumer Behaviour in Online Shopping 2007-11-29 Authors: Tutors: Anders Hasslinger Lisa Kallstr6m. Selma Hodzic Christer Ekelund Claudio Opazo Abstract The Internet has developed into a new distribution channel and online transactions are rapidly increasing. This has created a need to understand how the consumer perceives online purchases. The purpose of this dissertation was to examine if there are any particular factors that influence the online consumer. Primary data was collected through a survey that was conducted on students at the University of Kristianstad. Price, Trust and Convenience were identified as important factors. Price was considered to be the most important factor for a majority of the students. Furthermore, three segments were identified, High Spenders, Price Easers and Bargain Seekers. Through these segments we found a variation of the different factors importance and established implications for online book stores. 1 Introduction The introduction chapter will be explaining the purpose of our research. The research questions, limitations and a background will be presented. 1.1 Background The invention of the Internet has created a paradigm shift of the traditional way people shop. A consumer is no longer bound to opening times or specific locations; he can become active at virtually any time and place and purchase products or services. The Internet is a relatively new medium for communication and information exchange that has become present in our everyday life. The number of Internet users is constantly increasing which also signifies that online purchasing is increasing (Joines, Scherer & Scheufele, 2003). The rapid increase is explained by the growth in the use of broadband technology combined with a change in consumer behaviour (Oppenheim & Ward, 2006). The Internet is considered a mass medium that provides the consumer with purchase characteristics as no other medium. Certain characteristics are making it more convenient for the consumer, compared to the traditional way of shopping, such as the ability to at any time view and purchase products, visualise their needs with products, and discuss products with other consumers (Joines et al. 2003). Oppenheim and Ward (2006) explain that the current primary teason people shop over the Internet is the convenience. They also tecognize that the previous primary reason for shopping online was price, which has now changed to convenience. Online shopping is the process consumers go through when they decide to shop on the Internet. The Internet has developed into a “new” distribution channel (Hollensen, 2004) and the evolution of this channel, e-commerce, has been identified by Smith and Rupp (2003) to be the most significant contribution of the information revolution. Using the Internet to shop online has become one of the primary teasons to use the Internet, combined with searching for products and finding information about them (Joines e¢ a/., 2003). Smith and Rupp (2003) also state that the consumers have never had access to so many suppliers and product/service opinions. Therefore, the Internet has developed to a highly competitive market, where the competition over the consumer is fierce. In order to have an impact on and retain consumers, in a competitive market, Constantinides (2004) stated that the first step is to identify certain influencing aspects when purchasing online, these can be regarded as factors. 1.2 Problem At any given time there are millions of people online and each of them is a potential customer for a company providing online sales. Due to the tapid development of the technologies surrounding the Internet, a company that is interested in selling products from its web site will constantly have to search for an edge in the fierce competition. Since there are so many potential consumers, it is of the out most importance to be able to understand what the consumer wants and needs. The importance of analysing and identifying factors that influence the consumer when he or she decides to purchase on the Internet is vital. Since the Internet is a new medium for there have been new demands set by the consumer. That is why it is crucial for the online retailers to know what influences the online consumer. Analysing consumer behaviour is not a new phenomenon. The tenowned marketing expert Philip Kotler has published several works on the topic of consumer behaviour theories. These theories have been used for many years not only to understand the consumer, but also create a marketing strategy that will attract the consumer efficiently. Hence, understanding and identifying the consumer is closely related to the directions a company will take with their marketing strategy. These theories can also be applied to identify the online consumer and to create certain consumer segments. However, some distinctions must still be made when considering traditional consumer behaviour and online consumer behaviour. Since online retailing is a new retailing medium and online consumer behaviour is diverse from traditional consumer behaviour, one must identify what influences the online consumer. Analysing the process that the online consumer goes through when deciding and making a purchase over the Internet, shows some factors that consumers consider. These factors need to be identified and taken into account by online tetailers in order to satisfy consumer demands and compete in the online market. To further understand how these factors influence different types of consumers, we must identify segments which will enable us to make comparisons. 1.3 Research purpose The purpose of this research is primarily to identify and get insight into what main factors the online consumer takes into consideration when purchasing books online, as books are the most commonly bought product on the Internet (Arbeitsgemeinschaft Online-Forschung e.V. [AGOF e.V.], 2007). Further, we will investigate if any segments can be established by identifying the consumers and how these segments relate 10 This chapter will present and discuss the results from the questionnaire and how the collected data was distributed among the respondents. Chapter 6 — Analysis This chapter will present the analysis and conclusions of the conducted tesearch. We will identify certain segments and analyse how the factors Price, Trust, and Convenience affect these segments. Chapter 7 — Conclusions This chapter will present the conclusions that were drawn from the analysis of the research. It will also give implications for online book retailers and discuss further research possibilities. 1.7 Summary Since the rapid development of the Internet online shopping has become a new and widely used medium for retailing. Books are recognized to be the most traded merchandise and the fierce competition of attracting consumers requires online retailers to have comprehensive up-to-date information about the consumers. In order to understand the consumer the retailers need to know what influences the consumer. That is what we want to accomplish with our research. 2 Method This chapter will illustrate the way the research has been conducted by presenting the methodologies and theories used. 2.1 Choice of methodology We will attempt to find the main factors that influence the online consumer when making an online purchase. In order to broaden our own understanding of the subject we conducted our initial research in literature on consumer behaviour and e-commerce. We reviewed studies that had similar aims and paid particular attention to their results. For our own research we decided that the most appropriate approach would be a questionnaire that would be filled out by students at Kristianstad University. To encourage the students not to reject the questionnaire outright, and to increase the response rate, the questionnaire should be limited to maximum of one sheet of A4 paper. This study started out as an exploratory study but developed into an explanatory study since we start out with first gaining knowledge about consumer behaviour to further being able to gain knowledge about online consumer behaviour. Having this knowledge we continue to identify specific factors that are of importance when the online consumer is making online purchases. This information is then used in order to find relationships and correlations between these variables. 1 12 2.2 Research Approach There are two most commonly used research approaches, the inductive and the deductive method. The inductive research method attempts to set up a theory by using collected data, while the deductive research approach attempts to find the theory first and then test it to the observed data. We chose a deductive research approach for our study as we would move from the more general to the specific. We will present the theoretical findings on consumer behaviour in the next chapter, after which we will present our questionnaire in chapter four where we present our collected primary data. 2.3 Research Philosophy When starting a study there must be an understanding of in which way the study will be approached. The established research philosophy explains this approach when collecting and analyzing data. The research process has three main focuses: positivism, realism, and interpretivism (Saunders, Lewis & Thornhill, 2007). Positivism is the approach where the researcher does not want to be affected by nor affect the subject of the research. The researcher believes that the collected and analyzed data can be simplified to a law- like generalization using existing theories to develop hypotheses from these. In the realistic approach, there is a reality existing independent of the mind. Like the positivistic approach it assumes a scientific approach to the development of knowledge. The interpretive way of approaching the subject of the research does not agree with the fact that law-like generalizations can be made. Instead it stress that the human mind and the social world are too complex in order to be generalized (Saunders et al., 2007). 