ANTECEDENTS OF CUSTOMER REPURCHASE INTENTION - A STUDY OF ONLINE GROUP-BUYING IN VIETNAM

Hence, this study focuses in measuring relationship between cognitive factors – trust, satisfaction and perceived usefulness – and online group-buying repurchase intention.. Results in t

ABSTRACT

Online group-buying has emerged as a new e-commerce model and received attention in both academics and practice Prior researches focused on investigating online group-buying mainly from the marketing perspective, such as the transaction process, price mechanism, and benefits (Li & Liu, 2012) Few of studies have investigated the relation between consumer’s acceptance and their purchasing behavior Hence, this study focuses in measuring relationship between cognitive factors – trust, satisfaction and perceived usefulness – and online group-buying repurchase intention Simultaneous, this study also integrates website quality - a direct and indirect variable – to measure its impact on customer repurchase behavior

To examine research model, information and data is accessed by using questionnaire for respondents more than 18 years old and have ever purchased on online group-buying websites Sample size of this quantitative research is 365 respondents Confirmatory factor analysis (CFA) is used to test measurement scale and the structural equation modeling (SEM) is used as the main method for analyzing research model and hypotheses

Results in this study show that individual user’ intention to repurchase in online group-buying websites is motivated by trust, satisfaction and website quality Among three impact factors, website quality has the strongest direct influence, followed by trust and satisfaction Besides direct influence, website quality also has indirect impact on customer repurchase intention through both of trust and satisfaction Trust also has strong impact on customer satisfaction, thus, affect indirectly to customer retention

With these results, research framework can be seen fitted with data market Study results also suggest that in order to increase customer retention should not only consider about their strategies of increasing trust and satisfaction, they should also take consideration of increasing website quality, especially in content quality and technical adequacy

CHAPTER 1

INTRODUCTION

This chapter is starting point of this study In this chapter, the research interest of thesis is first introduced Subsequently, the motivation of this research is discussed Research objectives are presented in the next section Then, methodology and scope of this research is introduced summarily Final, structure of this study is presented This chapter aims at specifying the purpose of this research and the research content

1.1 Research interest:

In recent decades, science and technology develops surprisingly Achievements of these progresses create more opportunities as well as challenges for development of economies Forms of transactions become more diversified; suppliers have more approach ways to interact with customers Traditional markets have not caught up with higher demands of consumers Buyers become more and more busy and have so many choices that make their buying decisions more difficult Hence, to satisfy customers, electronic commerce appears and grows extraordinarily with widespread Internet usage

Electronic commerce, commonly known as e-commerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks A form of e-commerce is online shopping which is the process whereby consumers directly buy goods or services from a seller in real time, without an intermediary service, over the Internet This form of shopping are attracting more buyers, suppliers and researchers because it offers a lot of benefits such as convenience, speed, time, a 24-hour opening, information on products and reviews To nowadays, online shopping continues their rapid spread and gains many increasing importance in the lives of a wider range of the population

Group-buying is seen as an effective form of online shopping and a promising field for applying agent technologies Group-buying is a model in which multiple buyers cooperate and buy goods at a discount price (Matsuo, 2009) Innovative group-buying sites offer bargains on everything from meals to travel packages Customers can make

comparison of product/service prices and choose the supplier with the lowest price (Gounaris et al., as cited in Li & Liu, 2012) when using this new model

With the tremendous growth, online group-buying attracted more and more attention of practitioners as well as researchers However, most previous online group-buying studies focus mainly on the pricing mechanisms, coalition formation, benefits

of bidder cooperation, uncertain demand, incentive mechanisms and consumer adoption (Fan et al., 2010) There are not many studies investigated the relationship between customers’ acceptance of online group-buying and their purchasing behavior

In recent years, this topic begins become a hot issue, especially, continuance behavior receives more attention because this issue at an individual level has been regarded as crucial for sustainable web-based services (Premkumar & Bhattacherjee, 2008) Besides that, many online group-buying websites as well as others online websites are facing strong competition due to the evolution and proliferation of web-based services Moreover, web-based services have low entry barriers by its nature, if one service is created, then a number of comparable alternative web-based services follow, resulting in a high switching rate between those services by users (Vatanasombut et al., as cited in Lee & Kwon, 2011) Thus, many online group-buying providers are struggling to find strategies to exist in this difficult period Retaining their existing customers becomes a strategic way to ensure the company's success and overall sustainability Exploring and analyzing which factors influence customer retention have significant meaning to online providers

