International Journal of Arts and Sciences (IJAS) Conferences 31 March to 3 April 2014 at FIAP Jean Monnet, Paris.

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International Journal of Arts and Sciences (IJAS) Conferences 3 March to 3 April 204 at FIAP Jean Monnet, Paris. STRUCTURAL EFFECT OF MARKETING MIX STRATEGY, SERVICE QUALITY PERCEPTION, SATISFACTION AND TRUSTWORTHINESS AS DETERMINANT TOWARD CUSTOMER LOYALTY IN ONLINE BUSINESS, THAILAND Boonchanit Wingworn and Boonthawan Wingwon Ph.D. Program in Faculty of Management Science, Lampang Rajabhat University, Thailand The purpose of research were () to study marketing mix strategy, service quality perception, satisfaction and trustworthiness as determinant toward customer loyalty in online business and (2) to study structural effect of marketing mix strategy, service quality perception, satisfaction and trustworthiness as determinant toward customer loyalty in online business. It was survey research with 88 online business customers from 5 regions as population. The research tool was questionnaire with descriptive statistics to analyze average, frequency, standard deviation and inferential statistics to analyze structural correlation with AMOS program. The outcomes of research revealed that satisfaction factor and marketing mix strategy factor had statistical significance at highest level and followed by service quality perception, trustworthiness and customer loyalty at high level. The factor analysis revealed that the applied variable measurement model conformed to theory with factor value between.786-.987, with average variance value between.606-.879 and reliability value between.696-.998. The structural equation model conformed to empirical data as χ2=38.53, χ2/df =.35, df=28.47, GFI=.997, CFI=.998, RMR=.08, RMSEA=.027. The satisfaction factor had highest effect and followed with marketing mix strategy had direct effect toward customer loyalty while service quality perception and trustworthiness had positive effect toward customer loyalty in online business. Keywords: Marketing Mix Strategy, Service Quality Perception, Satisfaction, Customer Loyalty, Online Business Introduction The situation of current servicing business is continued changing and evolving which has both positive and negative effect toward business operation of entrepreneurs. Especially on the positive effect, in particular on the potential economic growth in Thailand with the developing of numerous new products and services in order to cater with the free trade system within the country and the readiness in expanding business and investment in international market. Even through, under the current economic recession, the majority of consumers have economized their routine spending but they are still willing to spend their money in purchasing products online due to its speed and convenience. The survey of National Electronics and Computer Technology Center (NECTEC) revealed that consumers purchased products online had increased from 47.80% to 57.20%. There were over 0 million product items offered online by local entrepreneurs with the increasing trend of local and international online entrepreneurs and the rolling out of Asian Economic Community: AEC with over 600 million populations, it would even widely open the opportunity for online business. Hence, the online business was the single most economic option with potential increase of direct sale volume.

National Statistical Office revealed the most popular type of online commercial business was Business to Customer B2C where entrepreneurs were receiving full supports from Department of Business Development and from Ministry of Commerce in doing online business and with the increasing trend of growing market share due to its convenience in searching for products and in accessing to products. Consumers could place order any time around the clock and from any corner of the world. In addition, the improving of preventive internet security and innovative technology in intelligent security system, they ensured the security of online order system and entrepreneurs had also applied marketing mix strategy to attract consumers, e.g. low competitive prices, large selection choices products (Kotler and Armstrong, 202) However, the outcomes of research by Segoro (203) had highlighted various problems of online business, ranging from the speed of internet, the trustworthy of e-commerce payment system and the opportunity to view the real products which had effect on the customer satisfaction and loyalty, including the concern over the not receiving products after payment (Yoon, 2002). These were all problems and issues on the lack of trustworthiness and felt insecure in purchasing products through e-commerce among Thai consumers which had similar effect to other developed countries (Pongvitayapanu, 2007). Hence, those key impact factors toward the purchasing of online products were convenience, low expenses over the regular channel, purchasing speed and quality of information or content presentation. On the problems and issues holding consumers from making decision to purchase online products were mainly from the lack of trustworthiness on the security of electronic payment system (Horsatitkul, S. 2000), including other causes that confined the widespread of e-commerce usage in Thailand, i.e. lack of confidence on online business entrepreneurs leading to short of trustworthiness in service usage, indecisive in purchasing products through internet due to lack of trustworthiness on seller, not knowing sellers and their locations, not being able to view and inspect products and concerning over product loss during transit (Pongvitayapanu, 2007, p. ). The secondary factors were the trustworthiness of products and company selling products through internet and the level of difficulty in getting access to purchase product through internet. Even through, these were not the direct impact toward decision making, but had indirect impact toward decision making of consumer in purchasing online products (Anderson and Srinivasan, 2003). Therefore, the above elaborated information had captured researchers attention in studying marketing mix strategy, service quality perception, satisfaction and trustworthiness as determinant toward customer loyalty in online business. Research Objectives. To study marketing mix strategy, service quality perception, satisfaction, trustworthiness and customer loyalty in online business. 2. To study marketing mix strategy, service quality perception, satisfaction and trustworthiness as determinant toward customer loyalty in online business. Literature Review From the review of concepts, theories and relevant literatures of this research, researchers specified main theoretical concepts as () marketing mix strategy of Kotler (2008), (2)

