The Role Of Online Sales Promotion And Its’ Impact On Consumers’ Purchasing Decision Making In Chinese E-Commerce Platform – A Case Study Of Taobao

Executive Summary

The aim of current study has focused on exploring the online sales promotion that might influence consumers’ online decision making in China combine with the case study of Taobao. The research has focused on fulfilment of three key objectives. The first objective pertainsto evaluation of online sales promotion in shaping decision making of online purchasers. The second objective is about identification of identification of effective sales promotion on Taobao, while the final objective is about investigation of problems that are associated with online sales promotions at Toabao. The current research has been motivated by the notion that online sales promotion are being offered significant lacing to influence consumer’s purchasing decision making. The study has relied on extensive review of literature with an aim of setting theoretical foundation for the underlying research issue. The literature has significantly supported the notion that exist a considerable association between online sales promotion and purchasing decision making of online consumers.

In order to fulfil the aim of current study and to answer the underlying research questions, the quantitative research design has been adopted by the researcher by focusing on the numerous benefits of the quantitative study. The primary data collection method has been implied by the researcher and the data has been obtained through administration of online survey. The population of current research is comprised of online consumers of Taobao in China and UK. The 120 respondents have provided data for the current research, who have been contacted through internet and the link of online survey has been sent to them in email. While collection of data, the ethical concerns have been considered significantly by the research and neither of the respondent has been coerced in any manner for participation in current research study.

The researcher has kept his interference to minimum level to ensure high reliability and validity of data. The collected data has been analysed through descriptive method of analysis. The frequency distribution table and bar charts are being used to display the responses of participants. The results have indicated that online sale promotions are highly important for shaping the purchasing decision making of online consumers. The results have further provided that online sales promotion tools used at Taobao are highly effective for shaping consumer’s decision making and there are limited problems which are being faced by online consumers. Overall the results of current study were highly aligned with the findings of previous related studies. The results of the current study are highly significant for both practitioners and researchers as it can be implied by the retailers on Taobao to influence purchasing decision making of online consumers. Likewise, the findings of study have significantly added in the stream of growing literature. Moreover, in the light of limitations of current research, some improvements has been suggested that can be pursued by the future researchers. Finally, the study has been concluded by highlighting the important aspects along with main findings of the present research.

1Introduction

In contemporary business environment of intense competition, the organizations need to communicate the differentiated benefits of products to the consumers in effective manner (Ranganathan and Ganapathy, 2002). The active communication with consumers has been considered as an important way of creating value for the products and it also helps in shaping the purchasing intentions of consumers. The modern organizations are available with active source of communicating with consumers through internet. The internet has revolutionized the way to which companies can promote their products to the potential consumers in real time with greater reach and increasing effectiveness (Simonson and Nowlis, 2000). The online sales promotion can be pursued by relying on number of strategies such as online discount, online coupons and free shipping of products to the final consumers (Limayem, Khalifa and Frini, 2000). The greater ease to approach the products at reasonable prices act as an important element for influencing the purchasing decisions of consumers.

Along with this, the online sales promotions are carried out in way that has higher level of persuasion for the target consumers. The target consumer must be able to interpret message in the way that can arouse the intention of consumers for purchasing (Zhang, Prybutok and Strutton, 2007). The online sales promotions are considered as effective as internet can help the businesses to reach to huge number of consumers at one. The today’s consumers are likely to visit the website of companies prior to making purchasing and the successful companies are creating websites in the manner that can offer huge value to the consumers (Peltier, Drago and Schibrowsky, 2003). The attractive sites can help to grab the attention of consumers and it can enhance the chances of second visit by consumers. Likewise, the consumers may rely on social networking sites for obtaining information about the companies. It is important to note that highly competing companies are likely to engage in extensive level of two way communication with consumers through social networking sites with an aim of listening the concerns of consumers for their satisfaction.

1.1Research Background

As a result of the significant improvement for the information technology, the convenient and cost efficient e-commerce has gained the huge success in China to win back the consumers. According to Chinese online shopping market research report from CNNIC, the population of Chinese online consumer has reached 361 million in December 2014. Compare with 2013, there are 55.7% internet user shopping online. In 2014, Chinese online retail transaction has kept growing fast, the annual sales are 2.7898 trillion RMB, that it increased by 49.7%. In contrast to the traditional high street shop, Chinese consumers are much more favored on purchase via the internet which has been evidenced by the significant growth for the online purchase volume and value (Senecal and Nantel, 2004). E-commerce platform such as TaoBao has gained the huge success.

An increase in the use of e-commerce platform for promotion of consumer products by online retailers is expected. It has been highlighted by the researchers e-commerce market of China is the largest digital market which is comprising the 90% of the business to consumer market and is growing at the rate of 20% per annum (Kulach, 2015). Followed by this, it has been highlighted in the report that every fourth internet user is from China and the online retail market of China is one of the world’s largest market with more than 640 million internet users. The China is an emerging market that has more potential for online sales and therefore, more penetration of internet retailer is requires for meeting the needs of diverse online consumers (Kulach, 2015). The China has giant ecommerce platforms such as Taobao and greater recognition of online sales patterns can help to gain substantial understanding of linkage between online sales promotions and purchasing decision making of consumers. Therefore this study focuses on providing better understanding on the use of sales promotions for consumer products in Chinese e-commerce platform.

1.2Motivation

The motivation for carrying out current research lies in the fact that there is significant reliance on internet by contemporary organizations for establishing relationship with consumers and for communication of products features with consumers. The China is one of the significant emerging and the trend of e-commerce is increasing mainly in China. The Taobao is being approached by huge number of consumer each day with an aim of making reasonable purchases. Therefore, the researcher has found it important to study the online sales promotion approaches of the e-commerce platform that can help in attracting the consumers and can influence the purchasing decision making.

Along with this, the research could deliver the significant impact to the stakeholders. Due to the significant popularity of online purchase in China, study could benefit the online shopper owner in order to better understand the clients’ needs and perception for the online shopping, to therefore improve the success for the online shop. Likewise, for the consumers, the study could also help them to understand the key influencing of sales promotions and potential problems, and therefore to make the rationale decision in the most effective manner.

