FACTORS THAT INFLUENCE E-SHOPPING IN THE GHANAIAN GROCERY MARKET

Abstract

Information communication technology (ICT) has altered the way of business is being carried out. Electronic shopping has unleashed yet another revolution which is changing the way businesses buy and sell products and services. The internet gave birth to e-commerce, e-shopping and online stores. Internet marketing or online marketing refers to advertising and marketing efforts that use the Web, email, social media, and mobile apps to drive direct sales via electronic means. In the cause of this study relevant research objectives were put forward by the researcher to aid the completion of the study; two null and two alternate hypotheses were tested, primary data were obtain for the study with the aid of a well-structured questionnaire, and a survey research design was use for the study as it best suited the study because of the large population as n>50. The data collected were analyzed using (SPSS)simple percentage and chi-square statistics, from the analysis, conclusions were drawn and certain recommendations were made by the researcher.

CHAPTER ONE

INTRODUCTION

• Background of the study

Online shopping involves the sale and purchase of products and services over the internet and has become increasingly popular in Ghana during the last few years. As the internet connectivity in Ghana increased from 10% in 2010 to 35% in 2012, more and more shoppers have turned to online shopping (Anonymous, 2013). Research conducted by the Digital Media and Marketing Association (DMMA) and Echo Consultancy estimates the total internet population in Ghana in 2013 to be almost 4 million users. This represents 39% of the adult population (Cinman, 2013). In Ghana, 58% of the internet population shop online and 75% of these shoppers have done so in the previous three months. This is significantly higher than the 18-24% internet users in other African countries, such as Kenya, who make use of online shopping (Cinman, 2013). Much research has been conducted on on-line buying in the world, but limited research has been conducted in Ghana. Prior international research has focussed on topics such as E-service quality, E-customer satisfaction, E-loyalty, website design, system satisfaction, information satisfaction, and so forth. Because of the unique differences between African countries and other countries in the world, the results of research done in Africa regarding online shopping might differ significantly from those done in the rest of the world. Research has been done inter alia on online apparel shopping behaviour of South African professional women (Jacobs & De Klerk, 2010), cybershopping concerns of the Ghanaians consumer (North, Mostert, & Du Plessis, 2003), the fastest  growing categories of online sales (Goldstuck, 2013), online shopping trends (Wealthwisemag, 2013), online spending habits (Wilson, 2013), and so forth. It is imperative for businesses selling their products and services online to know more about the factors which influence the satisfaction of the customers who make use of online shopping. With this information they can convert potential customers into real customers and retain them.

Having said the above, understanding the mechanisms of virtual shopping and the behavior of the consumer is a priority issue for practitioners competing in the fast expanding virtual marketplace. Given the continuous expansion of the internet in terms of user numbers, transaction volumes and business penetration, quite a lot of research has endeavor to uncover various technicalities involved. More than 20 per cent of Internet users in several countries already buy products and services online (Taylor Nelson Sofres, 2002) while more than 50 per cent of US net users regularly buy online (Forrester Research Inc, 2004). These developments are gradually transforming e-commerce into a mainstream business activity while at the same time, online consumers are maturing and virtual vendors realize the importance and urgency for a professional and customer-oriented approach. (Joines et al., 2003, p. 93). As in the case of traditional marketing in the past, most of the recent research and debate is focused on the identification and analysis of factors that one way or another can influence or even shape the online consumer’s behavior; a good deal of research effort is focused on modeling the online buying and Decision-making process (Miles et al., 2000; Liu and Arnett, 2000; Cockburn and McKenzie, 2001; Liao and Cheung, 2001; McKnight et al.,2002; Joines et al., 2003; O’Cass and Fenech, 2003). While many researchers do not see any fundamental differences between the traditional and online buying behavior, it is often argued that a new step has been added to the online buying process: the step of building trust or confidence (Lee, 2002; Liebermann and Stashevsky, 2002; McKnight et al., 2002; Suh and Han, 2002; Liang and Lai, 2002). An important contribution in classifying the increasingly growing number of research papers on the subject of the virtual customer’s behavior is the study of Cheung et al. (2005).

Internet marketing which is a combination of methods, approaches and tools used or put together for the promotion of goods, products and services of an organization via the internet. The advent of e-shopping has enable many grocery stores in Ghana to advertised their product or services to a wider world which under the orthodox marketing mix would have been impossible. The essence of the internet was to make the world a global village, thereby creating an avenue of trade without border (b borderless economy) and also serving as a tool of synchronizing relationships between the buyer and the seller because of adequate feedback mechanism. However without over emphasizing on the benefit of the internet to retail outlet, the maximization of all these benefit that accrue to the use of the internet has its own requirement for its to succeed because of its dynamic nature. In addition to this large shift in food preferences, the hygienic nature of the market environment and the food supply system in these developing countries, especially food retail formats, is also undergoing a dramatic change. Driven by the new food demand and liberalization of retail foreign direct investment (FDI), the “supermarket revolution” wave began in developing countries in the early 1990s and then spread to Latin America, followed by East/Southeast Asia and East/South Africa, then finally West Africa (Reardon et al. 2003; Reardon et al. 2004; Reardon and Hopkins 2006). In China, many international retailers, such as Walmart, are present and expanding quickly (McLoughlin et al. 2012) and their share amounts to 5-20% of national food retail sales (Hawkes 2008). Numerous previous studies comprehensively explored the effect of supermarkets. The reports include the competition between grocery stores and existing actors in the food system (Reardon et al. 2009; Neven et al. 2006), the challenges faced by small farms and small processing/distribution firms (Louw et al. 2007 and 2008), as well as the macro impacts on domestic market development, local employment, and economic growth (Shepherd 2005; Emongor and Kirsten 2009). However, as the final link in the food supply chain, the consumer’s role has often been neglected or underestimated. Among the previous studies, very few investigate grocery shop expansion in developing countries and how it relates to the consumer food outlet choice. Consumers’ selective adoption of supermarkets was first identified by Goldman (2000), who noted “consumers who regularly shop in supermarkets continue to purchase fresh food in traditional outlets”. Okello et al. (2011) used interview information to access consumer choice of retail outlets when purchasing fresh vegetables in Ghana. Gorton et al. (2011) applied a consumer-centered model to investigate the extent to which supermarkets can capture food retailing in Thailand.

