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Impact of Technological Changes on Consumer Buying Behavior of Bangladesh

By mazharulisl Apr 30, 2014 2131 Words
Research Paper
On
Impact of Technological Changes on Consumer
Buying Behavior of Bangladesh

Table of Content

Executive Summary

VI

1.0

Introduction

1

1.1

Problem

2

1.2

Research purpose

3

1.3

Research questions

3

1.4

Limitations

3

2.0

Literature Review

4

3.0

Conceptual Framework and Hypothesis

6

3.1

Conceptual Framework

6

3.2

Hypothesis

6

4.0

The Research Methodology

6

4.1

Research Type

6

4.2

Primary data source

6

4.3

Secondary data source

6

4.4

Data analysis tools

6

4.5

Variables and Scale

6

4.7

Sample

7

5.0

Analysis & Findings

7

5.1

Respondents Profile

7

5.2

Descriptive Statistics

8

List of Illustration

List of Tables
Table 1

Respondents’ Demographics

7

Table 2

No. of respondents preferring category of Technologies

8

Table 3

Purpose of Website Use

9

Table 4

Purpose of Using E-mail

9

Table 5

Purpose of using Facebook

9

Table 6

Consumers’ purchasing interest is influenced by

10

websites
Table 7

Consumers’ purchasing interest is influenced by mobile

11

phone calls
Table 8

Consumers’ purchasing interest is influenced by e-mails

11

Table 9

Consumers’ purchasing interest is influenced by

12

Facebook applications
List of Figures
Figure 1

Conceptual Framework

6

Figure 2

Most visited Bangladeshi Buy-sell websites

8

Executive Summary
The technology in Bangladesh has witnessed phenomenal growth. The Technology has developed into a new distribution channel and very soon the internet payment gateway will open for Bangladeshi people. This has created a need to understand how technological factors influences consumer buying behavior. The motivation for this research is the fact that numerous organizations in Bangladesh do not realize the importance of technology to their consumer for better service delivery quality and ultimate impact on the organizations portability.

The purpose of this research was to examine the impacts that influence the consumer. To address the research objective, surveys were administered about a sample of 50 peoples in Dhaka City. Primary data was collected through a survey that was conducted on them. Results indicate that all technological factors have influences on consumer buying behavior. These findings suggest that online retailers should emphasize site factors that best suit the involvement/experience profile of their primary users.

1.0 Introduction
The technology in Bangladesh has witnessed phenomenal growth. Although facing many constraints in expanding technology specially internet access and use, development of the internet and information Technology are high government priorities. According to the Pew internet and American Life Project, it takes one to three years for most internet browsers to begin to use online stores (Green and Hof 2002). This means that a large number of consumers can be expected to turn into online buyers in a short period of time. This increased internet penetration will result in a 2.6 per cent contribution to the country’s GDP by 2020 (Boston Consulting Group). Recently, the Bangladesh Bank (BB) has given permission to Online Payment Gateway Service Providers (OPGSPs) to facilitate repatriation of remittance against small value service exports in non-physical forms, such as data entry/processing, offshore IT service, and business process outsourcing etc. (Uddin, 2012). Who will capture this profitable market? Certainly businesses, which are able to identify the preferences and concerns of these consumers and then utilize this information to design effective online strategies, should benefit most. 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, visualize their needs with products, and discuss products with other consumers (Joines et al. 2003). Oppenheim and Ward (2006) explain that the current primary reason people shop over the internet is the convenience. They also recognize that the previous primary reason for shopping online was price, which has now changed to convenience. Marketing in internet can be of many types. It may be on websites, e-mails, Facebook applications and so on.

To help online Bangladeshi marketers to build effective technologies to achieve the goal, the objective is to learn about the impact of that influences consumer behavior.

1.1 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 rapid development of the technologies surrounding the internet, a company that is interested in selling products from its web site, Facebook Apps or e-mail will constantly has 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 analyzing 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.

