Role of online retailers’ post sale service in developing repurchase intention on online shopping in vietnam

FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS ---***---RESEARCH PROPOSAL Module: Research Methodology For Economics And Business Role of online retailers’ post-

FOREIGN TRADE UNIVERSITY SCHOOL OF ECONOMICS AND INTERNATIONAL BUSINESS

-*** -RESEARCH PROPOSAL Module: Research Methodology For Economics And Business

Role of online retailers’ post-sale service in developing repurchase

intention on online shopping in Vietnam Class: KTEE206.1

Intake: 60 Lecturer: Dr Pham Thi Cam Anh

Hanoi, October 2022

TABLE OF CONTENTS

ABBREVIATION i

I INTRODUCTION 1

1 Context 1

2 Literature review 3

3 The objectives of the study 11

4 Research questions 12

II THEORETICAL FRAMEWORK AND HYPOTHESES 12

1 Connection between post-sale service and customers’ satisfaction 13

2 The level of impact of post-sale services on repurchase intention 14

3 Hypotheses development 14

III RESEARCH METHODOLOGY 15

1 Qualitative methods: 15

2 Quantitative methods: 15

3 Questionnaire administration 18

IV LIMITATIONS OF THE STUDY 19

V PROPOSED TIMELINE 19

REFERENCES 20

APPENDICES 25

ABBREVIATION

I INTRODUCTION

I.1 Context

The past decade has seen significant growth in e-commerce transactions, whichresults in irreversible changes in the retail landscape The number of online shoppers isincreasing annually as the availability and usage of the Internet grow steadily In Asia,the growing middle class and increasing internet penetration make this area theforefront of global e-commerce dynamism By 2024, Asia’s e-commerce revenues arepredicted to reach USD 1.92 trillion, accounting for 61.4% of the global e-commercemarket Developing in line with the area, Vietnam is seizing opportunities to thrivebased on digital transformation in a post-pandemic future Vietnam e-commercemarket is forecasted to grow at a compound annual growth rate (CAGR) of 16.3%from VND 218.3 trillion (USD 9.4 billion) in 2019 to VND 399.5 trillion (USD 17.3billion) in 2023, according to forecasts from Global Data

Obviously, online shopping is increasingly important in the Vietnam economy.Robust logistics networks, a rising middle class, progressing financial infrastructureand rapid innovation are promising in driving up Vietnam’s e-commerce revenues,which will in turn prompt GDP growth and productivity Meanwhile, this asset-lightbusiness model is an opportunity for small entrepreneurs and start-ups to access largermarkets, which increases competition but also makes Vietnam economies moreinclusive At the same time, consumers benefit from greater choices and better pricetransparency Hence, it is crucial for online businesses to sustain and provide theircompetitive advantages in this fast-growing industry

Prior studies have revealed that online business is more prone to negative customerperception due to customers’ perceived purchase uncertainty such as online retailers’credibility, inability to inspect the product before receipt, and the physical distancebetween buyer and seller (Faqih, 2016; Davari et al., 2016) E-retailers also face thechallenge of retaining customers who frequently do store-switching (Jain et al., 2017).Thus, in the digital world, retail store operations encounter a breadth of novelcomplexities (Mou et al., 2018), most of which stress the paramount significance ofservice quality and customer perception (Vargo and Lusch, 2004; Zehir et al., 2014)

To this extent, online retailers' post-sale services may alleviate customers’ purchase uncertainty (Heiman et al., 2001; Ramanathan, 2011)

pre-A huge amount of research on the effects of pre- and post-sale service (Bressoles etal., 2015; Ba and Johnson, 2008) has been conducted and it turned out that initial salesservice received more focus of attention However, several after delivery servicefactors which may foster online orders including product exchanges, returns andrefunds are emphasized by researchers such as Grewal et al (2004) Increasingconsumers' online purchase convenience has been recorded, but repeated interruption

in the process still exists (Lai et al., 2014), causing customers’ decreasing futureconfidence (Bettua, 1999; Saleh, 2016) In terms of customer satisfaction andretention, post-sale services can be considered as crucial as pre-sale Previousresearchers note that while many retailers pay exclusive attention to access andtransaction convenience (i.e., pre-sale services), customers continuously experiencepost-sale annoyance (Laiet al., 2014) As e-purchasing is becoming competitive(Rezaei et al., 2014), customer experience is of more importance than ever (Dailey,and ULkü, 2018) Xu et al (2017) thus highlight how e-retailers could expand themarket share by putting more efforts on service, to which the results would beachievements in market goals (Zehir et al., 2014) Therefore, further research is needed

to investigate the role of online retailers after sale stages in relationship and repurchasedevelopment