1.3Research Aims, Objectives and Questions

1.3.1 Research Aims

This research aims to explore the sales promotion that might influence consumers’ online decision making in China combine with the case study of Taobao. Also, this research aims to find out the problems faced by customer while encountering online sales promotion for making purchasing decisions.

1.3.2 Research Objectives

The current research is being carried out to meet the following key objectives:

  1. To evaluate consumer’s attitude toward online sales promotion
  2. To identify the effective sales promotions on Taobao.com
  3. To discover the problem about online sales promotion on Taobao.com

1.3.3 Research Questions

Based on the research aims, the following questions should be answered in the context of Chinese e-commerce:

  1. What is the consumers’ purchasing decision making?
  2. What types of online sales promotions do customers usually encounter on when they purchase online and how do customers’ decision making be influenced as usual?
  3. What kinds of sales promotions may greatly impact on customers’ purchase decision on Taobao?
  4. What are the problems faced by customer while encountering online sales promotion?

1.4 Structure of Dissertation

The present research study has been divided into five sections. The first chapter of the study is focusing on introduction of the key concepts related to the current research. The motivation to carry out present research, objectives of research and research questions are also been incorporated in first chapter. Followed by this, the second chapter of research provides theoretical perspectives of the underlying research. The evidences from the prior literature are mentioned with an aim of justifying the selection of construct for underlying research study. The third chapter is focusing on providing the detail of research methodology by justifying the selection of methods pursued in this study. Along with this, complete procedure of data collection is also being mentioned in current section. In related vein, the third chapter is providing findings and interpretations of study’s results. Finally, the last chapter is about discussion of main findings of the research by relating it with results from prior related studies. The study is also being concluded and recommendations for future researchers are provided.

 

 

2. Literature Review

2.1 Introduction

The current chapter is focusing on providing an in depth theoretical insight on the concept of online marketing, online marketing mix, online promotion and online consumer sales promotion. Along with this, the importance has also been offered to online shopping behaviour of consumers. The online purchasing decision making model has been described in effective manner with an aim of understanding the impact of sales promotion of purchasing decision making. Finally, the characteristics of the Chinese population who make online purchases are being highlighted with an aim of shedding light on Chinese e-commerce patterns.

2.2 Online Marketing

The potential of internet as medium of marketing has offered significant importance by the recent researchers. The internet market is considered as a virtual storefront that is being used for selling the products of company (Kiang, Raghu and Shang, 2000). With the growth of online business platforms, the reliance of businesses on utilization of technology is increasing significantly. The online market can be extended by relying on following modes of communication with customers; search engine optimization, search engine marketing, social media marketing, content marketing and social media marketing (Grossnickle and Raskin, 2000). The online marketing has not only offered the way of introducing products and services online but it has also significant opportunity to provide online consumer support. The enhanced level of interaction with consumers allow the consumers to communicate their concerns to product and service providers which in turn fosters the consumers to feel valued (Gurau, 2008). 

By relying actively on online marketing, the companies can not only incorporate the feedback of their consumers but they can also respond them actively for overcoming the effect of negative word of mouth (Zhu and Zhang, 2010). The motivation behind reliance on online marketing lies in the notion that online marketing enables ease of access to the information regarding products and services of the company that helps in enhancing brand awareness. The online marketing helps in creating a brand awareness pyramid by increasing interaction of consumers and business, along with interaction of new consumers and existing consumers (Silva-Risso, Bucklin and Morrison, 1999). Finally, the reliance on online marketing is highly beneficial for e-commerce platforms who are solely relying on selling of products online across diverse range of consumers.

2.3 Online Marketing Mix (Product, Price, Place, Promotion)

The internet has shifted the way which is being used for selling the products to final consumers. The modern consumers rely on internet for researching about the products and then opt to purchase the products that has best marketing mix (Park and Lennon, 2009). There are four core components of online marketing mix including; product, price, place and promotion.

Online Product strategies: The online products are different from the physical products as the aspect of tangibility is missing and consumers can no longer touch the product for assessment (Heilman, Nakamoto and Rao, 2002). The features of online products are based on the real functioning and composition of the product rather than the perception of the sales person. Along with this, the returning has also been made easier in online purchasing and option of customization has also been offered by number of online sellers (Mangold and Faulds, 2009).

Online Price strategies:The pricing strategies of online sellers are offering huge competition to traditional sellers as the exclusion of physical store and personnel cost has removed and e-commerce platform can offer reasonable prices to consumers (Campbell and Diamond, 1990). The best deals can be assessed by consumer by making single click and loyalty incentives can be availed by repeated consumers due to emergence of consumer recognition technology.

Online Place Strategies: Consumers can make purchases directly from manufacturers by relying on online purchasing (Chen and Xie, 2008). The online placing strategy is focusing on placement of links on relevant websites. The availability of link of google home page can increase traffic of consumers.

Online Promotion Strategies: The online promotion strategies rely on advertisement of products through online marketing and promotional tools (Kwok and Uncles, 2005). The online promotional strategies are aimed at enhancing reach of communication campaigns.

2.4 Online Promotion

The huge number of organizations today are relying on web pages for wholly or partially advertising their products. An important form of online promotion is the use of banner advertisement which is being placed on other web pages (Liao, Shen and Chu, 2009). The placement of banner advertisement is carried out by keeping into accounting the browsing patterns of consumers. Along with this, the online promotion is also carried out through Web Public Relations (WPR), which enables the companies to post articles containing launching information of products and services, on the web pages and ask for reviews from consumers (Heilman, Nakamoto and Rao, 2002). Another form of online promotion is the sending of emails to potential consumers, however, it is considered as one of the most hated form of online promotion by number of consumers and therefore, it is less effective.

