The valuation of customer satisfaction and service quality in online purchasing in cambodia

MINISTRY OF EDUCATION AND TRAINING UNIVERSITY OF ECONOMICS HOCHIMINH CITY CHENG BUNKRY THE EVALUATION OF CUSTOMER SATISFACTION AND SERVICE QUALITY IN ONLINE PURCHASING IN CAMBODIA MA

MINISTRY OF EDUCATION AND TRAINING

UNIVERSITY OF ECONOMICS HOCHIMINH CITY

CHENG BUNKRY

THE EVALUATION OF CUSTOMER

SATISFACTION AND SERVICE QUALITY IN ONLINE PURCHASING IN CAMBODIA

MASTER OF BUSINESS ADMINISTRATION THESIS

Ho Chi Minh City – 2011

UNIVERSITY OF ECONOMICS HOCHIMINH CITY

CHENG BUNKRY

THE EVALUATION OF CUSTOMER

SATISFACTION AND SERVICE QUALITY IN ONLINE PURCHASING IN CAMBODIA

Major: Business Administration

Major Code: 60.34.05

MASTER OF BUSINESS ADMINISTRATION THESIS

Supervisor: Dr TRAN HA MINH QUAN

Ho Chi Minh City – 2011

Abstract

The findings of this research are mostly useful to those (managers, web designers, etc.) who intend to penetrate the Cambodian market with least cost, time and energy The results indicate the most important web quality factors through Cambodian online shoppers’ perspective In these recent years, a significant growth has been noticed in the Internet- based services in the pure Internet businesses as well as the traditional enterprises, which are developing their online services One

of the key challenges of online businesses is how they manage service quality, which holds a significant importance to customer satisfaction In addition of success stories, we should be aware of problems; in year 2000 nearly 900 US online firms were shut down, 31% of them were online retailers (Minjoon Jun, 2004)

The purpose of this research is to rank the quality factors perceived to be most important in relation to the use of online shops The questionnaire utilized was based on the SERVQUAL instrument that identifies five quality dimensions in service environments

Acknowledgements

First of all I would like to express my sincere gratitude to my supervisors,

Dr.Tran Ha Minh Quanat University of Economics Ho Chi Minh City, Vietnam,

for his intelligent guidance and helpful advice during the whole process, and Mr

Dang HuuPhucat University of Economics Ho Chi Minh City, Vietnam, for his

very helpful supports on processing data

I would like to thank all the participants who contributed to my work, not just for their responses, but also for the good suggestions they made and their kind help

Special thanks to my family and friends for their consideration andsupport during all the process

