Factors of customer shopping behavior via advantages of e commerce graduation paper, major business english

The purposes of the study Through the research, we would like to get the purpose of mastering the definitions of Marketing, E-commerce, Customer shopping behavior and characteristics ch

Full name: VÕ ĐÔNG TUYẾT VY

DECLARATION

I certify that the attached material is my original work No other person’s work

or ideas has been used without acknowledgement Except where I have clearly stated that I have used some of this material elsewhere, I have not presented this for

assessment in another course or unit at this or any other institution

Date: 18/06/ 2019 Writer’s Signature and Full name

Võ Đông Tuyết Vy

ABBREVIATIONS LIST

Activities, Interests and Opinions AIO

American Marketing Association AMA

Automatic Transaction Machine ATM

Cash On Delivery COD

Gross Domestic Product GDP

ABSTRACT

Online shopping is becoming popular in the modern society because the conveniences, which bring to people, make their shopping behavior changed Through the research, we would like to understand about the marketing, e-commerce , and its characteristics that could affect the customers more The study introduced how customers shopping behavior changed and what advantages of the e-commerce could

do that clearly Moreover, we also introduced some inconveniences when customer use the e-commerce for their shopping In order to get all information above, we would take the survey for people who live in Ho Chi Minh City and summarize the data to give the final conclusion for the study Through the result of the research, we hope that

we could know the most important elements could change the shopping behavior, and the most difficult things that customers faced to prepare the good solutions to deal with

it Based on it, the e-commercial companies could apply for their own business, and help it develop more and more in the future

Key words: E-commerce, Customers shopping behavior, Advantages, Inconveniences.

LIST OF GRAPHS

GRAPH 4.1 Percentages of people taking the survey in Ho Chi Minh City page 17 TABLE 4.1 Survey takers’ jobs in Ho Chi Minh City page 18 GRAPH 4.2 Monthly shopping expenses page 19 GRAPH 4.3 Monthly income of survey takers page 19 GRAPH 4.4 Percentage of people using the e-commerce in Ho Chi Minh City page 21 GRAPH 4.5 Percentage of devices in the online shopping page 22 GRAPH 4.6 Online shopping times of survey takers page 23 GRAPH 4.7 The advantages of the e-commerce page 24 GRAPH 4.8 Difficlties of the e-commerce page 26 GRAPH 4.9 The most popular goods on the e-commercial channels page 28 GRAPH 4.10 The appreciation of the survey takers for the e-commerce page 29 GRAPH 4.11 Percentage of survey takers continuing using the e-commerce page 30

TABLE OF CONTENTS

ABSTRACT

CHAPTER 1 INTRODUCTION 1-3

1.1 Background and identification of the topic 1

1.2 Previous related studies 1

1.3 The purposes of the study 2

1.4 The scope of the study 2

1.5 The organization of the study 3

CHAPTER 2 LITERATURE REVIEW 4-11 2.1 Definitions of Marketing 4

2.2 Consumer buyer behavior 5

2.3 E-commerce 9

CHAPTER 3 METHODOLOGY 12-16 3.1 Overview of the experiment 12

3.2 Subjects of the experiment 12

3.3 Materials 14

3.4 Procedures 14

3.5 Statistical treatments 15 CHAPTERR 4 FINDINGS AND DISCUSSIONS 17-31 4.1 Subjects in the research 17 4.2 Click and mortar behavior 20 4.3 The advantages of the e-commerce influent on the customer shopping behaviors 24 4.4 Difficulties of e-commerce 25 4.5 Future appreciated development of ecommerce 27 CHAPTER 5 DISCUSSIONS AND RECOMMENDATIONS 32-35 5.1 Conclusions 32 5.2 Recommendations 33 REFERENCES 36-38 APPENDIX 39-42

CHAPTER 1 INTRODUCTION

In this chapter, we would like to introduce some general information of the commerce and how important it is in the modern life We also showed the previous related studies done before to make the basis to compare and analyze in order to get the final purposes of the research

e-1.1 Background and identification of the topic

We are living in a modern life with the development of all aspects, especially the development of economy, commerce and Internet They all support together in the business activities E-commerce has been created as a result of the cooperation - the development of economy, commerce and the improvement as well as the popularity of the Internet Therefore, the e-commerce has been created