2.5 Summary In order to find the factors that influence the online consumer, as we have set out to do, this study will go from an exploratory to explanatory study. This also explains the deductive approach that we chose, as we first turn to the literature in order to gain knowledge. We do not want to affect the respondents’ answers and we, therefore, perform a positivistic approach to the study. By using secondary data we attempt to find the influencing consumer factors and then continue with primary data in order investigate the influence of the factors. 16 3 Theory This chapter presents the theories behind consumer behaviour. It will also discuss online consumer behaviour in order to continue with the identification of the influencing factors. The theories of consumer behaviour will be used in order to be able to find consumer segments that will show whom the identified factors affect. 3.1 Introduction This dissertation aims at finding factors that affect the online consumer’s buying behaviour. By reading literature concerning consumer characteristics and online consumer characteristics we believe to find implications for certain factors that are of importance for the online consumer. The Internet is a worldwide accessible series of computer networks that transmit data by packet switching using the standard Internet Protocol. It is a "network of networks" that consists of millions of smaller domestic, academic, business, and government networks, which together carry various information and services, such as electronic mail, file transfer, the interlinked Web pages and other documents of the World Wide Web. Onginally the Internet was mainly used by academics, research scientists and students; however that scenario has changed as commercial organizations have moved to incorporate the World Wide Web into their promotional campaigns, and by offering the facility of online purchasing (Jobber & Fahy, 2003). The Internet has evolved into a worldwide accessible marketplace for information exchange and e-commerce. The strategic importance to be available for consumers on the World Wide Web, with information and services has become particularly relevant to firms. According to Vesterby and Chabert (2001) the Internet can make it easier for companies to have information about their products or services available to their customers or potential customers. A company can satisfy the consumers’ individual need of information at a low cost in comparison to sending out product brochures for example. As the user can choose information from websites, which implies that the information provider can achieve better understanding of the user’s needs and wants by collecting data. On the other hand, the Internet is a place with hardly any structure or rules: therefore, large efforts are needed in order to show the consumer where a specific site is located, and what services are available on that site. Vesterby and Chabert (2001) claim that companies with no physical presence must market themselves considerably, both online and offline, for the consumer to remember their name. Whether it is the traditional market or the online market, the marketer must understand the consumer and how he makes his decisions and purchasing choices (Hollensen, 2004), because the consumer is under a constant flow of stimuli from the marketers advertisements. The marketer has the possibility to decide and to control the output that will be forwarded to the consumers, but when the advertisement reaches the consumer that control ends. The consumer then interprets the information that has been sent out in his own way based on specific factors for every consumer. Therefore marketers have developed different theories that can explain why consumers interpret information in a certain way, and thereby understand certain behaviours (Kotler & Atmmstrong, 2007). Several articles have set out to identify the characteristics of the online consumer. 17 20 Subcultures are small group formations with a certain number of people that share values and beliefs such as nationalities, religions or geographic regions. An identified subculture can serve as an important and effective market segment which can be targeted. Social class is recognized by Kotler and Armstrong (2007) as a class structure, consisting of a combination of factors which gather different types of members. Some identified factors are income, age, education, and wealth. Social characteristics The Social Characteristics are divided into three different categories, namely Reference Groups, Family and Social Role and Status. Reference Groups — According to Kotler and Armstrong (2007) the effects of the Reference Groups is mainly based on the belief that a person’s behaviour is influenced by many small groups. When a group has a direct influence it is called a Membership Group, for example: family, neighbours and co-workers. Reference Groups are the groups to which the person often wants to belong to and to be a part of but is not. These groups indirectly and directly form a person’s behaviour and attitudes. There are three different ways by which these groups influence a person’s behaviour, they may expose a person to new behaviours and lifestyles, influence a person’s attitudes and self- concepts and also create a pressure of confirmation by Reference Groups. Another influence of importance is the opinion leader. An opinion leader is a person that influences others to follow his believes and attitudes towards certain issues, products or areas (Kotler & Ammstrong, 2007). Family — Family members have a great influence on the buying behaviour. The involvement and influence by different family members varies, both to which degree but also in what way. Therefore, it is important for marketers to understand which role is played by whom in the family and direct the advertisement towards the main influencing part of the family. Roles and Status — Each person belongs to different types of groups and also plays different roles whilst having different positions in the various groups. Roles are identified by Kotler and Armstrong (2007) as what activities people are expected to perform from other members of the group. Personal characteristics These personal characteristics are categorized into: Age and Life-Cycle Stage, Occupation, Economic Situation, Lifestyle, Personality and Self- Concept. The Age and Life-Cycle Stage — These stages explain different periods in life that the consumer experiences as he goes through life. These different stages also represent different changes that the consumer may experience when reaching a new stage. According to Kotler and Armstrong (2007) marketers, therefore, define their target markets in terms of the different stages in order to develop appropriate marketing plans. Occupation — The occupation tends to have an effect on the products and services bought by the consumers. This leads to the possibility of developing different types of products or services that suits interests identified to be above average within an occupation. The Economic Situation — Wealth will affect a consumer’s product choice. A consumer may be price-sensitive or not depending on the level of income, level of savings, level of interest rates, and also the product or service itself. 21 22 Lifestyle — This is identified to be a person’s way of living which is tecognized by the activities, interest, or opinions he or she has and it also explains the way a consumer interacts in the world. Personality — This is mainly explained by the terms self-confidence, dominance, sociability, autonomy, defensiveness, adaptability and aggressiveness. These psychological factors are a result of one’s environment. Personality can be defined as a dynamic and organized set of characteristics possessed by a person that uniquely influences his or her cognitions, motivations, and behaviours in various situations (Ryckman, 2004). Self-concept or Self Image — \s the conceptual understanding that people’s possessions reflect their personalities. This concept does bring some conflict since people may have an image that satisfies who they are but does not agree with who they want to be (the ideal self concept), the question then arises which one we would want to satisfy. Psychological Characteristics The psychological characteristics are divided into the following concepts: Motivation, Perception, Learning, and Beliefs and Attitudes. Motivation — Motivation refers to a person needs that must be satisfied. These needs are of different kind; some are biological, such as hunger, thirst and discomfort, and some are psychological such as the need for tecognition, esteem and belonging. Needs are not satisfied until they teach a certain point of intensity and become a motive for the consumer to satisfy them. Kotler and Armstrong (2007) discusses several motivation theories, among them are Freud’s and Maslow’s theories of motivation. Freud argued that a person does not really and fully understand his or her motivations. Maslow on the other hand wanted to understand why some people set out to satisfy some needs before others. Personal Online characteristics Monsuwé, Dellaert and Ruyter (2004) explored the personal online consumer characteristics and concluded that income has a vital role for online purchasing behaviour. The authors discussed Lohse et al. (2000) who pointed out that consumers with higher household income would have a more positive attitude towards online shopping. This conclusion was explained by the fact that households with higher income would have a positive correlation with the possession of a computer, Internet access, and higher education. Smith and Rupp (2003) also identified the age factor as a determinant for online purchase intentions. They argued that older people who had no frequent interactions with the Internet and the computer would not use the Internet as a medium for purchases, while young adults would. This was concluded by that the young adults used the Internet and computers more frequently. Younger people were also identified to have more technical knowledge. Monsuwé et al. (2004) also supported this judgement by concluding that younger adults usually have greater interest in using new technologies to browse for information and evaluate alternatives. Psychological Online Characteristics Smith and Rupp (2003) identified the psychological characteristics of consumer behaviour as questions the online consumer would ask himself before making a purchase online. Motivation — The consumers is reasoning for incentives to engage in a particular behaviour. He may ask himself questions like: should I look around for better price? If online shopping saves me time, should I shop online more often? How much do I really need this product? 