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E-Commerce Analysis: Online Ticket Purchasing

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CHAPTER ONE: INTRODUCTION

1.1 INTRODUCTION

This chapter presents the background of the research study. It starts by providing an overview of Electronic Commerce, customer satisfaction and service quality, followed by an outline of the current situation concerning “Online Ticket Purchasing” in Kuwait. The problem of the study is then defined, highlighting the research the study seeks to investigate and its significance alongside the research objectives, questions and methodology used to achieve these desired objectives. The research limitations are then explored and the chapter concludes with an outline of the thesis structure.

1.2 OVERVIEW

Unprecedented advances in Information Technology in recent decades, alongside evolving business environments have seen the emergence of Electronic Commerce (E-commerce) as a major economic force. With the increasing number of Internet users and rapid development of network technologies, e-commerce is perceived as an essential application of the computer and communication technologies (Manvi and Venkataram, 2005 cited by Zhang and Tang, 2006).

As observed by Gunasekaran and Ngai (2005) e-commerce enhances communication channels and provides a virtual interactive environment where the suppliers and customers can exchange information and products. Moreover, it improves the communications between partners along the value chain and offers an integrated business model by which companies can be more responsive and flexible to the changing markets and customers' requirements (Zhang and Tang, 2006). E- commerce therefore replaces or enhances the traditional market channels by opening web-based storefronts, which is known as “business to customer e-commerce”. Firms present their products and services on the web and generate revenue from the sales of those products and services to their customers (Molla and Licker, 2001).

According to Khalifa and Liu (2003) there has been considerable growth of internet based services, both from internet businesses and from traditional companies developing online services. The technology of e-commerce identifies what can be offered to customers, but only customers determine which of those technologies will be accepted (Lin, 2003).

As Jamal (2004) has argued, in the last forty years the issue of customer satisfaction has been one of the most important theoretical as well as practical issues for most marketers and customer research. Satisfaction is significant in the success or failure of any business depending on the performance of the perceived service, if the perceived performance is less than customer expectation the customer will be dissatisfied; whereas, if the perceived performance exceeds their expectations then customers will be satisfied. Many researchers agree 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 experience (Oliver, 1980).

Numerous studies on service quality and customer satisfaction present service quality and customer satisfaction as conceptually distinct, but closely related constructs. Satisfaction is defined as the degree of discrepancy between customers' normative expectations for the service and their perception of the service performance (Parasuraman et al., 1994; Dabholkar, 1996). Different researchers such as Gronroos (1983) and Parasuraman et al. (1985) have tried to identify features of service more related to quality assessments. The most common measure reveals ten dimensions of service quality: tangibles, reliability, responsiveness, communication, credibility, security, competence, courtesy, understanding the customer and access. These were then filtered to 5 dimensions and based on these 5 items a measurement tool for service quality was devised known as SERVQUAL (PUT SOURCE HERE!!!).

While Yang (2001) highlighted the rapid growth of online retailing with broadening experiences of consumer's online shopping, Santos (2003) believes that e-service quality can increase attractiveness, hit rate, customer retention, stickiness and positive word of mouth. It can also maximize competitive advantages of e-commerce. Numerous researchers have the discussed the dimensions of e-service quality including Cox and Dale (2001), Madu and Madu (2002), Parasuraman (2002), Yang et al. (2003), Parasuraman et al. (2004) and Lee and Lin (2005), yet online retailers appear to fail due to poor quality services provided to their customers. For that reason online service quality is significant for two reasons: (1) it influences customers' satisfactions and intentions to shop online and (2) e-service quality plays a major role in attracting potential customers (Cai and Jun, 2003). Zeithaml (2002) points out online companies should focus on all elements of e-service quality before, during and after the transaction, as e-service quality is the extent to which a website facilitates efficient and effective shopping, purchase and delivery.
1.2.1 E-Service Quality and Customer Satisfaction

Customer satisfaction is a critical element in the success or failure of any business. Web customer satisfaction has been emphasized as crucial by the rising demand for long-term profitability of dotcom companies and traditional companies that are “Net enhanced” (Pather, Erwin and Remenyi, 2002). An understanding of the factors that influence web customer satisfaction is vital for e-commerce. Satisfaction is a result of an effective evaluation, where some comparison standard is compared to the actually perceived performance. If the perceived performance is less than expected, customers will be dissatisfied. In contrast, if the perceived performance exceeds expectations, customer will be satisfied (Lin, 2003).

A broad idea of traditional service quality might not be enough to build the e-service quality dimension, hence amending several variables is important. Santos (2003) discussed the e-service quality dimensions of, ease of use, web-appearance, linkage, structure and layout, content as the incubative dimensions; reliability, efficiency, support, communication, security, and incentive as active dimensions. This paper focuses on achieving a measurement of the service quality of the Jazeera Airways Website as perceived by their passengers, using a conceptual model of e-service quality developed by Santos (2003).

1.3 ONLINE TICKETING

Electronic ticketing over the Internet facilitates the buying or reservation of tickets online, by making the process more easily accessible and convenient. Through these services tickets may be purchased from any location and at any time, provided an Internet connection exists. The tickets are ordered from a web site that provides both ticket information and the purchasing or reservation service. Internet booking or online ticketing concentrates on providing a helpful and efficient service to clients. Firms who sell travel tickets, performing arts, game tickets, concerts, movies and many other activities have notably embraced the online ticketing system according to Burford (1998).

