Examining the impact of price flexibility on the buying behavior of online customers

Dissertation for Master's Degree in Executive Management

Marketing Orientation

Abstract

This research examines the impact of price flexibility on the buying behavior of online customers. The current research is practical in terms of purpose and the research method is descriptive and survey type. It asks for people's views and opinions on a specific issue, and then examines and analyzes them. In terms of its nature and method, this research is a correlational research booklet. The statistical population of this research is customers who shop online. The sampling method is random cluster. The library method was used to collect information in the first stage of the research. In this research, data was collected through an electronic questionnaire. Then, descriptive and inferential statistics will be used to describe the research data using the Student's t-test method, and to test the statistical hypotheses, Pearson correlation analysis was used due to the distance measurement scale, and Cronbach's alpha method and spss software were used to determine the reliability of the questionnaire. The research findings showed that there is a significant relationship between the variables of price flexibility based on customization and incentive price and fixed price and pricing with price flexibility based on customization on purchase behavior, purchase motivation, online customers. And all research hypotheses were confirmed.

Key words: online customers, purchase behavior, flexibility, pricing

Chapter 1

General Research

Introduction

The e-commerce environment that is based on the Internet allows customers to search for information and purchase goods and services through direct communication with online stores. It should be noted that online shopping is not based on the actual experience of purchasing goods, but based on appearances such as the image, shape, quality information and advertisements of the goods.

Turban et al. define e-commerce as a global channel for the distribution of goods, services and managerial and professional jobs. B2C business with customers has grown significantly due to online communication between businesses and customers. One of the main success factors of B2C is to find the demands of customers in terms of service, quality and price (Turban et al., 2008). In the 70s and 80s, price flexibility was first defined from the point of view of supply and demand and the amount of customer purchases through real stores. For example, Jesse and Kohl introduced flexibility in price depending on the demand elasticity of goods, especially famous goods (Jesse and Kohl, 1978). Beechler et al. [1], in their research showed that flexible pricing includes different pricing for customers based on the expected currency and dynamic pricing mechanism, such as an auction where the price and conditions are based on the bids of the participants (Beechler et al., 2008). Gutman [2], in his research, states that online customer decision making is based on three bases: price, transportation and financial issues (Gutman, 1998).

Jaronpa and Todd [3], emphasize that online customer buying behavior is based on awareness of the product, shopping experience, pricing, customer service and customer risk. So knowing these things can help the company to reach more customers through the design of more and newer products and services (Jaronpa and Todd, 1997 and 1996). Here it is pointed out that online customer behavior is presented as a perspective in which how the customer's income is allocated to purchase online products is considered.

Due to the globalization of business, the electronic space has replaced the traditional "face-to-face" communication with the "page to face" method, and it is no longer the building, telephone, employees of different parts and so on. There is no news; Because they have given their place to computers, [4] "ATM", laptops and other digital devices. Therefore, this is the only way of communication between sellers and customers, which is a new experience for business because there is no direct human communication. 1-1-Statement of the problem Today, the advancement of technology has had a great impact on trade and commerce, so that in the present era, with the advancement of tools in the field of science and industry, a new type of relationship between humans has emerged in the business world, which enables humans to do small and large transactions with each other without physical presence.The e-commerce environment, which is based on the Internet, allows customers to search for information and purchase goods and services through direct communication with online stores. It should be noted that online shopping is not based on the actual experience of buying goods, but on appearances such as the image, shape, quality information and advertisements of the goods. The most important tool that has made business easy for mankind and has accelerated it is computer communication networks, especially the Internet, so that today, instead of establishing real and physical stores, businessmen and companies have started to set up websites that provide all kinds of goods and services to the consumer, and the consumer, by referring to the said site, comes across all kinds of goods and services and chooses and orders any one he wants. In traditional commerce, consumers transacted face-to-face, on the phone, with account managers, in person, etc. In contrast, today's globalized business is the customer interface in the electronic environment, "screen-to-face" interaction, which requires a PC device with a monitor, ATMs, individual laptops or other electronic devices. The growing trend of using information technology has led to the emergence and emergence of electronic commerce in the form of using electronic markets in most industries. Entering electronic markets and trying to survive in these markets requires a review of all dimensions, topics and business strategies in companies. One of these topics is "pricing".

E-commerce, which we need to know, is a broad topic. Therefore, it has many aspects, including, company to company (B2B), company to consumer (B2C), consumer to company (C2B) [5], etc., but this research focuses on company to consumer. Company to consumer B2C is the most growing case in which the company transacts online with consumers. The main factor of B2C success is finding the consumer's desire for service, quality, and price (Turban et al., 2008). In fact, empirical evidence shows that consumer price evaluation is influenced by implicit factors such as the form in which pricing information is presented.  In many cases, the price is determined by the quality, quantity and brand name. Consumers will be happy to buy if these prices are flexible (Lichtenstein and Barden, 1998). The growing trend of using information technology has led to the emergence of electronic commerce in the form of using electronic markets in most industries. In such a way that after the emergence of B2B, B2C, C2C, the discussion of electronic government and G2G has been raised, which indicates the new wave of business. Entering electronic markets and trying to survive in these markets requires a review of all dimensions, topics and business strategies in companies. One of these topics is "pricing". Price is one of the four factors of the marketing mix, and with the right and accurate policies, companies can gain a lot of income and profit in addition to influencing the behavior of the target market in order to achieve the marketing goals. Since the price is one of the influencing factors on the customer's purchase decision, determining the inappropriate price in some cases has irreparable effects on the companies and leads to a decrease in profitability, a decrease in the market share and a decrease in the credibility of the companies. Therefore, companies should be aware of pricing strategies in the new business arena, which is the electronic market (Turban et al., 2004 and 2006). In this research, based on library exploratory studies, internet search in domestic and foreign sources, the effect of price flexibility from the two dimensions of flexible pricing based on order creation and flexible incentive or promotional pricing in the purchase of online customers in the form of two variables of purchasing behavior and purchasing motivation is investigated and analyzed.

1-2- Importance and necessity of research

Today, price as an important component of marketing mix in the case of consumer goods can play a very important role. Paying attention and focusing on points and things that can be used for the development of marketing strategies are worthy of consideration. In today's thinking, consumers are the driving seat of the company, and the arbiter of success, and if they don't value the company and its products, the company is in real trouble.