26 Perception — The consumer is interpreting acquired information by classing it. Questions such as the following may come about: I feel that this site seems pretty secure. It seems that this site has a good product but how can I be sure? Personality — The consumer is adapting to influences of his cognitions. He may ask himself, what types of Web sites are best suited for his personal buying preferences. Altitude — The consumer is working out what his likes and dislikes are in respect to a particular situation. He may ask himself: I am pretty unsure about extra costs, should I really be buying items from the Internet? If I do not buy the item online, how else can I get it? Emotions — The consumer is without conscious effort detecting how he is being affected by his cognitive choice. He may ask himself: The last time I ordered from the Internet I had a really bad experience. Should I try buying online again? What is the future of buying online? If Web sites get better should I invest more time in buying online? 3.3 Specific Consumer Traits and Online Behaviour The online consumer’s characteristics that we have identified to be the most important ones to have an effect on the online consumer, will be teferred to as specific Consumer Traits and how the consumer uses the Internet will be referred to as Online Behaviour. The online consumer characteristics such as personal, social, and psychological characteristics, need to be identified in order to understand what is important for the online consumer. These characteristics reveal the consumers’ lifestyle and identify who the consumer is and what attitudes he has towards online shopping. Therefore, we will be using the following characteristics to segment the online consumer, by analysing: ¢ The consumer’s demographics, as Bergman et al. (2005). ¢ Life patterns concerning Online Behaviour, such as how much the consumer uses the Internet, Webographics, as Bergman et al. (2005). ¢ For what purposes, Internet Usage, also as Bergman et al. (2005). ¢ How much the online consumer shops online, Online Shopping Patterns, can be used in order to find out what impact certain factors have on different type of consumers (Bergman et al. 2004). ¢ Prior experiences have also been identified to be relevant for what Beliefs and Attitudes the consumer has towards online shopping and are therefore also important for the research (Monsuwé ef al. 2004). ¢ Social influences have an effect on the consumer in the early decision making stage and these were referred to as Reference Groups (Christopher & Huarng 2003). These are the consumer characteristics that are relevant for this research and need to be identified in order to find out who the online consumer is and what affects him when shopping online. These we will be referred to as Consumer Traits and Online Behaviour. To summarise the prior text and to answer the question what identifies an Online Consumer, one can draw the conclusion that for this research the important consumer characteristics that need to be identified are: 27 30 conduct price comparisons has been cited as a major reason why consumers use the Internet (Wallace, 1995). Price sensitive shoppers are essentially concerned with buying products at the lowest price or getting the best value for the money they spend (Bellenger, 1980). Monsuwé et al. (2004) made a comparison of the traditional way of shopping and online shopping and that the comparison indicated that online shopping is a more convenient way of shopping compared to the traditional ones. This was mainly concluded on the fact that the Internet allows for more information to be gathered with a minimal amount of effort, inconvenience, and invested time by the consumer. With this conclusion, the authors show that the convenient factor is indeed televant for the identification of the online consumer (Monsuwé et al. 2004). The factors that affected the identified segments and that were relevant for the framework were: consumer traits, product characteristics, previous online shopping experience, situational factors, and trust in online shopping. Consumer trust in online shopping and _ prior experience with online shopping were identified to have a significant impact on a consumer's intention to shop online. Prior experience with positive outcome is also identified to decrease a consumer's risk perception with online shopping. As presented above, Smith and Rupp (2003) identified the psychological characteristics of an online consumer through questions a consumer would ask himself. The factors trust, security, and prior experiences are present and they are highly televant for the online consumer. Here the factor trust is recognised as important, which is highly connected with prior experience and expectations of online shopping. Smith and Rupp (2003) discusses and identifies factors in their work that influences the online consumer behaviour. These were identified as marketing efforts, socio-cultural influences, psychological factors, experience, purchase and post-purchase decisions. The authors plot a model which would explain the different stages that consumers go through when making a purchase decision online. They start out with identifying the first stage as the input stage where the consumer is influenced by the marketing efforts made by the media and the socio- cultural influences. The second stage is identified as the process stage, which attempts to identify and explain how the consumer makes the buying decision online. In this stage they identify that the convenience factor is one of the main determinants for the consumer’s intention to shop online. They also show that the consumer is affected by psychological factors, such as perception, motivation, personality, attitude, and emotion. The identification indicated that trust and security factors are a major influence for the consumers when considering a potential purchase. Due to the importance of making the consumer feel safe and comfortable, the authors argue that information regarding security must be mediated to the consumer in such a way that the perceived security is increased. The last stage is identified as the output stage, which is a post-purchase decision process. The article clearly states that that Trust and Convenience are major influencers to consumer online shopping behaviour, even though they are influencing the decision making process (Smith & Rupp, 2003). There have been many attempts to identify and segment the online consumer through various studies. By reading different studies we have identified certain factors that were constantly present in the literature. There are many factors that have an impact on the online purchase behaviour, but we have identified Price, Trust and Convenience to be very important and will put our attention to these three factors. 31 32 3.3.1 Identified Factors affecting Online Consumer Behaviour Price which is a part of the marketing mix is a factor used in order to stimulate the consumer and is also a communicator, bargain tool, and a competitive weapon. The consumer can use price as a mean of comparing products, judge relative value for money, and judge product quality (Brassington & Pettitt, 2000). The factor Trust is considered to be a concern on the emotional basis in the minds of the consumers. The consumers have a focus on their safety needs and want to satisfy them before making a purchase (Brassington & Pettitt, 2000). The factor Convenience is considered to be a benefit in the eyes of the consumer and a quality derived from purchasing over the Internet. It is therefore considered to be a motivator and a benefit to consumers. (Constantinides, 2004) We believe that these factors have a significant influence on the consumer when purchasing online. To further analyse the factors, we study underlying attributes that represent what way the factors affect the consumers. The Factor Price The Internet has become a global marketplace on which consumers can gather and compare information such as product information and prices. The technologies and innovative business ideas of the Internet allow sellers to discriminate between buyers and buyers to discriminate between vendors. Historically, however, prices have been set by negotiations after having examined the product (Kotler & Keller, 2006). The Internet facilitates the scenario that comparisons can be achieved with ease, overlooking several digital attributes (which can be Internet Shopping” by Lee, Matthew K.O, and Efraim Turban (2001), trust is dependent on the six variables Seller Trust in Internet Competency merchant Benevolence EC Trust Reliability Trustin Internet as Understandability Shopping Channel Security and Payment Figure 3.2 — Trust in Electronic Commerce Based on Lee, Matthew K.O, and Efraim Turban. “‘A Trust Model for Consumer Internet Shopping.” International Journal of Electronic Commerce, vol. 6, no. 1 (Fall 2001) A company must show the consumer that it is competent in managing information and supporting the consumer after a purchase is done. If that can be achieved, the consumer is more likely to "engage in trust- telated Internet behaviours like purchasing, cooperating, and sharing information" (McKnight & Chervany, 2001-2002). Table 3.2 shows the factor Trust and its attributes. Table 3.2 — The Factor Trust and its Attributes Factor Attributes Trust Perception of safety Trust in the Internet Retailer Trust in the Internet as retail shopping 36 The Factor Convenience Convenience is anything that is intended to save time and frustration according to the Swedish National Encyclopaedia. Further definitions of the concept of convenience are: © = The quality of being suitable to ones comfort, purpose or needs ¢ Personal comfort or advantage © Something that increases comfort or saves work at a suitable or agreeable time (Lexico Publishing Group [LLC], 2007) Online shopping