Convenience is a main advantage of buying tickets via the internet as the service is available at any geographical location, including one's home via laptop and cellular phone and at any time or day. Electronic ticket services have a further advantage by providing relevant information along with the service. This can help purchasing decisions and may encourage future usage (Burford, 1998). Another feature is that apart from maintenance and data updates, no manpower is necessary to offer the service once it has been established. The process of recording the transactions is more automated and overheads are reduced. An essential point is that ticket providers while providing a convenient service are thereby improving their public image and encouraging return customers (Burford, 1998). A number of countries across the globe are already benefiting from electronic ticketing including the U.S.A., Canada, Australia, New Zealand, Great Britain and France. In fact the U.S.A. it has 80% market penetration, while in Europe it is approximately 40% and in the U.S.A. more than $350 million dollars in event tickets were sold online during 2000 increasing to $3.9 billion in 2004 (Bhatia, 2004).
1.3.1 Online Services and E-Ticketing in Kuwait

The internet is a technology with many properties with the potential to transform the competitive landscape in many industries while at the same time creating completely new industries (Afuah and Tucci, 2003). The revolution of the internet continues to excel leading to rapid changes in many fields, at an overwhelming speed. In Kuwait, prior to 1990 internet usage was limited to electronic mail and minor services, however in 1992 a decision was made by the Ministry of Communication to facilitate the public data network. In the same year the National Science Foundation agreed to extend the Internet to Kuwait at a time when it was only available for US institutions and some selected institutions overseas.

In recent years with the support of the Kuwaiti government for IT plans, practical steps have been taken in this field with the possibility of payment for mobiles and traffic tickets via the internet and the sale of online airlines tickets for the first time. These advances indicate the growth and development in the IT field in Kuwait as a whole.

In 1943, the oil boom opened a new chapter in the modern history of Kuwait as The Kuwait Oil Company Limited (KOC) was founded. By 1947-1948 KOC developed the new Al-Nugra (Al-Mayass) Airport, located in the Nuzha district, operating in daylight only, with airlines opening offices in Kuwait City to handle ticketing and cargo operations for the Arab expatriate community. By 1954, the Kuwaiti National Airlines Company celebrated the arrival of the first airplane, which was called “Kazma” (http://www.da.gov.kw).

The worldwide revolution of low-cost carriers (LCCs) started successfully with Pacific Southwest Airlinesin the United States, which pioneered the concept in 1949. Notable successes which have followed are Ireland's Ryanair, which began low-fares operations in 1990, and EasyJet, formed in 1995. These low cost carriers then developed in Asia and Oceania from 2000 led by operators such as Malaysia's AirAsia, India's Air Deccanand Australia's Virgin Blue. The low-cost carrier model is applicable worldwide, although deregulated markets are most suited for its rapid spread. In 2006, new LCCs were announced in Saudi Arabia and Mexico (http://www.absoluteastronomy.com).

On September 12, 2005 Jazeera Airways owned by Marwan Boodai, Chairman and CEO, announced its first flights were open for booking. Jazeera Airways is the first privately owned airline in the Middle East, established in Kuwait. It offers passengers' ticketless flights to Dubai, Lebanon, Damascus, Amman and Bahrain via the web, by phone, SMS or through travel agents (www.jazeeraairways.com).

Breaking away from out-dated business models by developing a new model tasked with raising operational efficiency requires incorporating the latest revenue management procedures into the company and installing state-of-the-art technologies. This will ultimately enable travelers to become more independent in their bookings and payment. With tickets sold through a website as the main distribution channel, online booking is a very efficient distribution method for airlines. It reduces the number of back office staff and reduces the payment cycle. Jazeera Airways has worked hard to entice travelers to book through its website by making it the cheapest method to purchase tickets. Many promotional offers made by the company are available only to travelers who book online, therefore Jazeera Airways' strategy is rewarding travelers who book online (www.jazerraairways.com)

1.4 PROBLEM DEFINITION

Understanding customer's requirements is vital to any business enterprise in order for it to remain competitive. Customer satisfaction is of great interest since it has a direct effect on customer retention, loyalty and the prospect of new customers. Retention is a major challenge, as customers can easily switch from one service provider to another considering the internet can facilitate easy access to a wide variety of choices with lesser cost. Acquiring new customers may involve significant cost on the part of the company in terms of marketing, advertising and promotion. Hence it is important to understand the determinants of customer satisfaction and assess the current experience of the customer in order to improve services.

Customer satisfaction is a major issue of Jazeera Airways and good online service quality is a key factor that will determine in the long term, whether it will succeed or fail in retaining existing customers and attracting new ones. Due to rapid technological advancements in the marketplace Jazeera Airways maintains a close relationship with their customers, as their expectations and perceptions of online service quality may change.

This research will therefore be conducted on Jazeera Airways, the first low cost airline in Kuwait. Jazeera Airways offers online ticketing in its website as the main distribution channel. Therefore it is important to take into account the quality of its website and to pay more attention to customer evaluation of the service given. Customers want to make their own bookings in their own time without depending on middlemen; as a result it is necessary that online service quality determinants lead to satisfaction. Dissatisfied travelers may perceive one of the following:

  • Web sites do not seem to have many of the very basic features that experts consider important in forming relationship with customers.
  • Service providers undervalue the attributes that customers use to judge service quality that should be monitored and enhanced to help the service performance.
  • There are other variables of the online service quality that affect the overall travelers' satisfaction.

Therefore this research aims to address such problematic issues by researching the relevant factors including current opinion of the airline users.

1.5 RESEARCH OBJECTIVES

As this research study aims to examine the customer satisfaction of the service of Jazeera Airways in online ticketing through the quality delivered through its website, its main objectives are as follows:

  • To assess the perception of each service of Jazeera's e-service Quality dimensions.
  • To evaluate consumer satisfaction towards e-service quality for online service quality within Jazeera.
  • To determine the important dimensions leading to satisfaction when purchasing online tickets within Jazeera.

1.6 RESEARCH QUESTIONS

In order to fulfill the objectives of this study, the following questions need to be addressed:

  • What key incubative dimensions do online customers perceive as important for their e-service quality?
  • What key active dimensions do online customers perceive as important for their e-service quality?
  • What are the most influential online service quality dimensions of the website as perceived by respondents with a high level of customers' satisfaction in the Jazeera Airways website?
  • What are the most influential online service quality dimensions of Jazeera Airways contributing to customer satisfaction when examining the Jazeera Airways website?
  • Are the different socio-demographic variables involved perceiving e-service quality and satisfaction in the same way or differently?