Research on continuance intention in both online shopping and online buying is still in its infancy Prior researches on consumer online repurchase placed more emphasis on the impact of psychological factors such as trust, satisfaction formation, loyalty (Cheung et al., 2003) These researches primarily base on expectation-confirmation theory and information system (IS) continuance intention model Very few studies have attempted to investigate the impact of product/service characteristics as well as website quality on online consumer continuance

group-Website quality nowadays is assumed to have the potential to influence the future behavior of service users and have an impact on the profits of IS investment (Cronin and Taylor; Zeithaml, Berry and Parasunaman, as cited in Li, 2010) Several studies

on website quality in physical encounters have concluded that some factors of website quality are responsible for customers’ perception which is likely to lead to behavioral intentions to purchase However, in online group-buying context, according mentioned above, there are a few of studies attempted to measure the direct and indirect impact of website quality to repurchase behavior In particular, research on taking an integrated perspective to examine the predictors of website quality and investigate the relationship between website quality and repurchase intention is still lacking This is a promising topic for future research in this context of e-commerce

1.2 Motivation of the study:

In Vietnam, group-buying model was introduced in 2010 and after a short time, group-buying model and daily deal sites increased very quickly With a win-win-win model for three parties: enterprises can sell their products, group-on companies profit

from commission and customers can get good deals, group-ons or group vouchers

have become popular among Vietnamese students and white-collar workers due to attractive discounts and a wide range of services and products1

To the end of 2011, there are almost 100 group-on sites in Vietnam with more than 6700 deals and 4.2 millions sold out vouchers2 Four leading group-buying websites include: Nhommua, Hotdeal, Cungmua and Muachung Ho Chi Minh City is the strongest competition market with about 74% transaction deals and many followers2 Other markets such as Da Nang, Binh Duong, Can Tho… begin introduce this new model, however, amount of transaction is still limited

Along with development of group-buying market, perceived risk and competition between rivals also increase very strongly The biggest challenge for group-buying

sites is method of payment and privacy In Vietnam, many people are still not familiar with online transaction With weak privacy security system, customer beliefs have trend of reducing when purchasing vouchers by money transfer or cash on delivery method Besides, there are many partners who do not follow the contract, provide bad service or treat group-on customers differently Many vouchers are delivered late or lost, customers cannot dictate the time to receive vouchers and have to book in advance to use the service With many problems, online-group buying websites in Vietnam are facing many difficulties in attracting customers as well as keeping existing customers

Base on operational experiences in vouchers transaction, many group-buying businesses begin selecting other ways to limit their obstacles Firstly, they can become distributors, delivery directly products to customers, instead of delivering vouchers Second, group-buying company can become e-commerce exchange They can buy and manage deals by themselves They also provide some flexible solutions for suppliers such as: create own websites, provide orders management system, and provide customers management system… However, according to many experts the key to success for this kind of business is still to ensure service quality and price to keep customer trust Do (2012) – who is interested in Vietnam’s start-up, social media and technology scenes – cites that:

An increased skepticism of the online space is low on the list of dangers though With the internet penetration at 34 percent and an increasing portion of them moving into social media, the online market is getting bigger and bigger Although companies and people may not be trusting of web content, they are learning more and more to be dependent on it

In general, Vietnam is still a promising market for online group-buying model Companies in this market need to learn and develop more and more to succeed Customer retention is a necessary topic for helping group-buying businesses increase their competitive advantages and maintain their market Simultaneously, online group-buying model is really an interesting research field for practitioners and researchers in developing way of e-commerce in Vietnam

1.3 Research objectives:

As discussion in section 1.1, information system (IS) retention has been one of the most recently explored topics in the IS research field Many theoretical perspectives,

to nowadays, have been advanced in order to understand what motivates individuals

to repurchase in online group-buying websites Thus, based on literature covering the concept of IS continuance model and circumstance of online group-buying market in Vietnam, this paper aims:

 To propose a model predicting customers’ repurchase intention in online group-buying context in Vietnam

 To investigate impact of website quality on customers’ repurchase intention

in online group-buying context

 To examine impact of cognitive factors (trust, satisfaction and perceived usefulness) on online group-buying repurchase intention

This study is necessary for development of group-buying market in Vietnam It also demonstrates that website quality is a noteworthy factor affect repurchase intention of customers in using online group-buying

1.4 Methodology and scope of research:

Collecting data process of this study is designed into two stages First is a pilot test, second is main survey to collect data for examining research model Pilot test is quantitative research with sample 57 respondents to examine reliability and validity

of observed variables Main study is also quantitative research with sample size 365 respondents

