Literature Review - Customer Online Purchase Intention

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CHAPTER 2 LITERATURE REVIEW

2.1 Introduction

In this chapter, the first section will be the comprehensive review of customer online purchase intention, cinema e-ticketing, web security, perceived risk and perceived usefulness. The second section will be the relationships between independent variables and dependent variable. Through reviewing the published journals, articles and textbooks that relevant to this research study topic. It provides researcher a foundation to create a research framework to this research study. In order to reach the research objectives, the published journals, articles and textbooks will help this research study to proceed with further investigation and hypotheses testing.

The Internet market penetration rate has increased rapidly in Asia region (Maddox and Gong, 2005). According to Malaysia Internet Usage and Telecommunication report (2014), the number of Internet subscribers in Malaysia has increased from 2.9 million in year 2004 to 20 million in year 2013. It showed that there is a rapidly growth in the Internet subscription and online purchase in Malaysia. The online purchase of Malaysia is still at the development stage. However, there are not much information to know the customer online purchase intention and the factors that influence customer online purchase intention in the online purchase environment. Therefore, this research study will investigate the factors that affect customer online purchase intention in the online purchase environment in Malaysia.It showed that the factors that influence customer online purchase intention are very important. Therefore, the e-commerce company must pay attention and solve these factors in order to gain more profits.

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As mention above, there is a significant relationship between web security, perceived risk, perceived usefulness and customer online purchase intention. The independent variables and dependent variable will be review in this chapter to get better understanding in this research study.

2.2 Previous Study

2.2.1 Customer Online Purchase Intention

Jarvenpaa, Sirkka and Noam (1999) stated customer online purchase intention is customer's intention to purchase products or services from online retailer.Except selling products and services through traditional ways, there are many companies conduct online retail at the same time. These online retailers are selling products and services in a virtual medium through Internet. Ajzen (1991) said motivation factors will influenced a person online purchase intention. Normally, the motivation factors are come from personal and social motive. Additionally, motivation factors that influence a person online purchase intention included internal and external motive. It showed that motivation factors will influence a person intention who willingness to make online purchase decision.

On the other hand, Heijden, Verhagen and Creemers (2001) explained online purchase is a person intention who willingness to purchase products or services at the website through Internet.Thus, customer will purchase products or services through online transaction when customer perceived benefits from online purchase.Pavlou (2003) stated online purchase is the process of products or services purchase, information retrieval and information transfer. Therefore, these activities taken place in customer online purchase process.Other than that, Pavlou (2003) explained the information retrieval of products or services are considered as the intention of customer to use a website during online purchase.Thus, the description of products and services also affect customer online purchase intention.

Besides that, the development of Internet technology in Malaysia allowed the Malaysian customers to make online purchase from online retailer and search for products or services through Internet (Kwek, Tan and Lau, 2010).When customer has intention to purchase products or services in the web-shopping environment, it showed that customer perceived benefits from online purchase.The attractiveness of the website design, product's describe, advertising and many more can attract customer's eyesight as well as increase customer online purchase intention (Chi, Yeh and Huang, 2009).Zeithamal (1988) stated the more online purchase willingness will increase the purchase intention of customer. It showed that the perceived usefulness will influence online purchase intention so when the perceived usefulness increase, it tends to increase intention of online purchase at the same time.In addition, customer's perception on risk and usefulness and web security will affect online purchase intention. Therefore, these are the main factors to estimate customer online purchase intention in the e-commerce market.

2.2.2 Cinema E-ticketing

E-ticketing system is a new version that transform from the conventional paper ticket.E-ticket also is an electronic record to keepin the cinema's reservations system. In addition, Cinema e-ticketing system is a new marketing strategy implemented by cinema companies in order to serve customers through Internet Infrastructure (Goh, 2001).According to Sulaiman, Josephine and Mohezar (2008), the information of customers will store in cinema company database. Therefore customer can go into cinema with an e-ticket with using a special lookup code knows as QR code or bar code.E-ticketing system is still at the growing stage in Malaysia. According to Lau, Choo and Tan (2011), AirAsia was the first to start the e-ticketing system and subsequently followed by cinema companyin Malaysia.Thus, cinema company still need time to gain customers confidence of the e-ticketing system in order to succeed in the e-commerce market.

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Hoosain, Khan, Kira and Farhoomand (2000) said the main purpose of e-ticketing system is to develop customer self-services technology. Online cinema movie ticket purchasing is considered an easy task that may take about 5 minutes to complete a purchasing. However, the purchasing process of online cinema movie ticket included select a cinema, select a date, select a movie, select a payment method, select seat and then make payment after that customer will get the e-ticket from the cinema e-ticketing system.Enhance customer service and improve effeciency are the elements to lead e-ticketing system to success (Hoosain et al, 2000). Thus, cinema companies should enhance customer and improve efficiency to lead customer accept cinema e-ticketing system. E-ticketing system allows cinema companies to eliminate customers queuing tension of purchasing a movie ticket. Sulaiman et al (2008) stated e-ticketing system is beneficial for both consumer and organisation. Customer will save time and avoid long queue when using cinema e-ticketing system.

