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1Study of Marketing and Communication Strategy used by DigitalMarketing Portals to Allay Fears of Indian Consumers: A Case...
2Certificate of CompletionTo Whomsoever It May ConcernThis is to certify that Mr.Shubham Singh has successfully completed ...
3AcknowledgementI take immense pleasure in thanking Mr Saurabh Parmar, my mentor and subject lecturer ofdigital media who ...
4Table of ContentsChapter 1..................................................................................................
5AbstractThis research paper is concerned with the study and analysis of marketing and communicationsstrategies adopted by...
6Chapter 1Introduction1.1 The Concept of On-line MarketingOn-line marketing may be defined as a system for marketing produ...
7on delivery, the purchasing decisions of consumers are being influenced towards shoppingonline.Major hindrances cited by ...
8Chapter 2Literature ReviewSome studies regarding acceptance of online shopping in the Indian context have been conductedi...
9Also the entertainment value of online advertisements was given a lower priority than therelevance of information it conv...
10Chapter 3Flipkart3.1 OverviewLaunched in 2007 by two IIT Delhi alumni . Flipkart is headed by Sachin Bansal, CEO andBinn...
11worth Rs.4000 or more. The discounts and competitive prices offered by Flipkart are attributedto high margins it offers ...
123.3 Marketing and Communications StrategyFlipkart has positioned itself as the Indian version of Amazon.com, an online r...
13Facebook page4as well as a Twitter handle5and use social media for effective customerrelationship management. Flipkart a...
14Chapter 4Snapdeal4.1 OverviewSnapdeal was launched in February 2010 by two entrepreneurs, Kunal Bahl and Rohit Bansal,On...
15According to comScore Media Metrix report, the couponing segment has registered a growth of629% as of November 2011 comp...
16Top 8 cities Next 12 Rest of India54% 26% 20%Delhi Chandigarh AgraMumbai Jaipur AjmerBangalore Coimbatore AllahabadChenn...
174.2 Business ModelSnapdeal follows a business to business to consumer model, where businesses can use theplatform free a...
184.3 Marketing and Communication StrategyThe main aim of Snapdeal is to provide customers with the best deals possible on...
19In order to provide consumers with information about various deals in their immediate vicinity,Snapdeal launched a WAP s...
20Chapter 5Research MethodologyTwo surveys were conducted, one qualitative and one quantitative in nature. Sample size for...
21Chapter 6Data Analysis and Interpretation6.1.Qualitative AnalysisRespondent Profile18 - 20 520 - 25 925 - 30 6AgeStudent...
22Questions regarding both Flipkart and SnapdealQ.1. Do you make online purchases? From which site/portal? Why? If not, wh...
23Q.3. From where do you get information about the latest deals and offers?Respondents were divided on this question, eith...
24Q.6. Does unavailability of a brand/product of-line prompt you to seek it on-line? Do youcompare of-line prices with on-...
25Q.9. Why do you prefer Flipkart over others? (Could be any reason, emotional orintangible)Majority of the respondents di...
26and you get to experience really expensive stuff for a cheap price.”20Q.13. There are offers like 90% off on a meal for ...
276.2. Quantitative AnalysisRespondent Profile18 – 20 220 – 25 2525 - 30 12AgeStudent: Graduate 6Student: Post Graduate 23...
281. Change in share of product categories that respondents purchased from, when they initiallystarted shopping from Flipk...
292. 48% of total respondents from the sample, had started online shopping and shopping fromFlipkart in the same year. Als...
305. The different product/service categories’ share in purchases made from Snapdeal are:It can be seen that services like...
31Chapter 7ConclusionThe marketing and communication strategy of Flipkart and Snapdeal have succeeded in allayingconsumers...
32discouraging them, if offered in greater magnitude. Also a particular set of users used Snapdeallike Yellow Pages, they ...
33ReferencesAlexa. (2012, 2 8). Snapdeal site statistics. Retrieved 2 8, 2012, from Alexa:http://www.alexa.com/siteinfo/sn...
34Parikh, D. (2011). CUSTOMER ACCEPTANCE OF INTERNET SHOPPING IN INDIA:IMPACT OF. Nirma University. Ahemadabad: INFLIBNET ...
35AnnexureSample QuestionnairesQuestionnaire Regarding Flipkart and SnapdealName: Age: MHI/Stipend/Income:City: Profession...
36Does unavailability of a brand/product offline prompt you to seek it on-line?Or do you just compare off-line prices with...
37Have you seen any Snapdeal ads? Can you remember any? What would you like to say about theads?How many times have you pu...
38
39
40
41Quantitative survey data table:http://dl.dropbox.com/u/51959681/Quantitative%20Questionnaire%20Regarding%20Flipkart%20an...
