EMERGENCE

OF
E-MARKETING
AND
INDIAN CONSUMER
 ACKNOWLEDGEMENT

The satisfaction and euphoria that accompany the successful completion of our
project would be incomplete without the mention of the people who made it
possible and whose constant guidance & encouragement crowned our efforts with
success.
I express my sincere gratitude and thanks to Miss Gagan sidhu for his support,
guidance and valuable suggestions without which I would not have been able to
complete this project. We also thankful to all the respondents for their contribution
who helped us in this study specially contributors outside India.

Kotler Group
(BFCMT- 2009-11)
 DECLARATION

We undersigned, hereby declare that the project report entitled EMERGENCE OF

E-MARKETINF AND INDIAN CONSUMER has been written and submitted under
the guidance of Miss Gagan sidhu. We further declare that it is original work done
as a part of our academic course and has not been submitted elsewhere. The
conclusions and recommendations written in this project are based on the data
collected by me while preparing this report.

Kotler Group
(BFCMT- 2009-11)

RESEARCH METHODOLOGY
Data for this study was collected by means of a Survey conducted randomly within
a period of Thirty days. The sample size was 50. Questionnaires were filled by
sending them on email id of the samples .The Questionnaire (shown in Annexure)
was used mainly to test the model proposed for Attitude towards online shopping.
The type of research was both exploratory as well as Descriptive. Likert five point
scales ranging from Strongly Agree to Strongly Disagree was used as a basis of
Questions.
ONLINE SHOPPING IN INDIA
It is a fact that a great online shopping revolution is expected in India in the
coming years. There is a huge purchasing power of a youth population aged 18-40
in the urban area.

If we observe the growth of Internet Subscribers from the above graph, it is getting
doubled year by year. The usage of internet in India is only 4% of the total
population. This is also getting increased day by day as the costs of computers are
decreasing and net penetration is increasing. The cost of internet usage is also
getting lower, with good competition among the providers. Wi-Fi & Wimax
system has also started in India. This will increase the usage as it goes more on
wireless internet. Indians are proving everytime that they can beat the world when
it comes to figures of online shopping. More and more Indians are going to online
shopping and the frequency of India‘s online buying is crossing the overall global
averages.
Factors That Boost Online Shopping in India
 Rapid growth of cybercafés across India
 Access to Information
 The increase in number of computer users
 Reach to net services through broadband
 Middle-class population with spending power is growing. There are about 200
million of middle-class population good spending powers. These people have very
little time to spend for shopping. Many of them have started to depend on internet
to satisfy their shopping desires.

Few Facts about Online Shopping

The figures from IAMAI show that the internet users in India will grow to 200
million by 2010. Around 25% of regular shoppers in India are in the 18-25 age
groups, and 46% are in the 26-35 year range.
 Indian online matrimonial sector is worth around $230 million.
 Worldwide E-commerce is only growing at the rate of 28%, since India being a
younger market, the growth of e-commerce is expected at 51% in the coming
years.
 In line with global trends finally India has also started shopping online these
days. As per the study by IAMAI online shopping in India has rose from
$11million in 1999-2000 to $522 million in 2007 and it is expected to rise above
$700 million by end March 2010.
 Indians are also Shopaholics like other Asians. There is a strong booming
young adult population in India with good levels of disposable income.

INDIA - Over $50 Billion and growing rapidly - Most popular online shopping
products include:
There are over 120 million people online in India and this is expected to grow to
200 Million by the end of 2010.

INTRODUCTION

WHAT IS MARKETING?
Marketing is the process by which companies create customer interest in goods or
services. It generates the strategy that underlies sales techniques, business
communication, and business developments. It is an integrated process through
which companies build strong customer relationships and creates value for their
customers and for themselves.

Marketing is used to identify the customer, to satisfy the customer, and to keep the
customer. With the customer as the focus of its activities, it can be concluded that
marketing management is one of the major components of business management.
Marketing evolved to meet the stasis in developing new markets caused by mature
markets and overcapacities in the last 2-3 centuries. The adoption of marketing
strategies requires businesses to shift their focus from production to the perceived
needs and wants of their customers as the means of staying profitable.

The term marketing concept holds that achieving organizational goals depends on
knowing the needs and wants of target markets and delivering the desired
satisfactions. It proposes that in order to satisfy its organizational objectives, an
organization should anticipate the needs and wants of consumers and satisfy these
more effectively than competitors.

WHAT IS E-MARKETING?
Internet is changing the way consumers shop and buy goods and services, and has
rapidly evolved into a global phenomenon. Many companies have started using the
Internet with the aim of cutting marketing costs, thereby reducing the price of their
products and services in order to stay ahead in highly competitive markets.
Companies also use the Internet to convey, communicate and disseminate
information, to sell the product, to take feedback and also to conduct satisfaction
Surveys with customers. Customers use the Internet not only to buy the product
online, but also to compare prices, product features and after sale service facilities
they will receive if they purchase the product from a particular store. Many experts
are optimistic about the prospect of online business.

