Abstract

The Internet enables low-cost transaction-making via a variety of market mechanisms. It also facilitates the exchange of information between buyers and sellers more quickly without the limitations of time and space. Among the many new and innovative online business models, the online group buying model is an especially interesting one. Despite the enormous growth and significant impacts of group buying on Internet business marketplaces, little is known about the consumers’ motivations for participating in online group buying, the hierarchical structure of these motivations, and the hierarchical structure based segmentation.

Derived from the Uses and Gratifications (U&G) theory, this study aims to identify consumers’ motives behind their group buying behaviour, and build a hierarchical model of buying motives based on Means-end Chain (MEC) theory. According to the hierarchical structure of motives identified, the market will then be segmented. The results can provide a valuable insight into motivation theory by understanding the complexities underlying consumers’ motivational process that determines their online group buying behaviour. In addition, using U&G and MEC as theoretical frameworks, this study can not only provide in-depth insights into the major psychological and social drivers of group buying on the Internet, but also the concrete websites attributes which directly correspond with these motivations. By incorporating these lower levels attributes, group buying websites can attract more customers and survive in the competitive e-market.

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