Table of Contents

Introduction.................................................................................................................................................2

Perceived Behavioral Control..................................................................................................................2

Perceived Risk.........................................................................................................................................2

Perceived Risks in Online Shopping........................................................................................................3

Perceived Risks in Offline/ Brick and Mortar Channels..........................................................................3

Perceived Benefits...................................................................................................................................4

Perceived Benefits in Online Channel.....................................................................................................4

Perceived Benefits in Offline Channel.....................................................................................................5

Conclusion...................................................................................................................................................6

References...................................................................................................................................................6
Introduction
Introduce the company and topic

Perceived Behavioral Control

Continuing with the Theory of Planned Behavior, the most crucial factor is Perceived Behavioral
control (PBC). PBC refers to the perception of the consumer with which he can either perform a
task easily or with difficulty. However, the PBC changes with the situation surrounding it. So
PBC is dependent on the circumstances in the situation. For instance, if a consumer the
assortment available in the Brick and Mortar style supermarket isn’t appealing to the consumer,
then they might switch to the online channel (Norman 2021).

There are 2 factors which affect the PCB for a consumer: Self-Efficacy and Controllability. Self-
efficacy is the people’s perception or belief that a certain action will lead to a certain action,
whereas Controllability is the individual’s perception that how much of a situation and the
resources are in the control of the consumer (Ajzen 2002). This can be linked to the ease or
difficulty while shopping in an offline or online channel. It can include both the perceived risks
and perceived benefits associated with a particular channel. Moreover, it will include the
perceived assortment, which means that how much of resources or products are available for the
end consumer to pick from.

(Ajzen 2002) also stated that both controllability and self-efficacy need to be present together, on
their own can not lead to a decision being taken place. Self-Efficacy leads to a strong intention
but no behavior, and controllability leads to the behavior of the action but not the intention.

Perceived Risk

When a customer is faced with a buying decision, he is faced with a certain level of risk.
Perceived risk implies before purchasing an item, customers experience uncertainty and expected
loss from the purchase and use of the product. Perceived risk has four main factors namely:
(financial risk, product risk, time risk, delivery risk. The perceived risk is both present in online
shopping channel and offline shopping channels (Brick and Mortar).
Perceived Risks in Online Shopping.

Despite the benefits of the e-commerce, compared to offline shopping, there are still some
negative perceptions regarding the e-commerce platforms. Even though it provides multiple
benefits, consumers tend to experience prominent level of risks when shopping online. Due to
this negative perception of risk associated with Online Shopping, the intention and behavioral
action to adopt online shopping channel has reduced (Masoud 2013). As mentioned, there are
four factors which affect the perceived risk a consumer or an individual might face.

There is the financial risk associated with Online shopping. Consumers still are skeptical about
paying online without even touching or seeing the product. They are worried that their money
will not be returned if there is a flaw in the product or even more money might be demanded to
make the product work. In addition to this, several consumers are still hesitant with sharing their
personal banking information online and sharing them with strangers whom they have never met.
This has been a major obstacle for adopting Online Channel (Masoud 2013; Naiyi 2004). There
is product risk which is related to the performance and quality of the product. As the online
channel does not have physical presence, it is difficult to examine the nature, quality, and the
specifications of the product. Hence there a doubt in the minds of the customer. (Masoud 2013;
Naiyi 2004; Norman 2021).

There is time risk which occurs when time or effort is wasted when the product does not arrive or
even if it arrives, it is needed to be changed or returned. There is also a delivery risk associated
with online channel. Consumers is always concerned about the delivery of the product; they fear
that the delivery will not happen within the time frame promised or that the product will be
subpar in quality or even sometimes delivered to the wrong place which adds with the financial
risk as the customer will fear that their money and product won’t come back (Masoud 2013;
Naiyi 2004).

Perceived Risks in Offline/ Brick and Mortar Channels

Despite being there for forever, people still have some negative perceptions regarding the classic
brick and mortar channel. Due to this most of the consumers have switched to online channel.
There are four factors in perceived as mentioned above in Section 1.1, which might influence the
perception of risk in an individual. However, there are some exceptions in the list of the factors
for offline channels.

The first factor is financial risk. Financial risk not only includes the price of the products, but
also the shopping trip will cost. Some socio-economic classes might not be affected by it but
majority of the lower or even the middle classes will be immensely affected by it, which might
force them to switch the channels (Mitchell and Harris 2005).

The second factor is physical risk. This refers to the threats to health or threats to the appearance
of the consumer, which can be brought by unsafe products, like expired grocery items, or unsafe
experience, such as unsanitary surroundings. This also include the energy or the effort expelled
by the end consumer. (Mitchell and Harris 2005).

The third factor is psychological and social risk. This risk stems from failure to meet the peer
pressure and expectations of the society. Also arises from shopping at a store or supermarket
which doesn’t represent the image or reputation of the consumer (Mitchell and Harris 2005).

