CHAPTER 1

The Problem and its Background

Introduction
Nowadays, peoples way of life had become more complex because of
globalization. In terms of technology, the new generation began to discover, invent, and
innovate many things that help ease peoples way of living. During the 20 th-century,
internet had been discovered and it became a convenience to the users. With this, many
businesses began promoting and selling their goods and services on-line. At this moment,
sellers in the e-market allows for an easier and more realistic shopping experience for
those buyers who opt not to visit the physical store.
Internet marketing, or online marketing, refers to advertising and marketing
efforts that use the Web. It drive direct sales via electronic commerce. Internet marketing
and on-line advertising efforts are typically used in conjunction with traditional types of
advertising like radio, television, newspapers and magazines.
One of the top performing on-line shop in the Philippines is the Lazada.com.ph
which is part of Lazada group. The group operates in Southeast Asia. Pioneering ecommerce in the country, Lazada provides customers with an effortless shopping
experience and retailers with simple and direct access to the largest customer base in
Southeast Asia.
Sellers now used popular social media sites or web pages like Lazada.com.ph as a
way of advertising their products as well as for sales purposes. However, this way of buyand-sell could also lead to potential risks and dangers on both the sellers and the buyers.
Most of the factors are already in place especially with the upholding of the

Cybercrime Law that can further secure our e-commerce space in the country but better
internet infrastructure, simplified tax registration-filing-payment-reporting-correction
system that is less bureaucratic to lessen issue on non-compliance (Janette Toral, 2014).
Lazada group, aware of the importance of safe and secure shopping, provides
customers with a broad range of secure payment options including cash-on-delivery,
where buyers pay in cash only when the package or product is received, Paypal, etc.
53% of all respondents from Metro Manila already own a smartphone. For 2015,
it is estimated that the Philippines will still witness a 22% year-on-year increase in
smartphone adoption (as cited in the recent report of IDC) coupled 42% increase in the
sales of smartphones (as cited in the recent report of GfK), thus making m-Commerce
more and more viable and conducive amongst Filipinos. (Taylor Nelson Sofres
Philippines, 2015)
In contrary, the reality of poverty in the Philippines means that most Filipinos will
simply have no access to e-commerce, thus, emerge of e-commerce is slow yet a sure
route.
E-commerce will really move ahead if the large malls and retail establishments do
major launches of their online stores and heavily promote it. That is the tipping point we
all want to see. However, retail should make it easy for people to receive and return
goods (Donald Lim 2014).
In our country where Internet connection is so poor, the need to improve the
Internet infrastructure spur the growth of e-commerce in the country.

Background of the Study

Why is internet marketing so appealing? Its flexible, customizable, and extremely
measurable and, if done well, can be one of the most cost-effective tools. Internet
marketing is both an art and a science, a strategic blending of multiple on-line marketing
tactics all operating concurrently to provide a measurable return.
Most of the well-established store has both physical and virtual store, however,
Lazada.com.ph solely operates in the virtual store. With this, the on-line seller has already
launched its mobile app to make shopping more easier for its customers. It is very
beneficial to the buyers for they need not to leave their home. Sometimes, for some
consumers, their method of purchase is not because of their preference but rather because
of the generation gap. Whereas, Net-generation (net-geners), those who are born between
1977 and 1997, prefers the e-marketing (Kim & Ammeter, 2008).
Net-geners is relatively familiar with computers and how to use the internet
because they were the first generation where digitals, computers, and the Internet were
develop.
The Philippines is already a leader in social networking sites. It is just a matter of
time for people to adapt to e-commerce and make their lives easier. The mobile
penetration expectation for the Philippines is 50 percent in 2015. If this actually turns out
that way, then 2015 or early 2016 is going to be the inflection point in terms of significant
growth in mobile commerce (Inanc Balci, CEO Lazada.com.ph 2014).
While many business are still hesitant to expand their offerings and include online transactions, big corporation like SM is now targeting web shoppers as the inter
usage surges in the country. This leads Lazada being more competent because

competitors are now being established.