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Study of Marketing and Communication Strategy used by Digital Marketing Portals to Allay Fears of Indian Consumers: A Case Study of Flipkart and Snapdeal

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Study of Marketing and Communication Strategy used by Digital Marketing Portals to Allay Fears of Indian Consumers: A Case Study of Flipkart and Snapdeal

  1. 1. 1Study of Marketing and Communication Strategy used by DigitalMarketing Portals to Allay Fears of Indian Consumers: A CaseStudy of Flipkart and SnapdealShubham SinghADPR , IIMC – 2011-2012Advertising and Public Relations
  2. 2. 2Certificate of CompletionTo Whomsoever It May ConcernThis is to certify that Mr.Shubham Singh has successfully completed an individual term projecton “Study of Marketing and Communication Strategy used by Digital Marketing Portals to AllayFears of Indian Consumers: A Case Study of Flipkart and Snapdeal” under my tutelage, directsupervision and guidance in lieu of the same being a mandatory academic requirement as part ofthe PGDADPR course (2010-11) of the Indian Institute of Mass Communication, New Delhi.The study addresses the research objectives in totality, presenting an in-depth, holistic andinteresting market assessment of the category/brand in question as well as boldly attempts tomake a telling comment on the suggested way forward in terms of the communication strategy.I wish Mr.Shubham Singh the very best for a wonderful future and a successful career in themedia and communications industry in times to come.SincerelySaurabh Parmar
  3. 3. 3AcknowledgementI take immense pleasure in thanking Mr Saurabh Parmar, my mentor and subject lecturer ofdigital media who gave me the opportunity to carry out this research project under his guidance.His constant support, mentoring and suggestions have been most valuable in the completion ofthis work.I wish to express deep gratitude to Dr. J.Jethwaney for giving me the opportunity to work undersuch a mentor with immense expertise and knowledge in this field.I am extremely grateful to Mr Parveen Ahluvalia for teaching us Advertising Research, which Ifound extremely useful in carrying out this project. My heartfelt gratitude to Mr Alok Bhute whohelped me in every possible manner during the completion of my research and provided fullcooperation to ensure the best in my work.Finally, I extend my gratitude to my friends and colleagues who supported me during thisresearch and without their help this would not have been possible.
  4. 4. 4Table of ContentsChapter 1......................................................................................................................................... 6Introduction..................................................................................................................................... 61.1 The Concept of On-line Marketing ....................................................................................... 61.2 The Indian Scenario .............................................................................................................. 61.3 Research Objectives .............................................................................................................. 7Chapter 2......................................................................................................................................... 8Literature Review............................................................................................................................ 8Chapter 3 ................................................................................................................................... 10Flipkart ...................................................................................................................................... 103.1 Overview............................................................................................................................. 103.2 Business Model ................................................................................................................... 103.3 Marketing and Communications Strategy........................................................................... 12Chapter 4....................................................................................................................................... 14Snapdeal........................................................................................................................................ 144.1 Overview........................................................................................................................ 144.2 Business Model ................................................................................................................... 174.3 Marketing and Communication Strategy ............................................................................ 18Chapter 5....................................................................................................................................... 20Research Methodology ................................................................................................................. 20Chapter 6....................................................................................................................................... 21Data Analysis and Interpretation .................................................................................................. 21Chapter 7....................................................................................................................................... 31Conclusion .................................................................................................................................... 31Recommendations and Suggestions.......................................................................................... 32References..................................................................................................................................... 33Annexure................................................................................................................................... 35
  5. 5. 5AbstractThis research paper is concerned with the study and analysis of marketing and communicationsstrategies adopted by digital marketing portals to allay the fears of Indian consumers frompurchasing products online. The focus was on two major companies in particular, Flipkart andSnapdeal. The marketing and communications strategies were analyzed in terms of both onlineand offline media. Two surveys were carried out, a qualitative one, to gain insight into the maindeterrents that keep Indians away from online shopping and also to see the effect of thecompanies’ marketing and communications strategy. The quantitative survey was done online tosupplement and reinforce assumptions regarding the effects of marketing and communicationstrategy adopted by these companies.Several marketing innovations like cash on delivery and month long return policies along withmajor above the line campaigns had been launched in 2010 and 2011, especially by Flipkart andSnapdeal. These have made a significant impact on consumer attitudes towards shopping online.Their marketing and communication strategy has been effective, to some degree, in allayingfears concerning security of online transactions and receiving defective products. Consumers arestill apprehensive about purchasing products like consumer durables online. As they are moreexpensive and they prefer experiencing the product first before buying it. Also concernsregarding spamming, ease of using a website, along with brand image were major issuesregarding a consumer’s preference for shopping from a particular website or purchasing aparticular type of product. Good customer service experience was the most important factor, as itgenerated good word of mouth publicity and was a major deciding factor for a person to shoponline or from a particular website.
  6. 6. 6Chapter 1Introduction1.1 The Concept of On-line MarketingOn-line marketing may be defined as a system for marketing products and services to targetaudiences who use the internet and/or commercial on-line services by utilizing on-line tools andservices in a strategic manner, consistent with the organizations overall marketing programme.(Janal, 2005, pp. 14-17)With the advent of Web 2.01the traditional way of marketing has been revolutionized owing tothe shift in communication platform. Marketers are focusing on-line consumer communitiesrather than just targeting them individually. Platforms such as social networking sites, blogs,video uploading sites, podcasts, bookmarking sites as well as mobile applications and websitesare being used for marketing in new and innovative ways. They are stressing on engaging theconsumer in marketing their products rather than just treating them as passive audience. This hasled to the emergence of new marketing and advertising strategies.1.2 The Indian ScenarioAccording to an ASSOCHAM survey report of a random survey conducted by ASSOCHAMSocial Development Foundation (ASDF) during January to June 2011 in ten cities in which5,000 shoppers were interviewed. The online retail industry in India is likely to be worth Rs7,000 crore by 2015 due to easy availability of broadband services and increasing internetpenetration across the country. According to the report the Indian online retailing marketcurrently stands at Rs.2000 crore and is growing at an annual rate of 35%The report highlights a change in trend among the consumers. Earlier consumers used to use theonline media for gathering information about products and purchase them at traditional retailoutlets. With the advent of facilities like free shipping, time bound deliveries and cash payments1The phrase “Web 2.0” is usually attributed to Tim O’Reilly of O’Reilly Media, who popularized it at the firstWeb 2.0 conference in 2004
  7. 7. 7on delivery, the purchasing decisions of consumers are being influenced towards shoppingonline.Major hindrances cited by consumers were, high delivery costs, fear of financial informationtheft, lack of trust in product delivery and quality and lack of credit or debit card. (ASSOCHAM,2011)1.3 Research Objectives Analyze marketing and communication strategy of Flipkart and Snapdeal. Consumer reaction regarding the marketing and communication initiatives. Recognize consumer apprehensions about online shopping, that have been allayed andthose that still persist. Find any shifts in consumers’ online shopping behavior linked to new marketinginitiatives of Flipkart and Snapdeal.