as a new medium for retailing creates a number of different advantages. One of these is that it is considered to be more convenient to shop online compared to the traditional way of shopping. The convenience attributes that online shopping provides are: © Less effort: ¢ Being able to shop at home e Time saving © Being able to shop at any time of the day Azjen (as cited in Kim & Park, 1991) claims that online shopping provides convenience for consumers such as time savings and search convenience if compared to the traditional way of shopping. Kim and Park (1991) also argue that if online shopping is to be perceived as convenient for the consumer, the consumer must perceive a certain amount of easiness with accessing the Internet and also with carrying out the behaviour with shopping online. The less complexity the consumer perceives with accessing the Internet the more attention the consumer has to enter the Internet and search for information. Further, the authors found that there is a positive relationship between the time spent, the intention to shop online and the attitude towards the Internet. Therefore, Kim and Park (1991) came to the conclusion that the consumers that found the Internet to be easily accessible and used, would spend more time online and search for information and also shop more online. Hence, the consumers that perceives Internet information search as easy, would perceive it more convenient. They also conclude that the information online should be easy to find and, therefore, the consumer should develop effective search tools which would enhance the perceived behavioural control for the consumer online. Kim and Park (1991) argue that the perceived easiness of the Internet is one of the determinants consumers regard when deciding on convenience. Saving time is also mentioned by Kim and Park (1991), and it is closely telated to information search. The consumer is not required to leave his home in order to shop online and at the same time the information search and price comparison process is much more available and easy to access. Swaminathan et al. (1999) states that consumer characteristics play an important role in the consumer's decision to shop online. The authors then identify the so called convenient oriented consumer as the most potential online buyer since they value the convenience of shopping at home as a large motive for purchase. The characteristics of convenience with online shopping can be summarized as follows: Consumers can shop from their homes meaning they do not have to take certain aspects, needed when shopping in the traditional way, into consideration. Online shopping is, therefore, considered to require Jess effort. It is also considered to be time saving, the consumer can search for products and prices easy through the developed search engines. Through tracking devices a consumer can at any time check where their 37 40 4 Empirical Research Method In this chapter we will present how we will conduct our research in order to collect primary data and reach the objective of the dissertation. We will also be discussing which different types of methodologies that were used. Since our research is of deductive character our primary intention was to collect secondary data and analyse it. By doing so we found the factors Price, Trust and Convenience. We then collected primary data through a survey. The main purpose of the survey was to collect data about Online Consumer Behaviour and the significance of the established factors, Price, Trust, and Convenience. In order to be able to find and establish Online Consumer Segments, Consumer Traits and Online Behaviour had to be identified. The segments were used in order to further identify what impact the factors Price, Trust, and Convenience have on Online Consumer Segments. 4.1 Segments A segment is a subgroup of people that share the one or more characteristics and these segments have similarities such as that they share behavioural features or have similar needs. These similarities make a specific segment homogenous in their needs and attitudes. Different types of variables can be used in order to segment a market and one of the requirements was that it needed to be measurable. We will be using the identified Consumer Traits and Online Behaviour variables to segment the online consumers at the University of Kristianstad. 4.2 Sample The factors that we intended to examine can be applied to and investigated at any population that uses the Internet and buys books online. Since there are time and resource restraints, a specific population had to be identified in order to generalise and create relevant segments. We decided that the sample size should contain over 200 tespondents and we collected answers from 226 respondents. 4.3 Non Probability, Convenience Sampling The population for this research are university students at the University of Kristianstad. The university was chosen on a convenience basis. Convenience sampling involves using samples that are the easiest to obtain and is continued until the sampling size that is need is reached. The bias with the convenience sampling is that it is hard to generalize to the wanted population (Saunders et al., 2007). We will attempt to collect as many respondents as possible but since we will be studying students we assume that there will be little variation in the population making it more approved to generalize the response tates. The sampling method for students took also place on a convenience basis since the students that agree to answer the questionnaire are those that were chosen. 4.4 The Questionnaire In order to create the questionnaire we started out by deciding on the main variables that needed to be investigated. These were: 42 Demographics, Webographics, Online Book Shopping Patterns, Attitude towards Online Shopping, Social Characteristics, Reference Groups, and the identified factors Price, Trust, and Convenience. What about For the questionnaire, which was self-administrated, we used the Delivery and collection questionnaire method. This method was mainly used because of the limitations in time and available resources. The delivery and collection questionnaire was handed out to classes at the University of Kristianstad. This was done in order to ensure that a valid number of respondents were collected so that analysis could be made and conclusions drawn. This method was conducted at the University of Kristianstad because it is the University we are attending and the convenience factor had a great implication towards this choice. Different types of questions were set in order to be able to collect the information that was needed concerning the different topics. The examined variables were of different types. They were opinions, behaviour, and attributes. Opinions are used to understand how a respondent feels about something, behaviour attributes are used to record what the respondent does, and attributes shows what the respondent possesses (Saunders et al., 2007). In order to collect the correct data, we needed to ask questions with suited alternatives that were adjusted to the type of the variable that needed to be examined. In our questionnaire we were only using closed questions that were of the list, category, ranking, quantity, and rating type. The Fishbein Model, which we used to find the overall attitudes of the respondent, also required questions to be set in a certain way in order to compare the results and collect the nght kind of data. All rating questions used a seven-point Likert-style rating scale. In order to determine the underlying attitudes for Price, Trust, and Convenience we used the bipolar semantic differential rating, on a implications on which factor the respondent considers to be as the most important, second and least important. The question also allowed the tespondent to have this in mind while answering the next set of questions. The following questions were then further focused on the factors and concerned the different attributes constitute the different factors. The factors will be analysed through the Fishbein Model and were therefore developed in order to be able to apply the model. The questions are concentrating on first understanding the respondents believes and attitudes towards an action or statement and thereafter tanking the importance of this action and statement. The first factor was Price and there were two rating questions (6.2) concerning whether the respondent felt that online book shopping would save money. These questions gave us implications on how important it is for the respondent to save money by shopping for books online and to what degree he believes that it does. The last question in this section (6.3) was used to find out to what degree the respondent uses book price comparison sites before making a purchase. This is somewhat involved with finding out the respondent’s involvement with book purchases and his price awareness. The next factor analysed was 7rust with its three main attributes. Question 7.1 concerned the respondents trust within regulators on the Internet business, such as user policies, transaction regulations and laws for the protection of the consumers’ privacy and security. The second attribute, Trust in the Internet as Retailing Channel, was measured through question 7.2 and the third attribute, Zrust in Internet Merchants was measured through question 7.3. For these questions the respondent beliefs and attitude were measured through a rating scale and developed in order to fit into the Fishbein Model. The last part of this section concerned the Convenience factor. Here were three attributes making up the Convenience factor and these were 46 whether the respondent felt that purchasing books online was involving less effort compared to the traditional way of purchasing books, saving time, and being able to purchase at any time. The questions (8.1 to 8.3) were constructed in the same manner as the former (7.1 — 7.3) in order to be measured with the Fishbein Model. We pre-coded the answers to the questionnaire in order to be able ease the process of analysing the collected data in SPSS to analyse it. A pilot test was conducted in order to find errors in the questionnaire and