2.2.3 Web Security

Gray (2006) stated the security of customer's information has become significant issue that increased attention by the public. Thus, customer demand increased that the personal information should be protect by company during collection and use of such information. According to Goh (2001), perceived security included threat that may cause e-commerce economic hardship such as disclosure of data, fraud, waste and abuse to the Internet users. It showed that company must pay attention in web security when running e-commerce because web security is a factor that will influence intention of online purchase. Roca, Garcia and Vega (2009) stated customer will be more willing to use online purchase if the information provided during transaction is more secure.

Goh (2001) explained that hacker, poor security and immature website will influence consumer intention of online purchase.It showed that Malaysia's Internet users are concern with web security issue. Thus, customers only will online purchase cinema movie ticket when customers confident with the online transaction system provided by cinema company.Cinema's website is one of the contact tools between cinema company and customers. According to Powell (2009), the quality of the website will affect customer intention of online purchase. Thus, website's quality is one of the factors that will affect web security. Web security is the largest issues of e-ticketing system in Malaysia (Sulaiman et al, 2008). It showed that which organisation need to use e-ticketing system must pay attention in web security.

According to Hopwood, Sinason& Tucker (2000), web security has become the problem for e-commerce.Nowadays, customer is more careful during online purchase. On the other hand, Salisbury, Pearson.R, Pearson.A and Miller (2001) stated customer will only online purchase when the sensitive information is safe. Therefore, many large scale online retailer pay attention in the web security to protect the customer information.Customer will demand that online retailer to protect their sensitive analysis such as name, identity card number, credit card number and security code. Credit card number and security code is the most important sensitive analysis for customer. If the credit card number and security code get by other person through the website customer financial will get harmful from this issue. In addition, Salisbury et al (2001) said there are many large scale online retailer will hire professional employees in Information Technology (IT) department to design the company website and of course the security of website.An excellent web security will help cinema company to build customers trust and firm reputation. It showed that web security is a significant factor that will influence customer online purchase intention of cinema movie ticket.

2.2.4 Perceived Risk

Tam (2012) said perceived risk can be defined as unexpected or negative consequences a consumer fears may occur as a result of making the wrong purchase decision. This shows perceived risk plays an important role in purchase decision.Lee and Tan (2003) stated customer will perceived higher level of risk when online purchase compared with traditional retail shop. Customer hard to examine the physical products because customer only can rely on limited details and pictures shown on the screen. Perceived risk also can be defined as consumers’ belief the transaction has uncertain negative outcomes (Martin and Camarero, 2008). Thus, perceived risk is a vital hurdle for online purchase.

Kwek, Daud, Tan, Kay and Hassan (2011) stated perceived risk can be defined in various types of risk in the transaction environment. According to Chen and Barnes (2007), privacy risk and security risk are the predominant risk in online purchase environment. Besides that, Bart, Shankar, Sultan and Urban (2005) said security and privacy are the factors that influence customer trust in online purchase. Therefore, web security is very important for cinema company when running e-ticketing system because customer demanding cinema company will protect the privacy and sensitive information of customer. Customer willing to use cinema e-ticketing system to purchase movie ticket when customer perceived the level of risk is low.

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Jacoby and Kaplan (1972) identified there are five types of risk in pre-Internet context that are financial, performance, social, psychological and psychical risk. After that, Roselius (1971) identified time risk as the sixth dimension of risk. However, Kim (2008) stated that there are three types perceived risk in online purchase context that are product risk, information risk and financial risk.Product risk is worst product that bought from online. Information risk is wrong product's information provided by online retailer. Financial risk is loss of money derived from a bad product choice. It showed that perceived risk has negative influence for customer online purchase intention because there is too many risk in online purchase environment. However, customer is less likely to purchase online when perceived high risk. Therefore, when cinema company running e-ticketing system company must provide good web security, website, e-ticketing system and product to customer in order to reduce customers risk and gain the trust from customers. It showed that perceived risk is a significant factor that will influence customer online purchase intention of cinema movie ticket.

2.2.5 Perceived Usefulness

Teo (2011) explained that perceived usefulness is a degree to which a person believes that using a specific technology will enhance performance. Thus, perceived usefulness is a factor that influences customer online purchase intention of cinema movie ticket.Moreover, Venkatesh and Davis (2000) stated perceived usefulness will influence customer intention of using Internet. Customer perceived that online purchase is more benefits than traditional way.On the other hand, customer purchase through Internet is considered and ease of use.Venkatesh and Davis (2000) indicated perceived usefulness has a positive effect on customer online purchase intention, customers are more likely to online purchase when customer perceived online purchase is useful way to transaction.In the case of cinema e-ticketing system, if customers perceived that online purchase cinema movie ticket is useful and convenience, customer is more likely to use cinema e-ticketing system to purchase movie ticket through Internet.