  8. 8. 8Chapter 2Literature ReviewSome studies regarding acceptance of online shopping in the Indian context have been conductedin the recent past. These have mainly been concerned with internet penetration and spread of e-commerce. These studies take into consumer behavior, knowledge/awareness and securityconcerns regarding online shopping among Indians.A study conducted on customer acceptance of internet shopping in India used modelingtechniques to find relations between customer orientations and shopping behavior. The study didnot give any conclusions but discussed the efficacy of using such a model construct fordeveloping online shopping marketing strategies2. (Parikh, 2011)A study conducted by Dr. Richa Dahiya identified the variables influencing behaviourof consumers towards on-line shopping in India. The factors are: Demographic factors,Psychographics factors, Online shopping feature and policies, Technological factors and Securityfactors. The research was conducted in Metros and among internet users possessing credit cardsonly, in 2010. (Dahiya, 2010)Regarding consumer perception of online advertising and attitudes towards online shopping inIndia an empirical study was conducted by Neelotpaul Banerjee, which highlighted intrusivenessand privacy issues as key hindrances. It stressed on services instead of products as a keypreference by online consumers3. (Banerjee, 2011)A similar study conducted by Abdul Azeem and Zia ul Haq, focused on the relevance ofdemographics like age, profession and location. The research brought to light relations betweencredibility and relevance of online advertisements and consumers’ profession. It found out thatyounger and more entrepreneurial consumers were more trusting towards online advertising.2http://ir.inflibnet.ac.in:8080/handle/10603/269533http://www.baasana.org/proceedings/08588929297832950628-2011-BAASANA-OFFICIAL-Proceedings_PART-1.pdf#page=64
  9. 9. 9Also the entertainment value of online advertisements was given a lower priority than therelevance of information it conveyed. (Haq, 2012)On the potential of internet retailing in India and factors associated with it, a paper by PallaviSharda Garg, recommended that enhanced design of websites and complete shopping experiencewill play a key role in attracting consumers to online shopping. (Garg, 2011)
  10. 10. 10Chapter 3Flipkart3.1 OverviewLaunched in 2007 by two IIT Delhi alumni . Flipkart is headed by Sachin Bansal, CEO andBinny Bansal, COO. Both formerly worked at Amazon.com. Flipkart competes in the Indian on-line retailing market, which stands at Rs. 2,000 crore and is growing at an annual rate of 35%(ASSOCHAM, 2011). Flipkart positions itself primarily as an on-line retailer of books but hasexpanded to other product categories like music, video, games, computers, electronics, mobilephones, healthcare and personal products.It is the largest on-line book seller in India with over 11.5 million available book titles. They shipmore than 30 thousand items per day all over India and employ more than 4.5 thousandemployees. Flipkart is ranked among the top 30 most visited sites in India (Alexa, StatisticsSummary for flipkart.com, 2012) and own delivery networks in 27 cities (Flipkart, About Us,2012)3.2 Business ModelFlipkart follows a simple operating model focused on strong back-end services like warehousingand delivery. It has tie-ups with vendors and publishers and uses advanced algorithms to keeptrack of high demand books and products which get stocked immediately. Here is how it works;when a customer places an order online, if in stock at the local hub it is delivered within 3 days.If not then an order is placed with the publisher and Flipkart gives a timeline of 7 to 14 days fordelivery. The delivery is handled by Flipkart’s own delivery network where available, otherwisecourier services or speed post is employed. Flipkart offers free delivery on orders worth Rs.200or more, otherwise Rs. 30 is charged for delivery.Several payment methods are used, like cash on delivery, card on delivery, on-line credit anddebit card transactions as well as 6 to 7 months EMI on payments by credit cards, for orders
  11. 11. 11worth Rs.4000 or more. The discounts and competitive prices offered by Flipkart are attributedto high margins it offers to publishers, rumored to be 40% to 60%. Publishers even provide 45 to65 day credit windows to Flipkart. (Outlook, 2011)An interesting point to note is that Indian laws allow books to be imported and cross state lineswithout taxes or octroi. Flipkart uses a hub and warehouse model, where, the entire inventory isstocked at warehouses and only assembly and distribution is carried out by hubs distributedthroughout cities. Such dedicated delivery mechanisms can function round the clock and helpsby saving airfare and other delivery costs.