Author accesses information and collect data by using questionnaire Respondents are more than 18 years old and have ever purchased on online group-buying websites Sample is selected by using non-probability sampling method – convenience sample Research is studied from September 2012 to December 2012

Purpose of this research is to confirm and examine conceptual model The measurement scales are estimated using confirmatory factor analysis (CFA) to test

reliability and validity The structural equation modeling (SEM) is used as the main method for analyzing the research model and hypotheses

1.5 Research structure:

This thesis is organized into five chapters It begins with introduction chapter which presents an outline of this research, including the motivation, objectives and scope of this research The next chapter describes online group buying model, literature of IS repurchase behavior model and website quality concept This chapter also describes research model and hypotheses The third chapter is research methodology used to empirically test the research model The fourth chapter presents the results of data analysis The final chapter discusses summarizes the study’s core findings, its contributions and its limitations

2.2 Theoretical background:

2.2.1 Online group-buying model:

Group-buying, also known as collective buying, introduced in 1999 by a few of companies After introducing time, this model have been facilitated by the internet and the easy, fast group coalition process brought by social networks (Xiong & Hu, as cited in Erdogmus & Cicek, 2011) It is seen as a part of an innovative wave of online market-based pricing mechanisms, includes traditional auctions, non-traditional auctions, price-reduction models and group-buying models

There are mainly two different types of online group-buying systems (Fei et al., as cited in Erdogmus & Cicek, 2011) First type of this system is structured based on a dynamic pricing mechanism In this first type, masses of consumers are aggregated, and perform collective buying to enjoy price discounts online In the second type of the online group-buying, the group-buying company offers a certain product or service at a static large discount price This price required the total number of the buyers must be greater than the predetermined limit of the minimum required number

of buyers

Today, many online websites are using group-buying models and have got great success These websites usually offers a large of products and services at significantly

reduced prices These websites claim they can negotiate low prices with manufacturers and suppliers, and then pass these savings on to their customers (Kauffman & Wang, 2001)

However, group-buying websites, like other online shopping websites, are facing the problem of obtaining market attention With group-buying models, online group-buying websites need not only a critical mass of consumer patronage and interest, but also a significant amount of transaction volume so as to be able to profitably deliver on their low price guarantee Thus, if they cannot reach a critical mass of users and sales volume, then it will be difficult for the group-buying business model to bring the customers of the firms that adopt it the savings they expect (Kauffman & Wang, 2001) Moreover, Cook (as cited in Kauffman & Wang, 2001) points out that the group-buying business model is too difficult for the general consumer to understand The author also argues that the mechanics of group-buying on the Internet also prevent impulse buying, due to the lengthy periods consumers have to wait until the end of auction cycles With these problems, amount of customers of online group-buying websites begin increasing slower; in some markets, there are reducing signs of customers as well as transactions

In order to overcome obstacles, some online group-buying websites focus website quality and service quality For instance, Mobshop – a San Francisco, California-based group-buying service provider- increased from 37.00 to 132.000 registered users in a three month period from January to April 2000 (as cited in Kauffman & Wang, 2001) Its early success attributed by its careful design, increasing technical adequacy and saving delivery time Focusing on quality is a good strategy for online group-buying websites in highly competition market at current time and in the future

2.2.2 IS repurchasing behavior model:

Online buying behavior can be understood in two stages: the first stage is primarily concerned with the encouraging people to purchase online and the second is to encourage them to repurchase, which is critical if the e-commerce vendor is to succeed (Zang et al., 2011) In these two stages, second stage is an important subject

of study because customer retention is often seen as a means to gaining competitive advantage

Researchers have studied online customer retention in different contexts, such as

“online repurchase intention”, “continue to shop online”, “customer intention to return”, “web site stickiness”, and “continued information systems/IT intention” (Wen et al., 2011)

2.2.2.1 Online customer retention:

Online customer retention in recent years, become a hot issue in both the IT and marketing areas Studies of this topic have been mainly divided into two streams consisted of studies based on static-type models and process-type models (Lin & Ong, 2010)