Cheng Bunkry

Table of Content

CHAPTER 1: INTRODUCTION AND BACKGROUND OF THE STUDY 1

1.1 Background of the study 1

1.1.1 E-commerce 1

1.1.2 Online Retailing 2

1.1.3 E-commerce in Cambodia 2

1.2 Problem Discussion 3

1.3 Research Question 5

1.4 Demarcation 5

1.5 Disposition of the thesis 5

CHAPTER 2: LITERATURE REVIEW 6

2.1 Customer Satisfaction 6

2.1.1 Definition of Customer Satisfaction 6

2.1.2 Techniques to measure customer satisfaction 7

2.2 E-service quality 8

2.2.1 Conceptualization of e-Services 8

2.2.2 E-service quality 8

2.3 SERVQUAL Gaps Model 10

2.4 Measuring e-Service Quality 11

2.5 Dimensions and determinants of Service Quality 11

CHAPTER 3: RESEARCH METHODOLOGY 14

3.1 Research Purpose 14

3.2 Research Approach 15

3.3 Research Strategy 15

3.4 Research Process 16

3.5 Research Model & Hypotheses 17

3.6 SERVQUAL dimensions in relation to online Purchasing 19

CHAPTER 4: RESEARCH RESULT 23

4.1 Sample and Response rate 23

4.2 Service quality measurement 24

4.2.1 Cronbach’s Apha Analysis 25

4.2.1.1 Measuring service quality 25

4.2.1.2 Measuring Customer Satisfaction 27

4.2.2 EFA Factor Analysis 28

4.2.2.1 Measuring service quality 28

4.2.2.2 Measuring Customer Satisfaction 32

4.3Examination research model 32

CHAPTER 5: DISCUSSION AND CONCLUSION 38

5.1 Introduction 38

5.2 Implications for Theory 39

5.3 Implications for Further Research 40

REFERRENCES 41

APPENDIX I: QUESTIONAIRE 43

APPENDIX II: TABLES 45

List of Tables

Table 2.1: Definition of customer satisfaction 7

Table 3.1: Time of research process 16

Table 4.1: Number of respondents by gender 23

Table 4.2: Number of respondents by age 24

Table 4.3: Cronbach’s apha of scale factor: assurance 25

Table 4.4: Cronbach’s apha of scale factor: reliability 25

Table 4.5: Cronbach’s apha of scale factor: responsiveness 26

Table 4.6: Cronbach’s apha of scale factor: empathy 26

Table 4.7: Cronbach’s apha of scale factor: tangible 27

Table 4.8: Cronbach’s apha of scale factor: satisfaction 28

Table 4.9: EFA analysis result of factors affecting customer satisfaction 29

Table 4.10: KMO and bartlett’s test 30

Table 4.11: EFA analysis of the satisfaction scale 32

Table 4.12: Regression model summary 33

Table 4.13: ANOVA (b) 33

Table 4.14: Coefficients(a) 33

Table 4.15: Hypothesis and research results 36

List of Figures Figure 2.1: Service quality model , source: parasuraman et al (1985, p 44) 10

Figure 3.1: Research process flowchart 17

Figure 3.2: Service Quality and Customer Satisfaction based on servqual 18

Figure 4.1: Hypothesis and research results 36

CHAPTER 1

INTRODUCTION AND BACKGROUND OF THE STUDY

1 Introduction

The first chapter in this thesis introduces the background of the selected area

This will be followed by a problem area discussion that will help reader to

understand the insight of the research area The problem discussions end with a

research problem and specific research question In the end of the first chapter we

will also present the disposition of the thesis

1.1 Background of the study

This section will provide the background of the research area This section

contains some idea of e-commerce and online retailing as one of the important

factor in e-commerce Also, a brief introduction of e-commerce situation in

Cambodia is brought here This section also shows the importance of service quality

and its relationship with customer satisfaction

1.1.1 E-commerce

E-commerce has many definitions In business today electronic commerce is

one of the common topics of discussion (Daniel, Wilson & Myers 2002) Is not very

far from what TawfikJelassi& Albrecht Enders in 2005 believed is “Electronic

commerce deals with the facilitation of transactions and selling of products and

services online, i.e via the Internet or any other telecommunications network".This

was an academic definition for e-commerce, what practitioners believe is:

"E-commerce is often referred to as e-business

In order to perform one or more of the business functions Internet based e-commerce systems use World Wide Web based application solutions These

business functions include information provision, communication, buying, selling,

distribution, customer service, delivery and payment processing among producers, suppliers and their customers etc Using e-commerce systems organizations can market their products and services online and provide a range of services that customers themselves can perform without direct human assistance Its allows customers to conduct a wide range of activities such as changing address, securing a credit card or loan, learning from other customers, personalizing a service agreement and purchases without human assistance (Molla and Licker 2001) Electronic commerce is a new way of conducting, managing and executing business transactions using computer (Kalakota and Whinston 1996)

1.1.2 Online Retailing

The rapid growth of the electronics retailers worldwide as we have known today Although B2B plays a larger role in part of electronic commerce rather than B2C, both of them go pass the bricks and mortar Even if online visitors, most of them just try to search more informationinstead of buying These sites are e-CRM (customer relationship management) necessary tools for retailers to survive in a competitive market, value added services are necessary to keep the difference with their competitor After the emergence of many e-commerce companies start up the website to the pioneers in this field, but in the mid-2000 many bubbles burst The story of the surviving company will lead us to a better understanding of the strengths and powers.Customers are the lifeblood of an organization, so their satisfaction is the primary goal of the company

1.1.3 E-commerce in Cambodia

In Cambodia the Internet is mainly used in the universities for research purposes, the internet stations throughout the cities are used for limited activities such as checkinge-mail and making long distance phone calls Thus the entryof electronic commerce in Cambodia is in its early stages Clearly, E-commerce is something new for this country, but it’s expected to grow steadily in the near future

As the follower of this area, we should use the opportunities and avoid the risks By analyzing the success stories and looking for the key elements of their success, and also studying the trend of online retailers which have gone away, we will be in a better position to establish policies and strategies of us Many studies have been done in the field of online retailers worldwide, while many retailers start their website, it is time to guide them appropriately Academician who takes the localization of foreign results to help companyachieving the world standards in Cambodia