With the creation and the spread of the e-commerce all around the world, more and more companies apply it for their business because of benefits which it brings to them Not only it makes everything becomes more convenient, but it also makes the customer shopping behavior changes In the past, all transactions and trades were performed manually; it means, when customers wanted to buy something, they had to

go to the stores and chose all goods that they needed directly Different from it, nowadays, people have lots of choices to buy goods, and buying through the e-commerce channels becomes a popular way

1.2 Previous related studies

The e-commerce is becoming developed in Vietnamese market in general, and

in Ho Chi Minh City market in particular According to Kurokawa Kengo (2018), more and more e-commercial companies established such as Tiki, Lazada, Shopee, etc

combined with the investment of foreign companies into Vietnamese market makes the development of e-commerce in Vietnam becomes the potential market, especially the eventful market like Ho Chi Minh City These companies are competing to become stronger to conquer customers’ belief in Vietnam It is this competition that has created benefits for the customers when shopping online on the companies’ website and on their applications for IOS and Android

In the viewpoint of Pham Thanh Binh (2018), with the improvement of the Internet in the 4.0 industrial life, numbers of people use smart phones and other smart equipment for shopping, paying, booking, etc are increasing day by day, it also leads

to the change in customer shopping behavior Also following Kurokawa Kengo (2016),

he did a report that mentioned about what behaviors of the customers often appeared

on the e-commercial environment, and the products bought on the e-commercial channels by the customers However, we would like to research it again to compare whether the shopping trend of people change or not, and give the explanations for it Moreover, we also want to find out what main elements made the behavior of the customers changed

1.3 The purposes of the study

Through the research, we would like to get the purpose of mastering the definitions of Marketing, E-commerce, Customer shopping behavior and characteristics change the consumer behavior following the theoretical basis under the perspective of Philip Kotler, Kevin Lane Keller and Dave Chaffey Based on it, we could create the questionnaire including the questions with advantages and disadvantages when shopping on e-commercial channels of customers in the reality in the most detailed way

1.4 The scope of the study

In order to get the most correct result, we would take a survey with the people from varieties of jobs who were greater than or equal to 18 years-old, and all of them had to live in Ho Chi Minh City The most important thing to collect the correct data was we just selected the responses of people who used to use the e-commercial services for their shopping Through it, we could not only understand what elements of the e-commerce made them attracted and changed their shopping behavior, we but also know the difficulties that the customers often faced when shopping online

1.5 The organization of the study

This research paper begins with the introduction about the general information

of the e-commerce, where the background and the identification of the problem are shown The following chapter is devoted to the literature review, which revolves around the general matters of the idea It then goes to how the research is executed, which contains detailed information about the research conduction and how its data is collected and put in profound analysis The next chapter is presented with the research’s possible findings and a discussion The coming-after chapter of the research

is dedicated for the conclusion of the topic, and some solutions to improve the difficulties of the research’s subject The final part of this research is wrapped up with the reference of reliable resources and indexes

CHAPTER 2 LITERATURE REVIEW

Nowadays, the constant development of the Internet makes all aspects of the business changed in order to catch up the new trend of age – 4.0 industrial revolution

In addition, conducting transactions and trades on the Internet becomes the popular way for both businesses and customers because of the conveniences, and the benefits which it bring to people In this chapter, we would like to perform some definitions of

Marketing, E-commerce and Consumer buyer behavior in order to make the readers

could understand clearly about the theory in the most detailed way

2.1 Definitions of Marketing

According to The American Marketing Association (AMA), “Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.” (Philip Kotler & Kevin Lane Keller, 2012, p.5)

Philip Kotler and Kevin Lane Keller defined a short definition of Marketing in

21st century: “Marketing is a societal process by which individuals and groups obtain what they need and want through creating, offering, and freely exchanging products and services of value with others.” (Philip Kotler & Kevin Lane Keller, 2012, p.5)

Philip Kotler also gave the definition of Marketing as “The process by which companies create value for customers and build strong customer relationships in order

to capture value from customers in return.” (Philip Kotler & Gary Armstrong, 2012, p.5)