(1) Static-type researches are derivation from concepts such as theory of planned behavior (TPB), Fishbein and Ajzen's theory of reasoned action (TRA) or technology acceptance model (TAM) The theory of Reasoned Action assumes that if people view a behavior as positive (attitude), and if they believe that others would prefer them to perform the behavior (subjective norm), there will

be a greater intention (motivation) to behave in that manner and they are thus more likely to do so (Udo et al., 2010) TPB adds one major predictor – perceived behavioral control – “to account for times when people have intention of carrying out a behavior, but the actual behavior is thwarted because they lack confident or control over behavior” (Miller, as cited in Udo et al., 2010) Along with these theories, TAM has been confirmed as the most popular parsimonious framework used to explain customers’ behavioral intention TAM

is model that explains user intention and behavior based on forward-looking or prospective expectations about IT usage This model found perceived usefulness and perceived ease of use as salient beliefs influencing IS acceptance behaviors across a broad range of end-user computing technologies and user populations (Davis et al.; Mathieson; Taylor and Todd, as cited in Bhattacherjee, 2001) However, many empirical studies also comparing the

relative effects of perceived usefulness and ease of use during pre-acceptance and post-acceptance stages of IS use report that: perceived usefulness impacts attitude substantively and consistently during both stages of IS use, and ease of use has an inconsistent effect on attitude in the initial stages, which seems to further subside and become non-significant in later stages (Davis et al.; Karahanna et al., as cited in Bhattacherjee, 2001) Hence, studies base on TAM

to nowadays, perceived usefulness is usually used as direct variable influencing

on customer behavioral intention

(2) Second stream is process-type models, mainly based on confirmation theory (ECT) or expectation-confirmation model (ECM) This stream had been developed from some limitations of TAM It also uses individual cognitive factors for predicting IS continued use However, they based on their backward-looking or retrospective perceptions grounded in actual usage experience, such as performance, disconfirmation, and satisfaction,

expectation-in addition to expectation-initial expectations (Premkumar, Bhattacherjee, 2008)

Source: Bhattacherjee, 2001

Figure 2.1: A post-acceptance model of IS continuance

In this model, consumers’ intention to repurchase a product or continue service use is determined primarily by their satisfaction with prior use of that product or service (Anderson and Sullivan 1993; Oliver 1980, 1993, as cited in Bhattacherjee, 2001) Satisfaction is viewed as the key to building and retaining

a loyal base of long-term consumers and confirmed in many studies Until today, this stream develops widely in the consumer behavior literature to study consumer satisfaction, post-purchase behavior and service marketing in general

(Anderson and Sullivan; Dabholkar et al.; Oliver; Patterson et al.; Tse and Wilton, as cited in Bhattacherjee, 2001) Many researches try to add new construct, and integrate studies that combine these models and another theory or

model

In addition to the mainstream researches, there is a recent focus on affective factors According to Lee & Kwon (2011), the factors suggested classified into two categories: cognitive and affective Cognitive factors are those related to the mental process of knowing, including aspects such as perception, reasoning and judgment Representative cognitive factors are: perceived usefulness, satisfaction, trust, perceived ease of use, security, confirmation and disconfirmation, perceived risk, perceived switching cost… In contrast, affective factors are related to specific emotions or states of feeling Some affective factors are studied in recent years such

as perceived playfulness (enjoyment), pleasure, arousal, familiarity and intimacy Lee

& Kwon (2011) also suggested that customer retention research has shifted its focus from cognition-oriented factors to affective factors to explore more factors influencing on customer behavior

Table 2.1: Some integrated models of customer retention Study Characteristics of the research model Research domain

Lin et al (2005) Based on ECM: introduced perceived playfulness as a

new factor

Web-portal Thong et al (2006) Based on ECM: introduce post-adoption beliefs and

perceived enjoyment as new factors

Internet service Limayen and Cheung

(2008)

Based on ECM: adds IS habit as a new factor Internet-based

learning Atcharuyachanvanich et

model, adds perceived quality and perceived usability as new factor

E- learning

Liao et al (2007) An integrated study that combines EDT model and the

theory of Planning Behavior, adds subjective norm as a new factor

E-service

Chiu and Wang (2008) An integrated study that combines United theory of

Acceptance and Use of Technology, adds subjective task value as a new factor

Web–based learning

Source: Lee & Kwon (2011)

In general, researchers have integrated many other factors to create new framework that will improve the explanatory and predictive power for explaining online customer retention

2.2.2.2 Online group-buying repurchase model:

Few studies have tested online repurchase intention in online group-buying context In 2010, Fan et al has used model of Bhattacherjee adapted expectation-confirmation theory (ECT) and integrates the technology acceptance model (TAM) to theorize a post-acceptance model of IS continuance In this study, relationship between customer satisfaction, perceived usefulness and online group-buying repurchase intention are confirmed Simultaneously, role of price expectation is also