It has been highlighted by Laroche et al. (2003) that noteworthy proportion of organizations are relying on social media marketing for promotion of their products. The considerable mode of social media communications are; Facebook, Twitter, Pinterest, Blogs and discussion forums of the organizations. The increasing reliance of social media marketing as promotional tool can be justified by the fact that it allows active interaction of organizations with consumers and therefore, leads to increasing level of brand awareness and brand recognition (Park and Lennon, 2009). The organizations with active social media presence can successfully overcome negative reputation and can spread positive news in real time. Likewise, the ability to actively responding to consumers’ concerns can lay its hands in gaining higher level of brand loyalty of consumers (Changchien Lee and Hsu, 2004). Therefore, due to online presence of consumers, the overall reach and effectiveness of online promotion is significantly high than traditional modes of promotion.

2.5 Online Consumer Sales Promotion

Sales promotion is an action that helps in inducing the desire among purchasers of the product. Park and Lennon (2009) defined sales promotion as an offer that has the potential to foster demand for product and motivation to make purchase.Ranganathan and Ganapathy (2002)have considered number of sales promotion approaches that can help in boosting the level of desire among purchasers and can influence their decision making process. With the increasing reliance on internet for boosting the businesses, the sales promotion tool has also been implemented through internet that is considered as highly effective source. The information about features and pricing of product can be easily communicated through internet that considered as an important communication medium. There are some difference in online and offline sales promotion such that price discount is considered as more attractive in online purchasing and shoppers expect the retailers to rely on price promotions (Heilman, Nakamoto and Rao, 2002). Moreover, the research finding from Koufaris (2002) showed that free shipping and coupon promotions has also changed the face of online purchasing and enhanced the level of revenues.The online sales promotion can be carried out by companies in number of ways. Some of these ways include the following; coupons, refunds and rebates, premiums, loyalty programs, discounts, free shipping, samples, point of purchase, bonus pack, cross promotion and contests.

2.5.1 Coupons

According to the views of Simonson and Nowlis (2000), the coupons are the important certificates which are issued to the consumers and can be used later by the consumers for shopping. The coups are in the form of slips that has mentioned discount rate and can be accessed by consumers online. The coupons are considered as important sale promotion tools during the trial of products and they also help in increasing sale levels normally (Gilpin, Pierce and Rosbrook, 1997). The coupons help in convincing customers for making purchases during trial period and it can help in fostering brand switching. However, it has been highlighted by Zhu and Zhang (2010) that coupons are not considered useful by the large organizations for approaching the consumers who are not interested in the products of the company. Yet, it is considered as a significant tool of inducing higher level of sales volume for meeting short term goals of sales volume.

2.5.2 Refunds and Rebates

The refunds and rebates allow the customers to return product with money back offer by showing the evidence in form of purchase invoice that they have made purchase from the specific retailer (Ranganathan and Grandon, 2002). The refunds and rebates are being used by organizations for short run with an aim of coping with highly competitive environment. The opportunity of rebates or refund being offered to the customers helps in enhancing the involvement of customers and can induce the purchasing decision positively (Reibstein, 2002). The customers are attracted towards the product through refunds and rebates, therefore, it can be considered as a noteworthy online sale promotion tool.

2.5.3 Premiums

The premium has also been widely used by the companies as a sale promotion tool. The premium is type of promotion where customers are offered goods for making purchases. The premium can be free of cost or the customers have to pay small amount for pursuing reward in the form of premium (Senecal and Nantel, 2004). The premium that is being offered during the purchase to consumers, helps in increasing the level of excitement among consumers. In order to be successful for inducing the purchase decision of consumers, the premium must be able to generate higher level of value for the underlying consumers.

2.5.4 Loyalty Programs

The main aim of implementing loyalty programs is to foster repeated transaction by the consumers. The loyalty programs induce consumers to continually make purchases from the company. It has been provided by Ranganathan and Ganapathy (2002) that loyalty programs are the type of reward for loyalty of consumers which further motivates consumers to shop frequently. The loyalty programs strengthen long term relationship between consumers and manufacturers, where consumers receive points that can be pursued in the form of discount or can be exchanged with goods. The databases can mainly be developed by the companies with the purpose of recognizing consumers who make frequent purchases (Silva-Risso, Bucklin and Morrison, 1999). The frequent buyers can then be offered reward in the form of saving stamps that fosters them for making future purchases as the part of continuity program. The frequent buyer programs are widely implemented and they are highly effective sale promotion tools.

2.5.5 Discounts

The discounts are termed as price reduction which is being used for short term period with an aim of increasing eagerness among consumers to make purchases (Park and Kim, 2003). The discount is considered as an important promotional tool for boosting level of sales volume for short term period and it is widely implied by large number of online retailers.

2.5.6 Free Shipping

The free shipping is considered as an important online sale promotion tool that is being pursued mainly by giant e-commerce websites (Mangold and Faulds, 2009). The free shipping is considered as highly motivating approach for shaping purchasing decision making among consumers as they received products at door step at minimum cost.

2.5.7 Samples

The samples are being used as sale promotion tool mainly when the company launches new product and samples are being provided to consumer for influencing their buying behaviour (Limayem, Khalifa and Frini, 2000). It has been asserted by Li and Zhang (2002) that samples are mainly offered for limited period of time which is largely the testation of the new product. The free samples are considered as significant for fostering purchase decisions, yet they are highly expensive and sometimes small amount is being charged with an aim of covering cost.

2.5.8 Point-of-Purchase

The pint of purchase is the considerable sale promotion tool which targets the purchasing decision right at time of purchase. It has been offered by Degeratu, Rangaswamy and Wu (2000) that most of the purchase decisions are being shaped at the time of purchase. The point of purchase sale promotion tools provide information regarding the availability of item for sale. It tells that whether the product is available for sale or it has been sold by displaying tags on the products. The point of purchase promotions are considered as highly important for increasing the level of sales volume, as according to a research study, the point of purchase promotion can bring 65% increase in sales volume (DelVecchio, Henard and Freling, 2006).