Analyzing consumer behavior is not a new phenomenon. There are many theories that 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 behavior and online consumer behavior. Since online retailing is a new retailing medium and online consumer behavior is diverse from traditional consumer behavior, one must identify what influences the online consumer. Analyzing 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 retailers in order to satisfy consumer demands and compete in the online market. To further understand how these factors influence the consumers, we must identify segments which will enable us to make comparisons.

1.2 Research purpose
The purpose of this research is primarily to identify and get insight into what main factors that impacts the online consumer takes into consideration when visiting internet technologies, Further; the study will investigate if any segments can be established by identifying the consumers and how these segments relate to the identified factors. The findings of this research will be outlined as implications for future Bangladeshi online retailers in order to enhance their consumer knowledge and increase their online marketing strategy effectiveness.

1.3 Research questions
1. What are the impacts that affect the consumer when considering a website for information to purchase a product/service?
2. What is the connection with the impacts?

1.4 Limitations
However, this research is tried to identify the impact influencing the online consumer and limit these to a few in order to be able to investigate the effect on the online consumer. Within the field of consumer behavior there are many theories and models that identify the consumer. This research limits itself to identifying the consumer through his/her consumer characteristics and the consumer buying process.

2.0 Literature Review
The consumers” buying behavior has been always a popular marketing topic, extensively studied and debated over the last decades while no contemporary textbook is complete without a chapter dedicated to this subject. The predominant approach, explaining the fundamentals of consumer behavior, describes the consumer buying process as learning, information-processing and decision-making activity divided in several consequent steps:

(1) Problem identification.
(2) Information search.
(3) Alternatives evaluation.
(4) Purchasing decision.
(5) Post-purchase behavior (Bettman, 1979; Dibb et al. , 2001; Jobber, 2001; Boyd et al. , 2002;
Kotler, 2003; Brassington and Pettitt, 2003).
A distinction is frequently made between high and low involvement purchasing, implying that in
practice the actual buying activity can be less or more consistent with this model, depending on the buyer’s perceived purchasing risks. High or low degree of involvement is also a question of buyer experience; products purchased for the first time, in general, require more involvement than frequently purchased products (Boyd et al. 2002).

The internet experience as a major parameter of customer influence is crucial for dot.com-type firms but also for multi-channel vendors. For traditional firms expanding their business with internet presence, the quality of online experience they deliver is an issue requiring special attention: poorly designed and dysfunctional Web sites are a potential threat not only to the company’s virtual aspirations but also a hazard for their physical activities. The primary means of delivering the Web experience is the corporate Web site along with e-mails and facebook. Sites delivering superb Web experience are designed in a way not only addressing the client’s product needs and expectations but also assisting the customers through the steps of the buying process. In that respect the back-office ecommerce

infrastructure (O’Keefe and McEachern, 1998) is also of crucial importance. Internet must be seen therefore as vital instruments of customer service and persuasion rather than simply as online brochures or catalogues of the company’s products. Several academics and practitioners have identified the “online shopping experience” or “virtual experience” as a crucial e-commerce marketing issue. Tamimi et al. (2003) define the online shopping experience as a process of four stages describing the successive steps of an online transaction. Considering that an online customer is not simply a shopper but also an information technology user (Cho and Park, 2001) one can argue that the online experience is a more complicated issue than the physical shopping experience: the internet experience can be defined as the consumer’s total impression about the online company (Watchfire Whitepaper Series, 2000) resulting from his/her exposure to a combination of virtual marketing tools “... under the marketer’s direct control, likely to influence the buying behavior of the online consumer” (Constantinides, 2002, p. 60). The tevhnological experience embraces elements like searching, browsing,

finding, selecting, comparing and

evaluating information as well as interacting and transacting with the online firm.

3.0 Conceptual Framework and Hypothesis
3.1 Conceptual Framework:

Website

Impact on
consumer
buying
behavior
E-mail

Facebook

3.2 Hypothesis:
Based on the discussion of the relevant website factors, the following hypotheses’ is proposed:
4.0 The Research Methodology
4.1 Research Type: Descriptive
4.2 Primary data source: Structured questionnaire survey
4.3. Secondary data source: Journals, Internet etc.
4.4 Data analysis tools: Correlation
4.6 Variables and Scale: There were three variables of this study. Variables were: Website use, use of e-mail & use of facebook applications.
b. Consumer buying behavior of people as dependent variable.