In addition to the tremendous potential of the E-commerce market, the Internet

provides a unique opportunity for companies to more efficiently reach existing and
potential customers. Although most of the revenue of online transactions comes
from business-to-business commerce, the practitioners of business-to-consumer
commerce should not lose confidence. It has been more than a decade since
business-to-consumer E-commerce first evolved. Scholars and practitioners of
electronic commerce constantly strive to gain an improved insight into consumer
behavior in cyberspace. Along with the development of E-retailing, researchers
continue to explain E-consumers‘behavior from different perspectives. Many of
their studies have posited new emergent factors or assumptions which are based on
the traditional models of consumer behavior, and then examine their validity in the
Internet context.

LITERATURE REVIEW
The current literature on consumer online purchasing decisions has mainly
concentrated on identifying the factors, which affect the willingness of consumers
to engage in Internet shopping. In the domain of consumer behavior research, there
are general models of buying behavior that depict the process which consumers use
in making a purchase decision. These models are very important to marketers as
they have the ability to explain and predict consumers‘purchase behavior. The
classic consumer purchasing decision-making theory can be characterized as a
range extending from routine problem-solving behaviors, through to limited
problem solving behaviors and then towards extensive problem-solving behaviors.
The traditional framework for analysis of the buyer decision process is a five-step
model. Given the model, the consumer progresses firstly from a state of felt
deprivation (problem recognition), to the search for information on problem
solutions. The information gathered provides the basis for the evaluation of
alternatives. Finally, post-purchase behavior is critical in the marketing
perspective, as it eventually affects consumers‘perception of
satisfaction/dissatisfaction with the product/service. This classic five-stage model
comprises the essence of consumer behavior under most contexts.

Nevertheless, the management of marketing issues at each stage in the virtual

environment has to be resolved by individual E-marketers. It is an early stage in
Internet development in terms of building an appropriate dedicated model of
consumer buying behavior. Decision sequences will be influenced by the starting
point of the consumer, the relevant market structures and the characteristics of the
product in question. Consumers' attitude towards online shopping is a prominent
factor affecting actual buying behavior. (Source: Jarvenpaa Journal of Electronic
Commerce Research, VOL. 6, NO.2, 2005)
There are several indicators, belonging to four major categories; the value of the
product, the shopping experience, the quality of service offered by the website and
the risk perceptions of Internet retail shopping. There are some nine factors
associated with users' perception of online shopping. Among those factors the risk
perception of users was demonstrated to be the main discriminator between people
buying online and people not buying online. Other discriminating factors were;
control over, and convenience of, the shopping process, affordability of products,
customer service and ease of use of the shopping site.

Experts tested a model of consumer attitude towards specific web base stores, in
which perceptions of the store's reputation and size were assumed to affect
consumer trust of the retailer. The level of trust was positively related to the
attitude toward the store, and inversely related to the perception of the risks
involved in buying from that store. Researchers concluded that the attitude and the
risk perception affected the consumer's intention to buy from the store.
Consumer risk perceptions and concerns regarding online shopping are mainly
related to aspects involving the privacy and security of personal information, the
security of online transaction systems and the uncertainty of product quality. It is
found that trust is interwoven with risk. One of the consequences of trust is that it
reduces the consumer‘s perception of risk associated with opportunistic behaviour
by the seller. Lack of trust is frequently reported as the reason for consumers not
purchasing from Internet shops, as trust is regarded as an important factor under
conditions of uncertainty and risk in traditional theories. Researchers developed a
model which combines traditional marketing philosophy on consumer motivation
to buy and the trust model. In this model, trust propensity; which is a personality
trait possessed by buyers; is an important sign of trust. In Internet shopping, there
is not much information available to the buyer regarding the seller, prior to
purchase. A buyer with a high propensity to trust will more likely be a potential
customer than a buyer with a lower propensity. The ability, generosity and honesty
constitute the main elements of trustworthiness. Ability refers to skills,
competencies and characteristics that a seller has in a specific domain. In this
context, sellers need to convince buyers of the competence of their companies in
the Internet shopping business. Generosity is the extent to which the seller is
perceived by the buyer as wanting to ‗do good‘. Sellers have to convince buyers
that they genuinely want to do good things for buyers, rather than just maximize
profit.

CHARACTERISTICS OF E-MARKETING
• Addressability
• Interactivity
• Memory
• Control
• Accessibility
• Digitization
• ADDRESSABILITY
– The ultimate expression of the marketing Concept.

– Ability to identify customers before they make a purchase.

– “Cookies”: identifiable tracking device, allows for more customization.

• INTERACTIVITY
– Customers have the ability to tell you what they want.

– Real-time communications at lower cost.

– Concept of “community” – belonging to the group.

• MEMORY
– Ability to access database profiles.

– Creation of specific, customized offers.

– Allows for better inventory management.

• CONTROL
– Ability of customers/prospects to determine their information absorption –
Amount, rate, sequence.

– Web is a “pull” medium; website visitor controls the viewed content.

– Attracting and retaining prospect’s attention much more difficult.

– Hypertext and links are critical.

• ACCESSIBILITY
– Ability to gather information.

– Increases the competition.

– Brand equity, brand awareness, and name recognition more important.

– The website address (URL) – Uniform Resource Locator.

• DIGITIZATION

– Ability to represent a product or its benefits as digital bits of information.

– For example: customer histories, tracking capabilities.

– Quick and inexpensive modifications.

IMPORTANCE OF E-MARKETING