measured

In 2012, Tien et al also do research about repurchase intention in online buying context They examine repurchase intention through relationship quality and expectation – confirmation theory views though relationship quality is regarded as an important factor in the relationship marketing literature This study emphasize satisfaction is a particularly important foundation for a successful long-term relationship between customers and group-buying websites Hand in hand with satisfaction is trust of the second factor Just like previous researches, satisfaction and trust continue being the important of two influence factors Satisfaction is a stronger predictor of repeat purchase intention than trust; this is consistent with the study in e-commerce (Deng et al., as cited in Tien et al., 2012) Trust has direct and significant effect on satisfaction and repeat purchase intention Moreover, the results of this research also show that trust, perceived value and perceived quality are important antecedents of satisfaction Among these factors, perceived quality is highly influential determinant of perceived value and indirectly affecting repeat purchase intention through satisfaction

group-In the same year, Liu and Wu also study relationship between service quality, word-of mouth, customer satisfaction, promotional incentive, and customer

satisfaction This study show that service quality has strong effect on customer satisfaction, thus, indirectly influence to customer loyalty

In summary, very little studies in online group-buying context focus on customer buying behavior, especially, customer retention While the online market is growing and profitable, the competition for market share is also increasing To remain competitive, it is imperative for online providers to invest time and money to find out strategy to keep existed customers Studies of customer retention are really necessary for development of online group-buying model in the future

2.2.3 Website quality:

Quality is not a new concept in information systems management and research Information systems practitioners have always been aware of the need to improve the information systems function so it can react to external and internal pressures and face the critical challenges to its growth and survivability (Aladwani & Palvia, 2002) However, to nowadays, both the conceptualization and the measurement of website quality have been two debated topics

In study of Éthier et al (2006), research on the concept of website quality can be classified broadly into four complementary research categories (1) The first focuses

on functionalities and/or content of website The dimensions identified have generally been: functional issues, navigation, content, technical issues and contact information (2) The second category includes researches affected by technology acceptance model TAM, relationship between perceived ease of use and perceived usefulness can be seen as a relation of quality Information quality, system quality and service quality of websites are the essential components of website quality (3) The third category includes studies that highlight service quality as a fundamental aspect of the overall quality of a website E-service quality and website quality sometimes are use exchangeable Many researchers try to make conceptualization of service quality of website, for instance, Zeithaml (as cited in Li, 2010) defines e-service quality as the extent to which a website facilitates efficient and effective shopping, purchasing and delivery of goods and services; Santos (as cited in Udo et al., 2010) defines e-service

quality is the overall customer perceptions, judgments and evaluations of the quality

of service obtained from a virtual marketplace These concepts are used popular and developed from time to time However, this category still faces many debates (4) The fourth category is composed of authors who believed that the principal criterion for website quality was defined by customers' perceptions of quality For example, Huang (as cited in Éthier et al., 2006) describes website quality as whether the website meet and/or exceeded expectations in terms of information and enjoyment position; Wan (as cited in Éthier et al., 2006) states that the quality of a website was based on: information, friendliness, responsiveness and reliability

Like concepts of website quality, many instruments that combine the diverse aspects of website quality have also been proposed (see in appendix A) Some instruments combine traditional service quality dimensions and web interface quality dimensions as the point of departure For instance, in 2000, Loiacono et al proposed WEBQUAL, includes: ease of understanding, intuitive operation, informational fit-to-task, tailored communication, trust, response time, visual appeal, innovativeness, emotional appeal, online completeness, relative advantage, and consistent image After that, Yoo & Donthu (2001) measures website quality by SITEQUAL scale with

12 dimension: aesthetic design, competitive value, ease of use, clarity of ordering, corporate and brand equity, security, processing speed, product uniqueness, and product assurance quality Aladwani and Palvia's (2002) instrument focuses on website design and content It used four dimensions: specific content, content quality, appearance, and technical adequacy

With the growth of recognition of different variability in the outcome of measuring website quality, many studies show more different dimensions in website quality, for examples: Madu &Madu (2002, as cited in Li & Suomi, 2009) develop a 15 dimensions scale of website quality, which is built on better understanding of customers and providing services to meet the needs and expectations of customer; Field et al (2004, as cited in Li & Suomi, 2009) develop process model for assessing and improving website quality by identifying e-service system entities and

transactions between those entities and mapping key quality dimensions onto them Most recently years, Sohn & Tadisina (as cited in Li, 2010) proposed six dimensions

to measure website quality, include: trust, speed of delivery, reliability, ease of use, customized communication, website content and functionality