  12. 12. 123.3 Marketing and Communications StrategyFlipkart has positioned itself as the Indian version of Amazon.com, an online retailer with booksas its core products along with various other products, available at cheap prices and coupled withgood consumer service.Since its inception in 2007 Flipkart’s marketing strategy has been focused on generating goodword of mouth advertising through satisfied consumers. Their main aim has been to removeconsumers’ hesitation of buying products online. The three main problems they have addressedare:1. Fear of getting a defective or wrong product.2. Fear of divulging credit/debit card details online3. Fear of not getting product delivered or delayed delivery.Flipkart started by delivering only books, a low cost low risk product which is easy to deliverwithout risk of damaging. This allowed them to woo consumers initially and build a loyalconsumer base. Subsequently they expanded horizontally by offering other product categorieslike mobile phones and CDs/DVDs. Presently they sell office supplies, computer accessories,home and kitchen appliances, personal care, health care, gaming consoles, audio players andtelevisions.They have effectively used the digital medium for their marketing by making good use of searchengine optimization, to successfully gain top ranks in search engine results of book titles andother products. As the Indian consumer shops online on basis of need rather than on whim. Theyhave also used digital advertising tools like Google Ad-words to increase their reach.Flipkart also uses an affiliate program (Flipkart.com, 2012) which allows website owners,bloggers and others to include Flipkart advertisement banners and product links on their websiteand within their content. Flipkart pays them a certain percentage as commission for the leadsthey generate.Flipkart has capitalized upon word of mouth in the digital space also. They have a dedicated
  13. 13. 13Facebook page4as well as a Twitter handle5and use social media for effective customerrelationship management. Flipkart also maintains a blog, which features as a journal for bothinternal as well as external publics. (Flipkart, Flipkart blog, 2012)Their main digital marketing tool is the website. It features a clear, concise and easy to navigatelayout, as well as detailed information on products available. Another feature of the website isthe suggestions for products a customer might be interested in. These suggestions are based ontheir previously bought products, or products they accessed detailed information about. Thewebsite also provides all relevant links for customer support. The site allows customers to writereviews as well as rate products.Direct e-mail as well as text messages are used to confirm placement of order as well as trackingof shipment. Regular messages are sent to registered users regarding latest products on offer.In 2011 Flipkart started using traditional media for advertising, buy launching the “Over 10Million Titles Available online” commercial, aimed at establishing brand image as the largestonline book store. Later on in August they launched their “No kidding” campaign, consisting ofa series of TVCs as well as OOH, Print and Radio campaigns on the same creative route.The campaign addressed the major consumer concerns regarding online shopping as well ashighlighted the range of products on offer besides just books. The television campaign6addressed these issues and highlighted the following benefits:1. Cash on delivery.2. 30-day replacement guarantee.3. Original products with original warranty.The campaign featured children acting as adult, a tongue in cheek approach which highlightedthe ease of using the service as well as differentiated the campaign from advertising clutter. Thecampaign is reported to have generated encouraging response from consumers. (Prasanna, 2011)4https://www.facebook.com/flipkart5https://twitter.com/#!/flipkart6http://www.youtube.com/user/MrFlipkart
  14. 14. 14Chapter 4Snapdeal4.1 OverviewSnapdeal was launched in February 2010 by two entrepreneurs, Kunal Bahl and Rohit Bansal,One a graduate from Wharton Business School and the other an IIT Delhi alumnus. They areowners of Jasper Infotech, a multi-channel direct marketing platform company under whichSnapdeal operates. Their initial vision was to introduce discount couponing in Indian markets,offline, which was subsequently shifted to the online platform.Snapdeal is a pioneer in the online discounting market in India. It holds the 25thrank among toptraffic receiving sites in India. (Alexa, Snapdeal site statistics, 2012) It is the leader in onlinecouponing segment in India.
  15. 15. 15According to comScore Media Metrix report, the couponing segment has registered a growth of629% as of November 2011 compared to November 2010. (onlinemarketing-trends.com, 2012)Presently the company claims to sell 4,000 to 5,000 products a day with 40% of its productbusiness coming from Tier 2 cities. The distribution is as follows (Sinha, 2011):
  16. 16. 16Top 8 cities Next 12 Rest of India54% 26% 20%Delhi Chandigarh AgraMumbai Jaipur AjmerBangalore Coimbatore AllahabadChennai Mysore AmbalaHyderabad Lucknow AurangabadPune Indore BhopalKolkata Amritsar BhubhaneswarAhmedabad Coimbatore DehradunVizag GandhinagarPatna GoaKochi GuwahatiNagpur JallandharVadodaraVaranasiVijayawadaRest of IndiaSource: SnapdealThe company currently employs 800 employees, it company recently raised USD 12 millionfrom two private equity players -- Nexus Venture Partners and IndoUS Venture Partners andbought over Grabbon.com (Sinha, 2011)
  17. 17. 174.2 Business ModelSnapdeal follows a business to business to consumer model, where businesses can use theplatform free advertising and cut down customer acquisition costs, thereby allowing customers toavail huge discounts. This allows businesses to utilize distress inventory and consumers to getthe best prices available. For every discount coupon sold, Snapdeal earns a certain percentage,which can be paid up front, on the site; the rest can be paid to the dealer. Snapdeal itself does notmaintain an inventory, orders are placed when customers buy from the site, this saves them costof maintaining the inventory.Snapdeal provides two types of services; one is discounted services, like meals at restaurants,travel packages, spa and healthcare services, etc. The other includes selling products likeApparels, accessories and luxury items, etc, at discounted rates. This foray into selling productsrather than just services has been done recently.When a customer wishes to make a purchase, he/she must register at the site using an emailaddress and mobile number, a certain amount on the deal purchased is either paid online or ondelivery, the rest must be paid to the dealer. All terms and conditions as well as the location ofstores offering the deal is provided on the website. As soon as a deal is purchased, the customerreceives a confirmation via e mail and text message. The customer can either print out thecoupon or just show the text message at point of purchase to avail the offer.Snapdeal currently operates in all metros and certain tier 1/2 cities. It does not own a deliverynetwork in all cities but relies on courier services. Cash/Card on delivery is also provided. Toencourage users in tier 1/2 cities it even offers cash on delivery for coupons.Snapdeal focuses a lot on brand building and hence it conducts quality checks as well as trainsstaff of businesses it hosts on its website, to ensure customers are delivered what is promised.