1.7 Research Methodology

This research is considered deductive, quantitative, descriptive, explanatory, and exploratory to some extent type of study. The research follows the survey strategy approach and consists of 67 questions composed of a two page questionnaire distributed to the target sample in Kuwait. Data was collected using Arabic and English questionnaires, from a sample size of X passengers who booked online through Jazeera's website. The questionnaire consists of four sections (A, B, C, D). Section A solicits demographic information. Section B evaluates Jazeera's Airways e-service quality using an adapted Santos (2003) model. Section C measures the level of customer satisfaction. Statements of Section B and C are scaled using a Likert type scale from 1 to 5. Section D collects information added by customers that will add value to the research.

1.8 RESEARCH LIMITATIONS

Throughout this research conducted in Kuwait regarding Jazeera Airways website service quality a number of limitations were noted as follows:

  • The thesis investigates the customer satisfaction of Jazeera's Airways website service quality and does not include the company's perspective/point of view; therefore the study is limited in its scope to customers and not employees or managers.
  • The study does not include product quality, price, situational factors, personal factors, and other services provided by Jazeera Airways.
  • Using a quantitative approach only towards addressing the research problems, a qualitative approach is lacking.
  • The research scope is limited as it assesses Jazeera online service “e-ticketing” excluding airport customer services such as check in, luggage, lounge and on board services.
  • There is limited relevant literature concerning service quality in the airline industry in Kuwait and the region, therefore there are no previous findings or frameworks to consult.

1.9 THESIS STRUCTURE

This study is composed of five main chapters.

  • Chapter One presents the background details of the selected research area and the experience in Kuwait, followed by the problem definition, the research objectives and questions, the methodology, the study's limitations and the thesis structure.
  • Chapter Two discusses related theories, concepts and models providing a comprehensive review and an insight into the subject area as a whole, followed by an explanation of the research to the country of Kuwait.
  • Chapter Three describes the methodology, research design and techniques used in the collection and analysis of the data.
  • Chapter Four presents the gathered data, their interpretation and analysis.
  • Chapter Five looks at the findings, assessing whether they satisfy the research questions and objectives to draw conclusions from the results. Based on these conclusions, recommendations for management are provided with further suggestions for future research.

CHAPTER TWO: LITERATURE REVIEW

2.1 INTRODUCTION

In this chapter a comprehensive review of available related literature is made concerning website service quality and customer satisfaction. In the process various concepts, models and theories covering customer satisfaction, determinants of customer satisfaction, the relationship between online service quality and satisfaction and online service quality dimensions are presented and explored to give the study a wide ranging theoretical basis. In addition the relevance of the research to the country of Kuwait is also addressed.

2.2 CUSTOMER SATISFACTION

2.2.1 Definition of Customer Satisfaction

Oliver (1980) explains satisfaction as the summary of a psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with a consumer's prior feelings about the consumer experience. In other words, satisfaction is an attitude or appraisal that is created by the customer comparing their pre-purchase expectations of what they would receive from the product or service to their subjective perceptions of the performance they actually did receive. Customer satisfaction has become a key intermediary objective in service operations, because of the benefits it conveys to organizations (Ranaweera and Prabhu, 2003).

The importance of customer satisfaction results from the generally accepted philosophy that for a business to be successful and profitable, it must satisfy customers (Shin and Elliott, 2001). While many authors have described satisfaction using various definitions, Table 2.1 presents a few notable explanations 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 function of consumer's belief that he or she was treated fairly.

Hunt (1991)

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 expectation.

Kotler et al. (2000)

Source: Research based

From the above table we understand that satisfaction is the consumer's evaluation of the product and service that meet their needs and expectations. According to Parker and Mathews (2001) there are two main interpretations of satisfaction; satisfaction as a process and satisfaction as an outcome. Whereas Gustafsson (2005) argues satisfaction has a strong positive effect on customer loyalty intentions across a wide range of product and service categories.

2.2.2 Determinants of Customer Satisfaction

Zeithaml et al. (2005) argued that satisfaction, as shown in 2.1, is influenced by service quality perception, product quality, and price as well as situational and personal factors. Economists differentiate between two categories of properties of consumer products; search qualities and experience qualities. With search qualities consumers determine before purchasing a product like color, style, price, fit, feel, hardness and smell. Experience qualities, are hard to determine; as a result it can be evaluated after the purchase and until the service is received like vacations and restaurant meals (Zeithaml et al., 2005).

Keaveney (1995)ppp.jpg point out that a main reason leading to customers switching services is price, as customers, based on prior experience with the service provider, sometimes felt cheated and believed that price increases were unfair or even deceptive. According to (Zeithaml et al., 2005) comparing the price relative to value and state, research reveals that customers of services will make trade-offs among different service features such as price level versus quality.

A number of customers, for example, view price as an important element for their satisfaction more than quality. Perceived service quality is only one factor of customer satisfaction (Zeithaml et al., 2005). Consequently to achieve a high level of customer satisfaction, most researchers suggest that a high level of service quality should be delivered by the service provider as service quality is normally considered an antecedent of customer satisfaction (Cronin et al. 2000). Zeithaml et al. (2005) described a consumer's emotional state as a personal factor. Satisfaction will vary due to customer's biographical characteristics such as age, gender, education, ethnicity and income (Gilbert and Veloutsou, 2006;Van Pham and Simpson, 2006). Customers take partial responsibility for outcomes and describe those negative feelings that influence how a consumer responds to services, causing a person to overreact negatively to the slightest problem (Zeithaml et al., 2005). Situational factors can notably influence purchase decisions such as social environment, physical environment of the purchase place, time influence and the previous states (Vysekalová, 2004; Nagyová, 2001).

