An outstanding growth and development in an online environment during the past
decades imposed major revolution in retail trading and online markets. Information
technology is perceived as a cornerstone of e-commerce, thus the internet and
online environment has been considered as a perfect place for enterprises to
conduct their business activities such as promoting firms products or
services through online advertising, or other online business transactions.
According to the study by Lin and Sun (2009), the security
and convenience of customers are two contributors, which accentuated the most
before participating in an online purchasing. People usually perceive the internet
as an unsecured place to procure their needs; they are not compatible with electronic
transaction as well. Online shopping disinclination is a major obstacle for
e-commerce expansion. Thus, providing a secure website and making it easy to
use will reduce negative feelings about online transactions and facilitate online
purchasing (Lin and Sun, 2009).
Some Studies like Martin and Camarero (2009) argued
that trustworthy of firms can be questioned by their customers. On the other
words, customers might suspect to the reliability of online shopping malls.
Internet surfers usually are incredulous about quality of products and services
appeared in internet. Former research suggested that with creating trust, rate
of customer satisfaction subjects to significant growth and positive word of
mouth emerge from customer satisfaction. This would reduce customer uncertainty
about online business. Further, customer purchasing frequency emerged from satisfaction
would lead to customer loyalty (Martin and Camarero, 2009).
Martin and Camarero (2009) believed that employing new
technologies on website provides better quality of service and maximize the
websites security, which would boost customer e-satisfaction and e-loyalty.
Former online shopping experience is another factor, which impact on consumer
purchasing behavior. Base on psychological perception of buyers risk of online
shopping obviously different with offline one. Lack of interaction with
sale force is a prime cause of customer uncertainty; since this interaction
gap exists between customers and salesperson willingness of online purchasing
will be affected. Apart from the customer uncertainty about quality of goods
or service, cost of internet, learning process, security and privacy issue are
the other factors that impact on customer decision-making.
Nevertheless, perceived risk of online shopping cannot be the same among different
online purchasers. A paper conducted in past stated that perceived risk is always
in opposite side of a companys reliability (Johnson
et al., 2008). Although some internet surfers assume online shopping
as an inadvisable and uncertain method of purchasing, others cue to privileges
of online shopping such as facilitating of information searching and price comparing.
There are many factors, which can affect customer satisfaction via online purchasing.
An online shopping mall must provide minimum facilities for customers like
payment method, which are imperative for any e-commerce business. These elements
comprise the design of background color, pattern icon, dynamic scheme and web-border
(Chang and Wang, 2008). There are some tangible criteria
in online environment, which encourage customers to purchase online. These stimuli
are websites technical adequacy, content quality, content management and
websites appearance and layout (Aladwani, 2006).
Brand awareness is intangible stimuli, which can influence customer purchasing
decision as well (Aladwani, 2006). It is recommended
to assess the level of customer perceived risk before fulfillment of purchasing
process. Hence, to eliminate customer concern and possible problems, commercial
websites must take actions toward trust creation embrace spread positive signs
such as offline experience, good reputation, secure and justifiable transaction
(Martin and Camarero, 2009). The critical issue in building
and retaining seller-buyer relationship is trust which is indispensable principle
for customer loyalty (Chiu et al., 2009).
In fierce online competitive market, retaining the valuable customers is known
as key success factor for companies (Chen et al.,
2010). A particular customer can be regarded as profitable one when he or
she purchase four times from a website (Chiu et al.,
2009). Therefore, online business should develop proper strategies to persuade
customers to do repurchasing. The study (Chen et al.,
2010) highlighted that business profitability will exponentially boost when
there are more loyal customers in organization. As a result, small change in
number of loyal customer will significantly change companys value (Dick
and Basu, 1994). Given the facts, this research categorized discussed factors
into two internal and external and sought to explore the role of external factors
such as website capabilities (Technology factors), service quality and brand
equity on trust creation toward customer loyalty.
PERCEIVED RISK, TRUST AND LOYALTY
Unlike physical business environment, in the internet, goods and services appeared
untouchable. Lack of communication between buyer/seller and security issues
contributes to customer perceived risk and impact on customer purchasing behavior
(Laroche et al., 2005). Perceived Risk has a
primary role in consumer behavior. Therefore, this risk makes them to search
and investigate about quality of goods and service throughout the internet.