The findings of this research affirm the positive impacts of post-sale services on acustomer’s satisfaction and future confidence in a retailer Customers’ perception ofafter delivery services can play a key role in building a consumer-seller relationship Inthe age of globalization, these perceptions can expand the market share of a retailer,even during recessions Recent studies bring an important implication for managementthat beside product quality, customers also put their concern on retailer honesty andresponsibility after sale Besides, our research indicates that customers’ satisfactionwith after delivery services has a direct association with their trust in the retailer Theresults focus on the importance of a retailer’s past performance concerning post-saleservice and illustrate that the outcome can account for positive feedback from pleasedcustomers Therefore, e-retailers should take the interests, demands and behaviors ofcustomers into consideration to increase their satisfaction level (Edward et al., 2009)

Research on post-sale service by online retailers is not enormous, but some previousstudies emphasize the importance of customer perception (Grewal et al., 2004; Lin,2007; Khalifa and Liu, 2007; Park et al., 2012; Lai et al., 2014; Bressolles et al., 2015;

Xu et al., 2017; Jeng, 2017; Dailey and ÜLkü, 2018) Also, they reveal the linkbetween satisfaction and repurchase intention, however, not many identify the factorswhich influence both customer satisfaction and repurchase intention And there arevery few empirical studies investigating the relationship between after delivery serviceand repurchase intention, how they foster each other and the implication for onlineretailers to better off post-sale services and improve sales Moreover, knowledgeconcerning certain after-sale services such as return, exchange and maintenance andtheir actual impacts on customer satisfaction and repurchase intention in Vietnam islimited Our research fills this gap by analyzing connections between post-saleservices and customer satisfaction by investigating return, exchange and maintenanceservice and the extent to which they encourage continuance intention to purchase inVietnam online market Understanding this engagement might assist online retailers todevelop appropriate after sales service strategies and earn greater benefits.Furthermore, in the context of e-commerce, the literature on gender differences inbuilding a profitable customer relationship and encouraging repurchases is limited.Hence, we focus on the gender differences as another objective of our study

I.2 Literature review

Customer satisfaction is a multidimensional and extensive notion which is essential

to business longevity It is defined in Kotler 1997 as a person's feelings of pleasure ordisappointment resulting from comparing a product's perceived performance (oroutcome) in relation to his or her expectations Therefore, any failure to meet needsand expectations of the customers is assumed to result in dissatisfaction with theproduct or service So as to make customers satisfied, it is quintessential for businesses

to take many different factors into account and to consider continuous evaluation andimprovement of their various service activities namely addressing customer queriesand complaints, meeting customer expectations, etc (Sivadas and Baker-Prewitt,2000)

Wellington (1995) divides customer satisfaction elements into product, sales, sales, location, time, and culture Post-sales services, among numerous factors offered

post-by businesses, has proven to be an undoubted predictor of customer satisfaction andcustomer retention (Kurata and Nam, 2010) Research indicates that inefficient post-sale services may result in online customers’ retaliation (Arruda Filho and Barcelos,2020) The satisfaction elements of post-sales involve maintained interest andcomplaint handling Complaint handling should be responsive and keep the customeradvised and feel appreciated through the process Hassle-free order cancellation, easyreturn and refund procedures are recognized as critical tasks by business sincecustomers expect to receive support from a transaction after purchase Return policieshave become a competitive strategy (Janakiraman et al., 2016) and key element foronline retailing in service recovery that can be employed to averse the risk (Heiman,2001; Che, 1996) and customers’ uncertainty in terms of product quality Sinceconsumers are shopping at e-tailers, that is intrinsically less experiential and leniency

in the product return is thus pivotal to the retailer (Kirmani and Rao, 2000; Wood,2001)