The last factor is time risk. This include all of the amount of time it takes a consumer to leave his
house, reach the market, find the product, purchase it, and bring it back, which might be
extremely lengthy and might prove to be huge cause for dissatisfaction (Mitchell and Harris
2005).

Perceived Benefits

Perceived benefits is the perception of the consumer of the benefits or the advantages he
obtained when purchasing a product (Bangkit, Tumbuan, and Tielung 2022). About the retail
channels, perceived benefits would be the benefits which the consumer thinks he can realize
when purchasing through a specific channel.

Perceived Benefits in Online Channel

Online Channels have been gaining popularity since almost two decades ago. It has given several
advantages to the end consumer. First is the Shopping Convenience. With shopping on an online
channel, consumers are free to make purchases without any location restrictions. It saves them a
lot of energy which used to be wasted by travelling to different shops (Group and Malik n.d.;
Sözer 2018).

Second perceived benefit is Time saved. Time can be saved through eliminating the waiting time
in store, which is dissatisfaction for a lot of customers. Moreover, going from one shop to
another and even travelling to the market, all of this time can be saved (Bangkit et al. 2022).

Third perceived benefit is that online shopping channel enables the consumer to have a greater
access to substantial amounts of information about the product they are invested in. Online
shopping enables the end consumer to search reviews, promotions to make a well informed
decision (Group and Malik n.d.).

Lastly, in an online channel, consumers enjoy their shopping experience more due to the fact that
they are experiencing and discovering new eye catching items and as they browse through the
internet, they can obtain promotions and competitive lower prices (Group and Malik n.d.).

Perceived Benefits in Offline Channel

Consumers have started to switch towards the online channel; however, some consumers still
prefer to shop through the offline brick and mortar channel. The perceived benefits for offline
channel are that firstly, there are no financial scams or any security concerns with the
transactions taking place (Ghai and Tripathi 2019).

Secondly, for some consumers, shopping through a offline channel can be a great opportunity to
socialize with new people, or even with friends, which they are unable to do through an online
channel (Ghai and Tripathi 2019; Terblanché 1999).

Thirdly, in an offline channel, there is hedonic pleasure of the consumer of examining the
product physically rather than on a screen. Moreover the whole shopping experience and the
interactions with the sale staff (Ghai and Tripathi 2019).
And lastly no additional fees. A majority of end consumers hate paying the delivery fee premium
everyday for basic items like groceries and it is an inconvenience for the customers to refund the
defected product (Ghai and Tripathi 2019).

Conclusion

References
Ajzen, Icek. 2002. “Perceived Behavioral Control, Self-Efficacy, Locus of Control, and the
Theory of Planned Behavior1.” Journal of Applied Social Psychology 32(4):665.

Bangkit, Josefine L. K., Willem J. F. A. Tumbuan, and Maria V. J. Tielung. 2022. “ANALYSIS
OF PERCEIVED RISK AND PERCEIVED BENEFIT INFLUENCING ONLINE SHOPPING
BEHAVIOR IN MANADO.” Jurnal EMBA : Jurnal Riset Ekonomi, Manajemen, Bisnis Dan
Akuntansi 10(1):570–78. doi: 10.35794/emba.v10i1.38238.

Ghai, Sneha, and Somya Tripathi. 2019. “Perceived Benefits & Risks of Online Grocery
Shopping: Role of Cognitive Influences.” Indian Journal of Public Health Research &
Development 10(4):29.

Group, Publishing India, and Sheeba Malik. n.d. “A Comparative Study of Online Shopping
Behaviour: Effects of Perceived Risks and Benefits.”

Masoud, Emad Y. 2013. “The Effect of Perceived Risk on Online Shopping in Jordan.”
European Journal of Business and Management 5(6):76–87.

Mitchell, Vincent-Wayne, and Greg Harris. 2005. “The Importance of Consumers’ Perceived
Risk in Retail Strategy.” European Journal of Marketing 39:821–37. doi:
10.1108/03090560510601789.
Naiyi, Y. E. 2004. “Dimensions of Consumer’s Perceived Risk in Online Shopping.” Journal of
Electronic Science and Technology 2(3):177–82.

Norman, Maxine Chloe. 2021. “Post-COVID-19 Retail Customers’ Switching Behaviour: A

Case Study of Cape Town.”

Sözer, Edin Güçlü. 2018. “The Effect of Perceived Benefit on Consumer Based Brand Equity in
Online Shopping Context.” Ege Academic Review.

Terblanché, Nic S. 1999. “The Perceived Benefits Derived from Visits to a Super Regional
Shopping Centre: An Exploratory Study.” South African Journal of Business Management
30(4):141–46.

Instructions
Word Limit: 2000-2500 words

Submission mode: PDF

Pls make a title page mentioning group members

Follow IBA standard format as discussed in class

Good Luck!