service quality perception of Parasuraman, Zeithal and Barry (988), (3) satisfaction of Morse (958), (4) trustworthiness and (5) customer loyalty with details as follows:. Marketing Mix Strategy Marketing mix strategy was a technique, tool and marketing activities which adopted by entrepreneurs in generating added value by adapting them to cope with the situation (Kotler and Armstrong, 202), by engaging related stakeholders to repeat their service usage (Kotler, 2008), by responding to satisfaction of targeted customers through presenting product, price, place and promotion as follows (Kotler and Keller, 980; Kotler, 2008).. Product was the offered item by business to respond to customer requirements or needs in order to fulfill satisfaction. It consisted of tangible and intangible items, e.g. packaging, color, price quality, brand, and reputation of entrepreneurs or organization. The offered products could be either tangible or intangible..2 Price was the value of product in monetary term. It was the capital of consumer which consumer could compare between value and price to view whether such product had a higher value than the committed price. Hence, the price setter must considered customer acceptance on the product value whether it was higher than product price, capital and related expenses of such product under the situation of each competitive environment..3 Place or distribution was the channel structure consisting of format or activity supporting the distribution of product to final consumers. It consisted of transportation, warehousing and storage.4 Promotion was the communication between buyer and seller in order to create positive attitude and buying behavior. The communication engagement might be through personnel or other numerous means. Therefore, all 4 marketing mix strategy were linked and integrated to each another and were important on each situation in developing continued differentiation to support entrepreneurs or marketer in making decision. It aligned with the evolving marketing situation in order to ensure utmost customer satisfaction. It must distribute the right product through the right place, with the right promotion at the right price since the marketing mix strategy had impacted toward the service quality perception (Kotler, 2008). H: Marketing mix strategy had effect toward the service quality perception. 2. Service Quality Perception Service quality perception was the perception between the received service from the business and the expected service of customer with the relevant factors as () word of communication from a customer to another customer of the received experiences either good or bad, (2) personal needs of customer as perceived or expected from service or received product against the actual situation (Gronroos, 990), (3) experience of customer who used to receive service from online business which vary from case to case and (4) external communications to create service quality perception weather it align with expectation (Parasuraman, et. al., 990). So, the service quality perception arose from the customer expectation whether it matched with expectation (Antioned and Van Raaij, 985; 988) (5) professionalism and service skill were able to solved with the service commitment, accepting service errors and service provider care over their online business (6) reputation of service provider was the key factor in attracting received service customers to have a need in receiving new service, including the outcomes of received service whether match their expectation (Gronroos, 990). The service quality had effect toward customer satisfaction (Segoro, 203) under the condition of service quality as reliability, responsiveness, assurance, empathy and tangible (Parasuraman,

