A STUDY ON CONSUMER LOYALTY PERCEPTION FOR E-TAILING SERVICES FOR ELECTRONICS GOODS (The research was conducted in between )

Size: px
Start display at page:

Download "A STUDY ON CONSUMER LOYALTY PERCEPTION FOR E-TAILING SERVICES FOR ELECTRONICS GOODS (The research was conducted in between )"

Transcription

1 A STUDY ON CONSUMER LOYALTY PERCEPTION FOR E-TAILING SERVICES FOR ELECTRONICS GOODS (The research was conducted in between ) PROF. BISWAJIT ROY Assistant Professor, Future Business School, Kolkata ABSTRACT The entire world has become a virtual market for a common man nowadays, since it can provide faster and easier way of buying and selling of goods and services. As a result, the term retailing also has been continuously changing its meaning and scope as the organization progress. In India, E-tailing is emerging as a big service industry following the footsteps of the other parts of the world. E-tailing is the concept of selling of retail goods using electronic media, in particular, the internet (as well as fax or phone or Digital TV), to a place defined by the customer. To provide e-tailing services, the e-service providers adopt different techniques, and try to minimize customer complaints. Understanding of complaint factors and minimizing them can encourage consumers to purchase repeatedly from the same website. So, loyalty is another concept that e-tailers must concentrate on and for the purpose, it is important to identify those factors that can convert a consumer to show more loyalty intensions towards a specific service provider. The current study discusses about some important aspects of e-tailing services provided by different virtual platforms (websites). This study mainly concentrates on one important part of e-consumers perception, viz, consumer loyalty, associated with e-tailing service from different websites. For the purpose 437 respondents are interrogated about their opinion on most important factor among identified 9 possible loyalty factors that makes them loyal towards a specific e-tailing website while purchasing electronic goods. For the purpose, Thurston Case-V scaling technique is used. Key words: consumer loyalty, e-tailing, electronics goods, Thurston case-v. Introduction: e-business is getting extensive growth. On the consequence of it, the consumer experience, expectations of online businesses are increasing day by day. Retailing business is also experiencing the same changes, mainly the consumer goods, as e-retailing or e-tailing is gaining popularity day by day. It is therefore imperative to understand the structural changes taking place in market and also the long term impact of the changes due to online buying especially to understand the reasons /causes influencing the customers to buy online. (Datt, R, et al 2009). Measuring online service quality has been a major concern among researchers since a long time. Quality is related to customer satisfaction, retention and loyalty in both product and services settings. (Wolfinbarger. M et al., This research addresses to understand consumer loyalty for the development in e-retailing services in Kolkata. Consumers loyalty can be defined as a consumer continuing to believe that an organization s product/service offer is their best option. It best fulfills their value proposition whatever that may be. They take that offer whenever faced with that purchasing decision. It is a fallacy to assume that a customer is loyal just because they continue to buy from the same service provider. There are many reasons why a customer repeats purchasing which have little to do with being really loyal, like: Say positive things, Recommend to others, Encourage peers, Consider it to be always to be the first choice, Purchase from the same provider icmrrjournal@gmail.com

2 Literature review: The loyalty intentions construct was measured through a five-item Behavioral Loyalty Scale developed by Zeithaml, Berry, and Parasuraman (1996). They identified that privacy perceptions do influence customers overall quality/value perceptions and loyalty intentions. One author who has extended the SERVQUAL conceptualization to the electronic context is Gefen (2002), who found that the five service quality dimensions collapse to three with online service quality: (a) tangibles; (b) a combined dimension of responsiveness, reliability, and assurance; and (c) empathy. In that research, tangibles were found to be the most important dimension in increasing customer loyalty and the combination dimension most critical in increasing customer trust. However, the items in the scale were changed to adapt to the electronic context (e.g., tangibles were represented in part by an item about appearance of the Web site), and therefore the scales were not comparable across the research contexts. For this and other reasons discussed below, studying e-sq requires scale development that extends beyond merely adapting offline scales. Wolfinbarger.M et al. (2003) in their study paper etailq: dimensionalizing, measuring and predicting etail quality, establish the dimensions of the etail experience, and develop a reliable and valid scale for the measurement of etail quality. The analysis suggests that four factors website design, fulfillment/reliability, privacy/security and customer service are strongly predictive of customer judgments of quality and satisfaction, customer loyalty and attitudes toward the website. This study suggested that it is important to consider customer loyalty while measuring etail service quality. Santos (2003) through focus group interviews identified two categories of online service quality dimensions that influence customer retention. Yang.Z et al. (2004) have tried to set a reliable and valid means of measuring online service quality based on online banking customer review. This study is useful for further research to verify the dimensions developed in this study and to enhance the generalizability of the research findings, Next, the measurement instrument constructed in this study can be used to further investigate how customer perceived online service quality influence customer satisfaction and in turn purchasing behaviors such as customer repurchase intentions and loyalty. Similarly, the antecedents, such as time orientation, time pressure, and technology readiness, of customer perceived online service quality may also be examined using the measure. Swaid, S.I. et al. (2009) constructed a scale for measuring e-service quality and also they examined the dimensions of e-service quality on the various types of customer loyalty. According to them there are six dimensions of services. Those are information quality, website usability, reliability, responsiveness, assurance and personalization. They also identified the influence of the individual dimension of e-service quality on the different types of service loyalty. Their research analysis revealed that assurance is the most important factor affecting price tolerance, while reliability is the factor with the greatest influence on preference loyalty. The dimension of responsiveness is the only one having significant negative impact on complaining behavior. Online retailers are provided with tactical strategies on how to immunize online shoppers loyalty against switching behavior and price sensitivity icmrrjournal@gmail.com