Apart from easy product return, the allowance of customers’ exchanging purchasedproducts is another task in post-sale service, however, its implication for business israther different from a product returned When customers require an exchange, it ispossible to continue customer interaction (Hanet al., 2017) More significantly,research shows that retailer’s post-purchase policies such as product exchange have apositive impact on customer satisfaction and customer retention (Minnema et al.,2018) In recent years, products have become increasingly sophisticated, thereby thebuyer after-sale risks are escalating Therefore, many businesses now employmaintenance and repair of products such as home appliances and electronic gizmoswhich may require repair services during warranty period Maintenance and repair arebeneficial for online retailers as it decreases the perception of risks and uncertainty as

a result of being unable to inspect the products before any transaction These after-saleservices including return, exchange and maintenance are key elements for onlineretailers to improve customer experience and decrease customer turnover

A research by Copeland (1923) defined repurchase intention as repeatedlypurchasing goods or services over time, or it can be considered as the willingness to

buy products at a brand again where customers had past shopping experience.Repurchase intention is important since finding new customers is much more costlyand time-consuming than retaining existing customers, and it brings more profit tobusiness (Chiu et al., 2009; Spreng et al., 1995; Zhang., 2011; Maharani et al., 2020).Once the customers are retained, they may introduce the brand and spread thereputation to new buyers such as their friends, relatives, which will continue toincrease the company’s profitability (Pham & Ahammad, 2017; Ho et al., 2020)

Expectation confirmation theory (ECT), a theory applied in marketing context, hasbeen brought into the investigation of customers’ decisions to repurchase in thecustomer behavior literature (Oliver, 1993) ECT regards satisfaction as a key factorfor customers’ continuance intention It explains a high amount of variance andrepurchase intention (Giannakos et al., 2011), and increased customer retention might

be a result of higher satisfaction level (Ittner and Larcker, 1998) However, therelationship between customer satisfaction (CS) and repurchase intention (RPI) turnsout to be more complex than expected (R.E.Anderson & Srinivasan, 2003; Hennig-Thurau & Klee, 1997; Söderlund, 2002) In the 1980s, to reach a higher CS rating wasitself a target (Mittal & Kamakura, 2001) During the 1990s, it was widely realizedthat CS ratings lead to strategic ends, such as repurchases, that directly pose changes toprofit (Jones & Sasser, 1995; Mittal & Kamakura, 2001; Reichheld, 1993; Reichheldand Teal, 1996; Stewart, 1997) Huge investment in CS has shown that higher CS doesnot guarantee higher repurchase rates Even after achieving a considerable level of CS,retailers have discovered that making customers satisfied is not enough (Jones &Sasser, 1995; Neal, 1999; Stewart, 1997) A study’s result has pointed out thatalthough 85-90% of customers were satisfied with the brand, only 40% of themrepurchased those products (Reichheld, 1993)

To better understand the CS-RPI relationship, researchers began with the

moderators For example, Rust and Zahorik (1993) chose length of patronage, while

Homburg and Giering (2001) adopted personal factors such as variety seeking, age orincome Some recent studies indicate that the result of the evaluation would bedifferent between loyal and nonloyal customers A study of banking service by Mittaland Katrichis (2000) revealed that the importance of attributes differed between newand nonloyal customers Garbarino and Johnson (1999) also found that trust and

commitment have effect on loyal customers but not the nonloyal ones Regarding trust,Blau (1964) stated that people’s feeling about a relationship with another party relies

on their perception of fairness in exchange negotiation The process of service deliverywith the interaction between customers and company can be considered as socialexchange (Bowen, 1990), which is based on reciprocation and trust (Blau, 1964) Inconclusion, if the satisfaction level with post-purchase services provided by e-tailerscomes up with customers’ expectations, this tends to develop trust in customers as well

as their retention in purchasing in the future Moreover, in the context of onlinepurchase, there is a differentiation between females and males’ behavior as customers.For example, while men tend to be more rational, women turn out to be moreemotional (Wang and Kim, 2019) Further investigation also showed that femalesprefer higher convenience levels (Lai et al., 2014), easy accessibility and usage (King,2009) This led to the finding of the variety in male and females’ psychologicalsusceptibility toward online shopping (Wolin and Korgaonkar, 2003), reinforcing theconcept that gender will more or less affect online buyers’ behavior and decisions