et.al, 998, p. 5), including the trustworthiness and loyalty (Yang and Robin, 2004, pp. 799 822) with the following hypothesis H2: Service quality perception had effect toward satisfaction, H3: Service quality perception had effect toward trustworthiness, H4: Service quality perception had effect toward loyalty. 3. Satisfaction Satisfaction was one of the key factors in work achievement, in particular on the work related to service (Morse, 958, p. 9), especially on customer satisfaction (Mittal and Kamakura, 200). In addition to entrepreneurs or management had to operate and motivate workers to satisfy their works, they had to ensure service receiver satisfaction as well (Garbarino and Johnson, 999). The growth of service work could be viewed from the indicative factor on the number of website visit or online business visit, including the website design, content, value received through the user contact and data structure in online system (Anderson and Sullivan, 993; 2003), including the analysis on factors and elements in generating satisfaction of both service receiver and service provider of website or online business (Zviran et al, 2003). The evaluation on feedback of each customer level from their experiences in using services (Garbarino and Johnson, 999) by customers had satisfaction toward the overall feeling and attitude toward received service (Pearson, 983). The satisfaction had effect toward the trustworthiness (Deutsch, 958; Leonidou, Talias and Leonidou, 2008) and customer satisfaction had effect toward organization loyalty (Flint, Blocker and Boutin, 20; Garbarino and Johnson, 999) under the following hypothesis: H5: Satisfaction had effect toward trustworthiness, H6: Satisfaction had effect toward loyalty. 4. Trustworthiness Trustworthiness was the acceptance of individual toward certain thing or action of another party whom one confidence and trust (Moorman et al., 993). The willingness or acceptance was based on the trust toward such organization (Thom et al, 2004), willingness to accept exchanged support from partners by based on the trust of each others (Hadjikhani and Thilenius, 2005; Moorman et al, 992). The research work of Ndubisi (2007) revealed that the trustworthiness was the key important factor toward the developing of loyalty and had positive relations between customer trustworthiness and loyalty in building customer confidence and in delivering quality service which lead to the organizational success (Kramer and Ryler, 996). Customer trustworthiness was the willingness, acceptance or belief on service provider to operate toward service receiver by all means in protecting benefits and not taking advantages on them. The trustworthiness had positive effect toward customer loyalty (Kim, Ferrin and Rao, 2008) with the following hypothesis: H7: Trustworthiness had effect toward loyalty 5. Customer Loyalty Customer loyalty was the relationship developed from the long accumulated experiences (Kramer and Ryler, 996). The current online business competition was complex and on the rising trend following the customer demand (Rezai Dolatabadi; Jamshidi and Khazaei Pool, 202, p. 85). The continued communication technology and innovation changes had led online business to become universal players. It led to the increase of online business development (Flint, Blocker and Boutiu, 20) with objectives on long term profits of both Business to Customer (B2C) and Business to Business

(B2B). The business objectives were to build customers loyalty on using online business, to attract customers with numerous strategies to use online business on continuous basis, to retain customers and to maintain customers or service receivers. At the end, it would destine to higher profits for the business through the achieving of customer satisfaction on easy to access, easy to view products and easy to purchase products through online business (Reichheld, Markey and Hopton, 2000; Otim and Grover, 2006). Furthermore, the research work of Kassim and Abdullah (200) had concluded that the service quality perception had statistically significance toward satisfaction, trustworthiness and customer loyalty toward online business. Hence, after the review of related literature, researchers had summarized the conceptual framework as follows: Marketing Mix Strategy H H2 Satisfaction H6 Service Quality Perception H4 H5 Loyalty H3 Trust worthiness H7 Figure. Research Conceptual Framework Research Hypothesis H: Marketing Mix Strategy toward Service Quality Perception H2: Service Quality Perception toward Satisfaction H3: Service Quality Perception toward Trustworthiness H4: Service Quality Perception toward Loyalty H5: Satisfaction toward Trustworthiness H6: Satisfaction toward Loyalty H7: Trustworthiness toward Loyalty Research Methodology Population and Sampling Group Population was online business customers in Thailand from 5 regions, i.e. northern, central, northeastern, eastern and southern which were classified with stratified sampling technique (Comrey and Lee, 992) of 200 samples per region and sum up to the total of,000 samples for this research. The level of confidence was 95 percents on 88 respondents which representing 8.80 percents. The research applied descriptive statistics to find average, frequency standard deviation and inferential statistics to analyze structural correlation of both direct and indirect effect toward sustainable competitive capability with AMOS 7.0 program. Research Tools This research was survey research with questionnaire as research tool which was developed from literature review. The relevant 5 variable factors were () marketing mix strategy which modified from Kotler (2006) and (2008) (2) service quality perception which modified from Parasuraman, Zeithal and Barry (988) (3) satisfaction which modified from