Furthermore, consumer decision making can significantly be impacted by perceived
risk for special products or services during online shopping (Corbitt
et al., 2003). Risk can be defined as a psychological condition which
back to bad experience from previous purchasing and make it hard to estimate
its effects on customer behavior (Chiu et al., 2009).
Normally, customers have craven about online transaction, thus risk in this
case is greater based on customer uncertainty of security issues. The elements
discussed can increase risk for customers and influence on decision-making.
In this regards, acknowledge the importance of trust is imperative for businesses.
Trust definition refers to psychological state and multi-dimensional notion
that confederates cognitive or affective trust (Johnson
and Grayson, 2005). The study (Chang and Chen, 2008)
declared that cognitive trust about a subject probably creates with logical
and rational reasons. However, acute positive internal feeling toward a subject
might create affective trust (Chang and Chen, 2008).
Trust can also be defined in a reciprocal manner, which means one party relies
on other pledges and believes that his counterpart carries out its commitment.
Another party, in return, keeps its promises and delivers the service in a proper
way. This kind of behavior builds a mutual corporative relationship and it would
be lucrative for both parties (Salo and Karjaluoto, 2007).Trust
considered as one the important factors to promote business-to-customer relationships,
especially, on online environment. Several surveys acknowledged the importance
of trust role in online purchasing and transaction. Trust creates a positive
perception about the prospect behavior of the online purchaser and influences
on the consumers purchasing intention, satisfaction and loyalty (Ganesan,
1994). Trust and Risk are the psychological state and recognized as vital
mediators, which can impact consumer behavior while purchasing from companies'
portals (Chang and Chen, 2008).
Marketing practitioners prime priority is brand loyalty in online market
(Johnson et al., 2008). First impression of loyalty
implies repeat of act of purchasing based upon cognitive, affective, evaluative
and dispositional factors which are the classic primary component of an attitude.
The concept of customer loyalty corresponds to three main behavioral measures:
proportion of purchase, probability of purchase and sequence of purchase (Lin
and Sun, 2009). No other behavioral loyalty such as switch cost or word
of mouth can be included and other cognitive or little attitudinal loyalty can
explain the underlying behavioral actions. Trust-commitment theory emphasizes
switching cost and trust for the emotional commitment to specific service product
through relationship marketing strategy (Corbitt et al.,
2003). The goal of customer loyalty was to build a long-term emotional link
with customers through personal service, communication and differentiated products-personal
service. The trade-off of these research approaches was that there was no consistent
definition of the customer loyalty. Recently, there have been several regressive
and unique developments for trust-based loyalty studies. Affective trust or
emotional commitment was identified in the lodging industry; personal involvement
was proposed in the leisure industry and social bonding was discovered in the
restaurant industry. However, this study focuses on testing the determinants
affecting customer trust and eventual loyalty within service IT service industry.
Thus, the research considered the proper measures or modeling of the construct
on customer trust and loyalty to develop a conceptual framework.
TECHNOLOGY FACTORS AND SERVICE QUALITY
The Website is the consequence of IT progress. Online shopping portals are
a gateway in e-commerce, which make permission to consumers to choose and customize
goods and service base on their priorities. The value is asked to be paid online
in this type of transaction. Hence, find a secure and easy to use the online
shopping portal is the first concern of the online purchaser (Lin
and Sun, 2009). Consumers online experience can be explained based
on four scopes: the convenience of website, customer autonomy, a sense of customer
relation and customers trust to the website (Chen et
al., 2010). Being convenience and trusted are the two reasons that a
transaction would be fulfilled by online buyers, autonomy and a sense of relation
are essential for customer loyalty (Chen et al.,
2010). Many studies have done in last 10 years indicate that technical aptitude
is able to measure consumers purchasing propensity. TAM model present
two critical concept: first Perceive Usefulness (PU) that each person adopts
him or herself with the system which has a higher degree of compatibility and
improves his or her performance (Davis, 1989) and Perceives
Ease of Use (PEOU) refers to the scale that an individual gives to the particular
system which s/he used and considers it as free of effort system and get along
easily with it (Lin and Sun, 2009). Online purchaser
implication is rigorously depended on the technology acceptance factors (Shih,
2004). The outcome of a research evidently posited that making online purchasing
easier and applying a perfect and zero defect system lead in increasing consumer
satisfaction and accordingly consumer loyalty (Lin and Sun,
Website quality can be regarded as website browser assessment to explore website
features and can meet his or her expectation (Aladwani,
2006). Website quality can effect on purchaser attitude in terms of security
and aptitude. Website quality is measured based on following items: technical
adequacy, content quality, specific content and appearance. This evaluation
must be done by prospective consumers (Aladwani, 2006).