Name and

author of the

research

Scope, Theoretical foundation and Methodology

Findings Limitations of the

- Theoretical foundation:

developed on the basis of extant literature

- Methodology:

Mix method, SR model,

Confirmatory factor analysis (CFA model)

- Post-sale services

such as product returns,

exchanges and maintenance wereimportant

antecedents in determining the effects of post-sale services on customer

satisfaction in the online shopping environment

- Customers’

satisfaction has a direct influence

- The outcomes of the

current research should be interpreted within context and with caution

- Collecting online

data might introduce some bias into the outcomes due to this

population’s differing motivations

- Data was collected

only for one store, therefore, lack of

on their trust level.

- Customer trust

has a direct significant effect

on repurchase intentions

- For men and

women, the mechanism of post-sale services affecting

repurchase intention is the same

comparison betweenstores

- Theoretical foundation:

necessity to identify factors that affect satisfaction and retention in online shopping

to build a suitablebusiness strategy

- Methodology:

regression model,survey, anklet method

- Information

quality, delivery, convenience and perceived websitehave the strongestimpacts on

satisfaction and intention, trust moderately affects satisfaction and purchase

intention while responsiveness has the least effect

- Females tend to

be less satisfied than males

- Single customers

repurchase more than the other types of customers

- Not collect many

observations to guarantee the representativeness

of the sample

- Researchers should

expand the sample and measure the effects of more independent variables on customer satisfaction and repurchase intention

- Qualitative method

should be implemented more

“The leniency of - Scope: customers - Perceived return - Problems in

- Theoretical foundation:

expectation disconfirmation theory and previously established constructs

- Methodology:

survey, structural equation

modeling

policy leniency, perceived fairness

of the return experience and perceived quality

of the return experience are important and supporting factorsthat influence a customer’s intention to be a return customer

to e-tailers

- Perceived

leniency was found to not only

be the most influential factor for return

purchase intention but it also significantly impacted the perceived fairnessand the quality of the return

process

- A customer’s

expectation aboutthe returns policy and experience with product returns influence repurchase intention

measuring the perception of surveyrespondents

- Needs for e-tailer to

determine how to design the product return policies and process to balance the cost of these decisions with the benefits of

improved customer experience

- Return depth

positively fluences consumer’s

- Research did not

look at different product categories and their effects on

- Methodology:

survey, structural equation model, CFA

perceived return policy fairness, trust and purchaseintention

- E-tailer reputation

and perceived tailer competitionmoderate the relationship between return depth and consumer’s perceived return policy fairness and purchase intention

e The impact of

return depth on consumer’s perceived fairnessand purchase intention will be stronger when an e-tailer’s

reputation is high and perceived competition is low

the hypothesized relationships

- Theoretical foundation:

previous research, analysis

of the relationship between dimensions of Satisfaction, E-

- In an intense

competition of commerce vendorrepurchase

e-intention through customer trust building process could be one strategy to maintain profit and company sustainability

- There are so many

other factor can be predictor repurchaseintention in e-commerce context

- Data were collected

only in Indonesia, mostly Jakarta area Caution must

therefore be exercised when attempting to

service quality, Trust and Repurchase Intention

- Methodology:

questionnaire, non-probability sampling, Structural equation modeling (SEM),CFA

- E-service quality

can be reflection

of vendor performance in terms of giving service and overall quality which is important since customer will be very critical of vendor mistakes and behavior

- Satisfaction can

be key factor to customer buildingprocess and maintain customer intention to visit and make other transactions in thewebsite

- Trust has direct

and significant effect on repurchase intention as part

of customer retention

generalize results to other locations

- Theoretical foundation:

previous research, prior literature on

- After delivery

services had a positive influence

on both customers’

service satisfaction as well as their trust

- Small sample size

- Methodology:

structured questionnaire, structural equation modeling

customers give more weight to online retailers’

past service performance rather than their future promises

- The mediating

role of satisfaction with services in the relationship between after delivery services and trust in the retailer

