The Pluses and Minuses of Online Shopping - Essay Example

A Research Proposal The Pluses and Minuses of Online Shopping Rationale: More and more businesses are making their products and services available online. Merchandising concerns ranging from airline bookings, stock trading, PC firms, bookstores and purchasing goods and services are being transferred to the Internet. Marketing activities that involve making phone calls, sending promotional mail, ordering goods and services are all going online. Expert predictions are that the Internet will be used in ways that will transform existing business relationships such as those between buyers and sellers, workers and employers, suppliers and assemblers. This means radical changes in such institutions as manufacturing companies, service providers and retailers. (Kenney, M. & Curry, J., 1999) But although this newfangled idea has gone this far, research on the subject of e-commerce and Internet marketing remains largely confined to the difficulties encountered by companies going online, including its advantages and disadvantages to them. An important aspect of the phenomenon yet to be fully explored is the sentiment and attitude of consumers toward online shopping. As attempts get underway to create the ultimate e-mall, the question may be asked: Are the consumers willing and ready to accept and patronize such a store in place of the shopping mall This research project will thus give a fresh look at Internet marketing from the perspectives of the consumers. It will seek to identify the advantages and disadvantages the consumers derive from online shopping, with the end in view of determining whether the marketing process helps promote consumer welfare and interests at all, the way the traditional stores do so. Research Questions: The main research question is: Are consumers taking to online shopping with the same enthusiasm and confidence they bring to the old-fashion stores The subsidiary research questions are as follow: 1) How do consumers feel about making their purchases via the Internet 2) How often do they procure goods and services from the Internet 3) Are there products that they would rather purchase from the Internet than from the regular stores, or vice versa 4) Don't the virtual absence of guarantees on the quality of products and services provided by commercial websites bother them 5) In the consumer's view, what are the advantages and disadvantages of shopping online 6) Does online shopping really reduce the transaction costs than when one deals with a regular store 7) Does the design of a commercial website make any influence on a customer's decision to buy online 8) Is there a personal touch in online shopping, which is unlike the regular stores where you have to jostle your way among the multitude of other customers 9) In going to the regular stores, one has to contend with the traffic and pollution, spend for the thrift and search for a parking space that is often not there. Do these count as arguments for buying online instead Literature Review: Corporations, both established and new, are turning to the Internet to create new markets and reorganize existing markets. It began in 1990 when the US National Science Foundation approved the use of the Internet for non-academic uses. From only 5 million users in 1993, the figure jumped to 62 million in 1997 and 100 million in 1998. According to Internet provider Uumet Technologies, Internet traffic continues to double every 100 days that this has become "one of the fastest adoption rates any technology has ever experienced." (Yang, S., 2001) Worldwide, there could be 550 million users and a far greater number of .com sites. The latter websites are made up of companies engaged in online retail of all sorts of products and services. E-commerce is transforming the traditional retail industry. For this business sector, e-commerce is eliminating the costs of retail branches, thus lowering the initial entry costs and the fixed costs associated with retail stores. (Kenny, M. & Curry, J., 1999) Harris, Valerie (2005) estimates that 95 per cent of purchasing agents in the developed world today use the web to research new products and services, while 73 per cent of executives depend on the Internet to learn about new products and services. When considering to buy a product or service, 68 per cent of Internet users turn to the search engines, while 42 per cent actually makes a purchase. Internet marketing is one form of relationship marketing, a new concept that gained currency in the 1980s to replace the perceived weaknesses and limitations of traditional marketing. In the traditional approach, the emphasis is on the four P's of marketing - product features, the price, promotion and placement of advertising materials. Little interest is given to customer service, customer contact is limited and quality is largely a production concern. These considerations are believed necessary in ensuring the long-time profitability of a company. With relationship marketing through the Internet, the process accomplishes all the four goals of marketing. These are consumer awareness of the product, information about the product, branding and leads or sales. But the most important feature of the marketing approach is the attention it gives to customer retention or what is also called service marketing. This is a marketing effort that seeks to service all the customer's needs through the various stages of his life cycle. (Wikipedia) As for guarantees on the quality of products that consumers buy online, there are ongoing efforts to establish certification schemes for Internet retailers. In UK, for example, several certification schemes have sprouted to ensure quality purchase online. These include the Which Web Trader, in which quality certification is free, and Clicksure, which imposes a specific amount as assessment fee followed by an annual license fee based on the size of the company involved. There is some debate on which scheme, the free-certification or pay-for-certification systems, is effective in protecting the welfare and interest of consumers. Methodology: This research project may be categorized as an exploratory type of research since it deals with something not yet fully defined, or its scope still unclear. All the literature on Internet marketing so far looks at the phenomenon from the perspective of business and the academe, not the consumers. To get into the unexplored angle of this issue, we will use both the