Technical adequacy is the most important scope of website quality assessment,
which reveals how advanced technologies installed on the website to enhance
portal capabilities and remove website drawbacks. Content quality is referred
as the second scope of website browser assessment, which compass with website
attribute like accuracy of information uploaded on the website. Specific content
insisted to highlight specific details about the website service, customer support
and attractiveness of the portal such as colors, fonts photos, videos
and commercial banners (Aladwani, 2006). There is also
a significant distinction between an online purchaser and online surfer (Tsai
and Huang, 2007). Marketers assume that portal ease of use does not have
a significant impact on consumer loyalty in the offline area, yet has much more
effect on loyalty in e-business (Chiu et al., 2009).
The main reason for service quality measurement is to examine the website implemented
elements association with website success (Lin and Sun,
2009). Following elements will be evaluated in order to service quality
measurement such as customer service, security of payment, user profile
privacy, website engine search. High qualities of aforementioned items are goals
for website owners, because the website is being regarded as an appropriate
shopping host in the internet. The outcome of a study (Lin
and Sun, 2009) declared that satisfaction among the online purchaser is
measured based on three factors: Technology Acceptance Model (TAM), Transaction
Cost Analysis (TCA) and quality of service. The study (Lin
and Sun, 2009) also perceived the usefulness of TAM and stated that dominant
element influence on consumer attitude and stimulates them to do repurchasing
via the internet. The result also indicated the strong impact of service quality
on consumer satisfaction in e-business. Thus, the better service provided in
the website lead to higher rate of consumer satisfaction and the higher rate
of satisfaction create higher level of profitability for firms.
Website brand is considered as intellectual property, which can define as name
or symbol illustrates an exclusive good or service that distinguishes a business
from those of its competitors (Chang and Chen, 2008).
Brand equity creates two approaches in terms of understanding for consumers.
The first is known as brand awareness while the second one is brand image. Awareness
is composed of brand reminder and recognition; while the image is composed of
various associations with a brand. Chang and Chen (2008)
argued that review achievement from senior experience can facilitate website
recognition; besides, the capability of remembering a website name as a good
reference for the website. Brand image is shaped based on customer satisfaction,
previous experience and diffusion of Word of Mouth (WOM). Brand building is
the most consequential thing for a business in the internet to achieve loyal
customers. Brand name indicates firms goods and service quality to arouse
consumer to repurchase. A well-known brand creates confidence and lessens the
risk for user to fulfill a transaction easier. Lack of trust is the main obstacle
that people dont involve online shopping; the credibility of the brand
has this power to create trust and mitigate consumer distress. Brand has a significant
role in forming a relationship between a firm and consumers. Building brand
is a long and multilevel achievement and can embody the firms success.
Brand creates value for consumer and makes the company plight to their commitment.
Brand can be used as a tool for customer retention, in spite of its persuasive
role in grabbing new customers. The study (Lin and Sun,
2009) also declared that consumer trust of brands forms long run relationship,
yet satisfaction of product would make consumer loyal to the brands and consumers
purchase their need from particular portal based on former satisfaction. A famous
brand makes their customers rest assured about the quality of the product, so
the brand name is very effective on customer trust and impact directly on customer
loyalty. As a result, the trust can be directly affected by the bad experiences
that other customers had. The study (Gefen, 2000) stated
that the consumer evaluation of e-satisfaction impacted by website ease of use
been done. In addition, the loyalty of a customer to company or brand is defined
as a strong obligation for repurchasing product or service from the company
over and over. Thus, loyalty to brand causes repetitive buying the same brand
regardless of marketing effort of the other brand in order to persuade a customer
to change their taste (Lin and Sun, 2009).
THE RESEARCH CONSTRUCT
It is believed that a research framework is a foundation that the entire research
processes conducted based on that design. The research framework is logically
developed, defined and explained the network of associations among variables
which have been determined through the fact-gathering techniques such as structured
interviewing, questionnaires, secondary records searching, observations and
literature review (Miller and Rollnick, 2002). The study
conceptual model was extracted from the documentation of previous research that
exists in the problem domain combining with the researchers logical beliefs
appear in following. The model was proposed in general form, yet is useful for
the related hypotheses and conceptual foundation that are presented in the study.