have the opportunity to correct these before conducting the research itself. The pilot test was conducted with 40 people, and errors were temoved after the pilot test. 4.5 The Fishbein Model The Fishbein Model is used in this research to measure the factors Price, Trust, and Convenience. The results from the measurement were used to find relationships within the segments that we found by conducting our research. The Fishbein Model is widely used within Marketing Research in order to investigate the attitudes and beliefs towards certain matters. The difficulty that arises when investigating these matters is how to find the overall attitude. The Fishbein model is developed so that it shows a person’s overall attitude which is derived from a person’s beliefs and feelings. A consumer holds many individual beliefs, making it hard to identify the overall attitude. The Fishbein Model is developed in a way which separates attributes that constitutes a certain matter, and investigates them one by one. The feelings and beliefs towards the attributes are then generalized in the overall attitude that the consumer holds. Hence, the Fishbein Model can be used to separately analyse the attributes as well as the overall attitude that is constituted by several attributes. This is one of the reasons to why the Fishbein Model also is called The Multi-Attribute Model. (www. larsperner.conyteaching_materials.htm The model works in the way that it attempts to summarise the overall attitudes into one score by using the equation: Ay = im1 W; Xin The Importance (“;) is measured by using a rating scale and then this weight is multiplied with the Belief (Xi,), also measured with the same tating scale for the same attribute. All the scores for the different attributes are then added up to one score which sets the overall score for the matter and represents the overall attitude (A,) towards the matter. (Shwu-Ing Wu, 2003) To clearly show how the Fishbein model works we will present an example: Example of the questions formation and rating: How does coffee taste? Bad 1 2 3 4 5 6 7 Good (Rating scale) (-3) (-2) (-1) (0) (J) (2) (3) (Calculating scale) How important is taste of a beverage? Not Highly important 1 2 3 4 5 6 7 important (Rating scale) (-3) (-2) (-1) (0) (J) (2) (3) (Calculating scale) The scale 1 to 7 is presented to the respondents but then converted when we calculate the values, as shown above. This is done in the Fishbein model in order to clearly show the negative attitude an attribute contributes to. 47 clear and non-ambiguous questions that can be interpreted indisputable and provide us with the right information for our purpose. However, there is no guarantee that the respondents interpret the questions definitely, yet we have to assume they will and do consider the benefit of doubt. 48 Generalisability This term refers to how generalisable the results of a research are, and whether the findings can be applicable to other research settings (Saun- ders et al., 2007). Due to our decision to focus on students, and since this group only represents a small part of the Swedish population, the tesults would only be generalisable, if generalisable at all, to students. 5 Results In this chapter the results from the questionnaire and how the collected data is distributed among the respondents is presented and discussed. 5.1 Introduction The questionnaire was designed to collect primary data in order to find firsthand information on how the respondents value the importance of price, trust, and convenience when making book purchases over the Internet. The questionnaire was designed to, first, collect data that would be used to find segments among the respondents, and second, to collect data about the factors price, trust, and convenience. The questions in the questionnaire were based on the findings from the literature. Questions which were designed to collect data to find tespondent segments were derived from the findings within consumer behaviour. Questions about the factors price, trust, and convenience were derived from the literature found about the factors when purchasing online. The questions were designed in order to find the overall belief about the factors and therefore designed to suit the Fishbein Model. We handed out the questionnaire at the University of Kristianstad and chose certain classes in order to make sure not to collect data from the same respondent more than once. We decided that the sample size should be over 200 respondents and we collected 226 tespondents. In order to analyze the collected data we used the software program SPSS. The following will present and discuss the results from the questionnaire. 5.2 Questionnaire — Collected data 5.2.1 Online Consumer Traits Demographics Questions 1.1, 1.2, 1.3, and 1.4 These questions were used in order to establish the consumer demographics. They were used to find out the respondents gender, age, semester at the University, and income. Gender Gender was included in the survey in order to find out if there is a difference between men and women concerning the beliefs towards the factors. The following table will show the distribution of the male and female respondents that were included in the survey. Table 5.4 — Q1.1 Distribution according to the variable “Gender” Sex Frequency Percent Cumulative Percent Male 80 35.4 35.4 Female 146 64.6 _100.0 Total 226 100.0 The distribution of male and female respondents shows a majority of female respondents (64.6%), compared to the male respondents (35.4%). An explanation for this distribution might be that there is a majority of female students at Kristianstad University, and also that the female respondents might have been more willing to answer the questionnaire. Table 5.7 — Q1.4 Distribution according to the variable “Disposable income” Disposable Income SEK Frequency Percent Cumulative Percent < 5000 82 36.3 36.3 5000-6999 36 15.9 52.2 7000-8999 67 29.6 819 9000-10999 23 10.2 92.0 11000-12999 ll 49 96.9 = 13000 7 3.1 100.0 Total 226 100.0 Disposable Income Income was used in the questionnaire mainly to find if the respondents that have a higher income spend more money online or not. This variable is also used in order to find the correlation to the factors price, trust, and convenience. The distribution of the variable income is highly connected with the fact that the respondents are students and, therefore, have a lower income. This explains the fact that the majority of respondents have the lowest income (36.6%). Students usually take student loans which explains the fact the second largest group, 29.6%, was the group where the amount of a regular Swedish student loan falls into. Attitudes and Beliefs Questions 4.1 and 4.2 Prior experience This question was used in order to see what attitude the respondent had about shopping online. The measured attitude was mainly derived through questions about the respondent’s prior experiences. This usually also affects the attitude towards performing an action, in this case the action was to shop books online. The question was, therefore, wn a designed to let the respondent rate their prior experience for shopping books online. Further on, we made sure by asking the respondents beforehand whether they had been shopping for books online before. If they had not they were excluded from the survey. Table 5.8 — 04.1 Distribution according to the variable” Previous experience with online book purchases” ; Cumulative Experience Frequency Percent Percent 1 (Very bad) 9 4.0 4.0 2 5 2.2 6.2 3 10 44 10.6 4 (Neither) 32 14.2 24.8 5 50 22.1 46.9 6 66 29.2 76.1 7 (Very good) 54 23.9 100.0 Total 226 100.0 Overall the respondents showed a good to very good prior experience with purchasing books online. The number of respondents with a very good attitude towards online shopping is high and the distributed attitude declines as less respondents think of it as a bad experience. Rating number four on the scale is considered as neither a good nor bad experience. A the majority of respondents, overall 89.4 %, do consider their prior experience with online book purchasing as good. This question is closely related to the following question which investigates the respondents’ future expectations of online book purchasing. Future expectations of online book purchases This question is a part of analyzing the respondents’ attitude towards online book purchases. Future expectations are highly dependent on tespondents’ prior experiences of online book purchases; this will be further discussed in the analysis of the results. Table 5.9 — 04.2 Distribution according to the variable “Future expectations of online book purchases” Cumulative E tati Fr Percent ‘xpectations ‘requency ercen' Percent 1 (Very bad) 4 18 18 2 4 18 3.5 3 11 49 84 4 (Neither) 24 10.6 19.0 5 AT 20.8 39.8 6 74 32.7 72.6 7 (Very good) 62 27.4 100.0 Total 226 100.0 As with prior experiences the respondents have a highly positive attitude towards future online book purchases. The majority (91.5%), of the respondents have rated future expectations with online book purchases to be positive or neither good nor bad. Not considering the neutral respondents, an overall 80.9% of the respondents had positive expectations. Impact of Reference Groups Questions 5.1, 5.2, and 5.3 The impact of Reference Groups These questions were designed to find out which of the three Reference Groups, family, friends, and online forum, that have an impact on the respondent. Families as Reference Groups have not shown to have an impact on online book purchases among students. A majority of 66.8% do not consider any of their families’ opinions and experiences at all when purchasing books online. 