2.5.9 Bonus Packs

Bonus packs are the type of sale promotion tool which helps in adding up in the value of product. The instance of bonus packs is the offer of buy one and get one for free (Hu, Lin and Zhang, 2002). The bonus pack helps in offering higher level of attraction for the consumers as the consumer receive additional value without any cost. The bonus packs are mainly used by the manufacturers when they want to quickly finish their stock so that they can buy new stock. The consumers who are rewarded with extra quantity of product free of cost can foster the consumers to make purchase in future and can help in gaining loyalty of consumers (Keng-Kau, Tang and Ghose, 2003). In case of already loyal consumer, the bonus packs help in adding incremental value for the manufacturer.

2.5.10 Cross-Promotion

The cross promotion is the collaborative promotional campaign which is being pursued by two companies who are selling complementing products to the consumers (Gilbert and Jackaria, 2002). The cross promotion is considered as the form of strategic alliance between two or more companies, with an aim of promoting their products in combine. One significant example of the cross promotion can be between cookie and milk company. The cookie company can offer discount on the milk and therefore, the product of both companies can be promoted. In online sales promotion the social media sites of one company can promote the product of other company on their sites by liking or sharing the links of offers provided by company (Heilman, Nakamoto and Rao, 2002).

2.5.11 Contests/ Sweepstakes

The contests are being arranged by the companies to motivate consumers for participating in games for winning prizes. The contests demand for effort for consumers which could be in the form of answering questions (Cui, Lui and Guo, 2012). On the other hand, the sweepstakes offer chance of winning even without any effort by consumers. The sweepstakes allow the chance of winning by just including the name of consumer in list. Both the sweepstakes and contests can increase the level of excitement among consumers and can shape their purchasing decision for shorter period of time.                     

2.6 Online Shopping Behaviour

There are number of factors which motivates consumers for making online purchases. The behaviour of online consumers is mainly shaped through the relative ease of shopping as consumers can buy anything without have to visit the physical store. The Campbell and Diamond (1990) has provided that convenience is significant factor that helps in shaping the online behaviour of consumers as the consumers can make purchases around the clock. Likewise, the online services and avoidance of crowd are also important contributor for shaping online consumer behaviour. Along with this, it has been mentioned by Bakewell and Mitchell (2003) that consumers expect to get manipulated by the sales personnel in physical purchase, therefore they pursue online shopping.

Followed by this, an important aspect of online shopping is the availability of information as the data can be easily accessed regarding products. The online consumers are offered with extensive information regarding product as they do not get chance to physically touch and feel the product before making purchasing decision (Kim, Ferrin and Rao, 2008). Along with this, the reviews of product are also available online and they can be accessed before making purchasing decision. Likewise, the behaviour of online consumers is based on the level of ease that is being offered by e-commerce sites for processing transactions (Koufaris, 2002). The online shopping allows the consumers to gain access to products that cannot be accessed physically and through online shopping they can be purchases by anyone (Constantinides, 2004). Finally, the online shopping is both cost and time effective and the consumers can compare prices on different websites before making purchases. The behaviour of online shoppers is highly susceptible of these factors and by relying on these aspects the companies can enhance level of sales and performance.

2.7 Online Purchase Decision Making Process Model

The research on consumer decision making has mainly captured the behaviour of online consumers based on two aspects; the individual behaviour and market behaviour. The individual model focuses on the behavioural patterns of individuals for making selection of retailers in online purchasing. On the other hand, the market behaviour model analyses the behaviour of larger sample of online consumers with an aim of viewing their patterns of decision making. Both of the model has considered the approach of information processing as an important aspect for explaining the decision making approach of consumers. The information processing model provides that there are three main stages of consumer decision making including; identification of information, evaluation of information and decision of purchasing.

At the first step, the consumers rely on internet for obtaining information about different retailers selling the product. In online purchasing, the information is extensively available to consumers about the features and price of the product.  The information can be obtained from website of the respective retailers or can be accessed from the social media pages and accounts of the sellers. The second step is based on the evaluation of information which is being gained by the consumer. The online consumers compare information of different retailers in the context of features and price of the product. It has been highlighted by the researchers that consumers’ first equate the features and then make purchasing decision on the basis of price of the products. In this manner, the online sales promotion play significant role in influencing the decision of consumers. The retailer who rely on most effective sales promotion tools are more likely to grab the attention of online consumers and can increase their level of sales. Therefore, in the last step of information processing model, the online consumers make purchasing decision in favour of retailers who provide best deal by implying highly effective sales promotion tools. The information processing model is considered as an integrated model of consumer decision making processes and it has been offered significant importance in the literature. Therefore, it serves as offering the theoretical foundation for the association of underlying study variables, which are; online sales promotion and decision making of consumers.

2.8 Constitution and Characteristic of Chinese Online Shopping Population

With the growth of e-commerce in China, the number of local manufacturers have decided to move online. Similarly, the foreign brands has also considered it strategically important to reach Chinese consumers through e-commerce. The main motivation of Chinese consumers to make online purchases is their eagerness to access more choices and good value. Along with this, it has been highlighted in the report of multimedia research group, that almost 60% of Chinese consumers has considered better price as one of the significant reason for driving online purchasing decisions. Therefore, it is important to note that Chinese consumers are highly price sensitive and there is greater possibility for effective online sales promotion to shape purchasing decision making of consumers.

Along with this, the accessibility of products on e-commerce sites is also considered as an important option for shaping the purchasing decision making of online consumers. It has been indicated by the data on Toabao that huge percentage of consumers in China make purchases of international brands based on the fact that the cannot be accessed physically by them. The Chinese consumers prefer the websites that have overwhelming presentation style of their products. In this manner, the display of product from multiple angle is preferred and greater information is required by Chinese consumers. Followed by this, there is significant difference of payment method adopted by Chinese and western consumers. In China, there is greater trend of making payments on the delivery of the product, while the western consumers prefer to pay through credit cards.