Among studies of website quality instruments, most researchers develop adapted website quality scales based on the modification of the SERVQUAL instrument SERVQUAL scale is measurement scale had been used widely to measure service quality with five dimensions: tangibles, reliability, responsiveness, assurance, and empathy (Iwaarden, Wiele, as cited in Li, 2010) When adapting to e-commerce context, Zeithaml (2000, as cited in Li & Suomi, 2009) proposed a 7-dimension website quality scale Later, Panasuraman et al (2005, as cited in Liu & Wu, 2012) developed it into seven constructs divided into two groups, includes: core e-SQ: efficiency, fulfillment, availability, privacy; recovery e-SQ: responsiveness, compensation and contact To nowadays, these instruments is used popular in many studies because it offers the surface dimensions of e-service quality based on customers’ experience and evaluation perspective, which are viewed also as the antecedents to the adoption of e-service (Rowley, as cited in Li & Suomi, 2009)

In general, website quality concept remains underdeveloped and is a vastly undefined concept This is a complex concept which has multiple dimensions Although recently, research on website quality has adopted a much broader scope on website quality compared to its past focus on usability and interactivity However, to nowadays, there is no consensus on a definition on it This topic is still a promising field for researchers

proposed in this study

Firstly, online group-buying repurchase intention was designed as dependent variables Intention was considered the best immediate factor in the relationship between attitude and behavior, and is appropriate to test consumers’ behavior (Wen et al., 2011) Online repurchase intention was one of context of customer retention In many prior researches, online repurchase intention and IS continuance intention were used exchangeable In this study, repurchase intention was used instead of continuance intention because these concepts were still different (Wen et al., 2011) although in online environment, both continuance intention and repurchase intention are influenced by the initial use/purchase experience and sometimes used as the same Continuance intention emphasizes the continued usage of e-commercial websites to shop instead of the use of physical stores while online repurchase intention is a construct combining information system theory and marketing theory (Wen et al., 2011) In online group-buying model, customer purchased products or service through online group-buying websites, not directly from providers, so, both on customers’ IS use and purchasing behavior needed to investigate “Online group-buying repurchase intention” construct was acceptable with this study

Secondly, two cognitive factors in expectation-confirmation model (ECM) – satisfaction and perceived usefulness - were chosen for this study because they commanded a majority of factors found to affect customer retention in prior studies Simultaneously, it ensures that the nomological structure of the research model is consistent with the traditional belief-attitude-intention linkages in IS literature (Davis, Bagozzi & Warshaw; Venkatesh et al., Ajzen, as cited in Li, 2010) In these linkages, satisfaction is typically viewed as user attitude towards IS, which is primarily measured by various beliefs about IS and posited to have strong saliency in predicting continuance intention Perceived usefulness in this study represents as IS user beliefs and is a salient determinant of behavioral intention regarding IS use in TAM

Thirdly, trust was added to the model due its role in influencing both satisfaction and online repurchases intention Trust in sellers is a vital key to maintaining

continuity in the buyer relationship An individual level of trust may increase gradually based on positive outcomes from repeated behavior, although its important

in determining repeat purchase intention may decrease over time (Chiu et al., 2012) Especially, in Viet Nam market, when some online group-buying websites faced many problems make customer trust decrease, studies of the impact of this factor on customer behavior become necessary for practitioners in improving and developing their business

Finally, website quality in this proposed model was also incorporated as a factor leading and influencing to customer behavior through three constructs: perceived usefulness, customer satisfaction and customer trust

A review of the literature evaluation reflected that there were many instruments to measure website quality In this study, instrument from study of Aladwani & Palvia (2002) was used due to its concept base on website functionalities and contents This instrument included four constructs: content quality, appearance, specific content and technical adequacy Appearance referred to the visual attractiveness of a website, included colors, fonts, and multimedia features as well as an appropriate overall layout Specific content referred to finding specific details about products or services, customer support, privacy policies and other important information (Aladwani & Palvia, 2002) Content quality dealt with attributed such as information usefulness, completeness, accuracy, and so forth, and was similar to the “information quality” concept (Liao et al., 2006) Technical adequacy, according to Liao et al (2006), was also similar to the “system quality” concept It meant that appropriate technologies had been adopted by the web retailer It could improve the security of online transactions and contribute to convenience of usage for IS users

With above discussions, the proposed research framework and hypotheses are presented in figure 2.2

H1a

H2

H3a H4b

H4a H5

to Burk (as cited in Al-maghrabi et al., 2010) perceived usefulness is the primary prerequisite for mass market technology acceptance, which depend on consumers’ expectations about how technology can improve and simplify their lives (Peterson et al., as cited in Al-maghrabi et al., 2010) Numerous empirical investigations have established strong empirical support for direct impact of perceived usefulness on intention So, in this study, perceived usefulness is proposed factor captures the instrumentality of IS use, and influences subsequent continuance decisions

