CHAPTER ONE
INTRODUCTION
1.1. Background of the Study
Over the past decades, the internet has played a vital role in human lives in that humans can communicate through the internet to another person who is miles apart, and it has also appeared to be a new consumption area among online businesses and consumers. The internet has opened a new medium of communication for businesses and individuals and also offered chances to communicate and access information in an entirely different ways. Online shopping has been generally accepted as a way of purchasing products and services across the world. As a result of technological development, consumers have moved to quickly adapt to the use of various internet devices and this situation has led to a unique opportunity for online businesses.
Nonetheless, the increasing trend of e-commerce, has led to greater shift among consumers towards online shopping. However, there is massive inflow of online deals and sales in different e-commerce websites which are persuading people to go for their shopping requirements particularly in retail sector (Singh, Keswani, Singh, & Sharma, 2018). However, it has been seen that response to online shopping is spreading fast in different part of the world regardless of the myriad of contexts and factors that determine its acceptance (Venkatesh, Thong & Xu, 2016). Online shopping provides consumer more information and the opportunity to compare product and price, more choice, convenience, easier to find anything online (Butler & Peppard, 2016). Online shopping has been shown to provide more satisfaction to modern consumers seeking convenience and speed (Yu & Wu, 2017). Shopping on the internet offers considerable benefits to consumers, such as not having to shop among the crowds, not waiting in the queue and not spending time to go to the physical stores. Therefore, it brings a kind of freedom to consumers; they have been free to shop whenever they want since then (Jiang, Yang & Jun, 2016; Mosteller, Donthu, & Eroglu, 2017).
In other words, internet has changed the way consumers and marketers communicate with each other (Wang, Yu, & Wei, 2015). Online businesses, which consumers shop from them so consciously and willingly, encountered with intense competition. Businesses have been continuously trying to improve the services they have offered online to keep the consumers (Jun, Yang, & Kim, 2016). Interestingly, internet penetration is remarkably popular among Nigerian consumers. As a result, the use of online shopping is now a modern means of trading that is pervading every marketing activity among Nigerians (Omotayo & Omotope, 2018). Previous research revealed that Nigeria is rated as one of the fastest smartphone market penetration in Africa after South Africa (Ayodele & Ifeanyichukwu, 2016). However, due to its complexity, the online shopping system is still in its early stage in lower-middle income countries, requires consideration. Therefore, to understand the phenomenon of online shopping, it is very important to have a good understanding about the factors that influence consumers’ online purchasing intentions (Rahman, Khan, & Igbal, 2018).
Rani (2017) states that, these factors shape a person as an individual, and influence his or her view of the world, ways of making decisions, and as well as purchasing decisions. As stated Rani (2017), psychological and socio-demographic characteristics like age, annual income, economic conditions, occupation, or personal lifestyle, and many others have a significant influence on the consumer buying behaviour as each individual is a unique person with unique personal characteristics. Based on many types of research, it is clear that social, cultural, personal, and psychological characteristics influence directly marketing strategy (Sukdeo 2018). Marketing starts with the needs, wants, and desires of the consumer and finishes with the satisfaction of these needs and wants, and desires to achieve companies' goals (Dumaz, 2018).