Here is some of the Cambodian online retailers which is starting their first step: www.bongthom.com, www.sombok.com.kh, etc

1.2 Problem Discussion

Though the internet channel is increasingly being used by many online stores, but many online retailers are closed In the needs of a competitive market place understanding customer’s needs become very important So the company has moved from a central product to a central location of the customer Customer retention is directly affected by customer satisfaction Retention is an essential challenge, particularly in Internet-based services, as customers can easily switch from one service provider to another at low cost (Khalifa and Liu, 2003) Is not very far from Van Riel, Lijander&Jurriensin 2001which believe that “Considering the high costs of acquiring new customers and the apparently high customer turnover of many online services, it is very important to study the determinants of customer satisfaction”

Customer satisfaction is the key factor determining how successful the organization will be in customer relationships, so it is very important to measure it Total quality management (TQM) is based on the idea of customer satisfaction - an approach to management of an organization focused on quality, based on the participation of all members and towards its long-term success through customer satisfaction and benefits to all members of the organization and to society (ISO

8402) The achievement of customer satisfaction actually include customer-oriented culture, an organization focused on customer, employee empowerment, ownership

of the development team and relations working with customers and suppliers

In the other words:

• Improving the reputation and image of the company;

• Reducing the customer turnover, increasing attention to customer needs in TQM planning;

• Reducing the marketing costs and lower transaction costs;

• Reducing the costs related to product / service failures;

• And, finally, increasing the satisfaction among personnel and the stability of the workforce

There are many benefits of quality found through market research, especially

in measuring the satisfaction of existing customers, identify customer needs for product development, and analyzing customer retention and customer loyalty To better manage customer satisfaction, companies spend millions on effective monitor the methods to ensure that customer satisfaction, because the quantitative measurement of customer satisfaction is a great help to measure overall the impact

of product quality on consumer behavior

For keeping online retailers alive with logical profits; retaining customers must be the foremost aim Customer satisfaction, as we discussed before, has the most important effect on customer stickiness and in order to narrowing down we focus on service quality as one of the customer satisfaction’s factors

2 What are the orders of Service Quality factors that impact on online

purchasing through Cambodia perspective?

1.4 Demarcation

Since aspects of the problem areas are many choices, researchers have tried

to narrow down the focus The purpose of this study is to find the most important service quality dimensions that influence customer satisfaction online purchasing in Cambodia

In the literature, we will introduce the theory related to service quality and satisfaction to give a clear idea about the specific area to the readerand to explain the appropriate context of the study

1.5 Disposition of the thesis

In this section we will outline how the thesis is structured:

Chapter 1: This chapter will present the background of the study

Chapter 2: This chapter will present theories related to the topic will be presented Chapter 3: This chapter will explain and justify our choices of methodology that

will beused in order to conduct our thesis

Chapter 4: This chapter presents the data which is gathered through the

questionnaire survey

Chapter 5: This chapter will present the conclusions, implications and

recommendationsbased on our findings

CHAPTER 2

LITERATURE REVIEW

2 Literature Review

This chapter will give an overview of literature and models that are related

to the research problem presented in the previous chapter This chapter will introduce the concepts of customer satisfaction, service quality, relation between customer satisfaction and service quality, traditional service quality dimensions, online service quality dimensions and service quality model of online retailing in order to give a clear idea about the research area

2.1 Customer Satisfaction

Early concepts of satisfaction research have typically defined satisfaction as

a post choiceevaluative judgment concerning a specific purchase decision (Churchill and Sauprenant 1992) Most researchers agree that satisfaction is an attitude or evaluation that is formed by the customer comparing their pre-purchase expectations of what they would receive from the product to their subjective perceptions of the performance they actually did receive

2.1.1 Definition of Customer Satisfaction

Several authors have defined satisfaction in a different way Following table will present some definition of customer satisfaction that will give us clear idea about satisfaction concept

Table 1Table 2.1: Definition of Customer Satisfaction

Table 2.1: Definition of Customer Satisfaction

DEFINITION AUTHOR

Customer satisfaction is a collective outcome of

perception, evaluation and psychological reactions to the

consumption experience with a product/service

Yi (1990)

“Satisfaction is a person’s feelings of pleasure or

disappointment resulting from comparing a product’s

perceived performance (or outcome) in relation to his or

her expectations”