2.3 The Evidence of Service (3Ps)

Services are intangible; therefore customers are searching for evidence of service in every interaction they have with the organization. The three major factors of service experienced by customers are: people, process, and physical evidence. Together these elements are considered as an evidence of the service. Each evidence or subset is present in each service 2.2. Firms should essentially manage the service quality that will lead to satisfying their customers (Bitner, 1993).

2.4 SERVICE QUALITY

Numerous researchers have defined service quality their own ways, including Bitner, Booms and Mohr (1994) who described service quality as the consumer's overall impression of the relative inferiority / superiority of the organization and its services. Perceived service quality is only one component of customer satisfaction (Zeithaml et al., 2005). According to Parasuraman et al. (1994) service quality is defined as, the degree of discrepancy between customers' normative expectations for the service and their perception of the service performance. Gronroos (1982) stated that total service quality is customer's perception of difference between expected service and perceived service.

Afterward in 1984, he then explained service quality of the service encounter as two different dimensions: one is technical or output quality and the other functional or process quality. Therefore, service quality has become a well-liked area of academic investigation, recognized as a major factor in differentiating service products and gaining competitive advantage (Zeithaml et al., 1996).

Table 2.2 presents the concept of service quality from varied authors' viewpoints who combined suggest we can understand that meeting the need and requirements and achieving customer's expectations depends on delivering the best level of service quality. Notably with time, service quality takes place before and leads to overall customer satisfaction

Table 2.2 Definition of Customer Satisfaction

Definition

Author

Service quality as the subjective comparison that customers make between the quality of the service that they want to receive and what they actually get.

Gefan (2002)

Service quality can be defined as “the difference between customers' expectations for service performance prior to the service encounter and their perceptions of the service received”.

Asubonteng et al. (1996)

Service quality is determined by the differences between customer's expectations of services provider's performance and their evaluation of the services they received.

Parasuraman et al. (1985,1988)

Source: Research based

Gilbert and Veloutsou (2006) determined different approaches to measure customer satisfaction, varying between measuring expectations relative to perception or measuring the performance aspect only, without relating it to the desired level of service. Service quality has been found to be an important input to customers' satisfaction (Caruana, 2002).

2.4.2 Dimensions of Service Quality

Service quality has been the focus of increased study in recent years as many researchers have tried to reveal features of services that significantly relate to quality evaluation in traditional service environments.

In 2001 Brady and Cronin presented a model consisting of interaction quality, physical environment quality, and outcome quality. These dimensions draw on, among others, the work of Gronroos (1982) and Rust and Oliver (1994) who suggest that exploring both what is delivered (Gronroos' technical quality) and how it is delivered (Gronroos' functional quality) are important aspects of service quality.

Table 2.3 Dimensions of Service Quality

Quality

Requirement

Description

Reliability

Reliability

Consistency of service/ dependability, i.e. the ability to provide the service on time, accurately and dependably

Responsiveness

Responsiveness

Willingness/readiness of employees, i.e. the ability to deal effectively with complaints and promptness of services

Assurance

Credibility

The extent to which the service is believed and trusted; involves honesty, trustworthiness and believability

Courtesy

The politeness, respect, consideration and friendliness shown to the customers by the contact personnel

Security

The freedom from danger, risk and doubt

Competence

The possession of staff of the necessary skill, knowledge and information to perform the service effectively

Empathy

Access

The ease of approachability and contact

Communication

Listening to customer and keeping them informed about the service

Understanding the customer

Trying to understand the customers needs and specific requirements

Tangibles

Tangibles

Appearance of personnel and condition of equipment

Source: Parasuraman et al. (1985); Ghobadian et al. (1994); Curry and Herbert (1998)

A most widely used and accepted study done on service quality is by Parasuraman et al. (1985). Having developed ten dimensions through focus group studies: tangibles, reliability, responsiveness, communication, credibility, security, competence, courtesy, understanding the customer, and access.

These ten dimensions were then filtered and extracted to five: tangibles, reliability, responsibility, assurance, and empathy, which constitute the basis of a global measurement for service quality, SERVQUAL (Parasuraman et al., 1988). Based on these five dimensions researchers presented a 22-item service quality scale and on an operational level service quality research has been dominated by the SERVQUAL (Parasuraman et al., 1985; Curry and Herbert, 1998). Table 2.3 presents a description of the service quality dimensions.

2.4.3 Relationship between Customer Satisfaction and Service Quality

Service quality has been found to be an important input to customer satisfaction (Caruana and Malta, 2002). Cronin and Taylor (1992) examined the causal relationships between service quality, customer satisfaction, and purchase intention. The results suggested that service quality was an antecedent of consumer satisfaction, service quality had less effect on purchase intentions than did consumer satisfaction, and consumer satisfaction had a significant effect on purchase intentions. Customer satisfaction had a stronger effect on behavioral intentions than service quality did (Dabholkar et al., 2000). As a process in time, service quality takes place before, and leads to overall customer satisfaction. Customers' loyalty was affected by product quality, service quality, and retailer image. They also suggested that quality of product and service is directly related to customer satisfaction, and then leads to the loyalty of the customer (Cöner and Güngör, 2002). Based on empirical findings in service quality and satisfaction literature, service quality is one of the antecedents of satisfaction (Anderson and Sullivan, 1993; Cronin and Taylor, 1992), and loyalty is one of the consequences of satisfaction. Luarn and Lin (2004) indicated that not only customer satisfaction and perceived value directly affected customer loyalty, but also indirectly affected customer loyalty through commitment.

2.5 THE ROLE OF TECHNOLOGY IN SERVING CUSTOMERS

According to Parasuraman (2000), delivering excellent customer service is vital in case customers have to serve themselves by technology-based systems. With quick penetration of technology-based customer-company interfaces such as online banking and e-commerce, employee-delivered service is being replaced by self-service, reducing the need for face-to-face encounters between customers and company personnel. However, this fundamental shift does not mean that companies can afford to ignore customer service. Development of self-service technologies need to emphasize customer service to ensure the customer-technology interface is user-friendly, putting in place an excellent customer-service infrastructure (including properly trained and motivated employees) to aid customers experiencing problems or difficulties with the self-service technologies.