Through the definitions above, we could see that whatever companies do, the final purposes of that process are to create the benefits for their customers and aiming

at the customers’ belief in order to build a strong relationship between customers and

organizations Therefore, we could say that customer is an important factor that help the companies develop in their business; moreover, in order to maintain that relationship, understanding the customer shopping behavior clearly is also the most significant thing

2.2 Consumer buyer behavior

2.2.1 Definition

In the view point of The Apple, “Consumer buyer behavior refers to the buying behavior of final consumers - individuals and households that buy goods and services for personal consumption.” (Philip Kotler & Gary Armstrong, 2012, p.133)

2.2.2 Model of buyer behavior

According to Philip Kotler & Gary Armstrong (2012, p.135-136), there are three models of Buyer Behavior:

“- The environment:

+ 4Ps in Marketing Mix: Product, Price, Place, Promotion

+ Other factors: Economic, Technological, Social and Cultural

- Buyer’s black box:

+ Buyer’s characteristics: influence how he or she perceives and reacts to the stimuli (4Ps in Marketing Mix)

+ Buyer’s decision process: itself affects his or her behavior.”

To understand what the “black box” is, we could take a look at point of view of Philip Kotler and Gary Armstrong They explained that differences from measurement in whats, wheres and whens customers buying, it is difficult to “see” the thought of customer That is the reason why we could not find out whys which customers buy Therefore, they called it is the black box

“- Buyer’s responses:

+ Buying attitudes and preferences

+ Purchase behavior: what the buyer buys, when, where, and how much

+ Brand and company relationship behavior.”

2.2.3 Characteristics affecting consumer behavior

In the research of Philip Kotler & Gary Armstrong written in “Principles of Marketing – 14th edition, 2012”, customer shopping behavior is affected by these general characteristics:

• Cultural factors

Culture: it is the factor that influenced deeply on making decision of

consumers’ wants and behavior The culture in general includes believes, traditions, habits and customs created and maintained by generation to generation Marketers should determine what products would be suitable with the buyers’ culture (Philip Kotler & Gary Armstrong, 2012, p.135)

Subculture: every group of society has the smaller subcultures It is subculture

has created the variety of culture It always has the differences among subcultures; therefore, the marketers should invented products or programs that are suitable with every subculture (Philip Kotler & Gary Armstrong, 2012, p.136)

Social class: “are society’s relatively permanent and ordered divisions whose

members share similar values, interests, and behaviors It is not determined by a single factor, but measured as a combination of occupation, income, education, wealth, and other variables Marketers are interested in social class because people within a given social class tend to exhibit similar buying behavior.” (Philip Kotler & Gary Armstrong, 2012, p.139)

• Social factors

Reference groups: have the influence directly (face – to – face) or indirectly on

attitude and behavior of buyers The Marketers always try to identify reference group

as their target customers because of the variety of lifestyle and behavior (Philip Kotler

& Gary Armstrong, 2012, p.139)

Family: “Family members can strongly influence buyer behavior The family is

the most important consumer buying organization in society, and it has been researched extensively Marketers are interested in the roles and influence of the husband, wife, and children on the purchase of different products and services.” (Philip Kotler & Gary Armstrong, 2012, p.141)

Roles and status: “The person’s position in each group can be defined in terms

of both role and status A role consists of the activities people are expected to perform according to the people around them Each role carries a status reflecting the general esteem given to it by society.” Therefore, the marketers should focus on their target customers and how to create products which are suitable with the customers’ roles and status (Philip Kotler & Gary Armstrong, 2012, p 144)

• Personal factors

Following the view point of Philip Kotler and Gary Armstrong in “Principles of Marketing – 14th edition, 2012”, customer shopping behavior is affected by five personal factors:

Age and life cycle stage: “People change the goods and services they buy over

their lifetimes Tastes in food, clothes, furniture, and recreation are often age related” That is the reason why “Marketers often define their target markets in terms of life-cycle stage and develop appropriate products and marketing plans for each stage.” (Philip Kotler & Gary Armstrong, 2012, p.145)