Kotler (2000, p.36)

2.1.2 Techniques to measure customer satisfaction

Market research techniques to measure customer satisfaction which are:

• The survey methodologies of customer satisfaction;

• Focus groups to research the issue of customer satisfaction

• The standardized package for monitoring customer satisfaction

• Various computer software

There are some technical problems with measuring customer satisfaction as

the typical focus group, the survey methodologies of customer satisfaction software

They include:

• Analysis - concerned with the technical and formal procedures, systems, and

so on;

• Behavioral – concerned with the attitudes, beliefs, perceptions, motivation,

commitment and actions of those involved in the process;

• Organizational - concerned with the organizational structure, information

flows, management styles and corporate culture, i.e the context in which the

process is conducted (Ingrid FecIikovaA, 2004)

2.2 E-service quality

2.2.1 Conceptualization of e-Services

Customer perceived service quality has been theoretically represented as consisting of two dimensions Berry and Parasuraman (1991) distinguish a process and an outcome dimension, whereas makes a distinction between functional and technical quality The process or functional quality refers to ``how’’ the service is delivered, while the outcome or technical quality refers to ``what’’ customers receive, the benefits of using the service The propose that for services offered on the Internet the traditional service concept, consisting ofthe core service, facilitating and supporting services, needs to be extended with a fourth factor, the user interface As noted, it is often difficult to differentiate between facilitating and supporting services A term that has been coined to more generally denote services that are not part of the core service is supplementary services.Facilitating and supporting services are both closely connected with the core service For an online bookseller facilitating services could be search facilities, an invoice archive and secure payment methods Book reviews and personal recommendations could be interpreted as supporting services In addition, independent, though related products that are neither facilitating nor supporting the core service can be offered through the portal site In the case of a medical portal, we could think of self-contained products, such as specialized financial services, insurances, a travel agency, an option to purchase medicine online, etc

2.2.2 E-service quality

Using online trading sites can be described as a complex process that can be divided into sub-processes, such as retrieving or exchanging information and articles, or ordering books Each of the four service components could be described

in terms of process and outcome, and could also be analyzed into sub-dimensions and quality determinants For example, customers may be satisfied with the responsiveness and user-friendliness of a search engine but dissatisfied with the

reliability of the search outcome It is assumed that the un/successful process or outcome of an interaction influences customers’ overall satisfaction with the Web site However, most likely the customer will not evaluate each sub-process in detail during a single visit to a Web site, but will perceive the service as an overall process and outcome, unless one of the service elements stands out as especially positive or negative The same applies to a series of interactions within a customer e-service relationship In a study of critical incidents found that positive incidents were rare and that dissatisfying incidents were often caused by process failure, such as lost orders

The process and outcome dimensions of an e-service can thus be divided into more specific service quality dimensions The best-known evaluation dimensions are the five proposed in the SERVQUAL model (Parasuraman et al.,1988): tangibility, responsiveness, reliability, assurance and empathy

Parasuraman and Grewal (2000, p 171) suggest that research is needed on whether ``the definitions and relative importance of the five service quality dimensions change when customers interact with technology rather than with service personnel’’ Since the dimensions were developed from, and for, interpersonal encounters, in our opinion the content description and scale items would have to be reformulated before they can be meaningfully used in an e-service context For example, tangibility could be replaced with the user interface Responsiveness could refer to the company’s responses to customers’ requests and the speed of order confirmation Reliability could relate to the on time delivery of ordered goods, accurate supply of information and error freeness of links Assurance could refer to the safety of on-line transactions and the policy for using personal information by the company Assurance refers to a general trustworthiness, which has been considered one of the most important drivers of e-service satisfaction Finally,empathy could be interpreted as the degree of customization of communications and the service provider’s awareness of customers’ personal needs

2.3 SERVQUAL Gaps Model

Parasuraman et al.‘s (1985; 1988) basic model was that consumer perceptions of quality emerge from the gap between performance and expectations,

as performance exceeds expectations, quality increases; and as performance decreases relative to expectations, quality decreases (Parasuraman et al., 1985; 1988) Thus, performance-to-expectations —gaps“ on attributes that consumers use

to evaluate the quality of a service form the theoretical foundation of SERVQUAL The SERVQUAL model concentrates on five “gaps'' impairing the delivery of excellent service quality; this study focuses on Gap 5:

Figure 2.1: Service Quality Model , Source: Parasuraman et al (1985, p 44)

Figure 1Figure 2.1: Service Quality Model , Source: Parasuraman et al (1985, p 44)

Expected Service

Service Delivery

Translation of Perceptions into Service Quality

Management Perception of Consumer

External Communications

2.4 Measuring e-Service Quality

Customer satisfaction is a critical issue in the success of any business system, traditional or online In a turbulent e-commerce environment, in order to sustain the growth and market share, Internet companies need to understand how to satisfy customers, since customer satisfaction is critical for establishing long-term client relationships It is evidenced by the fact that over the last five years, customer satisfaction surveys have become common in many financial institutions Thus, a fundamental understanding of factors impacting Web-customer satisfaction is of great importance to e-commerce Furthermore, the need for research in Web-customer satisfaction has been accentuated by the increasing demand for the long-term profitability of dotcom companies and traditional companies that are “Net-enhanced” (Pather, Erwin &Remenyi, 2002)

To understand satisfaction in the e-commerce context, we need to have a clear understanding of what is meant by customer satisfaction Customer satisfaction is defined as a result of a cognitive and affective evaluation, where some comparison standard is compared to the actually perceived performance If the perceived performance is less than expected, customers will be dissatisfied On the other hand, if the perceived performance exceeds expectations, customer will be satisfied

2.5 Dimensions and determinants of Service Quality

Parasuraman et al (1985; 1988) addressed the issue as to how the customer makes an assessment of service quality They came up with ten determinants that can be used to measure service:

(1) Access (approachability and ease of contact);

(2) Communication (informing and listening to customers);

the service);

(4) Courtesy (demeanor and attitude of contact personnel);

(5) Credibility (trust worthiness and honesty);

(6) Reliability (consistency of performance and dependability);

(7) Responsiveness (timeliness of service and willingness of employees); (8) Security (freedom from danger, risk or doubt);

(9) Tangibles (physical evidence of service); and

(10) Understanding/knowing the customer (making an effort to understand the customer’s needs)

Credibility is an evaluation that can be made before using this service that has the same bearing in e-commerce In general, a client will only make an e-commerce transaction after some type of introduction from an outside source, whether through advertising, or by word of mouth Security is very importance when conducting transactions online Typically, these sites would indicate that it is

a secure site for customers to provide, for example, credit card details, without having to worry about other people access to this information Other determinants such as understanding the customer and also access to relevant e-commerce market

A site must be available at all times and no opening and closing like a high street bank or shop normally To understand the client, a Web site has smart cookies files that recognize repeat customers and do this by asking for a new customer to register certain types of users as an e -mail each time which they enter on the visiting site This way, customers can be sent information by e-mail or offers to purchase on the web depends on what they had bought The goal is to meet customer’s needs and provide the type of individual that a regular customer will receive from personnel contacts in a BAM environment Communication on the Internet is difficult because the interaction between Web sites and the customer is often one way; the website provides information to customers It is only when a web site provides a phone number or e-mail address where customers communicates with the company directly, and in many cases, the queries received from e-mail cannot respond directly to queries In a similar manner, courtesy and competence can hardly be said

to non-existent in the website experience The customer will generally navigate a website if it is easy to use but he or she will not be able to judge what the personnel

are like behind this interface, or if they have the skills necessary to perform a service It is only through customer service options that can be evaluated and even then, answer e-mail messages are not automatically in human characteristics

Tangibles are for the most part unrelated to measuring service quality in commerce as customers interact with the site Therefore, customers cannot comment on the physical properties are used to deliver a service Most e-commerce company or have their own warehouses to fulfill orders for products to be sent, or to ensure suppliers do this directly The activities may take place away from where the customers sit and so is not applicable Responsiveness and reliability, however, applicable because they relate to what the company promises There can be judged reliability, for example, by getting the correct product exactly by the customer within 48 hours This is important for any business and related to the interaction between the interface and the back-end process is complete Responsiveness is slightly more indiscernible, especially when directly interact with the Website If the customer has a problem, the customer service option of telephone or e-mail is how to report and it is here the ability to respond well and at a reasonable speed of company being assessed This is also relevant if it is completed as part of customer service and send back an item or it is late arriving

e-Parasuraman et al (1988, 1988) subsequently reduced these ten determinants

to five, the following first three being the original ones and the other seven original ones categorized into (4) and (5): (1) Tangibles; (2) Reliability; and (3) Responsiveness; (4) Assurance (knowledge and courtesy of employees); and (5) Empathy (caring, individualized attention the firm provides its customers)