To draw attention to the implications of technology-induced changes in the nature of customer-company interactions, Parasuraman (2000) proposed a Pyramid Model of Marketing as shown in 2.3. The Pyramid Model is an extension of the Triangle Model of Marketing as shown in 2.4.

The Triangle Model stresses that while the traditional marketing of goods take place in the form of external marketing, activities remain traditional with the “4 Ps” (product, price, promotion and place). Parasuraman (2000) stated that the well planned marketing of services and customer service require extra emphasis on two other forms of marketing: internal and interactive. Internal marketing deals toward employees as internal customers by providing them with suitable training, support, motivation and rewards to serve external customers. Interactive marketing deals with making an impression on customers during their encounters with employees.

The Triangle Model does not completely capture the difficulties of marketing to and serving customers. To reflect these complexities, the Pyramid Model includes technology as a new dimension adding to the two-dimensional Triangle Model and points out three new linkages: the company-technology, technology-employee and technology-customer linkages; that need to be well managed to maximize effectiveness. Successfully managing these technology-based links demands an understanding of how customers and employees respond to, deal with, and assess different technology-based systems, and how “ready” they are to accept those systems, an issue that has been the focus of much research on customer service (Parasuraman, 2000).

2.5.1 Self Service Technologies (STTs)

A wide range of technologies have been embraced by many service providers due to the increment of labor costs in delivering their products and services to customers. The main purpose of customers using the new technologies is to produce or consume the services without direct contact with the firm's staff. These Self Service Technologies (SSTs) are technological services that benefit customers of a service without any employee involvement (Meuter et al., 2000). It includes telephone/interactive voice response, interactive kiosks, and the Internet. As these new technologies have transformed the nature of customer communication and service, it is important to examine how customers evaluate the features of SST service and how service results are affected (Howard and Worboys, 2003). Consumers are mostly sophisticated in their technological interactions; they may keep away from certain SSTs if uncomfortable, even when benefits are clear (Meuter et al., 2003).

Parasuraman (2000) argued that customers' technology readiness (TR) should be taken into account in order to accurately expect the perception and behavior of customers. At present, there have been few studies examining consumers' readiness to adopt, willingness to use, or evaluation of SSTs and any consequent influence on behavior.

2.5.2 Technology readiness (TR)

Many studies have pointed out that customers often accept the use of SSTs, yet they experience anxiety related to the process as they lack technology readiness (TR) (Meuter et al., 2003 and 2005; Parasuraman, 2000; Yen, 2005; Zeithaml et al., 2002). Customer's experience of new service opportunities convey flexibility and result in saving time. In spite of this, some customers feel uncomfortable when dealing with an SST, resulting in annoyance with technology-based systems (Parasuraman, 2000). Moreover some internet surfers have shown a certain degree of technophobia (Meuter et al., 2003). For that reason organizations set up technology in their services depending on individual psychographic characteristics considering TR and the use of SSTs varies. An example of a positive effect of TR on customers' attitudes towards using SSTs is for airline check-in with customers' evaluation of the focal airline's internet check-in service.

2.6 ELECTRONIC SATISFACTION

In the electronic commerce environment, electronic satisfaction is defined as the pleasure of the customer with respect to his or her prior purchase experience with a given electronic commerce firm (Anderson and Srinivasan, 2003). A customer's perceived quality of a website is determined by the overall value of the use of a website as customer's perception of the website's usefulness. Hence, website quality is suggested to be a function of perceived usefulness of website use (seen as the website's ability to address and fulfill customers' needs) and quality perceptions (Piccoli et al., 2004).

Research by Pont and McQuilken (2005) and Ranaweera et al. (2008) revealed that satisfaction leads to initial and repeat purchase intention as well as customer loyalty. This positive association is also true in the e-commerce environment according to the findings of Anderson and Srinivssan (2003), Gommans et al. (2001) and Law and Bai (2008). Bai et al. (2008) argue that customer satisfaction has a positive impact on customers' purchase intention. however, scholars are still looking for a well-developed measurement of customer satisfaction. The concept of measuring electronic satisfaction has taken an essential place in marketing literature in recent times. Szymanski and Hise (2000) conducted a study of e-satisfaction based on four groups of interviews of online customers. Their results indicated that convenience; site design, product offerings/information and financial security were major factors in consumer assessments of e-satisfaction. Satisfaction is a major aspect and predictor of customer loyalty; therefore companies should put effort into improvements of their websites' quality.

2.7 E-SERVICE QUALITY

2.7.1 E-Service quality definition

As mentioned previously services are intangible goods that appeal differently to each customer. With the increasing numbers of research in Internet marketing and electronic commerce, service quality in an online environment has become recognized as an important factor as determining the success or failure of electronic commerce (Yang, 2001).

Ziethaml et al. (2002) presented the idea of electronic service quality (e-SQ), which is defined as the extent to which a website facilitates efficient and effective shopping, purchasing and delivery of products and services. E-service quality is also defined as overall customer assessment and judgment of e-service delivery in the virtual marketplace (Santos, 2003). Businesses that have been experienced and successful in offering e-services are starting to understand that as well as website presence and low price, the significant success or failure factors also include the electronic service quality (Yang, 2001; Zeithaml, 2002). One of the reasons for the increased importance of e-services quality is that via Internet, it is much easier for customers to compare different service offerings than through traditional channels (Santos, 2003).

Consequently, customers of online services expect equal or higher levels of service quality than the customers of traditional services (Santos, 2003). Many companies have recognized the significance of delivering high quality e-services, but there is the problem of how the quality of online services is defined, which its determinants are and how it can be actually measured. Flexibility, convenience, efficiency and enjoyment are examples of major positive themes in the online environment. E-service is referred to as the role of service in cyber space (Rust and Lemon, 2001).