For decades, researchers focused solely on supermarkets as retail outlets (Mai and Zhao 2004; Min 2006; Theodoridis and Chatzipanagiotou 2009). Several studies explored the product attributes in supermarkets and traditional markets such as price, quality, and variety (Goldman and Hino 2005; Minten and Reardon 2008). However, there is a lack of adequate studies assessing and comparing both modern and traditional food retail outlets in terms of consumer food e-shopping frequency, especially in West Africa, and the corresponding development of consumer profiles. Therefore, the present study fills the gap with a unique and comprehensive, as permitted by gathered data, illustration of consumer’s food e-shopping choice issue in Ghana. Furthermore, knowledge of food retail choices shows how various food retail formats are associated with consumer food selection, which affects consumer diet, nutrition, and eventually, health. This valuable information can be used by public agencies concerned about improving local diet, nutrition, and health by promoting certain healthy foods through descent shopping environment. However the study will not be complete if the next two chapter’s relevant literature is not reviewed to understand the merit, demerit and the theories in which this study is underpin. In chapter three the researcher methodology will be determine and population and sample size will be ascertained mathematically. The driving force behind this study is hanged on the specific objective which the researcher intends to achieve at the end of the study.

• OBJECTIVE OF THE STUDY

The main objective of the study is to investigate the factors that influence e-shopping in the Ghanaian grocery market. But to aid the successful completion of the study, the researcher intends to achieve the following specific objectives;

1. To evaluate the challenges encountered by grocery stores in adopting and implementing e-shopping in Ghana
2. To ascertain the financial and non-financial cost of adopting and implementing e-shopping among retail outlets

• To ascertain the effectiveness of e-shopping channels on grocery market in Ghana.

1. To evaluate weather e-shopping helps in increasing the sales volume of grocery market in Ghana
   • STATEMENT OF PROBLEM

E-shopping is gradually gaining prominence as a tool for competition in Ghanaian market. Most firms now offer e-banking transactions online to enable customers carry out transactions from the convenience of their homes or offices. The growth and acceptance of credit/debit cards and automated teller machines (ATMs) coupled with the fact that online shopping is gaining acceptance with more Ghanaians, who recognize that it is no longer necessary to go in person to shops to make their purchases are testimonials to the country’s fledging e-shopping.

However, despite the benefits attached to e marketing, most businesses and firms within the Ghanaian metropolis unlike their counterparts in other commercial cities of the world are reluctant to utilize this medium as is evident in the queues in retail outlets within the metropolis, the time frame used in service delivery among several others. It therefore becomes pertinent to ascertain the factors that influences e-shopping in the Ghanaian grocery market considering the gradual emergence of the state as a major tourist attraction center.

  1.4 RESEARCH HYPOTHESES

To aid the completion of the study, the following research hypotheses were formulated by the researcher;

H0: stand for the null hypotheses

H1: stands for the alternate hypotheses

H₀:  grocery stores in Ghana do not encounter challenges in adopting and implementing e-shopping in Ghana

H₁: grocery stores in Ghana do encounter challenges in adopting and implementing e-shopping in Ghana

H₀: e-shopping does not enhanced increase in sale volume in Ghana grocery market.

H₂: e-shopping does enhanced increase in sale volume in Ghana grocery market.

1.5 OPERATIONAL DEFINITION OF TERMS

Internet marketing

Internet marketing, or online marketing, refers to advertising and marketing efforts that use the Web and email to drive direct sales via electronic commerce, in addition to sales leads from Web sites or emails. Internet marketing and online advertising efforts are typically used in conjunction with traditional types of advertising such as radio, television, newspapers and magazines.

Internet

The Internet is the global system of interconnected computer networks that use the Internet protocol suite (TCP/IP) to link devices worldwide.

Marketing

Marketing is the study and management of exchange relationships The American Marketing Association has defined marketing as “the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large.”

 Retail

Retail involves the process of selling consumer goods or services to customers through multiple channels of distribution to earn a profit. Demand is identified and then satisfied through a supply chain.

Store

Where merchandise is sold, usually a product, usually on a retail basis, and where wares are often kept.

SCOPE OF THE STUDY

The scope of the study covers factors that influence e-shopping in the Ghanaian grocery stores.

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