The social characteristics on Chinese online shoppers are also important to consider which provides that virtual communities and decision groups on internet are having significant influence on purchasing decision of consumers. The online consumers used to read the feedback of other consumers on websites before making purchases. Finally, the personal characteristics of the online consumers are important to be considered by online retailers in China. The personal characteristics include; ages of consumers and life cycle stages, life style, values and economic aspects. All of these characteristics of consumers in China can help the Chinese retailers to focus on promotional approaches for shaping decision making of Chinese consumers.

2.9 Conceptual framework


 

 

3. Research Methodology

3.1 Introduction

The present section is aimed at discussingthe methods that are being employed by the researcher. The present section is considered as highly important for finding justification of methods and research design that is being incorporated by the researcher. The importance lies in the notion that effective methods leads to highly reliable results. Along with this, the selection and justification of data sources has also been implied in this chapter. Moreover, the detail of questionnaire has also been included along with sample description and potential limitations of chosen methods.

3.2 Research Approach

It has been asserted by many that quality of research is based on the appropriateness of implied research method.The research approaches allows the researcher to select from quantitative or qualitative design. Both of the methods/approaches have pros and cons, while the nature of research is important for choosing among the research approach.

3.2.1 Quantitative Research

The quantitative design is one of the most preferable and widely used method, which allows the researcher to rely on figures for gaining more comprehensive view of the underlying phenomenon (Zikmund, Babin, Carr and Griffin, 2012). The quantitative research has been considered as highly important for establishing cause and effect relationship in effectively controlled circumstances and it can help in investigation of association between different variables. The quantitative data can be measured and analyzed in effective manner and can generate dependable results. The quantitative research helps in testing theories and hypotheses in highly reliable manner. The quantitative research has limited subjectivity of the researcher which allows investigation of phenomenon in unbiased manner (Schwartz-Shea and Yanow, 2013). The negatives of quantitative research includes lack of inclusion of details regarding underlying research issue and it can lower the level of desired response from the participants. However, in spite of its few disadvantages, the quantitative research has been widely implied by the researchers in social sciences and it is considered as an effective approach for studying behavioral perspectives.

3.2.2 Qualitative Research

Among the qualitative design the interviews, focus group and observation can be applied with an aim of carrying out in depth investigation of an underlying phenomenon (Saunders, Lewis and Thornhill, 2009). The qualitative research is considered as of significant importance at early stages of the research when researchers have lack of clarity about direction of underlying research. The qualitative research can be carried out even without a comprehensive design of research. The qualitative research offers discretion to the researcher to unfold study in greater depth due to higher level of involvement of researcher. Along with this, it has been highlighted by Sekaran and Bougie (2003) that qualitative research allows the researcher to gain detailed information about the research phenomenon that could either be in the form of written description or recorded video and photographs.

3.2.3 Research Method Employed

In present research study, the researcher has focused on quantitative design and data was obtained in the form of numbers and figures which were further tested by using quantitative methods of analysis (Sekaran and Bougie, 2003). The variables were quantified and there was minimum interference of the research which has allowed to lower the biasness and has enhanced the accuracy of the results. It is also notable that reliance on quantitative methodology leads to more reliable outcomes and it also adds in enhancing the validity of results.  Therefore, the present research is relying on much reliable and unbiased source of data.

3.3 Data Collection

Among the available research design the research has the discretion to choose from primary and secondary research. There are number of benefits associated with both types of data collection, however, the compliance of data collection method with underlying research question is of significant important for realizing higher benefits of the data collection method.

3.3.1 Primary Data

The primary data collection method pertains to the collection of fresh hand data in which data is collected specifically for the underlying research purpose (Schwab, 2013). The present research study will imply primary data collection method. The primary data collection method is considered as appropriate as it has higher level of relevance with underlying research issue. The primary data has higher level of compliance with the objectives and scope of the research and researcher has significant control over the data, therefore, biases could be controlled effectively (Ramamurthy, 2011). The recency aspects of primary data has made it more significant to be used by the researcher as it has higher level of accuracy for current research. Finally, the primary data is being owned by the researcher and the need for sharing data is reduced, making the study more viable and unique (Schwartz-Shea and Yanow, 2013). The mentioned benefits of primary data has motivated the researcher to pursue primary data collection method for present research. 

In present research, the primary data was obtained through admiration of survey. The closed ended survey was administered through internet with an aim of finding association between online sales promotions and purchasing decision making of online consumers. The questionnaire was prepared on Google Docs. The questionnaire was administered through internet by emailing the link of survey to potential respondents in China and UK. The survey questionnaire were developed in the language which has higher level of understandability by the respondents. It is evident that survey may be exposed to extreme response bias, therefore the negatively worded items were also included in survey with an aim of reducing biasness. Moreover, it is evident form prior researches that response rate could be low in online survey, therefore, reminders were sent to participants with an aim of encouraging higher response rate. The survey link was emailed to 300 people out of which 120 have responded by filing out survey form. In this vein, the response rate was 40%.

3.3.2 Secondary Data

The secondary data has already been collected by other sources and it can be implied for investigating any research issue depending upon its relevance, and reliability of source (Saunders, Lewis and Thornhill, 2007). There are number of benefits associated with secondary data to which the most important advantage is about the efficiency of secondary data collection in terms of time and money (Newman & Benz, 1998). The access to secondary data can be easily obtained by the research through internet. Likewise, the secondary data has previously tested by the researchers and it can be considered as reliable for answering the underlying research questions. In addition to it, the preliminary work has already been done by other researchers and sorted data can be easily implied. The secondary data has also considered as highly valid as it has already been tested and the data has been published by authenticated web sources.

3.4 Questionnaire

The current study has relied on questionnaire for gaining data from focal respondents. The questionnaire has been widely sued in the research of social sciences and it helps in obtaining behavioural data in highly effective manner. Likewise, other research instruments, the questionnaires has number of advantages as well as disadvantages.