Occupation: “A person’s occupation affects the goods and services bought”

Because of the different in nature of work, shopping demand is also different about the product, quality, price, shopping time and habit Therefore, “Marketers often define their target markets in terms of life-cycle stage and develop appropriate products and marketing plans for each stage.” (Philip Kotler & Gary Armstrong, 2012, p 145)

Economic situation: “A person’s economic situation will affect his or her store

and product choices Marketers watch trends in personal income, savings, and interest rates.” (Philip Kotler & Gary Armstrong, 2012, p.146)

Lifestyle: “Lifestyle is a person’s pattern of living as expressed in his or her

psychographics It involves measuring consumers’ major Activities, Interests and Opinions (AIO) dimensions

o Activities: work, hobbies, shopping, sports, social events

o Interests: food, fashion, family, recreation

o Opinions: about themselves, social issues, business, products.” (Philip Kotler

& Gary Armstrong, 2012, p.146)

Personality and self-concept: “Personality refers to the unique psychological

characteristics that distinguish a person or group Personality is usually described in terms of traits such as self-confidence, dominance, sociability, autonomy, defensiveness, adaptability, and aggressiveness Personality can be useful in analyzing consumer behavior for certain product or brand choices.” (Philip Kotler & Gary Armstrong, 2012, p.146-147)

• Psychological factors

Motivation: “A motive (or drive) is a need that is sufficiently pressing to direct

the person to seek satisfaction.” There are two popular “theories of human motivation – theories of Sigmund Freud and Abraham Maslow” (Philip Kotler & Gary Armstrong,

2012, page 147)

Perception: “is the process by which people select, organize, and interpret

information to form a meaningful picture of the world.” (Philip Kotler & Gary Armstrong, 2012, p.148)

Learning: “describes changes in an individual’s behavior arising from

experience Learning theorists say that most human behavior is learned Learning

occurs through the interplay of drives, stimuli, cues, responses, and reinforcement.” (Philip Kotler & Gary Armstrong, 2012, p.149)

Beliefs and attitudes

- Belief: “is a descriptive thought that a person has about something Beliefs may

be based on real knowledge, opinion, or faith and may or may not carry an emotional charge Marketers are interested in the beliefs that people formulate about specific products and services because these beliefs make up product and brand images that affect buying behavior” (Philip Kotler & Gary Armstrong, 2012, p.150)

- Attitude: “describes a person’s relatively consistent evaluations, feelings, and

tendencies toward an object or idea Attitudes put people into a frame of mind of liking

or disliking things, of moving toward or away from them.” (Philip Kotler & Gary Armstrong, 2012, p.150)

2.3 E-commerce

2.3.1 Definition of e-commerce

According to Dave Chaffey (2009, p.10): “Electronic commerce (e-commerce) should be considered as all electronically mediated transactions between an organization and any third party it deals with.”

2.3.2 Range of perspectives for e-commerce

“Kalakota and Whinston (1997) refer to a range of different perspectives for commerce:

e A communications perspective – the delivery of information, products or

services or payment by electronic means

- A business process perspective – the application of technology towards the

automation of business transactions and workflows

- A service perspective – enabling cost cutting at the same time as increasing the

speed and quality of service delivery

- An online perspective – the buying and selling of products and information

online.” (Dave Chaffey, 2009, p.10)

2.3.3 E-commerce fundamentals

In the point of view of Dave Chaffey (2009), the e-commerce fundamental involves three main components:

• The e-commerce environment

Strategic agility: “is a concept strongly associated with knowledge

management theory and is based on developing a sound process for reviewing marketplace opportunities and threats and then selecting the appropriate strategy options.” (Dave Chaffey, 2009, p.57)

Online marketplace analysis: it is an important part of marketing that “helps

to define the main types of online presence that are part of a ‘click ecosystem’ which describes the consumer behavior or flow of online visitors between search engines, media sites and other intermediaries to an organization and its competitors.” (Dave Chaffey, 2009, p.59) A good online marketplace analysis could create the short-term digital marketing campaign Through it, companies could also give the strategies for their long-term development

