UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Đinh Thiên Phúc FACTORS AFFECTING CUSTOMER SATISFACTION ON RETAILER’S WEBSITE: A STUDY OF VIETNAM ELECTRONICS AND APPLIANCES INDUSTRY MASTER OF BUSINESS (Honours) HO CHI MINH City - Year 2015 TIEU LUAN MOI download : skknchat@gmail.com UNIVERSITY OF ECONOMICS HO CHI MINH CITY International School of Business ------------------------------ Đinh Thiên Phúc FACTORS AFFECTING CUSTOMER SATISFACTION ON RETAILER’S WEBSITE: A STUDY OF VIETNAM ELECTRONICS AND APPLIANCES INDUSTRY ID: 22120097 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr. PHAM NGOC THUY HO CHI MINH City - Year 2015 TIEU LUAN MOI download : skknchat@gmail.com i ABSTRACT Vietnam ranks 18/20 countries with the largest number of Internet users in the world, ranking eighth Asia and ranks third in Southeast Asia. Online shopping is the strategic direction in 2015 of electronics and appliances retail industry. This research aims to identify the influence of the website elements to customer satisfaction on electronics and appliances retailers’ websites.
This research will find out that specific information, care taking, general information, billing and payment are 4 factors that affecting customer satisfaction with specific information is the most important factor. Keywords: customer satisfaction, electronics and appliances, retailers’ website, online shopping TIEU LUAN MOI download : skknchat@gmail.com ii TABLE OF CONTENTS ABSTRACT.i TABLE OF CONTENTS .ii LIST OF FIGURES. iv LIST OF TABLES .7 CHAPTER 2: LITERATURE REVIEW. Factors affecting customer satisfaction on retailers’ website.
Website elements related to information influence on customer satisfaction. Website elements related to service influence on customer satisfaction. Website elements related to system influence on customer satisfaction.16 CHAPTER 3: RESEARCH METHODOLOGY. Research sampling method.
Measures of the constructs. Data collection procedure. Data analysis method .24 TIEU LUAN MOI download : skknchat@gmail. Exploratory Factor Analysis (EFA).
Multiple regression analysis .25 CHAPTER 4: RESULTS AND ANALYSIS. Cronbach’s alpha test. Exploratory Factor Analysis (EFA). Pearson Correlation Coefficient.
Discussions of the findings .46 CHAPTER 5: CONCLUSION AND IMPLICATIONS. Implications of this research. Research limitations and implications for future research. 53 APPENDIX A – QUESTIONNAIRE IN ENGLISH.
58 APPENDIX B – QUESTIONNAIRE IN VIETNAMESE. 62 APPENDIX C – STATISTIC ANALYSIS RESULTS. 66 APPENDIX D – MULTIPLE LINEAR REGRESSION. 69 APPENDIX E – PILOT STUDY RESULTS.
70 TIEU LUAN MOI download : skknchat@gmail.com iv LIST OF FIGURES Figure 1. The proposed research model. Histogram of SATIS dependent variable. Normal P-P Plot of regression standardized residual.
69 TIEU LUAN MOI download : skknchat@gmail.com v LIST OF TABLES Tables 3. Cronbach’s Alpha results. First KMO and Bartlett’s Test for independent variables. First Pattern Matrix.
Removal process during EFA. Final Pattern Matrix. Final total variance explained. Cronbach’s alpha summary after EFA.
Pearson Correlation Coefficient. The summary of overall value 1. The summary of overall value 2. The result of testing hypotheses.
43 TIEU LUAN MOI download : skknchat@gmail.com 1 CHAPTER 1: INTRODUCTION 1. Research Background The global Internet market today is estimated to have around 150 million users coupled with 44 million hosts in more than 130 countries. During the next decade, this figure is estimated to reach over 500 million users (Kamel & Hussein, 2001). Along with the popularity of the internet, e-commerce plays an increasingly important role in business strategy.
28% of internet users globally have either shopped online or plan to do so in the next 6 months (Taylor Nelson Sofres, 2002). Understanding the mechanisms of online shopping and the behavior of the online consumer is a priority issue for practitioners competing in the fast expanding virtual marketplace (Constantinides, 2004). According to Vietnam Internet Network Information Center, Vietnam ranks 18/20 countries with the largest number of Internet users in the world, ranking eighth Asia and ranks third in Southeast Asia with 31,302,752 Internet users as of Dec 2013, 35.53% of the population. The number of Vietnam Internet user has increased more than 15 times compare with that of 2001.
