Friday, August 31, 2007

Internet Shopping and Consumer Behavior

The Internet-based shopping environment enables consumers to search for information and purchase products or services through direct interaction with the online store.To successfully attract internet consumers and benefit from doing so, online stores must know more about consumer attitudes towards purchasing via the internet, online purchase intentions, and their antecedents.

The growing use of Internet in the world provides a developing prospect for online marketers. If online marketers know the factors affecting online buyers’ behavior, and the relationships between these factors and the type of online buyers, then they can further develop their marketing strategies to convert potential customers into active ones, while retaining existent online customers. We focus on factors which online buyers keep in mind while shopping online.

Consumer attitudes, demographic characteristics, and purchase perceptions influencing purchase decisions from traditional retail outlets also combine to affect purchases decisions from online shopping sites.

Four major elements that are believed to influence potential buyers are


Demographic characteristics

Purchase perceptions and

Product perceptions

In the domain of consumer behavior research, there are general models identifying various characteristics driving or inhibiting a consumer to purchase online. These models are very important to marketers as they have the ability to explain and predict consumers’ purchase behavior.

Theory of Reasoned Action (TRA) and Structural Equation Model
The TRA, is a well-established general theory of social psychology that is applied to consumer behavior research. TRA presents that behavior is preceded by intentions and intentions are determined by the individual’s attitudes towards the behavior and the individuals subjective norms (social influence).

As the internet evolves to become a major channel of distribution, the enormous potential of B2B, B2C and even C2C commerce can only be realized if consumers feel comfortable transacting over the new medium with unfamiliar vendors. Important to note is that, in contrast to the traditional business transaction, an online transaction is characterized by fairly unique aspects.

Theory of Planned Behavior
According to the theory of planned behavior, we can assume that an individual thinking of undertaking a specific action will estimate and evaluate expected results, determine his or her willingness to comply with the viewpoints of salient individuals or groups about the action, and decide how well his capabilities will allow him to control the action or behavior in question. If an Individual's determination of those three factors is positive, he or she will undertake the action and 'receive' the positive and negative consequences that flow from the action In the circumstances.

Technology Acceptance Model
Four exogenous constructs - namely, personal awareness of security, personal innovativeness, perceived ease of purchasing, and perceived usefulness - have not only direct influences on attitudes and online purchase intentions, but also have indirect influences on online purchase intentions through the mediation of attitudes.

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