When traditional businesses get into the e-commerce space, they tend to throw
large resources into driving success, which includes enabling partners, driving consumer
choice and addressing market concerns. So, if SM Investments was to enter the market,
they will clear the road for other players to enter the space as well which is a hugely
positive shift forward in driving the overall e and m-commerce success (Scott E Bales,
Hufftingtonpost 2014).
This research paper reports the findings of a thorough study to establish the
factors that have led to the success of Lazada.com.ph and how does its consumers see
their company as a more effective and efficient company in the on-line market in the
future. Emphasis is placed on the study of various security and protocols that are
implemented for businesses expanding in the e-market.
This paper allows the thoughts of Far Eastern University (FEU), Manila students
on various aspects and perspective of Lazada.com.ph and how can these be improved.
To assist the authors of this paper to establish unbiased and faithful report, they
used questionnaire survey and interview for the students of FEU who have says and
thoughts about on-line shopping. Students who have thoughts about Lazada.com.ph were
prioritized first.

Theoretical Framework
This research focuses on the perspective and behavior of individual engaging in
on-line marketing especially at Lazada.com.ph, including the security of engaging
therein. It also focuses on the intentions of the on-line shoppers even though they know

about the advantages and disadvantages of doing so, thus, it relates to the theory of
planned behavior.
The Theory of Planned Behavior (TPB) started as the Theory of Reasoned Action
in 1980 to predict an individual's intention to engage in a behavior at a specific time and
place. The theory was intended to explain all behaviors over which people have the
ability to exert self-control. The key component to this model is behavioral intent;
behavioral intentions are influenced by the attitude about the likelihood that the behavior
will have the expected outcome and the subjective evaluation of the risks and benefits of
that outcome.
According to TPB, individual consumption behavior depends on consumption
intention and perceived behavioral control, and consumption intention depends on
attitude (A), subjective norm (SN) and perceived behavioral control (PBC). Attitude
reflects advantageous or disadvantageous feeling when someone is doing something. SN
reflects the perception of someone on others opinion of whether he should perform a
particular behavior. PBC reflects someones perception on the availability of resources or
opportunities of performing a behavior (Ajzen and Madden, 1986).
Conceptual Framework

OUTPUT
Customer satisfaction and

PROCESS
Survey Questionnaire,
INPUT
FEU Students Perspective

Interview, and Published

security assurance towards

e-commerce process.

Articles.

of Lazadas On-line
Statement
of theProcess.
Problem
Shopping
E-marketing, also commonly known as on-line shops, has become increasingly

popular for the past few years. While it caters to all kinds of needs, at the same time it is
easily accessible and more convenient compared to other means of trading.
However, it is also evident that participants, on both ends, are prone to scams and
such. Having said that, online shops still continue to grow in market share and in
demographic it serves. It has come to the researchers naturally curious minds to question
or find the means to identify what are the other factors that influence their decision to
engage in e-marketing.
1. How can the sellers and consumers assure their security?
2. How can the customers assure the quality of the product they will purchase is in
good condition?
3. How does the customers know that the company exists?

Hypothesis
Hypotheses 1. The more concerned consumers are about payment security, it is
harder for them to decide whether to pay on-line
Hypotheses 2. Consumers who uses on-line payment does not hesitate to pay even
though they are concern about the security payment.

Scope and Limitation

The scope of this research paper will expand the awareness of Far Eastern
University students who are looking forward for on-line buying and/or selling
transactions.

The limitation of this paper is that it is only base on scholarly articles and
information found within the grounds of FEU and accredited websites. It also limits to
answer the readers question to the extent of the stated problems only.

Significance of the Study

To the students of Far Eastern University. The study aims to widen the knowledge
of this generation, most especially the Far Eastern University community, about on-line
marketing.
To the on-line sellers. t will be beneficial to on-line sellers because it strives to
determine whether e-market shopping has become safer and explains how does ecommerce affects the buying behavior of consumers.
To the future researchers. The result of the study will broaden the perspective of
future researchers about e-marketing and clears vague information about on-line
shopping on their minds and that will help them in their future study as well.
To the FEU community. The researchers expect that through this study, on-line
shoppers of Far Eastern University will become more aware in engaging to e-marketing.

Definition of Terms
On-line controlled by or connected to another computer or to a network.
E-marketing application of marketing principles and techniques via electronic
media and more specifically the Internet. It encompasses all the activities a business
conducts via the worldwide web with the aim of attracting new business, retaining current

business and developing its brand entity.

Computer a general-purpose device that can be programmed for personal use
and could be connected to a network
E-commerce - almost the same as the definition of e-marketing which is a
technique of selling products via the web through the use of Internet and other media
means
Internet - by the use of internet, people can get access to information and other
webpages using a computer or any electronic media that could connect to the world wide
web.
Net-geners - those born within 1977 and 1997 who became relatively familiar
with computers and how to use the internet.