Income is a factor that every consumer needs to put into consideration before engaging in online shopping. This is because it is the income of an individual that determines the kind of product or service to go for. For instance, a shopper who earns #50,000 monthly and plan to buy a brand new HP laptop, would rather opt for another product that is lesser or save ahead to buy the Hp product. According to Rox (2015), since online stores offer customers with different range of products and services, thus, it gives customers more chances to compare price from different websites and find the products with lower prices. A number of websites, Ebay for example, offer customers auction or best offer option, so they can make a good deal for their product. It also makes shopping a real game of chance and treasure hunt and makes shopping a fun and entertainment (Prasad & Aryasri, 2016). On the other hand, according to Foster and Cadogan (2016), price is one of the most critical factors that is considered during the customer buying decision process by the average customer. Loyal customers are willing to pay higher prices for the product and its quality that encompasses characteristics and features of a product that bears on its ability to satisfy customer needs and wants (Russell & Taylor, 2016)
Age is considered to be one of the key demographic factors that influence customer purchasing behaviour. Rani (2017) states that age is a significant factor for marketing strategy since age creates a critical difference among consumer choices and consumers’ consumption habits and patterns. Although age is considered to be one of the most significant factors of consumer behaviour, there are not too many scientific studies and articles that focus exclusively on these socio-demographic characteristics (e.g., Hervé and Mullet 2013, Rani 2017). Personality as a factor plays an important role in consumer purchasing intention due to the fact that the efficiency of the companies depend upon the decision of the consumers for several product categories. Extroversion, neuroticism, conscientiousness and openness to new experiences have a positive influence on the purchase intention of global brands (Zabkar, Arslanagic-Kalajdzic, Diamantopoulos, & Florack, 2017). The study of Gohary and Hanzaee (2016) showed that personality traits like conscientiousness, neuroticism and openness have an influence on the impulsive and utilitarian shopping behavior.
Researchers proposed that life style is important to analyze the behavior of consumers but it has also its impact on international marketing due to the decisions of customer whether to purchase that specific product or note everyday (Zhu, Wang, Yan, & Wu, 2016). The segmentation about life style focused on the concept that better understanding about customers may predict the different or similar behaviors having many reasons to make online purchases (Kamakura & Wedel, 2015). Life style is a pattern for evaluating the behavior of customers and expressing the characteristics that have modernity in it as compared to personality, more elaborative than personal norms and it has a strong impact on online consumer behavior to make online purchases. A special attention has been given to the analysis of the consumer’s lifestyle (Adjei, Clark, 2014; Dabija, Pop & Szentesi, 2018; Gohary, Hanzaee, 2016). Knowing the factors that determine consumers to buy can help retail companies to develop and adjust their strategies and instruments according to these and therefore increase the efficiency and the effectiveness of a shopping visit (Egan & Taylor, 2016; Pop, Pelau, 2011).
This study therefore examines the personal factors and consumer purchase intentions of online shoppers in Babcock University’s community.
1.2. Statement of the Problem
Online shopping offers a number of benefits that cannot be offered by physical stores, such as convenience, providing wide range of products, promoting user friendly websites and saving time. Customers have the opportunity of purchasing any product from any part of the world at any time without physically visiting the outlets. Online shopping enables customers place a purchase order at any time and as well minimize transaction costs. In addition, online shopping provides customers the convenience to make 24hours business deals without requesting the physical interaction. Online shopping helps to establish customer and supplier relationship, enhances customer loyalty and retention. As such, this helps entice an increasing number of consumers to shop online (Omotayo & Omotope, 2018; Sareen & Jain, 2016)
However, the problem of this study is to find out how various personal factors affects consumer purchase intention of online shoppers in Babcock University’s community. In Nigeria, there have been a growing number of online businesses who entice customers into their websites and persuade them to search for goods, window shop, make price comparisons, and finally buy the products (Gabriel, Ogbuiwe, & Ahiauzu, 2016; Omotayo & Omotope, 2018). However, the issue lies with online businesses knowing the factors that influence consumers in purchasing their products and services.
Rani (2017) states that age is a significant factor for marketing strategy since age creates a critical difference among consumer choices and consumers’ consumption habits and patterns. Although age is considered to be one of the most significant factors of consumer behaviour, there are not too many scientific studies and articles that focus exclusively on these socio-demographic characteristics (e.g., Hervé and Mullet 2013, Rani 2017). Adjei and Clark (2014) show in their research that certain personality traits have an impact on the satisfaction of consumers and on the relationship quality. Traits like the consumer’s tendency to innovativeness and the variety seeking behavior influence the loyalty towards certain brands (Adjei, Clark, 2014). Gohary and Hanzaee (2016) show in their study that personality traits like conscientiousness, neuroticism and openness have an influence on the impulsive and utilitarian shopping behavior.