2.7.2 E-Service quality dimensions

Table 2.4 Online service quality dimensions

Dimensions

Description

Reliability

Consists of correctness of order fulfillment, prompt delivery, and billing accuracy.

Attractiveness

Includes individualized attention, personal thank you notes from online retailers and availability of message area for customer questions or comments.

Ease of use

Relates to well organized, well structured, and easy to follow catalogues, site navigability, and concise and understandable contents, terms and conditions.

Access

Includes the list of the company's street and e-mail address, phone and fax number, accessibility of service representatives, availability of chat rooms, bulletin board and other communication channels.

Security

Includes security of personal information and minimal online purchase risks.

Credibility

Refers to the business history of online retailers, special rewards, and referral banners on the other website.

Source: Yang (2004)

Prior studies have presented that service quality in an online environment is a significant determinant of the effectiveness of e-commerce (Yang, 2001; Janda et al., 2002). Emphasizing e-service quality on the web can make online companies more effective and appealing. There are a variety of dimensions of service quality; Kang and James (2004) divide the perceived service quality dimensions into functional dimensions (the process), technical (the outcome) and image. The growth of technology pushes the service sector to provide a certain level of facilities and by using technological improvement, the service sector might be able to provide competent infrastructure in their e-service creation.

According to Yang (2004) there are seven factors of online service quality that align with the SERVQUAL: reliability, responsiveness, access, and ease of use, attentiveness, credibility, and security. In addition, Zeithaml et al. (2000) have developed E-SERVQUAL with eleven dimensions in a series of focus group interviews: access, ease of navigation, efficiency, flexibility, reliability, personalization, security/privacy, responsiveness, trust/assurance, site aesthetics, and price knowledge to measure online service quality. In the research, they found the core dimensions of regular service quality like efficiency, fulfillment, reliability, and privacy were the same online; at the same time, they offer responsiveness, compensation, and real time access to help as core dimensions of service recovery for online services.

In 2000, Kaynama and Black attempted to adapt the SERVQUAL dimensions to e-services to evaluate 23 travel agencies online services and seven dimensions from SERVQUAL: responsiveness, control and purpose (resulted from reliability), accessibility, navigation, design and presentation (resulted from tangibles), background (assurance), and personalization and customization (resulted from empathy). Moreover, Madu and Madu (2002) presented fifteen dimensions of online service quality which are: performance, features, structure, aesthetics, reliability, storage capacity, serviceability, security and system integrity, trust, responsiveness, product/ service differentiation, and customization, web store policies, reputation, assurance and empathy. In 2004, Yang has revealed six key online service quality dimensions as presented in Table 2.4, that are employed by the Internet purchaser to evaluate e-tailors' service quality.

A newly developed multiple item scale for assessing electronic service quality (e-SQ) in E-commerce was presented by Parasuraman et al. (2005) as the E-S-QUAL of a seven dimensions scale. Four of these are the core dimensions, and three are the recovery element of e-service quality. The four core dimensions of E-S-QUAL are:

  1. Efficiency: The site is simple to use, structured properly, and requires a minimum of information to be input by the customer.
  2. Fulfillment: The extent to which the site's promises about order delivery and item availability are fulfilled.
  3. System availability: The correct technical functioning of the site.
  4. Privacy: The degree to which the site is safe and protects customer information.

The E-S-QUAL has an e-recovery service quality scale E-RecSQual for problem solution. It is only applied when customers have questions or run into problems in the e-service process. The three dimensions of E-RecSQual are:

  1. Responsiveness: Effective handling of problems and returns through the site.
  2. Compensation: The degree to which the site compensates customers for problems.
  3. Contact: The availability of assistance through telephone or online representatives.

2.8 ELECTRONIC SERVICE QUALITY GAPS

The conceptual model of service quality developed by Parasuraman et al. (1985) presented customer perceived service quality as the discrepancy between service expectations and perceptions and depicts this discrepancy as a function of four organizational gaps associated with the design, marketing, and delivery of services as shown in 2.5:

  • Gap 1: Difference between customer expectations and management perceptions of customer expectations.
  • Gap 2: Difference between management perceptions of customer expectations and service quality specifications.
  • Gap 3: Difference between service quality specifications and the service actually delivered.
  • gaps model.jpgGap 4: Difference between service delivery and what is communicated about the service to consumers.

Although these gaps were recognized in the context of traditional service quality, Zeithaml et al.'s (2000) exploratory research indicated the presence of similar shortfalls in companies interacting with their customers by the Internet. They presented four e-service quality gaps: information, design, communication, and fulfillment gaps as illustrated in 2.6.

  • The information gap stands for the difference between customers' requirements relating to a website and management's beliefs about those requirements. The importance of the information gap in the context of e-service quality is heightened by the fact that customers are likely to desire an optimal level of performance that is neither too high nor too low on some website attributes. Moreover, the optimum performance level on any given attribute might also differ across customers.
  • The design gap refers to the failure to completely incorporate knowledge about customer requirements into the structure and functioning of the website. Management might be aware that their customers expect to receive support when a problem arises in the website. Therefore, for different reasons management might fail to act on their awareness and initiate proper website adjustments.
  • Communication gap represents a lack of accurate understanding on the part of marketing personnel about a website's features, capabilities, and limitations. It also includes such promises being made on the website itself, as marketing personnel or systems making those promises lack or ignore knowledge about shortfalls in the infrastructure underlying the website. Customers' website experiences falling short of their marketing requirements are an external sign of the internal communication gap and factor of fulfillment gap.
  • On the customer side of the model the fulfillment gap occurs. It represents the overall discrepancy between customer's demands and the experiences. This gap has two different forms; one occurs because of exaggerated marketing promises that do not correctly reflect the reality of the website's design and operation and that is, the communication gap. The other form, the fulfillment gap occurs due to the frustration that e-shoppers might experience even in the lack of external promises. These kinds of customer frustrations are not a result of exaggerated external promises, but rather due to deficiencies in the design and operation of the site in terms of their failure to fully incorporate customers' desires. This type of fulfillment gap results from the cumulative effect of the information and design gaps, just as the fulfillment gap is caused by inflated promises is a result of the communication gap.