3.4.1 The advantage and disadvantage of research questionnaire

The most significant advantage of questionnaire is that it allows the respondents to gain data in affordable way as questionnaire can be distributed online and it does not incur travelling cost for researcher (Saunders, Lewis and Thornhill, 2007). The questionnaire is being considered as a practical tool of collecting data from respondents. The sociability aspect is highly significant in case of questionnaires as survey forms can be distributed online to anyone and anywhere in the world. It is indicating that without incurring high cost, the survey can lead to target large pool or respondents from any geographical are and thus diverse data can be obtained through questionnaire. The data gained through survey can be easily and scientifically analysed by using simple analytical tools. In this manner, the survey allows to generate highly reliable and generalizable results. The questionnaire method of data collection can help in maintaining the anonymity of the participants, which leads to higher level of comfort of participants and data can be obtained in more unbiased manner.

Along with its several benefits, there are few disadvantages of questionnaire as well. The questionnaire can be exposed to dishonesty and the responses of participants may not be highly accurate. The respondents may be afraid of the privacy breaching or they may expect that results of study could harm the image of respondents’ organizations or individual. However, the dishonesty can be reduced by ensuring higher level of respondent’s privacy and by keeping the ethical considerations into account. Likewise, the differences of understanding and interpretation can also occur in survey as the aspect of face to face communication is missing. The questions that may seem clear to the researcher can be difficult for the respondents to understand and miscommunication can lead to skewed results. Along with this, the some questions can be ignored by the respondent and it can lead to the problem of missing data.

3.4.2 Questionnaire Design

The close ended questions are being included in the questionnaire of current research and the respondents are being given options to choose from. Most of the questions are anchored on five point Likert type scale in which 1= strong agree and 5 = strong disagree. Along with this, the anchors of yes, no or may be are also being used for some questions.

3.4.3 Structure of Questionnaire

The questionnaire was comprised of four parts. The first part has focused on the background information of the participants, while the second part has focused on obtaining data regarding the online purchasing behavior of consumers. Followed by this, the third part of questionnaire has focused on obtaining information about perceptions of consumers regarding different sales promotion tools that are being used by retailed on Toabao. Finally, the last section of questionnaire has obtained data about the problems that have been faced by consumers during their purchasing experience with Toabao.

3.4 Sample

Population: The population of the present research is comprised of Chinese consumer who are 18 years old and above having significant online purchase experiences. The population of online consumers was mainly targeted based on their purchase experience of Taobao that is a giant retailing website of China. The population of current study is not only comprised of Chinese who are currently living in China but the Chinese who are living outside of china are also being considered as study’s population.  The reliance of Chinese consumers has allowed to focus on various aspects of online consumer decision making with respect to online sales promotions used by the online retailers on Taobao.

Sampling techniques: The choice of effective sampling technique is based on selection of subset of individuals or firms from the whole population.  It is note able that there are two available sampling methods including probability and non-probability sampling technique (Zikmund, Babin, Carr and Griffin, 2012). The probability sampling method is recognized by the notion that each unit of population has chance to be selected, while in non-probability sampling method, the chances for being the part of sample are not equal for all units of population. The present research will consider probability sampling technique. Among probability sampling, simple random sampling will be selected. The simple random sampling allows random selection of sub set of population where each unit has equal chance to be selected. The randomization brings diversity in the chosen sample and sample becomes actual representative of population. The online Chinese shoppers will be randomly selected based on their willingness to contribute in the current research.

Sample Size: From the online Chinese shoppers, the total of 120 respondents will be selected for participating in present research. The selection of 120 respondents is an appropriate sample size and it will allow to study the underlying phenomenon with greater effectiveness.

3.6 Limitations

The association of online sales promotion and purchasing decision of consumers is a causal phenomenon and the adopted methodology is not much appropriate in this case. The causation needs to be studied over time and it is necessary to conduct a comprehensive longitudinal study with an aim of understanding the causation over time. However, by looking at the time constraint, in case of current study, the undertaken research design is considered as appropriate. In related vein, the problem of mono method bias could also contribute to affect the results which is mainly caused by collection of data at single point of time. However, the results of current study could be considered as free of mono method bias due to adoption of different analytical and statistical techniques to overcome the issue. In addition to it, the social desirability bias can also be considered as an important limitation of adopted research methodology, which is indicative of the notion that responses of people are usually in the direction which is socially acceptable. Therefore, all of these factors are needed to be considered by researcher while generalizing the results of research in a wider setting.

3.7 Ethical Considerations

It is highly important to keep in mind the ethical norms and values while conducting any study or research. There are different ethical standards that must be considered by researcher. For carrying out this study, researcher has focused on various ethical standards and norms. The researcher has made sure that none of the participant is personally identified and the information regarding sample is kept confidential. The participants or sample of this research were not pressurized to provide information at any cost. They willingly provided the information. The participants were given proper time for filling the questionnaire in relaxed way. There was no biasness shown towards any participant in current research.

 

4.Findings and Analysis

This chapter includes the analysis of the data for drawing findings. The descriptive analysis has been carried out to analyze the data. The results of descriptive analysis are presented for demographic and core variables of the study. The results are presented in the form of tables and graphs in which frequency distribution of the responses has been provided.

Demographic Information

Table 1. Demographic information of respondents in survey

Age

Categories

Frequency

Percentage

20-25

25

20%

26-30

31

25%

31-35

27

22%

36-40

28

23%

Above 40

9

10%

Gender

Female

70

58%

Male

50

42%

Nationality

British

30

25%

Chinese

90

75%

Total

120

100%

Social Economic Status

Upper

30

25%

Middle

40

34%

Lower

50

41%

Occupation

Blue Collar

10

9%

House wife

30

25%

Retires/unemployed

40

33%

Student

40

33%

 

 

 

 

 

 

 

 

 

 

 

 

The table 1 is presenting the demographic details of respondents. The demographic information has been obtained about the age, gender, nationality, social economic status and occupation details of the participants.

4.2 Online Buying Behavior of Respondents

Table 2. Online Buying Behavior of Respondents

 

Agree

Disagree

Neutral

I make frequent online purchases of Taobao.