60 The distribution shows that the majority of the respondents spend somewhere between 30 min to 2 hours online each day. The two second major groups are respondents that spend 3 to 4 hours and respondents that spend less than 30 min online each day, 14.6% respectively 13.3%. These results will be used in order to find what differs between these tespondents and which of the factors price, trust and convenience has the largest amount of impact. Shopping patterns Question 3.2 Expenditure on books This question is used in order to investigate what amount of money the tespondent spends on books each month. This question was included to teveal the respondents’ shopping patterns and is, among others, highly connected to the respondents’ attitude towards online book purchases. This will be further discussed in the analysis of the results. Table 5.14 — Q3.2 Distribution according to the variable “Expenditure on books in average per month” Expenditure SEK Frequency Percent Cumulative Percent <200 29 128 12.8 200-399 65 28.8 41.6 400-599 78 34.5 76.1 600-799 37 164 92.5 800-999 ll 49 97.3 >=1000 6 2.7 100.0 Total 226 100.0 The respondents spend up to 799 SEK on books each month, on average, and the most of the respondents’, 34.5%, spend between 400 — 599 SEK. This can be explained by the fact that the average cost of a course book is in this interval. Internet Usage Question 2.2 This question was included to investigate for what reason the tespondents mainly used the Internet. The respondents were given 5 alternatives from which they had to rank 3 by the primary, secondary, and tertiary choice of usage. According to the table 5.12 the respondents as the primary most popular use listed the alternatives Fun (43.4%), E-mail (26.5%) and Information (19.0%), accordingly. The secondary overall most popular choices were the alternatives E-mail (27.9%), Information (27.0%) and Fun (21.7%). The tertiary most popular choices were Information (28.3%), E-mail (23.0%) and Work (21.2%). According to the distribution the alternatives Fun, E-mail and Information were the most popular alternatives, with the exception of Fun as tertiary use where that alternative was replaced with work. Table 5.15 — Q2.2 Distribution according to the variables “Primary use, Secondary use, and Tertiary use” Internet Usage Primary usage Secondary usage _ Tertiary usage Fun 98 (43.4%) 49 (21.7%) 39 (17.3%) Work 22 (9.7%) 43 (19.0%) 48 (21.2%) Information 43 (19.0%) 61 (27.0%) 64 (28.3%) E-mail 60 (26.5%) 63 (27.9%) 52 (23.0%) Shopping 3 (1.3%) 10 (4.4%) 23 (10.2%) Total 226 (100%) 226 (100%) 226 (100%) 5.2.3 Identified factors Price, Trust, and Convenience When analyzing the factors price, trust, and convenience we used the Fishbein Model which is explained in the fourth chapter. The Fishbein Model has an interval that allows for all whole values between -9 to 9. In order for us to be able to set up a frequency table we needed to bin 62 these values and create fewer alternatives. As seen in table 5.13, the values are grouped into the following values, where the numbers in the left column correspond to binned values and the numbers in the right column to Fishbein values: Table 5.16 — Conversion of Fishbein values to Binned values Binned value Fishbein value <-8 -7--5 4-2 -1-1 2-4 5-7 8> Wkwoe ad Price Table 5.14 shows the results of both questions 6.2 and 6.3 of the questionnaire merged together. It measures the respondent’s overall attitude towards the factor price in the sense that the respondent feels that he/she is saving money when shopping books online, how important it is to him / her (question 6.2) and how much the respondent takes advantage of price comparison possibilities on the Web as well as how important this is to him / her. Table 5.19 — Merged results from questions 8.1, 8.2, and 83 “Distribution according to The overall attitude towards convenience” Convenience Frequency Percent Cumulative Percent 1 (Negative) 1 4 4 2 4 18 2.2 3 7 3.1 5.3 4 (Neither) 58 25.7 31.0 5 66 29.2 60.2 6 50 22.1 82.3 7 (Positive) 40 17.7 100.0 Total 226 100.0 The overall results show that the general attitude is positive and that the tespondents are somewhat convenience orientated. The results are presented on a seven-point scale where 5.3% had a slightly negative attitude and are not considered to shopping due to convenience. Slightly more than a fourth (25.7%), responded they had neither a positive nor negative attitude and can be considered as having a neutral attitude towards convenience. The majority of the respondents (69%) can be found between 5 and 7 and as a consequence having a positive attitude towards convenience and do their book shopping due to convenience reasons. 5.3 Identified Attributes Price Questions 6.2 and 6.3 66 Saving money when purchasing books online compared to purchasing books at book store This is the first attribute of the factor price and involves the tespondents’ attitude towards saving money when purchasing books online. The respondent was asked two questions in order for us to establish their attitude. The first question examined if the respondent agrees with the fact that purchasing books online saves money and the second question examines the importance of this statement. The results from these two questions gave us the following distribution of what the tespondents’ attitude towards this statement is. Table 5.20—Q 6.2 Distribution according to the attribute “Saving money when purchasing books online” . . . Cumulative Saving money Frequency Percent Percent 1 (Not at all) 2 9 9 2 1 A 13 3 8 3.5 49 4 (Neither) 53 23.5 28.3 5 50 22.1 50.4 6 20 8.8 59.3 7 (Always) 92 40.7 100.0 Total 226 100.0 The table 5.17 illustrates whether the respondents feel that they are saving money when they purchase books online compared to a regular book store. By using the Fishbein Model, we could at the same time measure how important it is for the respondent to feel that they are saving money when they purchase books online compared to a regular book store. 40.7% of the respondents felt that they saved money and that it is important to save money when they purchase books online. The second largest category is a neutral one, with 23.5% where the tespondent felt that they neither save money nor do not save money. The reason for the values being so high can be that even though the Comparing prices, through different price comparison websites, before purchasing books online This is the second and last attribute that constitutes the factor price. This question investigates whether the respondents compare book prices through different book comparison sites on the Internet before purchasing books online. The respondents were first asked if they agreed with the statement and second if they perceived it as important. These two questions then indicated the overall attitude towards comparing book prices before purchasing online. 67 70 This question investigates the respondents’ attitude towards the Internet as a medium for retailing. We have identified this attribute as the second one of the factor trust. The respondent was first asked if he or she trusts the Internet as a distribution channel and then how important it is to trust the Internet as distribution channel. The two questions then tepresent the overall attitude towards this attribute. Table 5.23 — Q7.2 Distribution according to the attribute “Trust in the Internet as a retail channel” Trustin Internetasa Frequency Percent Cumulative retailing channel Percent 1 (Negative) 3 13 13 2 2 9 2.2 3 16 7A 9.3 4 (Neither) 106 46.9 56.2 5 61 27.0 83.2 6 15 6.6 89.8 7 (Positive) 23 10.2 100.0 Total 226 100.0 The respondents were asked to rate whether they trust the Internet as a distribution channel, and also if it is important to trust the Internet as a distribution channel. The majority does not feel that the Internet is a completely trustworthy distribution channel. This result could have been derived from respondents that do not trust the Internet as a distribution channel, yet they believe that it is important that it is trustworthy. Trust in the Internet retailer This question investigated the respondents overall attitude towards the trust in the Internet retailer. Two questions were asked, one asked if the tespondent has to trust the Internet retailer in order to make a purchase from them, and the second question asked how important it is to have trust in the Internet retailer before making a purchase from them. The tesults showed the respondents overall attitude towards the third and last attribute constituting the factor trust. Table 5.24 — Q7.3 Distribution according to the attribute “Trust in the Internet retailer” Trust in the Internet retailer Frequency Percent Cumulative Percent 1 (Negative) 0 0 0 2 0 0 0 3 3 13 13 4 (Neither) 44 19.5 20.8 5 67 29.6 50.4 6 24 10.6 61.1 7 (Positive) 88 38.9 100.0 Total 226 100.0 The majority feel a need to trust the retailer, while also feeling that it is important to trust the retailer when proceeding with a purchase. Only three respondents fell into the negative part of the scale. This indicates that trust in the Internet retailer, to some degree, is almost always needed for the consumer to make a purchase from an Internet retailer. Convenience Questions 8.1, 8.2, and 8.3 If online book purchasing is perceived as involving less effort compared to purchasing books at a book store This question examines one of the attributes that constitutes the factor convenience and is included in the questionnaire in order to find out if the respondents perceive that purchasing books online involves less effort than compared to purchasing books in a book store. This question 71 72 is also a part of the factor convenience and the overall attitude the tespondents have towards the factor convenience. Table 5.25 —Q8.1 Distribution according the attribute “Purchasing books online involves less effort compared to purchasing books at a book store” Less effort Frequency Percent Cumulative Percent 1 (Negative) 9 40 4.0 2 5 2.2 6.2 3 14 6.2 124 4 (Neither) 74 32.7 45.1 5 55 24.3 69.5 6 16 71 76.5 7 (Positive) 53 23.5 100.0 Total 226 100.0 The majority (32.7%) of the respondents did not find purchasing books online neither convenient nor inconvenient when it involved the attribute less effort. The further distribution of all the respondents had a positive attitude towards the attribute less effort. This is clearly shown by that one of the largest respondent groups (23.5%) is the group with the highest value that perceived purchasing books online as always involving less effort compared to purchasing books in book store. Hence, there is an overall a positive attitude towards this attribute among the respondents. Does online purchasing save time compared to purchasing books at a book store? The second attribute of convenience is saving time when purchasing books online compared to when purchasing books in a book store. As the previous question, this question is a part of further estimation of the factor convenience and the overall attitude the respondent has towards convenience. The respondents rated to what extent they believed that 5.3.1 Primary Factor By multiplying all the attributes of the factors and looking at what factor each respondent had the most positive attitude towards and labelling it as the Primary Factor, we were able to identify the following distribution among the respondents for the factors price, trust and convenience in table 5.25: Table 5.28 — Distribution according to the "Primary Factor” Primary Factor Frequency Percent Cumulative Percent Price 94 41.6 416 Trust 68 30.1 71.7 Convenience 64 28.3 100.0 Total 226 100.0 We found that the majority (41.6%), of the respondents had the most positive attitude towards the importance of the factor price. The factors trust and convenience had an almost equal distribution of 30.1% tespectively 28.3%. This will be further investigated and explained in the following chapter. 