As presented in 2.6 the key determinants of perceived e-service quality are both fulfillment gap and customer experiences on the customer side. While the fulfillment gap indirectly captures customer experiences, some experiences will have a direct effect on perceived e-service quality.

Managers will know exactly what customers want if there is no information gap, as it demands a perfect positive relationship between customer requirements and managements beliefs about customers' requirements. As a result, in a situation where there is no information gap, if customers are given a list of possible requirements and asked to rate the importance of each and managers are given the same list of requirements and asked to rate their beliefs about customers' requirements, the ratings would match. As highlighted by Zeithaml et al. (2000) there will be no design, communication and fulfillment gap when there is a perfect relationship between the following:

  • Managers beliefs about customer requirements and the design and operation of the websites;
  • The design and operation of the website and the marketing of the website; and
  • The customers' requirements and experiences.

From the GAPs model presented by Zeithaml et al. (2000), the failure of the service provider will influence customers perceived service quality with company interaction through the internet.

2.9 MODELS OF ONLINE SERVICE QUALITY DIMENSIONS

Well-developed e-service quality of the web can make companies more effective and appealing and help them achieve a higher level of customer satisfaction and retention (Gronroos et al., 2000). Smith and Merchant (2001) believe that e-commerce firms depend on people visiting their sites, purchasing their products, and, more importantly, becoming repeated customers. Most organizations would like to understand more closely the effect of quality aspects of their web sites on purchasing decisions of web consumers, therefore different researches by providing different models have tried to show these relationships.

2.9.1 The Relationship among Overall Service Quality, Customer Satisfaction and Purchase Intention

A model developed by Lee and Lin (2005), used a revised SERVQUAL scale item to establish dimensions of e-service quality through website design, reliability, responsiveness, trust, and personalization which leads to customer satisfaction as illustrated in 2.7.

In addition, system, information, and service quality have been measured and evidenced as an important feature in measuring information systems (IS) success and an essential antecedent to customer satisfaction in the online shopping environment (Pitt et al., 1995; Rodgers et al., 2005).

2.9.2 Conceptual Model for Delivering a Quality Website to Satisfy the Customer

Cox and Dale (2002) detail the key quality factors (KQFs) putting forward a categorization of the KQFs in the form of a conceptual model delivering a website to satisfy customer requirements as shown in 2.8. They have grouped these KQFs into four categories whereby each category relates to a different part of the web site experience and serves to enhance customer satisfaction to the extent that the customer will return.

This model may be considered a guide of how to define the value proposition of the website before deciding which KQFs are appropriate in the assessment.

2.9.3 Santos E-service Quality Model

A model presented by Santos (2003) provides a comprehensive framework of e-service quality and its determinants. The author used focus group interviews in addition to earlier research to develop a conceptual model of e-service quality. In this study we identify the online service factors that influence user satisfaction. The model of e-service quality presented by the author consists of two dimensions: incubative dimension and active dimension. Both dimensions consist of five to six related, overlapping determinants. The findings from the focus group research showed the active dimensions are as important as the active incubative dimensions. The sequence determinants of both dimensions are presented according to their importance resulting from the focus groups in 2.9. The incubative dimensions are defined as the proper design of website, how technology is used to provide consumers with easy access, understandings and the attraction of the website. The majority of the elements in this dimension can be developed before a website is launched including the following:

  • Ease of use: is defined as how easy the website is for customers to conduct an external search in cyber space and internal navigation and search within the website. External search refers to the extent to which customers can easily find the website on the World Wide Web. The use of set up links with major search engines and a concise URL address are options that help to attain this objective. In summary, ease of use is an important determinant in the incubative dimension of e-service quality. The importance of this attribute for website users was also noted by other researchers, such as Abels, White, and Hahn (1999) and Yang (2001).
  • Appearance: is defined as the proper use of colors, graphics, images, and animations, together with the appropriate size of the web pages. Appearance is usually the first determinant observed by web users, in terms of graphics and images, the provision of good quality graphics, pictures, images, animation, Java applets, moving objects and zooming effects web quality. Van Riel et al. (2003), and Lee and Lin (2005) supported the appearance variable as a driver in e-service quality. However, appearance has sometimes been considered as a mere cosmetic element by some researchers (Meuter et al., 2000). It has been reported that website appearance has a weak correlation with a shopper's likelihood of buying again from the same web site. However good appearance cannot guarantee to attract web surfers for repeat visits, whether the actual product is appealing or not (Parasuraman, 2000).
  • Linkage: refers to the number of quality links a website offers. There is common agreement among researches (Abels et al., 1999) that the importance of a good website is not only to set up the proper link and avoid broken links, but also to maintain these links frequently. A majority of websites provide links to other websites. As a result regular checking is important to update or eliminate links to the web site that no longer exist or are under construction. Indeed, poor quality linked sites damage the total e-service quality of the home site.
  • Structure and layout: refers to the organization and the presentation of the website content and information. Clear, simple and consistent layout, is vital with a good use of frame, provisions of a site map that allow users to skip to a section of interest, a clear listed menu, and the company logo presented on each page. Structure and layout is a crucial factor in the quality of the online service. In contrast, a messy or confused layout and a puzzle like structure were more likely to make web surfers leave the website.
  • Content: refers to the presentation and layout of the information and functions on the website. According to Alves (2001), “Content is King” was a popular slogan in the early days of online news service development. A company's website should provide detailed information about the products and the services they offer, with the use of simple words and phrases that are easy to understand by web users. Conversely, too much information and too little information is considered a negative element for the website surfers. Therefore, companies need to conduct more research regarding the amount of information they should provide in pursuing e-service quality.