70%

20%

10%

The information of product’s features and prices plays an important role for shaping my purchasing decision

82%

10%

8%

My experience of online shopping on Taobao is highly favorable.

79%

11%

10%

I compare prices of products on Taobao with pricing comparison websites
 

77%

13%

10%

The online purchasing on Taobao is safer and I get high quality products.

88%

10%

2%

The table 2 is providing detailed information regarding the agreement and disagreement level of participants about the statement targeting their buying behavior on Taobao. It can be seen in the table that most of the respondents are making frequent purchases on Taobao as 70% of participants have agreed with the statement. Along with this, the second statement is aimed at asking the participants about the role which is being played by product information prices in shaping the online purchasing decision making.  It is note able that both the information about products’ features and price play significant role in shaping consumer’s decision. The 82% of participants have provided agreement with the statement, while only 10% have disagreed and 8% remained neutral.

Furthermore, the participants were asked about their experience of online shopping on Taobao. The responses of participants have offered that experience of online shopping is highly favorable. The 79% of participants have agreed while only 11% have sown disagreement. Followed by this, the focus of researcher has moved towards the ability of consumers to compare prices of items before making purchases. It has been provided by the participants that they are highly engaged in comparing prices of different retailers on Taobao. The 77% of participants have agreed with the statement while the only 13% have disagreed and 10 % remained indifferent. Finally, the participants were targeted with the statement about safety and quality of online purchasing on Taobao. The responses were highly favorable and 88% of the participants have provided that Taobao is a safer e-commerce giant and the products that are being purchased from Taobao are of high quality. From the above mentioned responses of participants, it is significant to note that online purchasing on Taobao is considered as favorable by them and they are overall happy by their online purchasing experience on Taobao. It can therefore be argued that Taobao is widely liked website by the participants.

4.3 Perceptions of participants regarding sale promotion tools

Figure 1. Influence of sales promotion on purchasing decision making of consumers

The figure 1 is presenting the response of participants about following statement: “My purchase decision is highly influenced by the sales promotion of brand”. It can be seen that 82% of the participants are showing agreement while only 10% are disagreeing and remaining 8% have remained neutral. Therefore, it is evident that sales promotion have higher level of influence on purchasing decisions of consumers.

Figure 2. The reliance on price discounts, coupons and free samples on purchasing decision

The figure 2 is presenting the response of participants about the influence of price discounts, coupons and fee samples on the purchasing decision making of participants. It can be seen in the figure that level of agreement in much higher than the level of disagreement. The 79% of the participants have agreed on the notion that the price discounts fosters them to make purchases. Likewise, the level of agreement for coupons and free samples in 87% and 83% respectively.

Figure 3. The reliance on price premium, refunds and rebates and loyalty programs for purchasing decision making

The figure 3 is indicating that how participants are being influenced by the premiums, refunds and rebates and loyalty programs. The responses of participants have indicated that the price premium has significant influence on their purchasing decision making, as it has been agreed upon by 79% of the participants. Along with this, the level of agreement for association of refund and rebates with purchasing decision of online consumers has been agreed by 88% of the participants. Whereas, the 89% of the respondents have shown agreement to the notion that loyalty programs are biggest motivation to make repeated purchases.  Therefore, it can be offered that there is significant association of price premium, refunds and rebates and loyalty programs with purchasing decisions of online consumers.

 

Figure 4. The reliance of participants on free shipping, point of sale and bonus packs for purchasing decisions

The above mentioned figure is indicating the response of participants about the effectiveness of sales promotion tools including; free shipping, point of purchase and bonus packs. The free shipping has been considered as a significant method that can reduce cost of purchasing and it is highly effective for shaping purchasing decisions. The 78% of the participants have agreed with the statement that their purchasing decision is influenced by free shipping. Along with this, the level of agreement for point of purchase is 83% which is indicating that point of purchase is important tool which can motivate shopper to make online purchasing. Finally, the 79% of participants has shown agreement with the statement that bonus packs are acting as substantial motivation for shaping purchasing decision.

Figure 5. Cross promotions and contests as source of purchasing decision of consumers

The figure 5 is presenting the responses of participants about the effectiveness of cross promotions and contest as sales promotion tool. It is evident that 83% are showing agreement with the statement that “Cross promotions are attractive and make me purchase related products easily”. The higher level of agreement with the statement and only 7% disagreement is indicating that it is an important sale promotion tool. Furthermore, the level of agreement with the statement “Contests provides winning opportunity and foster my buying decision.” Is substantially higher that is 90% and only 2% are showing disagreement. Therefore, it can be argued that contests are highly motivating for promoting the purchasing desire among shoppers.

4.4 The problems that fosters disappointment for online sale promotions

Figures 6. The problems in online sales promotion

The figures 6 is focusing on problems which are being faced by online consumers. The first problem that has been targeted is “Online sales promotions lack aspect of integrity.” It can be seen that level of agreement in favor of this statement is 30% which is reflecting that only fewer proportion of respondents have found that online sale promotions lack integrity. However, the 40% have disagreed and remaining 30% have remained indifferent.

Followed by this, the second statement has offered that: “Online sales promotions can deceive consumers.” Again the level of agreement is only 35%, while the level of disagreement is 45% and remaining participants have provided neutral responses. Therefore, it is important to note that fewer participants have faced negative experience regarding their purchasing on online consumer site. Finally, the last statement is focusing on the notion that “The online sales promotions are less likely to benefit the consumers in online purchasing.”  Only 40% have agreed while more than half either disagreed or stayed neutral, indicating that online consumers gain benefit from online purchasing.

 

 

5.Discussion and Conclusion

The present section is focusing on discussion of main findings of the present research. The findings have been discussed by relating it with the key objectives of research study and comparison with prior related studies have also been made. Followed by this, the recommendations has been made to the future research about the fruitful avenues that can be pursued. The significance of findings has then discussed and finally study is being concluded.