76 6 Analysis In this chapter we will present analysis and conclusions of the conducted research and the collected data that has been presented in the previous chapter. We will identify certain segments and analyse how the factors Price, Trust, and Convenience affect these segments. 6.1 The Factors In order to gain an initial understanding of how the respondent feels towards Price, Trust and Convenience, they were asked to rank these in the questionnaire accordingly. We have then investigated the different attributes of the factors. By using the Fishbein Model we could identify the overall attitude towards the different factors and their importance tespectively. When the respondent was asked to just rank the different factors, the tesults showed that 73.9% considered price as the primary concern when purchasing books online. When the respondent was put in front of the three factors, we could see that most of them chose price. However, if compared to the Primary Factor, where the different attributes to the factors were used to find the overall attitude and importance; the results did not match. The distributions for the Primary Factor were Price: 41.6%, Trust. 30.1% and Convenience: 28.3%. This showed that the tespondent generally thought that Price was the most important to him or her, but at the same time one of the other factors could actually be the most important to a respondent, since the distribution shifted between the two ways of evaluating, with the Primary Factor being the most accurate since it offers an overall attitude measurement. This answers the questions one and two in our research. 6.2 Two Step Cluster The two step cluster analysis was used to segment the respondents. This type of analysis grouped data so that records within a group were similar. It could be applied to data that described customer buying habits, gender, age, income etc. It created segments containing groups that had the most in common and this method was selected due to the amount of variables that needed to be taken into consideration when creating the segments. By analysing the collected data, for the various variables that we intended to segment by, we decided to exclude some variables. The teason was that some of the variables did not show a significant variation which would have enhanced the homogeneity of the segments. Segments need to be homogenous and diverse from the whole population in order for them to be targeted. The variables that we did not use would instead be applied to give an additional explanation to the formed segments. With the two step cluster analysis we found three segments in our sample, based on the variables that we chose to segment by, which were: Expenditure on books on average each month, Previous experience with purchasing books online, Future expectations with purchasing books online, The impact of the reference group: family, The impact of the reference group: friends, and The impact of the reference group: online forums. In this research the variables are categorized into the following variables shown by Figure 6.1. © Consumer Traits: Impact of Reference Groups (Family, Friends, and, Online forums), and Attitude and Beliefs (Previous experience and Future expectations) ¢ Behaviour Online: Online Shopping patterns (Expenditure on purchasing books per month) 77 80 Table 6.30— Two Step Cluster Number Two Step Cluster Number N Mean Rank PRICEFISHBEIN (Binned) 1 47 127,61 2 93 118,29 3 86 100,61 Total 226 TRUSTFISHBEIN (Binned) 1 47 151,37 2 93 112,26 3 86 94,15 Total 226 CONVENFISHBEIN 1 47 121,40 (Binned) 2 93 124,27 3 86 97,53 Total 226 When we conducted the test we found that the factors Price, Trust, and Convenience showed a significant variance within the segments and that the results presented below concur with the conclusions that we had drawn. Table 6.7 showed that all three factors were highly significant, especially the factor Jrust to which the respondents had answered with high variances (,000). Table 6.31 — Kruskal Wallis Test PRICE TRUST — CONVENIENCE (Binned) (Binned) (Binned) Chi? 6,540 26,277 8,852 df 2 2 2 Asymp. Sig. 038 ,000 012 6.3 Segments The two-step cluster created three segments out of the selected variables. According to the Table 6.1 the distribution of the respondents to the three segments is: Segment One with 47 respondents, Segment Two with 93 respondents and Segment Three with 86 respondents. Table 6.32 — Distribution according to The segments Cumulative The Segments Frequency Percent Percent Segment One 47 20.8% 20.8% Segment Two 93 41.2% 62.0% Segment Three 86 38.0% 100.0% Total 226 100.0 6.3.1 Description of Segment One: High Spenders Segment One held 20.8% of all the respondents. The consumers in this segment mainly spent each between 400-799 SEK on books each month during a semester. Hence, they are the segment that can be considered to spend most on books each month. The entire segment (100%) has had very good previous experiences with purchasing books online and very high expectations for the next time they will purchase a book online. The experience and opinions of their family and friends as Reference Groups did not matter to them when they purchased a book online, neither were the experiences and opinions discussed in online forums taken into consideration. As a conclusion this segment is the smallest of the three and consisted of consumers that had spent the most money on books. They had very high confidence in purchasing books online, mainly due to very good previous experiences. They did not regard the experience and opinions of any of the named Reference Groups. By further profiling the consumers in this segment that were studying at their first or second semester at the University, had an age interval between 18 to 24 years. They had a disposable income with a high variation between 5.000 SEK to 11.000 SEK. This segment group spent mainly somewhere between 1 to 2 hours each day online, however, keeping in mind that some respondents within this segment only spent 81 82 between half an hour to 1 hour online. This segment primarily used the Internet for fun and the second most important as E-mail, and the third as information. Because of the identified characteristics of this segment, we chose to label them as High Spenders. Primary Factor of Concern for High Spenders The distribution among the respondents according to the factors Price, Trust, and Convenience showed that the factor Trust was the main concern of the High Spenders with 38.3%, closely followed by Price (36.2%). The third concern of Segment One was identified as Convenience (25.5%). Table 6.33 — Primary factor Segment One Frequency Percent Cumulative Percent Price 7 36.2 36.2 Trust 18 38.3 74.5 Convenience 12 25.5 100.0 Total 47 100.0 According to table 6.1 the primary factor of concern for the High Spenders was Trust. Here, Trust had an above average distribution which lowered the distribution of the factors Price and Convenience. This indicated that the respondents of this Segment One were more affected by the Trust attributes when they purchase books online. By further exploring the variable Trust for this segment we found that the respondents were mainly concerned with feeling secure when purchasing books online. This also included trusting the Internet tetailer. The respondents had a very high positive attitude both in Primary Factor of Concern for Price Easers The distribution according to the primary factor of concern in this segment showed the factor Price with 39.8% to be the main influencer when purchasing books online. The Price factor was closely followed by the factor Convenience with 34.4% of the respondents. In this segment the respondents considered the factor Trust the least important with 25.8%. Table 6.34 — Primary factor Segment Two Factor Frequency Percent Cumulative Percent Price 37 39.8 39.8 Trust 24 25.8 65.6 Convenience 32 34.4 100.0 Total 93 100.0 As illustrated in table 6.2, the majority of the respondents in Segment Two believed that Price was their most important concern, followed by Convenience and Trust. This shows that the Price attributes affect the consumer the most when purchasing books online. It should also be noticed that the Convenience factor in this segment is very high when compared to the overall distribution of the factor to the entire population sample. These factors had an overall higher distribution which reduced the distribution of the factor Trust. When closer examining the attributes of the factor Price we found that according to Segment One, the majority of the respondents (52.7%), listed that they did agree with the statement that “purchasing books online saved them money” and the majority (62.4%) listed that “saving money is highly important”. The second attribute of the factor Price, “comparing prices through different price comparison websites before purchasing books online”, was shown to have an even distribution. The 86 tespondents were also evenly distributed between the groups, and the majority felt that this was important. Since the factor Convenience has a high distribution in this