According to Gefen, Karahanna and Straub (2003),perceived usefulness is a measure of the individual’s subjective assessment of the utility offered by the new information technology in a specific task-related context.Usefulness, reliability and ease of use are the main components for online purchase (Park and Gretzel, 2006).It showed that the customers who perceived usefulness for online purchase, customers will purchase through the company website.In the case of cinema e-ticketing system, when customers belief that e-ticketing system is usefulness so customers will purchase cinema movie ticket through e-ticketing system. Butler and Peppard (1998) stated consumers willgain benefits from online purchase because online purchase provides consumers global market and larger product catalogues from wide range of sellers.Nowadays, consumer can be easily connected to global networks because of the advanced network and technologies.

Lee (2009) said online purchase provided speed, quantity of information and products to customers. Thus, customers will be more confident to online purchase due to wide information and product varieties.According to Vijayasarathy (2004), the consumers perceived usefulness of online purchase included cool, enjoyable, save time, fun, free, flexibility, informative, resourceful, comparative, convenience and many more. In the case of e-ticketing system, customer perceived usefulness of online purchase cinema movie ticket included convenience, save time and flexibility compared with the traditional way. There are many benefits when customer using cinema e-ticketing system to purchase movie ticket. For example, customer using cinema e-ticketing system is very flexibility and convenience because customer can purchase cinema movie ticket at any places through Internet and device. Other than that, customer can avoid long queue when using cinema e-ticketing system to purchase cinema ticket and it is save time for customer.. It showed that perceived usefulness is a significant factor that will influence customer online purchase intention of cinema movie ticket.

2.2.6 Web Security and Customer Online Purchase Intention

There is a relationship between independent variable and dependent variable in this research study that are web security and online purchase intention of cinema movie ticket. Adeline, Ali and Hishamuddin (2006) said there is a correlation between customer online purchase intention and the personal information and security of credit card payment. However, the function of web security is to protect customer information and credit card payment process. Thus, customer has confident to use cinema e-ticketing system to purchase movie ticket.

Web security plays an important role in customer online purchase intention of cinema movie ticket. Security and privacy are the elements that influence intention of customer online purchase (Rehman, Ashfaq and Ansari, 2011). Zellweger (1997) stated the security of transaction that will also affect customer online purchase intention. Hacker is the person that will stole customer personal information and credit card detail, this will cause customer financial loss. Cinema company must pay attention in web security in order to protect privacy of customers. Therefore, customer will feel secure when using cinema e-ticketing system to purchase movie ticket.

H1: There is a relationship between web security and customer online purchase intention of cinema movie ticket.

2.2.7 Perceived Risk and Customer Online Purchase Intention

There is a relationship between independent variable and dependent variable in this research study that are perceived risk and online purchase intention of cinema movie ticket.Perceived risk is a factor that will bring negative consequences of using cinema e-ticketing system. The risk in online purchase always refers to financial risk that may lead customer financial loss (O'cass, 2002). Website malfunctions, e-payment, privacy and policy also are the risks that will affect intention of customer during online purchase. Thus, cinema company must control the quality of website security in order to reduce risk then customers will more willing to use cinema e-ticketing system.

Perceived risk can be defined as an essential aspect of customer purchase intention due to the potential perceived anxiety and impairment that will negatively affect a person intention (O'Cass, 2002). Pavlou (2002) said perceived risk is very influential point of discussing customer online purchase intention because customer is trying to avoid risks during online purchase.Thus, cinema company must do well in web security in order to reduce perceived risk of customer when using cinema e-ticketing system.

H2: There is a relationship between perceived risk and customer online purchase intention of cinema movie ticket.

2.2.8 Perceived Usefulness and Customer Online Purchase Intention

There is a relationship between independent variable and dependent variable in this research study that are perceived usefulness and online purchase intention of cinema movie ticket.Ignatius and Ramayah (2005) stated perceived usefulness is the important factors that influence people to use a new technology. Vijayasarathy (2004) said perceived usefulness is customer believes online purchase will get more benefits such as save time, convenience and many more. Vijayasarathy (2004) support the perceived usefulness will influence intention of online purchase. It means customer will use cinema e-ticketing system when perceived usefulness and customer will continue to use this technology. It is because cinema e-ticketing system help customer to save time and purchase movie ticket more convenience.

H3: There is a relationship between perceived usefulness and customer online purchase intention cinema of cinema movie ticket.

2.3 Related Theories

Technology Acceptance Model (TAM) is a theory to test the technology's usefulness and ease of use (Park, 2009). Consumers will only accept a new technology when that is usefulness, low risk and secure. The e-ticketing system that implemented by cinema companyis very useful for customer. It helps customer to save time and provide customer convenience when purchase movie ticket online. At the same time, cinema company must confirm that web security is secure and the risk is low. Customer will more confident to use cinema e-ticketing system when customer perceived usefulness of cinema e-ticketing system, web security is secure and the level of risk is low. Thus, customer will accept the cinema e-ticketing system and willing continue to use this technology to online purchase cinema movie ticket.