  18. 18. 184.3 Marketing and Communication StrategyThe main aim of Snapdeal is to provide customers with the best deals possible on products andservices they might be interested in, on a daily basis. They follow a very consumer centricapproach and this end even uses analytical tools to record and analyze individual customerpurchases in order to push deals most relevant to them.Snapdeal during its initial launch heavily focused on word of mouth by satisfied customers aswell as referrals and gifting of vouchers. To make good use of social media platforms, Snapdealintroduced gifting of discount vouchers, and a referral reward system, where a registered user onreferring the site to a non-user could earn Snapdeal cash, which could be redeemed at the site.Snapdeal also provides an e-wallet facility where a customer can deposit a certain amount ofcash and by pass the online transaction process on subsequent purchases.Social media sites as well as other popular websites are targeted by Snapdeal digitaladvertisements. These highlight lucrative deals on offer. In 2011 Snapdeal launched television,print and out of home advertising campaign. It consisted of a series of advertisementshighlighting the services provided by Snapdeal these were mainly;1. Deals within a customer’s immediate locality.2. Door step delivery.3. Cash payment on delivery.4. The variety of products and services on offer.The campaign made creative use of “Yumdude”7, who is an avid user of Snapdeal.The out of home campaign on similar creative rout covered bus branding, hoardings and mallbranding. A media innovation was used, where in-store (Croma) T.V. branding was done. Thetelevisions on display were made to play Snapdeal advertisements. Besides this mall activationswere also done.7http://www.youtube.com/user/snapdealTeam
  19. 19. 19In order to provide consumers with information about various deals in their immediate vicinity,Snapdeal launched a WAP site. Allowing one to look up deals available in a locality, on one’smobile phone.Although Snapdeal had built a good following using social media and word of mouth, yet usingabove the line media was mainly an exercise in brand building.Snapdeal also takes customer relationship management initiatives, it promises to take care of allcustomer complaints within 24 hours via it’s dedicated customer relationship cell. It has onseveral instances acted upon negative consumer feedback. For example, when consumers voicedtheir concerns over somewhat vulgar and cheap advertisements on social media platforms,Snapdeal immediately entertained their concerns and even discontinued those advertisements.8Snapdeal, even indulges in CSR activities. It adopted a village called Shiv Nagar in UttarPradesh in 2011, and provided the villagers with clean drinking water. In gratitude the villagerschanged the name to Snapdeal.com Nagar.8http://www.soravjain.com/listening-on-social-media-snapdeal-com-case-study
  20. 20. 20Chapter 5Research MethodologyTwo surveys were conducted, one qualitative and one quantitative in nature. Sample size forqualitative survey was 20 respondents, comprising of individuals aged between 18 to 30, Indiancitizens residing in metros and tier1/2 cities.The sampling method adopted was judgmental- snowballing and the instrument used was anopen ended questionnaire, consisting of 13 questions9. Face to face and telephonic interviewswere conducted. The data was analyzed question wise.The quantitative survey was conducted using 39 respondents sample size. Sampling methodadopted was judgmental- snowball sampling. The sample consisted of individuals aged between18 to 30, Indian citizens from metros and tier1/2 cities. The instrument used was a digitalquestionnaire consisting of 14 questions, both closed and open ended. The question wascirculated online and results tabulated.9See Annexure for sample questionnaire
  21. 21. 21Chapter 6Data Analysis and Interpretation6.1.Qualitative AnalysisRespondent Profile18 - 20 520 - 25 925 - 30 6AgeStudent: Graduate 3Student: Post Graduate 8Salaried 9ProfessionMetro 14Tier 1/2 6City15 - 20 520 -50 550 + 10Monthly Household Income ( in thousands Rupees)Male 14Female 6Gender
  22. 22. 22Questions regarding both Flipkart and SnapdealQ.1. Do you make online purchases? From which site/portal? Why? If not, why?Respondents who were well acquainted to on-line shopping used fashionandyou.com, yebhi.com,myntra.com, timesshopping.com, letsbuy.com, Infybeam.com and rediff.com besidesflipkart.com and snapdeal.com. Consumers which were particularly concerned with buyingbooks, were users of flipkart.com, others who buy apparels and accessories had a preference forindiatimesshopping.com and others. Snapdeal.com users mainly used the site for discounts onservices rather than on products.Respondents from tier 1/2 cities did not use snapdeal.com and those who did, did not buy anydeals on services simply because they were not available in their city. Unavailability of preferredbrands was also cited as a hindrance to purchasing from Snapdeal, “...the discounts are good butthe brands are unattractive….”10Q.2. How did you come to know about these sites? If you can remember the first time youfound out about them? Which medium was it?Majority of respondents, irrespective of the amount of time spent on-line, answered word ofmouth, either through friends or family. Those who were heavy internet users (more than 5 hoursper day) had seen digital ads on Facebook and other websites or a friend had sent them a referral.Especially in the case of Snapdeal, they were informed mainly by friends or had been invited to adeal bought by a friend.Very few respondents had been exposed to television or print ads. And almost none could recallany out of home advertisements or any CSR activities.10Male, 23, Varanasi