segment, there needs to be further examination of the different variables in order to wholly understand the consumers in this segment. We found that the overall attitude was positive and came from the attributes “saving time” and “less effort”. The consumers agreed with the fact that purchasing books over the Internet involved less effort compared to purchasing books offline. Yet they did not list it as important. The same distribution can be found for the attribute saving time, where the consumers agreed to the fact that it saved them time but they did not find it as important as timesaving. Compared to the previous attribute they found “saving time when purchasing books online” to be of greater importance than when it involved less effort. The last attribute of the factor Convenience was “being able to purchase books online at anytime” where the consumers did not show as much of a positive attitude as to the prior attributes. A closer examination shows that the respondent agreed with the statement but did not find it highly important. Overall we can conclude that the tespondents agreed with the attributes but did not perceive them as important. When asked to rank the importance of the three factors, the respondents in Segment Two listed the factor Price as the primary concer, Trust as the secondary and Convenience as the tertiary concern. Here the primary concern did agree with the overall attitude towards the factors, while the secondary and tertiary concern did not. The results showed that the consumers in this segment were more Convenience oriented than compared to Trust. In conclusion the Price Easers were generally price sensitive and at the same time very convemence oriented. This was supported by the fact that the respondents took consideration of the Reference Groups and mostly took the opinions of their friends into consideration. In this sense they were very convenience oriented. The respondents also connected to the fact that they wanted to save money but did not find it as important as comparing prices before purchasing. Instead, they turned to the advice and opinions from their friends. The fact that the tespondents in this segment were price sensitive can also be concluded by that the majority of the respondents had the lowest disposable income of the overall sample. Because of the Price and Convenience orientation, the consumer did not take much consideration to the factor Trust. Even though Price Easers spent less money on purchasing books, compared to the previous segment, they were still the largest segment group and because of that important. 6.3.3 Description of Segment Three: Bargain Seekers Segment Three was a segment with 86 respondents and 38.0% of the overall sample. These consumers spent about as much as the consumers in Segment Two, between 200 to 599 SEK on books each month. They had either slightly good or neither good nor bad previous experiences. Future expectations for purchasing books online were within a similar same range. Overall the consumers in this segment had the least positive attitude towards purchasing books online compared to the other two segments. Within this segment a majority of 61.6% did not consider the experiences and opinions of their family at all, while they showed a more positive attitude towards the experience and opinions of their friends. The impact of the Reference Group online forums, was in line with the Reference Group family, where a majority of 66.3% did not consider the experience and opinions that were discussed. To summarize the variable of Reference Group one can find that the experience and opinions of family and online forms were not 87 90 6.4 Summary The three segments that were found show a significant difference in the primary factor of concern. The general distribution showed that the factor Price was the primary factor for the entire population sample, and that the second factor was Trust which was closely followed by Convenience. When segmenting the respondents through the different variables we found that Segment One were mainly trust oriented and the respondents had a high positive attitude towards purchasing books online. As they did spend the most money, in comparison to the other segments we chose to label them High Spenders. Segment Two were mainly Price and Convenience oriented and therefore took the most consideration to the opinions and experiences of the Reference Groups. As they low disposable incomes and were somewhat convenience orientated when acquiring information about low prices, we chose to label them Price Easers. Segment Three were highly Price oriented and therefore actively involved in searches for the lowest prices online. They considered the experiences and opinions of their friends to some extent before purchasing books online while, and were actively searching for the lowest prices. Hence, we chose to label them Bargain Seekers. 7 Conclusions This chapter will present the conclusions that were drawn from the analysis of the research. It will also give implications for online book retailers and discuss further research possibilities. When a consumer purchases a book online, he or she is affected by various factors. The main influencing factors have been identified as Price, Trust, and Convenience. The Price factor exists because prices are often lower on Internet stores compared to physical stores due to lower costs. Purchasing a book online can greatly benefit the consumer in terms of convenience and saving money. It is also convenient to shop on various book sites with different assortments, from the home. Trust is evidently needed since the consumer must share detailed personal and financial information when purchasing a book online. These types of data include the full name, delivery address and credit card number for example, which makes Trust an important factor. To be able to see how these factors affect consumers, we conducted a survey at the University of Kristianstad. We the found that the factor Price is of the highest concern to the students and that the factors Trust and Convenience had lower impact on the students. The decision was made to investigate if any segments could be found within the population sample. We identified three segments, High Spenders, Price Easers, and Bargain Seekers. We further investigated these segments and their overall attitude towards the factors Price, Trust, and Convenience. We found that there was a difference in the consumers’ attitude towards the different factors which resulted in the following implications that will be presented below. So far we have answered the four first research questions and the last two questions will be answered in the following conclusion. 91 92 7.1 Implications for Online Book Retailers The majority of all the respondents were overall mainly concerned with the factor Price. This factor was shown to be present not only as the primary choice but also as a secondary choice within Segment One (High Spenders). This high importance for the factor Price had been expected since the population we choose to investigate consisted of students, which generally have a low disposable income that makes them price sensitive. Having the lowest prices as a retailer is a strong indicator for succeeding in being the market leader among students. As our research showed, the factor Price is not the only and in some cases not the primary factor, which the consumers tend to regard before purchasing books online. Overall, the factors Trust and Convenience were regarded as secondary choices among the overall respondents, but when looking at the segments we found that in Segment One (High Spenders) Trust was considered to be the most important. If the retailers would specifically target students as consumers, the following implications could be relevant for retailers: ¢ Discount prices e A transparent and reliable retailer ¢ Fast transactions By investigating the segments we found that Zrust was the factor that the High Spenders had the most positive attitude towards when purchasing online. Since these are consumers that spend the most money on purchasing books online, thereby indicating the importance of this segment, even though it was the smallest of the three segments. These consumers mainly need to feel secure are aware of the reputation of the retailer when they purchase books online. The High Spenders prefer to purchase from the same retailer they trust, indicating that they would have had been larger, the significant variance could to a greater extent affect of the factors which would have resulted in a more valid investigation and higher generalisability of the research. One could also argue according to the results, that the respondents were too absolute in their perception and perhaps would have needed to answer on a smaller scale than one with seven alternatives to choose from. 7.3 Future research After having conducted our research and considering the limitations in time and resources that we had been facing, it would be of interest to examine our research topic further as well as more profoundly. Below, we have listed a few deductions for possible future research: ¢ It would be interesting to conduct a survey at another university. If this would be done and similar results were discovered, one could apply generalisability to the results * Conduct a survey on a larger sample, also including people that are not students and segmenting according to that. This could find new segments, with new analytical possibilities. ¢ This research was conducted from the consumers point of view, and if could also be conducted with greater focus towards the online retailer. e We found that Price, Trust and Convenience were factors that are important when a consumer decides to purchase online, but it would be interesting to see whether the concepts of these factors are perceived equally between all consumers or if there were any discrepancies. 96 ¢ Furthermore, it would be of interesting to see if the factors were the same for other good that are traded online. In general, this tesearch could be conducted with a greater range of goods and with greater detail towards the specific factors. 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