3 Objectives: The objectives of this research were To test the association of customer perception on loyalty factors for e-tailing To identify the most influential loyalty factor of e-tailing Research methodology: Research design: The research is based on exploratory research design. It attempted to explore the most influential factors that influence consumer loyalty. Types of Data Source: For present research work, primary data were used. Data is collected in Kolkata. Questionnaire and Surveys: This includes range of response questions, close ended questions, providing limited answers to specific responses or on a numeric scale. Interview: This includes people to face-to-face interview. Develop the interview questions including close ended questions. Data collection & Sample Size: Samples were drawn on random basis. Sample size is 437. Sampling Technique: The study followed Simple Random Sampling. All sample units was personally contacted and interviewed. Place of primary data collection: Kolkata PIN code area Analysis and Findings: Analysis of the research started with finding out the reliability of the research data. The results of them are respectively as follows: Table 1- Reliability Statistics for Online Service Loyalty Intensions Cronbach's Alpha Cronbach's Alpha Based on Standardized Items N of Items From the above results it can be safely concluded that the alpha values are very good for most of the items. Analyzing Consumers Perception and Loyalty factors for classification: The formula used for the classification is as under: Where, π = Impact Index π = Σr i n i / m i * 100 r i = Score Of i th opinion n i = Number of respondents m i = Maximum attainable score for i th customer The Percentage score for all four categories, i.e, Consumers Perception and Loyalty factors are further classified on the following basis icmrrjournal@gmail.com

4 Table 2- Percentage impact classification of four factors PATTERN OF IMPACT RANGE CLASSIFIER No Impact 0-25% Poor Average Impact 25.01%-50% Low Moderate Impact 50.01%-75% Moderate High Impact 75.01%-100% High Association test between Perception and Loyalty class: Table 3- Association between perception class and loyalty class percep_class * loyalty_class Crosstabulation Count percep_class loyalty_class Low moderate High Total High Low Moderate Total Table 4- Chi-Square Tests Value Df Asymp. Sig. (2-sided) Pearson Chi-Square a Likelihood Ratio N of Valid Cases 437 a. 1 cells (11.1%) have expected count less than 5. The minimum expected count is.38. Table 5- Symmetric Measures Value Approx. Sig. Phi Nominal by Nominal Cramer's V Contingency Coefficient N of Valid Cases 437 Interpretation: It can be observed from the above test that the p-value is less than.05. So, we can reject null hypothesis and can accept H1. So, it can be concluded that there is significant association between Perception and loyalty class. Finding the most important loyalty factor: In this section, it is attempted to find the most important variable among loyalty factors. For the purpose Thurstone case V scale is applied here. The result revealed the following: 15 icmrrjournal@gmail.com

5 Table 6- loyalty factors Statement Average Z-score Adjusted R* How likely are you to...say positive things about this site to other people? How likely are you to...recommend this site to someone who seeks your advice? How likely are you to...encourage friends and others to do business with this site? How likely are you to...consider this site to be your first choice for future transactions? How likely are you to...do more business with this site in the coming months? How likely are you not to...switch to other website for buying electronics product next time? How likely are you to...purchase other electronic product from this site? How likely are you to...recommend this site to buy any electronic product to other people? How likely are you to...increase electronic product purchase from this website?