  23. 23. 23Q.3. From where do you get information about the latest deals and offers?Respondents were divided on this question, either they subscribed to direct e-mailers/textmessages and regularly checked them or they ignored them altogether.A common reply was “I just google what I want to buy”11. Those who were loyal towardsFlipkart answered, “Whenever I’m online, I checkout Flipkart at least once, everyday”12. Thosewho were regular Snapdeal users checked out text messages on a daily basis.Q.4. Which service/feature prompted you to buy from these sites?Regarding Flipkart a common reply was the cash on delivery and free and prompt delivery.Younger respondents cited lack of debit/credit cards as a deterrent for not using on-linetransactions. Respondents had more faith in COD than Online transactions, “I don’t trust onlinetransactions,the only reason why I prefer Flipkart.”13The availability of a wide variety of bookswas also commonly cited. Booklovers cited availability of out of stock and rare books as a majorreason. Those from tier 1/2 cities cited unavailability of books in local bookstores as a majorreason. The website design and ease of use was cited a major incentive by all Flipkart users.Respondents using Snapdeal, cited the discounts on otherwise expensive services a majorattraction.Q.5. Do you make purchases for other? Parents, friends, spouse, etc. (Someone who isn’ttechnology savvy)?Majority of respondents answered in the affirmative. Heavy users revealed that they inform theirfriends about any good offers they come across. The younger respondents had often helped theirparents buy from these sites. Gifting was also a common trend. Snapdeal user’s were not veryopen to referring deals, even though Snapdeal offers credit to members for each referral they get.1123, male, Varanasi1222, female, Bhopal1322, male, Ghaziabad
  24. 24. 24Q.6. Does unavailability of a brand/product of-line prompt you to seek it on-line? Do youcompare of-line prices with on-line ones?Younger respondents, especially the females responded that they used to search for brands andcompare prices earlier, but now they just go on-line. But this was true only for books andelectronic accessories. They preferred buying expensive things like consumer durables of-line.Male respondents were more open to comparing prices between on-line and of-line,A respondent replied regarding Flipkart, “…I don’t go to bookstores anymore.”14Q.7. Have you ever been dissatisfied with a product/service? Did you complain about it?How was it addressed?Except for two respondents none had so far been disappointed with either of the sites. Onerespondent had this to say about Snapdeal, “I bought this deal on a spa, it seemed very luxuriouson the site, but when I went there, it was very average, I felt misguided and I don’t use Snapdealanymore.”15Other respondents had not been dissatisfied with Snapdeal till now.A respondent replied, “In October two of my orders on Flipkart got delayed and despitecomplaining, nothing happened, in the end I had to go to the local courier service provider’soffice and pick up the package myself.” Yet she still uses Flipkart for lack of a better option. Noother respondent had been dissatisfied with Flipkart.Flipkart specific questionsQ.8. What do you usually buy from Flipkart? Is it just books, or do you buy anything else?Here majority of the respondents irrespective of age, gender or location, favoured buying booksand cheap electronic accessories like pen-drives or earphones. Male respondents had boughtmore expensive things like Hard-disk drives, but even they were averse to buying the moreexpensive consumer durables. The possibility and hassle of couriering such heavy items in caseof a defect was cited as a common concern.1423, female, Jamshedpur1521, female, New Delhi
  25. 25. 25Q.9. Why do you prefer Flipkart over others? (Could be any reason, emotional orintangible)Majority of the respondents did not cite any other reason than competitive discounts and goodservice. But one respondent replied “…I like the blue colour theme, it’s very nice andsoothing.”16Another respondent replied “…I like the fact that it’s an Indian start-up and I support it.”17Q.10. Have you seen any Flipkart ads? Can you remember any? What would you like tosay about the ads?Only a minority of respondents said they could remember the ads, the rest had seen them butcould not recall what the message was. None of the correspondents had anything negative to sayabout the ads, one of them replied, “I like the kids wala ad, it’s very cute and funny.”18Q.11. How many times have you purchased from Flipkart?Almost all respondents had purchased more than three times from Flipkart, although onerespondent19, a booklover had purchased 67 times from Flipkart, over a course of two years.Snapdeal specific questionsQ.12. Snapdeal has a lot of neat discounts on services like spas and restaurants besidesdiscounts on products like clothing, which do you prefer to buy? Is there a particularreason?Young female respondents preferred buying deals related to services as well as products likeclothing accessories, those with lower MHI mainly stuck to services based deals. Those withhigher MHI preferred service based deals, but were not satisfied with the range of products onoffer. One respondent replied, “I like to buy deals on spas and salons, they interest me the most1625, male, New Delhi1722, male, Ghaziabad1829, female, New Delhi1922, female, Bhopal
  26. 26. 26and you get to experience really expensive stuff for a cheap price.”20Q.13. There are offers like 90% off on a meal for two worth Rs.1000 for 99. Would you buyit? If not, why?Respondents were open to buying such a deal but only if they had experienced the place beforehand. The heavy discount was cited as a reason for believing that the service might not be asgood as promised or they might receive second-hand treatment. Regular buyers also expressedthe same apprehension. One respondent, a regular user, replied, “I never go for such a deal. Idon’t think it’s credible enough!”21Q.14. Have you seen any Snapdeal ads? Can you remember any? What would you like tosay about the ads?Although all respondents had seen either TV, digital or OOH ads, only two could recall thecontent. One respondent had this to say about the ads, “I remember the Yumdude, and found itvery funny but I cant remember what the ad was specifically about. I like the Flipkart admore…”22Q.15. How many times have you purchased from Snapdeal?Snapdeal users although a minority, were frequent purchasers. Majority had purchased 7 to 8times. These were also the most disloyal, one dissatisfied respondent had this to say, “I used tobuy a lot of deals from Snapdeal, almost every month. But ever since the Spa fiasco I’ve stoppedgoing there.”232030, female, New Delhi2130, female, New Delhi2223, male, Ahmadabad2323, female, New Delhi
  27. 27. 276.2. Quantitative AnalysisRespondent Profile18 – 20 220 – 25 2525 - 30 12AgeStudent: Graduate 6Student: Post Graduate 23Salaried 11ProfessionMetro 21Tire 1/2 18City15 – 25 1025 – 50 1450 – 100 8100 + 7Monthly Household Income ( in thousands Rupees)Male 23Female 16Gender