Pearson (983) (4) trustworthiness on website or on online business which was modified from Kim and Tadisina (2005) and (5) customer loyalty which modified from Reichheld, Markey and Hopton (2000); Otim and Grover (2006). The questionnaire had 3 sections, i.e. () basic data of respondents (2) opinions on marketing mix strategy, service quality perception, satisfaction, trustworthiness and (3) determinant toward customer loyalty on online business. Research tool was examined for reliability with alpha coefficient by Cronbach on 4 variable factors, i.e. total measurement on marketing mix strategy factor with average value equal to 0.983, service quality perception factor with average value equal to 0.982, satisfaction factor with average value equal to 0.985, trustworthiness with average value equal to 0.983 and customer loyalty with average value equal to 0.984. The measuring scale of questions was based on the 5 point Likert scale with meant the least and 5 meant the most (Likert, 970). Research Summary Section : Basic Data of Customers The outcomes of research revealed that majority of online business customers were female, with age group between 2-25 years old, with single marital status, with northern and northeastern regional domicile, with educational level as high school and professional school at similar proportion, with profession as students and business personnel, with usage frequency of -2 times per month and followed by 3-5 times per month, with the peak period usage between 9:00-2:00 and 2:0-24:00 hours, with the most common service system usage on product sale website / Facebook / Instragram / Line, with product purchase on clothes and followed by on cosmetics, ornaments, supplemental foods, IT apparatus and electric appliances. The analysis outcomes on opinion level toward marketing mix strategy, service quality perception, satisfaction, trustworthiness and customer loyalty on online business. Table. The opinion level toward marketing mix strategy, service quality perception, satisfaction, trustworthiness and customer loyalty on online business. Descriptive Statistics Mean S.D. Level Marketing Mix Strategy 3.65 0.626 High Service Quality Perception 3.64 0.588 High Satisfaction 3.77 0.598 High Trustworthiness 3.62 0.577 High Customer Loyalty 3.6 0.585 High Data from Table revealed that online business customers had opinion level at high level on all variable factors by ranking from the high to low as satisfaction (3.77), marketing mix strategy (3.65), service quality perception (3.64), trustworthiness (3.62) and customer loyalty in online business (3.6). Section 2 Covariance Analysis of Variables This research had 5 variable factors, i.e. () marketing mix strategy, (2) service quality perception, (3) satisfaction, (4) trustworthiness, (5) customer loyalty. The outcomes revealed that the relationship between variables had value between 0.84-0.578 which had relationship value not over 0.7, hence it could be concluded that there were no problem on too high relationship value or multi-co linearity on all analyzed variables.

Table 2. Outcomes of Structural Equation Model and Empirical Model Tests Model χ 2 χ 2/ df Df p- Value GFI CFI RMR RMSEA Result SMK 2.74 0.94 3.000 0.433 0.999.000 0.000 0.000 Accept SERVQ 8.456.626 5.200 0.46 0.989 0.998 0.02 0.340 Accept SAT 0.07 0.07.000 0.744.000.000 0.000 0.000 Accept TR.03.03.000 0.294.000.000 0.000 0.839 Accept LOY 0.340 0.340.000 0.560.000.000 0.000 0.000 Accept Online Model 84.56 2.090 2.976 0.3 0.998 0.997 0.04 0.029 Accept.00.0.0.0.0 e e2 e3 e4 e5 SMK2 SMK3 SMK4 SMK5 SMK7.00.00.85.00.00.0.02.0.03.5 e0 SERVQ.99.04.6 e9 SERVQ2.06.3 e8 SERVQ3.05.7 e7 SERVQ4.00.5 e6 SERVQ6 e23 SMK.53 e22 SERVQ e SAT2.43.80. e2 SAT3.00 e3 e4 SAT4 SAT5.97.99.93 SAT.24 e24.7.70.20.4.06.07 e7 TR.04.06.03 e6 TR3.6 e5 TR4.00 TR.3.99 Loy. e26.97.00 e25.0 LOY2.00 e2 LOY3.35 e20 LOY4.0 e9 LOY6.22 e8 Figure 2. Empirical Model of Online Business Table 3. Consistency of Empirical Data and Model of Online Business Model χ 2 χ 2/ df Df p-value GFI CFI RMR RMSEA Result Online Business Model 38.528.353 28.47 0.099 0.997 0.998 0.08 0.027 Accept The outcomes of table 3 revealed the consistency of model with empirical data on all variable factors. Hence, it could be concluded that there was consistency between online business model and the developed theoretical model at acceptable level. The outcomes of data model and theoretical model revealed the statistical value of Chi Square with Degree of Freedom (χ 2/ df) equal to.353, statistical test of p-value equal to 0.099, statistical GFI value equal to 0.997, statistical CFI value equal to 0.998, statistical RMR value equal to 0.08 and statistical RMSEA value equal to 0.027. The comparison on statistical values with the assigned criteria weather the value of Chi Square with Degree of Freedom (χ 2/ df) should be lower than 2 against statistical p-value test, weather no statistical significance on GFI value and CFI value with value should be higher than 0.90, weather the statistical value of RMR and RMSEA value should have value lower than 0.05; in order to have model fit between data model and theoretical model (Tabachnick and Fidell, 2007). It could be concluded that online business loyalty had model fit with the assigned theoretical model at acceptable level. Section 3: The outcomes of hypothesis test revealed that all developed hypothesis were supported with details as per Table 4 below.