• Location of trading in the marketplace

Multi-channel marketplace models: “Defines how different marketing

channels should integrate and support each other in terms of their proposition development and communications based on their relative merits for the customer and the company” (Dave Chaffey, 2009, p.70)

Different types of new online intermediary in 21 st century

“Sarkar et al (1996) defined some new online intermediaries:

- Directories: such as Yahoo!, Excite

- Search engines: AltaVista, Infoseek

- Malls: BarclaySquare, Buckingham Gate

- Virtual resellers: own-inventory and sell-direct, e.g Amazon, CDNow

- Financial intermediaries: offering digital cash and cheque payment services, such

There were lots of authors who did the research about the e-commerce in the world and wrote their results in the books or articles such as Stephen L Vargo & Robert F Lusch in “Evolving to a New Dominant Logic for Marketing, 2004”, Ahasanul Haque, Ali Khatibi and Shameem Al Mahmud in “Factors Determinate Customer Shopping Behaviour Through Internet: the Malaysian Case, 2009”, Douglas

B Holt in “Why Do Brands Cause Trouble? A Dialectical Theory of Consumer Culture and Branding, 2002”, etc However, they did not mention what exact elements affect the customers shopping behavior in detail They just gave the general information which was based on the theories of the “father” of the marketing – Philip Kotler in two famous books “Principles of Marketing” and “Marketing Management”

In addition, there also were the authors who wrote about the e-commerce and the customers shopping behavior in Vietnam such as Hoang Son in “Báo cáo khảo sát về

hành vi mua sắm online của người tiêu dùng Việt Nam, 2019”, Linh Nguyen in “Thấu hiểu người tiêu dùng Việt Nam, 2016”, Kurokawa Kengo in “Thị trường thương mại điện tử và hành vi mua sắm trực tuyến tại Việt Nam, 2016”, etc However, the researchers just gave the developed trends in Vietnam in the future, but there was not the good elements for the customers shopping behavior Moreover, there were not studies done about the change of the shopping behavior from the customers in Ho Chi Minh City in person to give the detailed information for the research That was the reason why we would like to do it in order to give more the information for this topic

CHAPTER 3 METHODOLOGY

In this chapter, we would like to present the methodology that we used for the research It includes some information such as why we decided to choose this topic for our research, how we collected and analyzed the data, our target survey takers and what limitations that we met when we did the survey

3.1 Overview of the experiment

In order to get the information, we made a survey with people who used to buy goods from e-commercial applications in Ho Chi Minh The survey was started on 10thApril, and it took nine days (19th April) to collect enough information for the research from survey takers There were 140 people in total taking the survey However, two of them were rejected because they haven’t bought goods online yet

3.2 Subjects of the experiment

3.2.1 Characteristics of the subjects

All 140 people who took the survey are our friends from schools and our colleagues at the office in Ho Chi Minh City We chose people living in Ho Chi Minh City because of the non-stop development in all aspects of the economy in Ho Chi Minh City, especially the e-commerce This is also a potential market that could attract the investment from the foreign investors With the conditions like that, people would have more opportunities to approach the e-commerce than other places in Vietnam Therefore, focusing on the customers in Ho Chi Minh could make the collected results reflected more exactly

3.2.2 Questionnaires design

The number of 140 samples of survey were used for the data collection, 120 ones were made online on Google Form among them, and 20 ones were printed and made manually by writing down paper There are two sections including 12 questions

in total in the survey Five first questions of the section 1 mentioned some basic personal information of the survey takers, and three others mentioned general information when customers buy goods online such as the frequency of shopping online, devices that were used and types of goods that were often bought In the section

2, we focused on the advantages influencing the changes of customer shopping behavior in detailed to make readers could understand clearly about the extra advantages beside the ones listed in Chapter 2-Literature Review

Moreover, we also listed some disadvantages that customers often met when shopping online Through it, we could recommend some solutions that help the e-commercial companies in Vietnam could improve their service quality better On the other hand, through the survey, we also could see the development ability of e-commerce through appreciation and decision of customers in continuing shopping online in the future