Despite the importance of these factors in influencing consumer purchase intentions, not much have been carried out specifically in relation to personal factors and consumer purchase intentions of online shoppers, which is a gap this present study seek to address with special reference to personal factors such as age, income, lifestyle and personality.
1.3. Objective of the Study
Fundamentally, the objective of this study is to examine personal factors and consumer purchase intentions of online shoppers in Babcock University’s community. In order to achieve the fundamental objective, the following specific objectives are:
- To assess how income influence consumer purchase intentions of online shopping among Babcock undergraduates
- To examine the influence of age on consumer purchase intentions of online shopping among Babcock undergraduates
- To evaluate the impact of lifestyle in influencing consumer purchase intentions of online shopping among Babcock undergraduates
- To examine the influence of personality on consumer purchase intentions of online shopping among Babcock undergraduates
1.4. Research Questions
The following are the research questions for the study.
- What is the impact of income on consumer purchase intentions of online shopping among Babcock undergraduates?
- What is the impact of age on consumer purchase intentions of online shopping among Babcock undergraduates?
- How does lifestyle influence consumer purchase intentions of online shopping among Babcock undergraduates?
- How does personality influence consumer purchase intentions of online shopping among Babcock undergraduates?
1.5. Research Hypotheses
The research hypotheses for this study will be formulated in their null form.
Ho1: Income has no significant influence on consumer purchase intentions of online shopping among Babcock undergraduates
Ho2: Age has no significant influence on consumer purchase intentions of online shopping among Babcock undergraduates
Ho3: Lifestyle has no significant influence on consumer purchase intentions of online shopping among Babcock undergraduates
Ho4: Personality has no significant influence on consumer purchase intentions of online shopping among Babcock undergraduates
1.6. Scope of the Study
The study focuses on personal factors and consumer purchase intentions of online shoppers in Babcock University’s community. The study is streamlined to personal factors such as income, age, lifestyle and personality. The demographic location of this study is Babcock Univerity Community, Ogun State. The unit of analysis of the study is the undergraduates of Babcock University, Ilisan Remo, Ogun State.
1.7. Significance of the Study
This study is expected to contribute to the existing literature on personal factors and consumer purchase intentions of online shoppers in Nigeria. In addition, this study may be of importance to the online business owners and companies in order to identify the various factors that influence consumer purchase intention so as to offer a range of products and services that will meet consumer expectations. Besides, it is important for online businesses to make their website easy to navigate for consumers to search product and service.
Furthermore, the findings of this study may provide data that can be beneficial to both consumers and online business owners and companies to help them provide quality services and products to consumers.
This study will as well be significant to industry in the sense that it will help provide knowledge in adjusting or modifying the factors leading to consumer purchase intentions so as to improve the business performance.
Lastly, this study can be used as a reference point for future researchers who might want to conduct a study of this nature in the future.
1.8. Operationalization of Variables
The independent variable is personal factor, represented by Income (IC), Age (A), Lifestyle (LS), and Personality (PS). On the other hand, consumer purchase intention is a constant variable as the dependent variable.
Where Y= Dependent variable
X= Independent variable
Y= f(X)
X= Personal Factors
X = f(x1, x2, x3, x4)
x1= Income (IC)
x2= Age (A)
x3= Lifestyle (LS)
x4 = Personality (PS)
Y= Consumer Purchase Intention
Y= f(y)
1.9. Operational Definition of Terms
Personal Factors: refers to factors such as age, lifestyle, income and personality that influence an individual purchase intention of a product or service.
Consumer Intention: refers to an individual’s subjective possibility to make a purchase for a product or service.
Consumer: refers to an individual to make a purchase for his or her own consumption