observation and direct communication methods of research. With the observation method, it means we will collect relevant data by human, mechanical, electrical or electronic means. This in effect entails gathering materials from the Internet, books, periodicals and similar sources. At the same time, we will utilize the direct communication approach by collecting data from the subjects through direct interaction, through others and through sampling methods like a questionnaire. In research, direct communication may be quantitative or qualitative. Both approaches will be used in this research project by doing the quantitative research on a person-to-person basis, through telephone or self-administered questionnaire. We will also make use of qualitative research by involving focus groups. Methods: By using the observation method of research we will collect information from the traditional library sources and the Internet. We will also observe first-hand how a website retailer handles purchase orders and how many orders it receives in one day. In addition, we will conduct person-to-person interviews with Internet users who have made a purchase online at one time or another. A questionnaire will be distributed among other Internet users who are known to pay their bills, book flights and buy goods from the Internet. For the research to be thorough and complete, we will also conduct similar interviews with Internet users who have never bought anything online or have no desire to do so. The objective is to find out why they feel that way. Another research subject that we deem important are customers who buy online from a quality certified site and those who make the same purchase from an uncertified Internet retailer. Dissemination is an intrinsic element of a good research practice. If in the course of the research, we uncover information that we feel would enrich the literature in this field, we may be obliged to share this information and knowledge with the wider public. Sampling: To be chosen for the questionnaire sampling are Internet users who are either frequent or infrequent Internet customers. We will also try to pinpoint consumers who bought something from the Internet and ended up with a substandard product but do not know where to complain that their consumer rights have been violated. The person-to-person and group interviews will be conducted with an eye on finding the individual and group sentiments of customers on online shopping. In the sampling, we will avoid the common mistake in research to survey as wide a segment of the population as possible since this would be more costly, less accurate and more time consuming. Instead we will confine the sampling to a few who we believe represent the general attitude of people who patronize commercial websites. Moreover, we will frame the questionnaire in such a way that it is made up of open-ended questions so that the subjects can respond in their own words and express their own ideas. The close-ended questions in such an undertaking often confuse research subjects, elicit pre-determined responses and may not yield the information we need. Technical and Practical Issues: The technical aspects of this research involves the complexity of the technology involved in putting up a commercial website. In this connection, we hope to gather background information on the technical angle from the online retailers that will be set up for the interviews. From these online retailers we will try to find out how they entice customers to their websites and products. Is it by web design or promo sales We will also ask how they carry out customer retention programs, a basic feature of relationship marketing. How effective are the customer loyalty programs, special recognition programs, affinity programs, community programs and knowledge-building programs that Internet practitioners of relationship marketing pursue to generate customers' goodwill in attracting customers (Sorce, P., 2002) As for the practical issues, these aspects will be included in the discussions to be held with the Internet users, both by individuals and by groups. Ethics: We will carefully observe the universal code of conduct in research, the basic principle of which is to respect the rights to privacy of interviewees and subjects of the project. For this reason, the identities, addresses and other personal data about the research subjects will be held in strictest confidence. Every school has its own code of ethics and conduct for research and most schools require that the collection, storage, use and retention of all data must be entrusted to them. These records and data must also be kept by the school concerned for a given period. We will faithfully comply with whatever code of conduct is imposed on this research. References Kenney, Martin & Curry, James (1999). "E-commerce: Implications for Firms' Strategy and Industry Configuration." E-conomy Paper 2, July 1999. Yang, Silian (2001). "E-commerce in Airline Business." Paper presented at the International Symposium on Government in E-commerce Development, Apr 23-24, 2001; Ningbo, China. Wikipedia. "Relationship Marketing." http://en.wikipedia.org/wiki/ Relationship_marketing Levitt, Theodore (1983). "After the Sale Is Over." Harvard Business review, Sept-Oct 1983. Berry, Len (1983). "Relationship Marketing." Emerging Perspectives on Service Marketing, American Marketing Association, Chicago; 1983. McKenna, R. (1991). "Marketing is Everything." Harvard Business Review, Jan-Feb 1991. Harris, Valerie (2005). "Why Companies Shouldn't Rely on Traditional Marketing." http://www.webpronew.com/ebusiness/small business/wpn-2 Temple, Claudia (2002). "Five Steps to Relationship Marketing." Nov 11, 2002. http://www. sitepoint.com/article/marketing_success Gordon, I.H. (1999). "Relationship Marketing: New Strategies, Techniques and Technologies to Win the Customers You Want and Keep Them Forever." John Wiley & Sons Publishers, 1999. Payne, Adrian (1991). "Relationship Marketing: The Six Markets Framework." Working Paper, Cranfield Graduate School of Management. Sorce, Patricia (2002). "Relationship Marketing Strategy." Rochester Institute of Technology, Sept 2002. Yang, Silian (2001). "E-Commerce in Airline Business." Paper presented at the International Symposium on Government in E-commerce, April 23-24, 2001; Ningbo, China. Kenny, Martin & Curry, James (1999). "E-commerce: Implications for Firm Strategy and Industry Configuration." E-conomy Paper 2; July 1999. Read More