This model reveals that when technology, service quality and brand factors is
aligned with overall business strategy, trusties created as an important determinant
in firm structure leading customers loyalty. The firm uses these factors
in its business processes within an industry structure, benefiting customer
trust, the ability to create loyalty standards and access to scarce talents
and resources. Figure 1 illustrates the overall construct
of the study. It was developed as a guideline to show the underlying process
of this research.According to this framework, three determinants namely; technology
factors, service quality and brand were considered as main independent variables
which derived from the literature reviews in previous sections. As discussed
before technology factors facilitate online purchasing and change the customers
perception of website and the company (Shih, 2004).
Additionally, making online purchasing easier and applying a perfect and zero
defect system increases consumer trust and eventual loyalty using reliable technologies
(Lin and Sun, 2009). The service quality, on the other
hand, can rigorously change the customer perception of service and products
|| The research overall construct
Service quality and technology factors can work along building strong relationship
with customers as discussed (Aladwani, 2006). Brand
building is the most consequential thing for a business on the internet to achieve
loyal customers. The recognized brand creates confidence and lessens the risk
for user to fulfill a transaction easier. Brand has a significant role in forming
a relationship between a firm and consumers (Chiu et
al., 2009). To add up, the link between trust (as mediating variables)
and technology factors, service quality and brand was explored in this study,
besides, the association with customer loyalty as final goal of this research
study. There are different assumptions have been investigated regards to the
framework and the result is presented in next section.
DATA ANALYSIS AND RESULTS
Once the data were collected, the study coded, categorized and checked the
raw data for error elimination. Since there are multiple variables, the study
needs to use multivariate analysis and also descriptive analysis approach. The
entire collected data were populated in SPSS (V.20) to test the correlation
between variables and moderating effects. Based on the sampling design, 200
participants were selected for the research study, those who have interaction
with IT service in online environment. Capability of data will also be accomplished
through the reliability test. In following, the summary of the results is presented
in Table 1.
From Table 1, it can inferred that the result of Cronbachs
Alpha reliability coefficient for all variables are above 0.07. According to
Nunnally (1978), the coefficient values in the range of
more than 0.7 are perceived to be acceptable and reliable. As such the measurement
tools for this study are reliable and researcher can proceed for further analysis
(Nunnally, 1978). The descriptive analysis of socio-economic
factors is presented in the next section.
Socio-economic analysis: In this section, the Socio-Economic data from
the participants has been investigated and interpreted for purpose of the research
study. Table 2 involves descriptive analysis such as frequency
and percentage of respondents in different categories.
From Table 2, 108 (54%) of participants were male and 92
(46%) of participants were females in this study. This shows males participation
in this research were more than number of female. However, the result of t-test
with the value of 0.138>0.05 shows no significant differences among two categories.
|| Results of Cronbachs alpha reliability test
|| The Socio-economic analysis results
In terms of the age of participants, total of 76.5% of participants had age
of between 20 to 50 and other 23.5% were less than 20 or above 50 years of age.
The first category with 61 (30.5%) participants had the age of between 20 to
30 which belongs to the youngster age groups. The second largest group of respondents
was belonged to category between 41 to 50 years of age. The ANOVA test shows
no significant difference between age categories. There are four categories
were determined for education level of the participants in this study. More
than 50% of respondents were degree holder including associate or bachelor degrees
or above. 19.5% of respondents were diploma or less which constitutes second
last number of the study respondents. However, the result of Post Hoc Tests
shows the differences between the means of Post Graduate group compare with
other categories within education level. Eventually, in terms of the income
level of the respondents, 76 (38%) of participants had income of 1000 to 3000
RM. This shows majority of the studys respondents were from medium and
low incomes. The next largest category was belonged to respondents who had income
between 3001 to 5000 by 26% of participation. The ANOVA test indicates no significant
differences between the means of different categories of respondents by their
income levels. Next section discussed the correlations between variables of
|| Pearson correlation test of variables affecting the trust
|| The stepwise analysis
Correlation analysis: To statistically show the effect of trust determinants
on customer loyalty, the study explore the three dimensions namely; Technology
Factor, Service Quality and Brand. Therefore, Pearsons correlation analysis
was carried out for each relationship to assess the correlation of variables
for the interval or ratio scales measurement. The result of Pearson's test shows
linear correlation among all variables. The regression results based on the
factors affecting trust and are shown in Table 3.