6 Figure 1 - Thurston Case V scale for loyalty factors So, according to the result, the most important loyalty factor is Consumers are likely to encourage friends and others to do business with this site. This factor is closely followed by; the fact that Consumers are likely to recommend this site to someone who seeks advice. And it is least important for a loyal consumer to switch to other website for buying electronic product next time icmrrjournal@gmail.com

7 Conclusion: Customer loyalty factors can be the identifier of post purchase behavior of consumer. To understand consumers thinking about the two factors, viz, consumer perception and loyalty, each of the customers are identified and classified under four headings based on the impact of each of these factors on them. The four classes are, High, moderate, low and poor. Any customer having average score of more than 75%, identified as High class. Similarly, getting average score in between 50%-75%, identified as Moderate class. Low and poor classes are 25%-50% and less than 25% of average scores respectively. A chi-square association test revealed that, there is significant association between Perception class and Loyalty class of customers. So, we can conclude that a good perception about the e-service provider can help them to earn more loyal customers. To identify the most influential reason of loyalty among customers, it is discovered that the most influential loyalty factors are identified and it is found that, loyal customers are more likely to recommend their friends towards the e-retailing service providers to purchase the product. And quite obviously, switching to other website is found to be the least important loyalty factor. References: Berry, Leonard L (1986), Retail Businesses Are Service Businesses, Journal of Retailing, 62, spring 1986, pp.3-6. Cox J and Dale B.G (2001), Service quality and e-commerce: an exploratory analysis, Managing Service Quality, Vol. 11, No. 2, pp Datt. R, Mandeep (2009), Impact of Electronic Marketing in a Globalizing World: Indian Perspective, Computer Science and Information Technology - Spring Conference, IEEE explore, ISBN: Gefen, David (2002), Customer Loyalty in E-Commerce, Journal of the Association for Information Systems, 3, Li. H, Suomi. R (2008), Dimensions of E-service Quality: An Alternative Model,2008 Second International Conference on Future Generation Communication and Networking Symposia, IEEE explore, ISBN /08. NASSCON and BCG, E-Commerce Opportunities for India Inc. (study report prepared by NASSCOM and The Boston Consulting Group). Parasuraman A., Zeithaml V.A., Malhotra A (2005), E-S-QUAL: A Multiple-Item Scale for Assessing Electronic Service Quality, Journal of Service Research, 7(3), pp Parasuraman, A., Zeithaml V.A, and Berry L.L (1985), "A Conceptual Model of Service Quality and Its Implications for Future Research," Journal of Marketing (Fall), Paulin, M. and Perrien, J. (1996), Measurement of service quality: the effect of contextuality, in Kunst, P. and Lemmink, J. (Eds), Managing Service Quality, Vol. III, Chapman, London, pp Rastogi, R (2003), INDIA: COUNTRY REPORT ON E-COMMERCE INITIATIVES; Part Three: Country Presentations, pp Santos, J (2003), E-service quality: a model of virtual service quality dimensions, Managing Service Quality, Vol. 13 No. 3, pp Sharma, D.P; e-retailing (2009), Principles and Practice; First Edition, Himalaya Publishing House. Siadat. S.H, Buyut. V.C, Selamat. H (2008), Measuring Service Quality in E-Retailing using SERVQUAL Model,2008 International Symposium on Information Technology, IEEE Xplore, ISBN Swaid. S.I, Wigand. R.T (2009), Measuring The Quality Of E-Service: Scale Development And Initial Validation, Journal Of Electronic Commerce Research, Vol 10, no icmrrjournal@gmail.com

8 Wan H.A, (2000) Opportunities to enhance a commercial Web site, Information and Management, Vol. 38 No. 1, pp Wolfinbarger.M, Gilly. M.C (2003), etailq: dimensionalizing, measuring and predicting etail quality, Journal of Retailing 79 (2003),pp Zaheer. A (2011), E-retailing strategy boom across the globe, amity business review, vol12, no.1. Zeithaml, V.A., Parasuraman, A. and Malhotra, A. (2002), Service quality delivery through Web sites: a critical review of extant knowledge, Journal of the Academy of Marketing Science, Vol. 30 No. 4, pp Zhao. W, Xiong. X (2011), E-Tail-SERVQUAL: Conceptualization and its Validity, IEEE explore, ISBN / icmrrjournal@gmail.com