CHAPTER ONE
INTRODUCTION
The internet has played a significant role in our daily life in that people can talk through the internet to one who is actually on the other side of the Earth, can send email around the clock, can search information, can play game with others, and even can buy things online. Meanwhile, Internet shopping has been widely accepted as a way of purchasing products and services. It has become a more popular means in the Internet world (Bourlakis et al., 2008). It also provides consumer more information and choices to compare product and price, more choice, convenience, easier to find anything online (Butler and Peppard, 1998). Online shopping has been shown to provide more satisfaction to modern consumers seeking convenience and speed (Yu and Wu, 2007). On the other hand, some consumers still feel uncomfortable to buy online due to lack of trust, for instance, seems to be the major reason that impedes consumers to buy online. Also, consumers may have a need to exam and feel the products and to meet friends and get some more comments about the products before purchasing. Such factors may have negative influence on consumer decision to shop online. There is need to identify some basic factors that drive consumers to decide to buy or not to buy through online channel, as it would discuss in the research study.
1.1 BACKGROUND OF THE STUDY
The process of making decision are very similar whether the consumer is offline or online. But some major differences are shopping environment and marketing communication. According to traditional consumer decision model, consumer purchase decision typically starts with need awareness, then information search, alternative evaluations, deciding to purchase and finally, post-purchasing behavior.
In terms of online communication, when customers see banner ads or online promotion, these advertisements may attract customers’ attention and stimulate their interesting particular products. Before they decide to purchase, they will need additional information to help them out. If they do not have enough information, they will search through online channels, e.g., online catalogs, websites, or search engines (Laudon and Traver, 2009). When customers have enough information, they will need to compare those choices of products or services. In the search stage, they might look for the product reviews or customer comments. They will find out which brand or company offers them the best fit to their expectation. During this stage, well-organized web site structure and the attractive design are important things to persuade consumers to be interested in buying product and service (Koo et al., 2008). Moreover, the information sources nature may influence buyer behavior (Bigné-Alcañiz et al., 2008). The most useful characteristic of internet is that it supports the pre-purchase stage (Maignan and Lukas, 1997) as it helps customers compare different options (Dickson, 2000). During the purchasing stage, product assortment, sale services and information quality seem to be the most important point to help consumers decide what product they should select, or what seller they should buy from (Koo et al., 2008). Post-purchase behavior will become more important after their online purchase. Consumers sometimes have a problem or concern about the product, or they might want to change or return the product that they have bought. Thus, return and exchange services become more important at this stage (Liang and Lai, 2002).
All five stages described above are affected by external factors of risks and trusts (Comegys et al., 2009). The search process is a significant component of customer’s online shopping behavior (Seock and Norton, 2007). The source risk comes in the stage of information search and evaluation because the information in the web sites might contain some mistakes. Some websites require customers to register before searching their website. As such, in addition to product risk, consumers also face the risk of information security (Comegys et al., 2009; Wang et al., 2005). Because of the nature of online purchasing, customers take the risk as they are not able to examine the product before purchasing. They also take the risk in the payment process because they may need to provide personal information including their credit card number. Security problem does not stop at the purchase stage but continues to the post-purchase stage because their personal information might be misused.
A framework that compares online consumer decision with offline decision making was developed by Laudon and Traver (2009), who suggest that a general consumer behavior framework requires some modification to take into account new factors.
When consumers want to buy product, they will look at the brand and the characteristics of the product or service. Some products can be purchased and shipped easily online such as, software, books, wears, accessories etc. On the other hand, some products are hard to decide through online channel. Web site features, firm capabilities, marketing communication stimuli, and consumer skills are also important, in terms of the proposed framework (Laudon and Traver, 2009). When consumers want to buy product, they will look at the brand and the characteristics of product or service. Web Site feature is one of the important things that can influence consumers to buy product online. For example, online retailers can use high technology to improve their websites in order to influence consumer perceptions of the web environment (Prasad and Aryasri, 2009). If the web site is too slow, not navigability, or not safe enough, will have negatively impact on consumer willingness to try or buy products from the website. Consumer experience with online shopping (Broekhuizen and Huizingh, 2009) or consumer skills, which refer to the knowledge that consumers have about product, and how online shopping works also influences online shopping behaviors. Click stream behavior is another aspect that becomes more important in the online world. It refers to the behavior that consumers search for information through web sites many sites in the same time, then to a single site, then to a single page, and finally to a decision to purchase (Laudon and Traver, 2009). All these factors lead to specific attitudes and behaviors about online purchasing and a sense that they can control their purchasing environment through the online world.
