Ba (Hons)

Introduction

Starting from the development of the Internet over the last years, with more and more users on both sides, private persons and companies, it can be determined that also e-Commerce gained more and more in significant importance. According to a new report of Forrester Research US e-Commerce grows at a steady 19 percent year-over-year growth rate and the European e-Commerce is following (Cantwell, E., Forrester Research Projects US e-Commerce To Hit Nearly $ 230 Billion In 2008, available: http://www.forrester.com/ER/Press/Release/0,1769,823,00.html, accessed 11.0304).

The economic life of today is among other things identified by global competition and the factor of time. The fact that the sale of products and services via the Internet influences competition strongly and sustainable, was foreseen by many economists and brokers. This is why e-Commerce started euphorically during 1999, when online shops and malls sprung up like mushrooms. Companies of the so- called "new economy" reached high stock exchange values, which exceeded those of large, established and profitable companies of the offline world within a short time.

But in 2000 online vendors were brought back to reality:

The expectations were not only too high, but there was also not enough knowledge or know-how about how to keep an online-shop successfully. The result was insolvencies and closings, especially in the business-to-consumer market (b2c) - the Internet euphoria became a depression (Siegel 2004, p.76).

Nowadays the position is calculated as being optimistic again. e-Commerce is increasing strongly and potential for growth is looming even in the b2c market. Especially in Germany the online market is flourishing. According to the Gfk Web Scope there was an increase 22% of online sales during 2003 in the b2c market (Gfk Consumer Scope 2003, available: http://www.gfk.com/produkte/produkt_pdf/100/CSNewsletterDez2003.pdf, accessed 11.03.04). This shows that the Internet users on both sides advanced over the last 5 years, knowledge was gained and is now used to transact online.

Nevertheless the question arises which factors are decisive for the success (or even failure) of an online shop.

The aim of this dissertation is to analyse the customer buying cycle of business-to-consumers (b2c) transactions, to reveal weak points and to find out if there is potential for improvement, as well as to show, which factors contribute to success.

In this context the German online market is studied, whereby an online questionnaire in Germany was conducted.

The results of this questionnaire will help to get new insights of the current customer-supplier relationship in Germany and will be the basis for the proposal for improvement.

Chapter One: Theoretical Basics of e-Commerce and Consumer Behaviour

This chapter provides the necessary theoretical basics of all the influencing aspects of the customer buying cycle.

First the term e-Commerce as the frame of all online transactions will be defined.

Second the customer in the decision-making process as the basis of the customer buying cycle will be identified.

Third a basic model of the customer buying cycle will be given.

How the knowledge about the decision making process and the customer buying cycle is applied to the Internet is shown in Chapter Two.

1.1 e-Commerce

e-Commerce can be seen as a frame in which the online sales process takes place. Due to the fast development of e-Commerce in the late 1990s there are numerous definitions and it seems to be impossible to specify the term universally. Furthermore it would go beyond the scope of this dissertation to contrast and discuss the different definitions .

However, in the context of this piece of work an appropriate description of the term e-Commerce is given by Turban who states that e-Commerce is an emerging concept that describes the process of buying and selling or exchanging of products, services and information via computer networks including the Internet (2000, p.5).

As the focus of this dissertation is on the b2c e-Commerce it should be mentioned that the term e-Commerce always refers to transactions with the end customer, an appropriate definition for b2c can be found in Deitels' book "e-Business and e-Commerce for Managers" where it is described as a relationship between a business and the end consumer. Businesses that market towards consumers, as opposed to other businesses (2001, p.750).

The rapid growth of e-Commerce can be explained by the changes of the external environment of each business.

Economic factors such as the strong and global competition, or the low labour cost in some countries and social changes like the increasing social responsibility of organizations as well as the technological environment of rapid technological obsolescence, increased innovations and an information overload force every business to act accordingly in order to stay competitive.

e-Commerce provide a framework to act on these new challenges not only in a traditional way, by e.g. reducing costs but also in an innovative way by e.g. customizing products in order to meet the increased expectations of the customer.

The focus on the customer is one of the most important drives as far as the development of e-Commerce is concerned anyway.

Especially in mature industries products become more and more homogenous and therefore quality and service are no longer sufficient. In order to be competitive, marketing executives must employ technology to develop low-cost customer prospecting methods, establish close relationships with customers, and develop customer loyalty (Kalakota and Whinston 1999, p.9).

An appropriate statement is furthermore given by Lou Gerstner, IBM's CEO: E-business is all about cycle time, speed, globalization, enhanced productivity, reaching new customers and sharing knowledge across institutions for competitive advantage (1999 cited in Turban et al. 2000, p.5).

This is why the potential of e-Commerce is no longer a new insight and companies with