  28. 28. 281. Change in share of product categories that respondents purchased from, when they initiallystarted shopping from Flipkart, from what they purchase presently.Books are still the largest selling product category, but respondents have started purchasingproducts from electronic accessories category and the much recently added mobile phonecategory. Therefore, to some extent consumer sentiment of ordering slightly more riskier productcategories has started coming up.Books68%ElectronicAccessories26%Pens3%CD/DVD3%Initial share of product categories (percentages)Books56%ElectronicAccessories34%Appliances4%CD/DVD4%Mobile Phone2%Present share of product categories (percentages)
  29. 29. 292. 48% of total respondents from the sample, had started online shopping and shopping fromFlipkart in the same year. Also, 41% of the sample had started buying online from Flipkart fromlast year. This coincides with Flipkart taking part in traditional mass media advertising and alsointroducing features like, cash on delivery, 30 day return warranty and delivery within 3 days.3. Snapdeal users were all recent users, and had just started using Snapdeal for a year. Majorityhad not made purchases more than 5 times till now. No marked trend was observed in shift inproduct category shares sold from Snapdeal.4. When it comes to preference for purchasing either product based deals, or service based dealsfrom Snapdeal. Respondents who preferred to purchase service based deals were a majority andthose who preferred products followed, very few preferred to buy both types of deals.It shows that respondents consider services as less risky, when it comes to purchasing fromSnapdeal, when compared to products.Products27%Services64%Both9%Preference of type of deals among Snapdeal users
  30. 30. 305. The different product/service categories’ share in purchases made from Snapdeal are:It can be seen that services like discounts at restaurants and health and beauty are favored morethan product categories like, accessories and apparels. But given the wide array of products onoffer, respondents were open to purchasing electronic and luxury items, although theirpercentage was only marginal.Restaurantdiscounts35%Health/Beautyservices16%Apparels11%Accessories21%Personal/Healthcare products3%Elecronics11%Luxury items3%Share of purchases made by Snapdeal users
  31. 31. 31Chapter 7ConclusionThe marketing and communication strategy of Flipkart and Snapdeal have succeeded in allayingconsumers’ fear of online shopping, albeit to a certain degree.The findings point to the fact that consumers are aware of the unique propositions that on-lineretailing sites offer. For example, those interested in books had a preference for Flipkart, yet thesame respondents used Letsbuy, Myntra and indiatimesshopping if they had to buy consumerelectronics and other products.A majority of respondents pointed out that they usually just google what they wish to buy andfollow the search results, As more and more sites start offering free delivery and COD,especially in Metros it might result in parity among on-line retailers. Particularly so, as price wascited as a major factor for loyalty towards a certain site/portal.The findings established that cash on delivery and free shipping are the major factors thatencourage new consumers to buy on-line. Flipkart in particular has benefited from it and hasplayed a major role in encouraging the trend of on-line retailing among Indians, yet consumersare still vary of buying consumer durables, which are more expensive. Majority have still notbeen informed about the warranty and EMI payment options that Flipkart offers.Consumers have now formed the perception that on-line prices are cheaper and more competitivethan of-line ones, to the point that majority do not even compare of-line prices anymore, exceptwhen they have to buy expensive consumer durables. They Consumers are also particularlystringent about the service they are offered, if the service does not match up to their expectationthey quickly form a bad perception about the brand. This was clearly exemplified by a regularfemale user of Snapdeal who stopped using it altogether just because of one unsatisfyingexperience. Hence maintaining top notch quality of service is paramount for building brandloyalty among online retailers.In case of Snapdeal, heavy discounts were both helpful in attracting buyers as well as
  32. 32. 32discouraging them, if offered in greater magnitude. Also a particular set of users used Snapdeallike Yellow Pages, they just check out new places nearby that get featured on Snapdeal, ratherthan buy any deals.Consumers who were regular users seemed very perceptive towards direct e-mailers and texts,but light users preferred checking out the site themselves rather than get spammed. Someparticularly didn’t use Snapdeal because of the fear of getting spammed after registration. Anotable trend surfaced, some heavy internet users had two or more e-mail accounts. Theyreportedly used their old accounts just for registering at sites, and used another account forofficial, day to day purposes. They don’t even check their old accounts. So text messaging mightbe a better option of communicating latest information to consumers, as e-mails don’t reallyreach them. And mandatory registration (or even a false notion of it being mandatory) can beunfruitful and in some cases a major deterrent also.Recommendations and SuggestionsPossible recommendations could be that online retail companies adopt best practices concerningspamming, adhere to them and communicate this more effectively to the consumer. Services likecash on delivery are a major enabler in introducing consumers to online shopping and should beencouraged further.Security features like insurance of goods during delivery are being provided but it is not beingcommunicated effectively, as consumers are largely unaware of such features. Controlling andmaintaining the standards of services and products on offer is very important, especially with thehigh rate of expansion these companies are witnessing. Consumers have a lot of choice and arenot very loyal, even a single bad experience is enough to turn them away.Maintaining a presence in traditional mass media in terms of brand building is very important,judging by the effectiveness of such campaigns in introducing consumers to online shopping,especially in the case of Flipkart. As competition increases, brand will act as a key differentiator.