One of the important factors of the Internet is that it offers an interactive function with its customers. Companies take advantage of the interactivity function as an essential feature of the e-service quality. The provision of a real audio player, video preview, online brochure, 3D product viewing, personal accounts, images, and customizing of products are valuable functions to website visitors. In addition, a function allowing a country specific search that the company service available in a specific country is major function to website users.

As observed by Santos (2003) the active dimension of a website defined as the good support, fast speed and attentive maintenance a website can provide to its customers. The active dimensions must be achieved consistently throughout the period a website remains active, as it can increase customer satisfaction, retention, and encourage positive word of- mouth referral.

The active dimensions as presented in 2.9, the E-service Quality Model are:

  • Reliability: is the ability to perform the promised service accurately and consistently, including the frequent updating of the website, prompt reply to customer enquiries, and accuracy of online purchasing and billing. According to Parasuraman et al. (1988), reliability is the most significant dimension in all services. Websites that provide up to date information received high appraisals; companies that maintain an e-commerce site must ensure it allows customers to enquire about merchandise, check status of their orders and file complaints or send compliments. Lee and Lin (2005) and Van Riel et al. (2003) conceptualize reliability as one dimension in e-service quality. The element of responsiveness noted by Yang (2001) is a determinant of reliability for the online service. As the internet offers opportunities for faster and cheaper communication than traditional media, companies should offer their online customers an accurate process of billing and to receive the products or the service similar to those described online on time.
  • Efficiency: is the speed of downloading, search and navigation. Online surfers demand a service that is fast to download and search, images and mechanisms. Although the hardware specifications of consumers' possession may be inefficient, service providers can take this into consideration reducing the number of complicated graphics. Parasuraman (2000) suggested that efficiency is an important positive factor contributing to adoption in the online environment.
  • Support: covers the technical help, user guidelines and personal advice available to customer users of the website. Providing user friendly guideline help pages and FAQs are the first steps in good quality support. Nevertheless, many website users find that FAQs are not sufficient; they prefer personal advice through email or traditional channels such as the telephone. However, many companies practicing e-commerce have a reputation for not replying to email enquiries and having long telephone queuing times (Bettua, 1999).
  • Communication: is defined as keeping customers properly informed and communicating with them in languages they can understand. E-service consists of online communication such as e-mails and chat rooms; as well as the traditional communication methods such as telephone, fax and postal mail. Effective communication tools allow companies to quickly solve customer complaints and provide customers with feedback, which is a major element of customer satisfaction online (Bhattacherjee, 2001). Examples of important communication website e-services are FAQs, the ability to lodge complaints, tools/interface for resolving customer complaints, a Web centre for customer service and support, and “click-to-talk”-applications (Rust and Lemon, 2001; Bhattacherjee, 2001). Other important e-services are online community features, such as chat-rooms, guest books, talk forums, and message boards, which are important for word-of-mouth and direct marketing (Khalifa and Shen, 2005). A good quality website should offer many contact methods, with global access of the WWW offering choice of language as effective element of e-service quality. Hence, offering languages other that English is important for companies involved in international business.
  • Security: refers to freedom of danger, risks or doubt during the service process. Yang (2001) pointed out that security is an important online element. It is a determinant of online service quality affecting e-satisfaction in dissatisfying incidents (Szymanski and Hise, 2000; Zeithaml et al., 2006). Customers perceive risk on the WWW concerning secure credit card transactions and the protection of private sensitive information Johnson (2001). Although the majority of the website provides security options in the form of user names, passwords, and credit card guarantees, many online users doubt the security on the WWW. On the other hand, many customers who do not perceive online risks consider purchasing online the same as the traditional method.
  • Incentive: is the encouragement offered by web providers to customers to browse and use the website, including rewards for doing so. Since the WWW is a highly competitive environment, offering incentives encourages web users to test the website, engage in online purchasing, and participate in market research. Companies offering online incentives can attract and retain online custom, therefore it is recommended that a company focuses on this element. Excessive online service quality provides long-term benefits to any organization. The model presented in 2.9 provides a comprehensive framework of e-service quality and its determinants allowing companies to develop a well designed website that creates an interest in the firm and attracts customers.

2.10 RELEVANT STUDIES ON WEBSITE QUALITY

2.10.1 Airlines E- Service Quality

New web technologies have been influential in the development of the airline industry particularly concerning passenger airlines. Due to the growing recognition of different variables of website quality services, many different satisfaction models and web service quality have been introduced. Consumer satisfaction is closely related to service quality of the website they are purchasing from. According to Santos (2003) with incubative dimensions (proper design of a website, how technology is used to provide consumers with easy access, understanding and attractions of a website), the majority of elements in the incubative dimension can be developed before a website is launched. With active dimensions (good support, fast speed and attentive maintenance that a website can provide to its consumers consisting of reliability, efficiency, support, communications, security and incentives) must be achieved consistently throughout the period that a website remains active for any organization website.

2.10.2 Recent Empirical Research of E-service Quality

Arshad et al. (2008) conducted an empirical study on consumers' perceptions of Internet service quality with respect to transportation service companies in Malaysia. It was conducted based on Santos' e-service quality model to determine Internet service quality in online ticketing. An analysis covering 240 questionnaires was distributed among transportation's consumers in the Klang Valley.

The results revealed that Malaysian consumers felt that all determinants for consumer perceptions were reliable and consistent except communication, and linkage. The reliability test support was considered the most reliable and consistent. It was found that e-Ticketing web sites provide a lot of different supports, for example user-friendly guidelines pages and frequently ask questions (FAQs) services. Linkage refers to how the link between websites affect the overall service quality via the Internet. Consumers felt that too much linkage may mess up the content and thus lead to complicated services. Most of them preferred simple and fast services. The study found customers emphasized reliability as an important feature of e-service quality compared to the other ten dimensions. The second most important determinant element is Ease of use. There was a high demand for a website that was easy to find, use and navigate within. Some websites offer the option of an internal search, a highly rated quality found in many studies, which allows consumers to search within the site by product, feature or keyword. While web users commented website appearance is also an essential


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