- Consumers who

are more satisfiedwith an online retailers’ past performance regarding after delivery services would make greater cognitive effort to move from past performance to future confidence

I.3 The objectives of the study

In the context of the growth of the internet and related firms, business witnessed arevolution in the form of purchasing Online shopping or e-commerce in general havebecome popular Similar to physical stores or face-to-face purchasing, onlinebusinesses always desire to enhance products and services to keep loyal customers andattract new ones Post-sale service is one of the key elements in establishing thebusiness credibility

This study is to deeply figure out the relationship between the post-sale service ofonline retailers and customers’ repurchase intention The objective of this study is toexamine the effect of return, exchange and maintenance policies of retailers oncustomers' expectation and satisfaction; thus generating the desire to repurchase Weaim to research customers of different genders, age groups, marital status, occupationsand location to conceptualize the customers’ preference of after-sale service and level

of satisfaction resulting in repurchase behavior The result and implications can bedata for retailers to implement suitable post-sale service terms and adjust their existingpost-sale service to fulfill buyers demand and improve market competitiveness

I.4 Research questions

To establish the scope and depth of the project, we operate the research based on theresearch questions The process of literature review, hypothesis development, datacollection, analysis and evaluation is guided following the questions:

RQ1: Is there a connection between post sale service and online customer satisfaction?

Many relevant studies indicate the close relationship between post-sale service andcustomer satisfaction in many fields, for example automobile firm, manufacturing, (Saraswathi, S,2008) N Nordin et al (2016) stated that aftersales, comfort, staff,warranty, loyalty are all customers’ needs Answering this first question is the key tocomprehensively understand this connection in online retailing firm

RQ2: To what extent can post sale service be predictive of repurchase intention?

The quality of post-sale services may be important to distinguish an online retailerfrom others and to attract returning shoppers (Pee et al., 2018) It is proved that after-sale service is significantly linked to the customer's satisfaction In this question, wediscussed in detail how return, exchange and maintenance service affect repurchaseintention

RQ3: How can online retailers improve after sale service and increase sales?

Vuk Miletić et al (2022) indicated a research outcome that confirmed theassumption that post-sales services (activities) that were valued at the top of the range

of the marked organizational performance indicators, are very significant for the

achievement of sustainable competitiveness on the market Regarding the findings interms of influence of after-sale service on satisfaction, the implication is that businesscan maximize reputation and profits through after-sale service.

As stated in the introduction, the e-commerce market worldwide is developing byleaps and bounds There are few barriers to enter the firm of online retailing but it ischallenging to boost sales without notable products and business strategies, especiallyservices Better understanding the essence of service can lead to better sales revenue It

is revealed that service quality is relatively significant in its impact on consumer trust

in online shopping, proving the positive proposed impact upon perceived quality ofcustomer trust (Mohammad Al-nasser et al., 2015)

II.1 Connection between post-sale service and customers’ satisfaction

- Post-sale services in online retailing

Post-sale service, or after-sale service are those taking place after the purchase ofthe product and devoted to support customers in the usage and disposal of goods(Fazlzadeh et al 2011) To be more specific, post-sale service is included in theprocess of the transaction between sellers and buyers Post-sale service is aimed toensure that buyers are properly consuming the products This indicates the customerspriority, all-time support and feedback reception Post-sale service is also used interms of business marketing strategy

Rapidly growing internet-based market with the emergence of a multitude ofplatforms forces retailers to adapt and figure out competitive advantages of their own.Retailers apply the innovation in website designing, vouchers, membershipdiscounts, to become notable in the market and pre-sale and after-sale service isworth mentioning As online shopping is somewhat related to “blind-buying”, theexperience of the customers is not always exactly the same as the illustration Theypsychologically need an “insurance” and be assured that sellers are always willing tosupport This increases the belief and the motivation to purchase

After-sale services in online retailing can include: User training, Online support,Warranty services, Upgrade, Free replacement In this study, we concentrate on