Table 4. Outcomes of Hypothesis Test Research Hypothesis Coef. t-stat Result H: Marketing mix strategy had direct effect 0.653 20.2*** Supported toward service quality perception H:2 Service quality perception had direct effect 0.577 6.70*** Supported toward satisfaction H:3 Service quality perception had direct effect toward trustworthiness 0.853 5.39*** Supported H:4 Service quality perception had direct effect 0.569 5.393*** Supported toward loyalty H:5 Satisfaction had direct effect toward 0.077 2.70*** Supported trustworthiness H:6 Satisfaction had direct effect toward loyalty 0.405 7.897*** Supported H:7 Trustworthiness had direct effect toward loyalty 0.082 2.64*** Supported Remark: t-stat.96 showed that hypothesis had statistical significance at 0.05 level**. t-stat 2.59 indicated that hypothesis had statistical significance at level 0.0***. Therefore, table indicated the outcomes of hypothesis test on all variables were supported on every path. Conclusions Online business customers had high opinion level on all variable factors which could be ranked from high to low as satisfaction, marketing mix strategy, service quality perception, trustworthiness and customer loyalty in online business. It could be concluded that satisfaction was key factor in developing customer loyalty in online business. If any business was able to operate their business with customer satisfaction, it would generate opportunity for expanding market share and enhancing competitive capability for the business (Zhilin, Yang and Peterson, 2004) The determinant of customer loyalty in online business revealed the first effect factor was the service quality perception had direct effect toward satisfaction since service quality perception was generated from the customer expectation. If the result was matched with the expectation, then it would generate satisfaction among customers in making their online business purchasing decision and later to repeat their purchase and to generate loyalty at the end (Antioned and Van Raaij, 988). Furthermore, the research work also was related with the research of Gronroos (990) who stated that the reputation of service providers was the factor that attracted both existing and new customers when the received service matched with their expectation. It would be the key effect toward satisfaction when service quality perception had effect toward customer satisfaction through reliability process, responsiveness, assurance, empathy and tangible. Service quality perception had direct effect toward trustworthiness since trustworthiness was the key factor in developing competitive advantage among online business (Yang and Robin, 2004, pp. 799 822). It was the trust of customer on the business, belief on the favorable property of the product or service provided by the business. It was the precious value for the business sine it was generated from customer trustworthiness (Kramer and Ryler, 996), reputation of the business (Aqueveque and Ravasi, 2006), including direct effect toward customer loyalty (Otim and Grover, 2006). Marketing mix strategy had direct effect toward service quality perception as per concept of Kotler (2008) who concluded that marketing mix strategy was a technique,

tool and marketing activities in increasing product sale volume or generating motives among customers to speed up their purchase decision process (Kotler and Armstrong, 202), including the building relationship by engaging business stakeholders to repeat their service usages and to stimulate and achieve satisfaction among targeted group customers. It could be through the offering of products, prices, places and promotion (Kotler and Keller, 980; Kotler, 2008) by online entrepreneurs and focused on the introducing new products and innovation. Satisfaction had direct effect toward trustworthiness as per research of Mittal and Kamakura (200) who summarized that if business focused on the service operation with quality standard would definitely effect service receiver customers on their satisfaction under the trustworthiness basis (Garbarino and Johnson, 999). Especially, the website or online business service users, the trustworthiness toward product quality, web design, content, user communication and data structure in modern online system would definitely yield customer loyalty to business at the end (Anderson and Sullivan, 993; 2003). Last but not the least, trustworthiness had direct effect toward customer loyalty was related to the research of Rezai Dolatabadi, Jamshidi and Khazaei Pool (202) who stated that customer loyalty was the relationship from the long accumulated experience. If online business entrepreneurs would develop the way for customers to have loyalty toward business, it would produce long term profits. It was the results from online business service receiver customers on continued basis, from capability in maintaining customer by based on continued basis, from developing strategy in attracting customers or service users, from focusing on the customer satisfaction with provided convenience in viewing products and in purchasing online business (Reichheld, Markey and Hopton, 2000; Otim and Grover, 2006). At the end, customer would have business loyalty on continued basis. Recommendations Policy Recommendation Government ought to support online business standard, in particular on the data security system, to support entrepreneurs in taking in to account of business ethnic which would have direct impacted toward general society and in gaining confidence and trustworthiness from consumers as a whole. Research Recommendation Further research should be covered and focused on the quality of website which have also direct impacted on the trustworthiness of customers by matching their requirements. Acknowledgement Researchers would like take this opportunity to extend appreciation toward external peer reviewers in recommending opinions or in rectifying this research works up to international standard and for the benefits of this study for national and international academic forum. References. Anderson, E., & Sullivan, M. (993). The antecedents and consequences of consumer satisfaction for firms. Management Science, 2(2), 25-43. 2. Anderson, R. E., & Srinivasan, S. S. (2003). E- satisfaction and e-loyalty: A contingency framework. Psychology and Marketing, 20(), 23-28.

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