3.1 Research Design

Early in any research study, one faces the task of selecting the specific design to use A number of different design approaches exist but, unfortunately, no simple classification system defines all the various that must be considered (Cooper

& Schindler, 2003)

Research can be classified in terms of their purpose Accordingly, Saunders, Lewis &Thornhil (2003) mentioned that they are most often classified exploratory, descriptive or explanatory while Cooper and Schindler (2003) categorized in descriptive and causal This way the essential difference between descriptive and causal studies lies in their objectives If the research is concerned with finding out who, what, where, when, or how much, then the study is descriptive In a causal study, we try to explain relationships among variables

The purpose of the research is descriptive The data has been collected through questionnaire, is aimed to understand the most important factors of service quality

Qualitative research is multi method in focus, involving an interpretive, naturalistic approach to its subject matter This means that qualitative researchers study things in their natural settings, attempting to make sense of, or interpret, phenomena in terms of the meanings people bring to them

Since the purpose is to understand the most important dimensions of service quality from the Cambodian customers’ perspective, quantitative research is found

to be more appropriate for this study

3.3 Research Strategy

Research strategy will be a general plan of how researcher will go about answering the research questions that has been set by researcher It will contain clear objectives, derived from research questions specify the sources from which researcher intend to collect data and consider the constraints that researcher will inevitably have such as access to data, time, location and money, ethical issues (Thornhill et al., 2003)

Based on the conditions 1) form of research question 2) requires control over behavioral events and 3) focus on contemporary events five research strategies were identified in social science These are – experiments, surveys, archival analysis, histories and case studies

Since question in this study is based on “what” question and this what

question is actually form a “how many” and investigator has no control over the

actual behavioral events, Survey is found to be a more appropriate approach in

order to gain a better understanding of the research area Survey is more appropriate

for quantitative study

Purpose of this research is to classify the service quality dimensions in online

shopping from the Cambodia shoppers For the study sample has been selected from

people who works and live in Phnom Penh Capital, Cambodia; because this group

has more experience of e-commerce and online shopping than the rest of people in

other provinces or city, Cambodia Sample was selected by using judgment because

some criteria were followed during the sample selection:

The questionnaire was divided into two parts in order to let responders more

time to concentrate on each question

3.4 Research Process

Research process is presented in Figure 3.1 and the time of data collection is

presented in Table 3.1

Table 2Table 3.1: Time of Research Process

Table 3.1: Time of Research Process

Step Types of Research Research method Technique Time

Figure 3.1: Research Process Flowchart

Figure 2Figure 3.1: Research Process Flowchart

3.5Research Model & Hypotheses

Based on the narrow down scope of literature review above, the relationship between service quality and customer satisfaction can be shown in figure 1 The five Service quality dimensions have been selected from the SERVQUAL In the SERVQUAL instrument, 28 statements measure the performance across these five dimensions For each statement, the expectation and the experience of a customer are determined There is some criticism on the long-term stability of the results of

Literature review

SERVQUAL

Draft measurement scales

Face to Face Interview

Final measurement scales

ƒ Check Cronbach’s alpha coefficients

ƒ Eliminate variables that have low EFA loadings

ƒ Check Eigen values and extraction Sums of Squared Loadings

Multiple Regressions

ƒ Test hypotheses

ƒ Check the fitness of the multiple regression equation

the SERVQUAL scale and on the general applicability of the five dimensions Although alternative models have been proposed for the measurement of service quality, the SERVQUAL scale has been widely used by academics and practitioners

to measure service quality

Therefore, this model has been used as a point of reference in this thesis

Figure 3.2: Relationship between service quality and customer satisfaction based

on SERVQUAL

Figure 3Figure 3.2: Relationship between service quality and customer satisfaction based on SERVQUAL

Based on the above research model, we propose the hypothesis of the study

as below:

H1: Customer perception about the tangible of this service is increased or decreased,

their level of satisfaction with services also increase or decrease with

H2: Customer perception about the reliability of this service is increased or decreased,

their level of satisfaction with services also increase or decrease with

H3: Customer perception about the responsiveness of this service is increased or

decreased, their level of satisfaction with services also increase or decrease with