4.8 Sample: In order to investigate the impact of technologies on consumer behavior, people from Mirpur area were targeted. Both male and female were selected on the basis of the convenience of the surveyor. A questionnaire was developed contained fifteen questions regarding factors of deceptive advertisement and consumers’ buying behavior.

5.0 Analysis & Findings
5.1 Respondents Profile: Table 01: Respondents’ Demographics Demographics

Items

Gender

Male

28

56%

Female

22

44%

Total

50

100%

up to 20

4

8%

21-30 years

35

70%

31-40 years

2

4%

41-50 years

4

8%

51-60 years

3

6%

60+ years

2

4%

Age

Numbers %

Total
Level of education

100%

undergraduate

19

38%

post-graduate

31

62%

5.32 Descriptive Statistics:

No. of respondents preferring category of Technologies.

Yes

No

Total

Website

44

6

50

E-mail

41

9

50

Facebook

33

17

50

Most visited Bangladeshi Buy-sell websites

Most visited Bangladeshi Buy-sell websites
18
16
14
12
10
8
6
4
2
0

Bikroy.co
m
No. of Visitors
18

Cellbaza
ar
16

Clickbd.c
om
8

Eokomar
i.com
4

Bdstall.c
om
2

Others

2

Purpose of Website Use

Weight
out of
5

Ease of Access

4

User friendliness

3.7

Time saving

4.3

Quick Delivery

3.5

Others

2.7

Purpose of Using E-mail

Weight
out of
5

Ease of Access

3.7

User friendliness

3.4

Time saving

3.8

Quick Delivery

4.2

Others

3

Purpose of using Facebook

Weight
out of
5

Ease of Access

4.6

User friendliness

4.2

Time saving

4.1

Quick Delivery

4

Others

3.6

Results of Correlation analysis:
We have collected some data in various technology based organizations from which we have tried to find out the correlations between purchasing interests with media of technologies. Customer’s purchasing interests is measured by no. of visits/ response and the influence of technology is measured by the sales relating with the visits.

H1: Consumers’ purchasing interest is influenced by websites.

No. of Weeks

No. of visits

Sales

1

1078

30232

2

1123

31672

3

1356

32422

4

1562

32547

5

1613

34563

6

1676

35828

7

1705

36778

Correlation

0.904324

The result in the table shows that the correlation between consumers interests and website visits are almost close to 1.00. that means that website visits influence the customer purchasing behavior.

H2: Consumers’ purchasing interest is influenced by mobile phone calls. No. of Weeks

No. of mobile calls

Sales

1

34

2033

2

39

2554

3

43

2155

4

47

2321

5

52

2954

6

56

3133

7

62

3221

Correlation

0.892812

In this hypothesis, it is found that no. of mobile calls is increasing with the no. of weeks consequently. Besides, sales are also increasing with no. of weeks. So, it is obvious that the correlation will be positive & hence, the calculation also seems to be so. Correlation here is about 0.9 which indicates the positive response of consumer behavior towards mobile phone calls.

H3: Consumers’ purchasing interest is influenced by e-mails. No. of Weeks

No. of e-mails

Sales

1

84

16754

2

89

16888

3

85

16533

4

92

17328

5

91

17674

6

92

18632

7

90

17896

Correlation

0.775253

Again, from the perspective of sales and no. of e-mails for buying products, it is seen that the correlation between these two is 0.77 which is a strongly positive correlation that

H4: Consumers’ purchasing interest is influenced by Facebook applications. No. of Weeks

No. of users

Sales

1

4959

61345

2

5166

63877

3

6238

65433

4

7185

66390

5

7420

67894

6

7710

68103

7

7843

69175

Correlation

0.962455

Among all these technologies, facebook application uses are most convenient for the consumers for purchasing products because people always use facebook in their spare time and find it easy to choice and select their products with comfort. So, the correlation here is very strong which is about 0.96 that close to 1.00.

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