Hypothesis 1a: Customer perceived usefulness is positively associated with online

group-buying repurchase intention

Besides an important predictor of initial intention to use information system (Davis; Davis et al., cited in Liao et al., 2006) and of intentions for continued use (Bhattacherjee, 2001), perceived usefulness also influences indirectly to customer

Perceived Usefulness

Customer Trust

Customer

Repurchase Intention

intention through customer satisfaction Some studies also examine and confirm this relationship such as Bhattacherjee, (2001), Li (2010), Wen et al (2011) Thus, it is

Hypothesis 2: Customer satisfaction is positively associated with online

group-buying repurchase intention

from engaging in online shopping because they are unlikely to carry out transactions with sellers who fail to convey a sense of their trustworthiness, mainly because of fears of sellers’ opportunism (Hoffman et al., as cited in Wen et al., 2011) So, trust plays an important role on driving repeat purchase intention Following hypothesis is proposed:

Hypothesis 3a: Customer trust is positively associated with online group-buying

repurchase intention

Beside directly impact on customer repurchase intention, users’ trust also influences customer behavior through satisfaction In some previous researches, trust’s impact has not high significance on customer repurchase intention (Tien et al., 2012), and in study of Wen et al., (2011), this significant is very low However, in the other hand, some studies confirm that trust is still a factor influencing customer repurchase intention because lack of trust could be the main reason customers decide not to shop online or why they have negative concerns related to shopping online So, this study

is proposed that:

Hypothesis 3b: Customer trust is positively associated with customer satisfaction

2.3.4 Hypotheses related to website quality:

Several elements of website quality, such as information quality, response time, and visual attractiveness have been verified to be related to perceived usefulness (Liao et al., 2006) Saeed and Abdinnour-Helm (as cited in Li, 2010) also assert that service quality has impact on users’ extended usage and the exploratory usage of a website via the perceived usefulness of a website Thus, website quality is expected to have an influence on user perception of the usefulness of online group-buying context It is assumed that:

Hypothesis 4a: Website quality is positively associated with customer perceived

usefulness

Website quality is referred to “the consumers’ judgment about a product’s overall excellent or superiority” (Zeithaml, as cited in Tien et al., 2012) Consumer satisfaction is a transient and experience – specific attitude, which is based on a consumer’s specific service encounter (Li, 2010) Numerous studies have been conducted to clearly demonstrate the relationship between service quality and satisfaction Fornell (as cited in Tien et al., 2012) proposed that website quality positively affect overall customer satisfaction Hence, this study proposed:

Hypothesis 4b: Website quality is positively associated with customer satisfaction

In study of Mcknight et al (as cited in Liao et al., 2006), authors showed that if consumers perceive that website quality is of high quality, they are likely to have high trusting beliefs about the web retailer’s competence, integrity, and benevolence; and will develop a willingness to depend on the web retailer Zhou et al (as cited in Li, 2010) also found that service quality had a stronger impact on consumer trust and satisfaction So, it is suggested that:

Hypothesis 4c: Website quality is positively associated with customer trust

Service quality usually was demonstrated to be an antecedent to satisfaction and asserts a direct influence on consumer satisfaction (Anderson & Fornell; Sweeney & Soutar, as cited in Li, 2010) However, some prior marketing literature also had evidence showing that service quality affects the purchasing intention Study of Liang

&Lai (as cited in Liao et al., 2006) showed that a high quality website not only affects the customer’s purchase decision, but also is one of the main reasons for consumers to determine whether they will purchase online or not (Gehrke & Turban, as cited in Liao

et al., 2006) Poor quality can result many loss in completion such as loss of customers, reduction in profits, increasing costs… Therefore, website quality turn leads to behavioral intention to use and reuse of customer So, hypothesis is proposed that:

Hypothesis 4d: Website quality is positively associated with online-group-buying

repurchase intention

2.4 Conclusion:

This chapter presented theoretical background of IS repurchase models and website quality concepts and instruments Base on discussion of literature review, online group-buying had emerged a new e-commerce model Customer retention of online group-buying context was an interesting topic and necessary for development of this model in the future Hence, in this study, a research model was proposed with nine hypotheses Three cognitive factors – trust, satisfaction and perceived usefulness - was chosen for this study because they commanded a majority of factors found to affect customer retention in prior studies Website quality was also incorporated to research model The next chapter will discuss about research method used to test this research model

CHAPTER 3

RESEARCH METHOD 3.1 Introduction:

This chapter presents a detailed account of a research methodology of this study First, it discusses data collection method and research process Then, measurement scales are presented to develop questionnaire Finally, results of pilot test are discussed

to contribute for measurement scales This chapter aims at explicating the research approach choice and presenting the reasons for its use

3.2 Research design:

Collecting data process of this study was designed into two stages First was a pilot test, second was main survey This study was conducted in Ho Chi Minh City, the principal business center in Vietnam Sample of this study is selected by using non-probability sampling method – convenience sample Most of respondents of this study was full-time and part-time students who were studying at University of Economics

Ho Chi Minh City They also were individuals who had experience in group-buying and still had repurchase intention

The pilot test of this study was conducted to assess the validity and reliability of the instrument before the questionnaire was distributed The initial data was collected from a sample 70 randomly; however, only 57 questionnaires were collected The pilot study helped ensure that the final questions would be well understood and attempted to predict an appropriate sample size and improve upon the study design prior to performance of a full-scale research project Simultaneously, cronbach alpha and exploratory factor analysis (EFA) was used to test measurement scales

Main survey was also quantitative research to collect data for examining research model The sample for this survey was also individuals who had experience in group-buying but with a large amount Based on rule of five observations per parameter estimated, the minimum sample size needed for testing overall model was 205 (there were 41 free parameters), hence, for the survey, 600 questionnaires were distributed directly and email to respondents After the data collection, total 550 responses were

collected, 185 responses were eliminated because respondents indicated that they had never use online group-buying before or they had no intention to repurchase Finally,

365 responses were used as a valid data for this research In this main study, exploratory factor analysis (EFA) and confirmatory factor analysis (CFA) were used

to assess measurement scales The structural equation model (SEM) had been used as the main method for analyzing the research model by testing the assumed causation among a set of dependent and independent variables Bootstrapping with N = 1000 re-samples was also used to assess the path significance

Figure 3.1: Research process

Cronbach Alpha EFA- Exploratory factor analysis

(Examine reliability and validity)

Composite reliability and Average

variance extracted

(Examine reliability validity)

CFA - Confirmatory factor analysis

(Examine discriminant and convergent

validity)

SEM – Structural Equation Model

(Examine research model)

3.3 Instrument construction:

A paper-based questionnaire was developed to collect data to validate the constructs and theory pointed in the research framework (see in appendix F) This questionnaire was firstly developed in English, and was translated into Vietnamese later It was divided into three parts

- The first part of the survey instrument was designed to get information about the respondents’ experience and online group-buying habit

- The second part of this survey instrument contained questionnaire items that measure five constructs in the proposed model These questionnaire items were measured using a seven-point Likert scale (from 1- strongly disagree to 7- strongly agree) These items were selected from many previous related researches and subsequently modified to fit the online group-buying experience (Figure 3.2 listed the items for each measure and provided the sources of measures)

- The third part of the survey included questions regarding demographic and social economic status

In this questionnaire, five main constructs were measured in this study, included: online group-buying repurchase intention, satisfaction, perceived usefulness, trust and website quality Among these constructs, website quality was a multi-dimensional construct with four constructs: content quality, technical adequacy, appearance and specific content

- Perceived usefulness items were adapted from Fan et al (2010) These items were modified from Davis et al.'s (1989) four-item perceived usefulness scale The first three items of this scale measured the performance productivity, and effectiveness dimensions of online group-buying usefulness, while the fourth item assessed overall usefulness

- Satisfaction was measured by items modified from Wen et al (2011) and Li (2010) Three items used originally from Spreng et al.'s (1996) overall satisfaction scale, designed to assess users' satisfaction with camcorder use According to

Ajzen and Fishbein (as cited in Bhattacherjee, 2001), this scale was appropriate because affect such as satisfaction was best measured along bipolar evaluative dimensions The last item of this scale was taken from Li (2010) to confirm more clearly customer satisfaction

- Trust measured by items modified from Wen et al (2011), original from Gefen

et al (2003) and Enrique et al (2008) These items measured trustworthy base on ability of protecting customer privacy and providing good service of website

- Online group-buying repurchase intention was measured using five items adapted from Kim et al (2012) These items were modified from Khalifa and Liu (2007) and Zhou et al (2009) The four initial items measured respondents' intention to continue purchase on the same online group-buying website The fifth

item assessed respondents' overall continuance intention to control for potential

- Website quality was taken from Aladwani & Palvia (2002) This measurement scale mostly targeted the web users, so it measured website quality focus on functionality and content of website It included 25 observed variables to measure four constructs: content quality, specific content, appearance and technical adequacy However, in this study, two items – finding firm general information and personalization or customization - were removed when modifying scale for

online group-buying context