H4: Customer perception about the assurance of this service is increased or decreased,

their level of satisfaction with services also increase or decrease with

H5: Customer perception about the empathy of this service is increased or decreased,

their level of satisfaction with services also increase or decrease with

Customer Satisfaction in Online Purchasing Tangibles

Responsiveness

Assurance

Empathy

Reliability Service Quality

Dimensions

(SERVQUAL)

3.6 SERVQUAL dimensions in relation to online Purchasing

Tangibles

Examples of the tangibles factor are “has up-to-date equipment”, “physical facilities are visually appealing” and “materials are visually appealing” These aspects might be even more important in e-business as there is no face-to-face contact between the customer and an employee The visual aspects of the equipment (i.e theWeb site) are the only visual contact between a customer and an organization Therefore, the need to have well-functioning and good-looking Web sites is paramount There are a great number of customers who abandon their shopping carts on the Internet because they get frustrated with the technology or the design and layout of the Web site interface

The visual aspects of Web sites are also judged differently by the people of different age While young people may be attracted by flashy graphics, sounds and a high-speed interface, older people do not want blinking texts that are hard to read or animations that distract from the use of the Web site Although a number of Web sites offer users the opportunity to customize the Web site to their needs, this customization process is mostly aimed at the content of the Web site andnot at the graphics, animations and sounds

of convenience considerations If customers cannot trust an organization to do what they ask, those customers will be dissatisfied Price line, for example, ran into big problems by the end of 2000 because of its focus on the lowest prices People could buy a plane ticket at a very low price, but because of possible inconvenient flying

times there was a big risk for customers This resulted in dissatisfied-customers who were happy to trade off Price line’s discounts for the convenience of a competitor

Responsiveness

One of the aspects in the responsiveness factor is “gives prompt service” The amount of time it takes to download a Web page appears to be of great importance to the users of the Internet Research in 1999 found that fewer than 10 percent of users leave a Web site if page response time is kept below 7 s However, when it rises above 8 s, 30 percent of users leave When delays exceed 12 s, a staggering 70 percent of users leave a Web site It can be assumed that people expect Web sites to be even quicker than in 1999 because of the technological advances Thus, it is very important for organizations to have a Web site that is quick, but on the other hand users expect Web sites to be visually appealing As the number and size of animations, pictures and sounds increase to make a Web page more visually appealing, the time it takes to download that Web page will also increase,which is judged negatively by users Hence, there is a trade-off between the looks of a Web site and the speed of that site Organizations will have to try to find the right balance between good looks and speed The trade-off between looks and speed is complicated by companies’ demand that their Web sites convey the corporate image The design department of a company wants Web pages to be easily recognizable as belonging to that company In their view, Web pages have to display company and product logos as well as other graphics that underscore the corporate identity These graphics add to the overall size of Web pages and thereby increase the download time for Internet users It is questionable whether users are willing to accept slower pages in return for more logos and graphics that do not improve the functionality of the Web site (although they might improve the visual appeal)

Assurance

One of the aspects in the assurance factor is “knowledge to answer questions” Customers expect to find everything they want on a Web site In a bricks and mortar store, people feel comfortable with a limited inventory On the Internet, people are notsatisfied if they cannot find everything they want Web shops need to have great depth of inventory and rich and relevant product information Two other aspects in the assurance factor are “employees can be trusted” and “feel safe in your transactions with employees” First, there is the risk for users to share personal information with an organization they do not know Research on this topic shows that at least 50 percent of users are very concerned about: misuse of credit card information given over the Internet; selling or sharing

of personal information by Web site owners; and cookies that track customers’ Internet activity Second, the same research shows that two-thirds of active Web users typically abandon a site that requests personal information and one in five has entered false information to gain access to a Web site Aspects in the assurance factor that could be very important in e-business are:

• availability of a formal privacy and confidentiality policy on a Web site;

• secured access to a Web site (that customers are prompted to acknowledge);

• general reputation of supplier;

• certifications or guarantees of assurance; and

• reports of experiences of other customers

The first aspect in this list is also acknowledged by the International Organization for Standardization in Geneva The Code of Practice for Information Security Management provides a basis for establishing and maintaining the means

of handling sensitive data Certifications and guarantees of assurance are also important in e-business More and more organizations are trying to obtain certification by an objective, consensus-based standard, just as they did earlier with quality management standards These organizations are becoming aware of the