5.1 Key Findings

The prime aim of current research study was to investigate the likely association of online sales promotion with the purchasing decision making of online consumers. The objective of the study pertained about investigation of behavior of online consumers, effectiveness of online sales promotion of Taboa and the identification of problems associated with sales promotion of Taobao. The results of current research have backedmeaningfullythe study’s aim and objectives by offering considerable evidence of the fact that online sales promotions have substantial impact on purchasing decision making of online consumers. The results have portrayedcompliance with findings of previous studies and has emphasized the significance ofonline sales promotions.

The results have indicated that consumers have mainly favorable response about their shopping experience on Taobao and they have found Taobao as an important website for online shopping. The participants have provided that information of prices and features of the products are readily available on the Taobao and it has significantly contributed to influence the purchasing decision making of consumers. Along with this, the purchasing on Taobao has been considered as safer and products are of high quality. These results are in line with the previous studies on online consumer behavior providing that availability of extensive information and positive experience are significant contributors for repeated transactions (Park and Kim, 2003; Peltier, Drago and Schibrowsky, 2003; Laroche, Pons, Zgolli, Cervellon and Kim, 2003; Limayem, Khalifa and Frini, 2000).

In related vein, the participants has considered all of the available sales promotion tools as highly significant for fostering their decision making to make online purchases of Tabobao. All of the sales promotion tools were considered as highly substantial for motivating the participants. The respondents have provided that overall effectiveness of sales promotion tools used by retailers on Taobao is high and they are able to arouse the purchasing desire of the respondents. Finally, the participants have offered that there are fewer problems associated with the purchasing on Taobao. However, the level of agreement for problems remained substantially low, indicating that most of the purchasers find Taobao highly beneficial for making online purchasing.

5.2 Recommendations

The current study is based on investigation of causation and the future researchers are encouraged to rely on comprehensive longitudinal design with an aim of testing the causal association of online sales promotion with online purchasing behavior of online consumers. The current research has only relied on finding the overall effectiveness of sales promotion tools in defining the level of purchasing of online consumers. The future researchers can rely on making a comparison between different tools of sales promotion with an aim of suggesting that which sales promotion tools are more effective than others.

Finally, it is being recommended to the practitioners to rely on online sale promotion tools for arousing the desire of purchasing decision making in consumers. The online retailers can focus on increasing the positivity of consumer’s experience and they can rely on providing the more integrated information to the consumers as overwhelming websites are highly effective for fostering online purchasing.

5.3 Significance of findings

The findings of current study are highly significant for the researchers as well as practitioners. The practitioners can work on enhancing the experience of consumers by relying on effective sales promotion tools. The practitioners can learn that how sales promotion tools can lay their hands in fostering the online purchasing decision making of the consumers. The findings from online consumers of Taobao are providing that website is being considered as highly important for online consumers to gain favorable purchasing experience.Therefore, the retailers on Taobao can further work on enhancing the experience of online consumers.

Along with this, the results are also significant for theory as it has added substantially in the stream of extant literature. The study has strengthened the theoretical aspects on association of online sales promotion with purchasing decision making of online consumers.

5.4 Conclusion

The current research has been motivated by the notion that in todays’ competitive business environment, the businesses are struggling to increase the volume of their sales by fostering purchasing decision making of consumers. The e-commerce websites have considered online sales promotion as an important factor for encouraging the online consumers to shape their decision of purchasing. The current study has indicated that online sales promotion contributed effectively in enhancing the experience of online consumers. The online sales promotion tools can help in increasing the motivation for purchasing. The immediate decision of consumer to make purchase is significantly affected by the level and types pf sales promotion. The results of current study has answered the underlying research questions in appropriate manner.

 

 

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Appendices

Part 1: Demographic Information

1. Average age group:

c 20-25  c  26-30     c  31-35      c 36-40 c above 40 

2. Gender

cMale  c  Female

3. Nationality

c British  c  Chinese

4. Social Economic Status

c Upper     c Middle   c  Lower

5. Occupation

c Blue Collar c House Wife c Unemployed/retired c Student

Part 2: Online Buying Behavior of Respondents

 

 

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

  1.  

I make frequent online purchases of Taobao.

1

2

3

4

5

  1.  

The information of product’s features and prices plays an important role for shaping my purchasing decision

1

2

3

4

5

  1.  

My experience of online shopping on Taobao is highly favorable.

1

2

3

4

5

  1.  

I compare prices of products on Taobao with pricing comparison websites
 

1

2

3

4

5

  1.  

The online purchasing on Taobao is safer and I get high quality products.

1

2

3

4

5

 

 

Part 3: Perceptions of participants regarding sale promotion tools

 

 

 

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

  1.  

My purchase decision is highly influenced by the sales promotion of brand.

1

2

3

4

5

  1.  

Price discount and pricing deals highly affect my purchasing decision making.

1

2

3

4

5

  1.  

I make immediate decision of purchasing when coupons are offered.
 

1

2

3

4

5

  1.  

The distribution of free samples make me to purchase new product  

1

2

3

4

5

  1.  

I have higher willingness to make purchases in case of premium promotions.
 

1

2

3

4

5

  1.  

The refunds and rebates offers make me feel comfortable with online purchasing.

1

2

3

4

5

  1.  

The loyalty programs are biggest motivation to make repeated purchases.  

1

2

3

4

5

  1.  

Free shipping helps me to purchase on lowest cost and promote my purchasing decision.

1

2

3

4

5

  1.  

The point of purchase and bonus packs enable frequent purchases.

1

2

3

4

5

  1.  

Cross promotions are attractive and make me purchase related products easily.

1

2

3

4

5

  1.  

Contests provides winning opportunity and foster my buying decision.

1

2

3

4

5

 

 

Part 4: The problems that fosters disappointment for online sale promotions

 

 

 

Strongly Disagree

Disagree

Neutral

Agree

Strongly Agree

  1.  

Online sales promotions lack aspect of integrity.

1

2

3

4

5

  1.  

Online sales promotions can deceive consumers

1

2

3

4

5

  1.  

The online sales promotions are less likely to benefit the consumers in online purchasing.

1

2

3

4

5

 

 

 

 


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