3.2.3 Limitations

Although we tried to make this present research have the most correct results, it still had some limitations while taking the survey Firstly, as the number of people who took the survey was just 140 people, it meant, 140 people were not enough to give the correct conclusion about the advantages and disadvantages of e-commerce that could influence on the customers in order to change their shopping behavior

To have the reliable results for this research, it was necessary if we had had more time and more participants to take the survey Moreover, because most of

participants who took the survey are senior students and office workers, the scope of the survey was not spread for all social classes Finally, the ideas for the advantages and disadvantages of e-commerce were based on our experiences when shopping online and the suggestions from some of our friends; therefore, it could not embrace all reasons that change the customers shopping behavior

3.3 Materials

In order to make the survey’s results easier to process and analyze, Google Form was used to design questionnaires including 12 questions which were divided into 2 sections In addition, we also shared the link of the survey as Google Form format on both social network programs such as Facebook, G-mail, Zalo, etc and printed the form in paper to ask the help from friends in the friend list and colleagues to get the information for the survey Moreover, two programs of the Microsoft Office – Word and Excel were also used to help us draw the graphs in order to analyze the data and give the conclusion for the research

is the reason why more and more e-commercial companies were established in Vietnam Beside the development of the e-commerce, we saw that the consumers shopping behavior is also changing We found some materials providing us what created the change like that

After having the ideas for the research, we created a questionnaire survey which included the questions related to this problem by Google Form program Then, we posted the link of survey on some social network channels such as Facebook, G-mail, Zalo, etc and printed it to collect the data with the support from our friends and our colleagues Immediately having enough the data, we copied the data following the results of the survey in Google Form into the Excel and drew charts on Word to analyze the problems for this research paper After completing all steps, we could give the conclusion about what advantages that make the customer shopping behavior change, and also the disadvantages Through it, we would give some advice to maintain the good things, and give some solutions to make the limitations become better

3.5 Statistical treatments

After collecting enough quantity of the survey for the research, we started synthesizing the data With the survey collected online, we did not process the data to get the results because it was executed automatically by the Google Form program but the question number 2 in the section 1 - the job of the survey takers With the question number 2, we selected the answers of the takers, then we arranged them into the suitable groups and added up them in total to get the result for the jobs After that, we focused on processing the data collected by the 20 samples in the paper with the help

of Microsoft Excel program Firstly, we also classified the answers of each question, arranged them into groups following the order of the questions and added up in total as the same way that we used for the question number 2 in the section 1 made online Then, we added the results from Google Form and Paper to get the final results in total for each question Finally, we started calculating the percentages for each group based

on the number of 138 people took the survey All the calculated processes were made

by the functions of the Excel because of its convenience and population Comparing

with other tools in processing the data for the research, the Excel is easier to use and full of calculated functions; therefore, it is more suitable for the students than the others

Based on the data calculated in the Excel, we started drawing the charts and the table with detailed information for each question We used the chart function of the Microsoft Word program for this step because of the variety of chart types In addition, the combination between Word and Excel in drawing the chart also makes the users feel more convenient The components and the data appeared in the charts was created automatically by the data of the Excel and gave the most correct portion to help people could save time for drawing chart As we mentioned above, the Microsoft Office programs are population and convenient with the students; therefore, we decided to choose it for processing the data

After having the results and the charts, we started analyzing the advantages and disadvantages of the e-commerce To point out the most important things that could change the behavior of the customers, and the most difficult things that the customers often face when shopping online, we would arrange each factors following the portions

of the “Strongly Agree” and “Agree” opinions By that way, readers could appreciate correctly what elements companies should focus on if they wanted to expand their business

CHAPTER 4 FINDINGS AND DISCUSSION

In this chapter, we would like to present the results of our study through the graphs drawn based on the analysis that we did after collecting enough data Moreover,

we also give some comments in brief on them to make the elements changing the customer shopping behavior become more clearly

4.1 Subjects in the research

More and more people are using the e-commercial applications for shopping such as Tiki, Lazada, Shopee, etc in Vietnam, especially the youth In order to get the information that is about the elements of the e-commerce affect the consumer and make their shopping behavior changed, we focused on the survey takers who are greater than or equal to 18 years-old from different jobs in Ho Chi Minh City