  33. 33. 33ReferencesAlexa. (2012, 2 8). Snapdeal site statistics. Retrieved 2 8, 2012, from Alexa:http://www.alexa.com/siteinfo/snapdeal.comAlexa. (2012, 2 5). Statistics Summary for flipkart.com. Retrieved 2 5, 2012, from Alexa WebInformation ompany: http://www.alexa.com/siteinfo/flipkart.comASSOCHAM. (2011, July 3). Social Development Foundation (ASDF). Retrieved 2 5, 2012,from ASSOCHAM: http://www.assocham.org/prels/shownews.php?id=2965Banerjee, N. (2011). An Emperical Study on InternetUsers Attitude Towards Online Shoppingand Advertising in India. In D. D. Gehris (Ed.), BAASANA International Conference, (p. 64).Bloomsburg: Bloomsburg University.Dahiya, D. R. (2010). Factors Impacting Behaviour of Consumers Towards On-Line. (D. S.Nagar, Ed.) Pragyaan: Journal of Management , 1 (8), 33.Flipkart. (2012, 2 5). About Us. Retrieved 2 5, 2012, from Flipkart.com:http://www.flipkart.com/about-usFlipkart. (2012). Flipkart blog. Retrieved from Flipkart blog: http://blog.flipkart.com/Flipkart.com. (2012, 2 1). What is the affiliate program. Retrieved from Flipkart.com:http://www.flipkart.com/affiliate/Garg, P. S. (2011, 5). E-tailing in India- Myths, realities & Marketing Implications. InternationalJournal of Research in Finance & Marketing .Haq, A. A. (2012). Perception towards Internet Advertising: A Study With Reference toThreeDifferent Demographic Groups. Global Business and Management Research: AnInternational Journal , 4 (1).Janal, D. S. (2005). Online Marketing Handbook: How to Sell, Advertise, Publicize and Promoteyour Product on the Internet and Commercial Online Services (Vol. 24). New York: VanNostrand Reinhold.onlinemarketing-trends.com. (2012, 2 3). Online Coupons see 629% Growth. Retrieved 2 8,2012, from onlinemarketing-trends.com: http://www.onlinemarketing-trends.com/2012/02/online-coupons-see-629-growth-in-india.html#uds-search-resultsOutlook. (2011, 12 10). Feature/ Cover Stories. Retrieved 2 7, 2012, fromBusiness.outlookindia.com: http://business.outlookindia.com/article.aspx?279121
  34. 34. 34Parikh, D. (2011). CUSTOMER ACCEPTANCE OF INTERNET SHOPPING IN INDIA:IMPACT OF. Nirma University. Ahemadabad: INFLIBNET Centre.Prasanna, S. (2011, 9 6). Flipkart’s ‘No Kidding, No Worries’ gameplan. Retrieved 2 7, 2012,from Exchange 4 Media:http://www.exchange4media.com/news/story.aspx?Section_id=1&News_id=43376Sinha, A. (2011, 10 17). A Snapshot Of Snapdeal’s Product Business. Retrieved 2 8, 2012, frompluggd.in: http://www.pluggd.in/snapdeal-product-business-297/Weber, A., & Cutler, A. (2004). Lexical competition in non-native spoken-word recognition.Journal of Memory and Language , 50, 1-25. DOI: 10.1016/S0749-596X(03)00105-0.
  35. 35. 35AnnexureSample QuestionnairesQuestionnaire Regarding Flipkart and SnapdealName: Age: MHI/Stipend/Income:City: Profession: Internet access points:Average time spent online:Do you make online purchases? From which site/portal? Why?If not, why?How did you come to know about these sites?Indicate the first instance, the medium where you first found out about them.From where do you get the info about latest deals and offers?E mail, the site, ads, etc.Which service/feature prompted you to buy from these sites?Please indicate the particular service/feature regarding both Flipkart and Snapdeal, if possible.Do you make purchases for others?Parents, friends, spouse, etc. (For someone who is not computer savvy)
  36. 36. 36Does unavailability of a brand/product offline prompt you to seek it on-line?Or do you just compare off-line prices with on-line ones?Have you ever been dissatisfied with a product/service? Did you complain about it? How was itaddressed?(Please indicate whether it was Flipkart or Snapdeal)Flipkart Specific QuestionsWhat do you usually buy from Flipkart?Is it just books? Why do you not buy anything else than just books?Why do you prefer Flipkart over others?(Could be anything, even emotional aspects and other intangible reasons)Have you seen Flipkart ads? Can you remember any?What would you like to say about the ads?How many times have you purchased from Flipkart?Snapdeal Specific QuestionsSnapdeal has a lot of neat discounts on services like spas and restaurants besides discounts onproducts like clothing, which do you prefer to buy? Is there a particular reason?There are offers like 90% off on a meal for two worth 1000 for Rs.99. Would you buy it?Yes/No why?
  37. 37. 37Have you seen any Snapdeal ads? Can you remember any? What would you like to say about theads?How many times have you purchased from Snapdeal? (Products and Services separately)
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  41. 41. 41Quantitative survey data table:http://dl.dropbox.com/u/51959681/Quantitative%20Questionnaire%20Regarding%20Flipkart%20and%20Snapdeal.xlsx

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