From Table 3, the study conducted the regression analyses
and hypotheses testing. According to the results, the model is significant at
p<0.05 level regard to each variables. Technology Factors with p-value of
0.000<0.05, Service Quality with p-value of 0.000<0.05 and Brand with
p-value of 0.000<0.05 show the strong relationship between the independent
variables and trust. The R-square value of 0.731 indicates that independent
variables can 73.1% explain Trust. Despite the significant correlation between
independent variables and trust the model summary and stepwise test show only
Technology factors as main predictor of Trust in the model. The result of stepwise
test is shown in Table 4.
In addition, the result of Pearson Correlation on Trust as mediating variable
and customer loyalty reveals the value of 0.885>0.05 which indicate the strong
relationship between to variables. In general, the study conclude that three
independent variable namely and respectively; Technology Factors, Service Quality
and Brand effect on customer trust and trust lead to customer loyalty. This
is confirms the primitive assumptions and what the researcher expected for final
result of the study.
To conclude, this study figured out a positive relationship exists between
technological factors of online environment and creating trust for customer.
We also found out there is a direct relationship between these factors to achieve
satisfaction and eventual customers loyalty for a company as well. In
order to observe the positive behavior of customer, the website should provide
facilities to allow the customers save time and thrift in money without any
confusion while having shopping efficiency; this would contribute in consumer
trust and accordingly satisfaction and loyalty. Businesses are capable of providing
new strategies and approaches such as on-call customer support system and implementing
a tracking system to personalize customers needs and provide them with
easy and convenient area (Lin and Sun, 2009). This paper
strives to prove that providing convenient and trusted environment for customers
in the online environment leads to more satisfaction and accordingly increases
the rate of online purchasing as well as company profit associate with this
kind of buying approach. As a result, we can see many businesses and enterprises,
which try to develop their online websites and provide more convenient and trusted
environment to assure and persuade their customer to go through online shopping
than traditional form of shopping. Owning trusted and convenient commercial
websites enable businesses to increase their customers and make them satisfy,
retain them and build loyal customers at the end.
The study also investigated a website brand as another factor which influences
customers purchase decision making. The brand recognition in many times
placed over website quality to attract a customer toward a specific method of
buying, means that people may focus more on brand than the quality of the website
most of the times. As a matter of fact, the importance of the website brand,
especially management of the website brand must be considered by business owner
if they want to attract more customers. In small business particularly, brand
management plays a significant role to better allocate resources and bring more
outcomes. Thus, establishing awareness and enhancing a shopping website image
must be considered by online retailers. The customer trust is heavily relied
on business reputation in case of high-risk perception which driven business
towards more loyal customers. Moreover, regarding to our findings within IT
service based website, service quality is directly and completely effects on
customer e-satisfaction and e-loyalty. Therefore, in case of intense competition,
providing sufficient website service quality for customers is a main premise
to attract and retain them. For reaching this purpose the enterprise must enhance
their service quality such as implementing, running forum for getting customers
feedback, a competitive price of the product, list of goods and production existed
policy, customer support, multi-step discount and promotion and incentive. Conducting
this features enhance service quality and thus, customer loyalty.
Evaluated factors in this study are positively impacted customer satisfaction
and loyalty, yet the power of trust must never ignore in online purchasing.
Based on former studies and this studys deduction, it is believed that
trust is a primary step to create a loyal customer and there is a direct effect
between technology factors, service quality, brand and trust whereas indirect
effect with loyalty. The result of this study confirmed the role trust as a
mediating and realized that trust relationship toward loyalty is well-established
and should be incorporated into some other factors like quality of service and
technology factors as reflected (Harris and Goode, 2004).
Apart from this, bearing between service quality and customers loyalty
is confirmed by (Akbar and Parvez, 2009) while service
quality is most factor customers consider for their satisfaction. Brand communication
also builds and develops a trust-based correlation between brand and customers
(Zeheir et al., 2011). The outcome of their research
illustrates the perception of creating brand trust and brand loyalty. To summarize,
based on empirical results, technology factor, service quality and brand respectively
(from high to low)directly impact consumer trust and this trust leads to consumer
loyalty. The further study may require investigating more determinants within
broader scope and in different industry type.