Such an advantage of Internet is very potential for development of e- commerce service (Ngo & Gim, 2014). Vietnam Online Shopping Survey 2013 made by Vietnam E-commerce and Information Technology Agency under the Ministry of Industry and Trade showed that there were nearly 202 websites for shopping online with combined revenues of over VND1. 20% of Vietnamese use the internet for shopping online and only 29% of them felt sastified. Vietnam Online Shopping Survey 2013 also shows that mobile phones, computers and electronic devices is one of the most sold online goods.
73% of surveyed websites selling these items and 35% of customers said that they often buy the phones, computers or other electronic items online. 61% of customers when asked said that they often buy electronic goods via the stores websites instead of purchasing through social networks or other online trading platforms. TIEU LUAN MOI download : skknchat@gmail.com 2 According to Vietnamnet, the electronics and appliances retailers in Vietnam almost base on traditional stores, which is selling mobile phones, computers or other electronic goods. Some famous brands in this field could be mentioned as Tran Anh, Pico in the northern area, and Nguyen Kim, Cho Lon, VienthongA in the southern region.
With the rapid development of the internet, from the 2010s, most of the electronics and appliances retailers in Vietnam developed online shopping features on their website, thereby forming a separate business division, along with traditional selling. According to Vietnamnet, online shopping is the strategic direction in 2015 of electronics and appliances retail industry. Many retailers are focusing on this direction such as Pico, VinPro, Nguyen Kim, Tran Anh… Pico’s representative says that they would like to boost their online selling since 2015, while Nguyen Kim has the ambitious to grow their online sales 50% compared with 2014. The development of e-commerce website brings many benefits to them.
According to Alam et al. (2005), it has 6 major benefits of apply e-commerce website: ability to reach globally, no time barriers, enhance image, low cost communication, direct link with customer, future business tool. In Vietnam electronics and appliances industry, the biggest benefit of e-commerce website is to increase revenue: with e-commerce website, their customers are now no longer limited geographically or working time. The second benefit is to cut costs: with e-commerce website, they do not have to pay a lot to hire stores, staffs or storage… then they could reduce the selling price and get higher sales.
The last benefit is competitive advantages: online business is a "playground" for creativity, where they can apply the best ideas, the latest supported service, marketing strategy etc. And once all competitors are applying e-commerce, then the victory will belong to someone who is best creative in creating features for businesses, products and services to its attract and retain customers. The purchasing process that electronics and appliances retailers are offering on their website is quite simple, mainly includes the following steps: TIEU LUAN MOI download : skknchat@gmail.com 3 - Step 1: Searching. Using the search engine of the website to search for products to buy.
Click on image or product name appeared to move to the detailed information page of the product Firgure 1. Searching - Step 2: Finding information. View the details about product features, product photos, comparisons, promotions and reviews by other consumers about products. If you chose a appropriated product, click on Ordering button.
Some retail systems which has many stores also offer a feature that help customer to find the store which have the selected good in stock. Finding Information TIEU LUAN MOI download : skknchat@gmail.com 4 - Step 3: Order taking. Enter personal information on the items that the website request. Number of these items depending on retailers.
Order Taking - Step 4: Payment. The applying payment method may be different depends on retailers. There is 5 payment methods that retailers are offering on their websites, includes: payment by cash when receive goods at home, payment by cash when receive goods at stores, payment by bank transfer to the store, payment by internet banking system of local ATM, payment via VISA or MasterCard. TIEU LUAN MOI download : skknchat@gmail.
Payment - Step 5: Confirmation. Confirm the order information and contact the hotline if problems arise. Research Problems Value of electronics goods is not small for the majority of the people of Vietnam, so customers often fret a lot when buying online. For retailers, especially electronics and TIEU LUAN MOI download : skknchat@gmail.com 6 appliances retailers, websites keep a critical role in attracting and maintaining potential customer.
In fact, the electronics and appliances retailers in Vietnam still cause some barriers to customers in the use of the service through their websites, which are the important communication channels between customers and sellers (Song et al. 38% of those surveyed said that the reason makes them feel not satisfied when shopping online is the lack of information to make decisions, 37% choose inconvenient payment methods, 29% choose the comlicated of making orders and 20% choose the website interface is not professional (Vietnam E-commerce and Information Technology Agency, 2013). Clearly, the elements of customer experience on the retailer’s website have a huge impact on customer satisfaction. It's a part of the reason why despite the continuous communication of retailers, or discounts for online purchases, but the percentage of people using the online shopping features on their websites is still not as high as expected.
According to SaigonTimes, online sales of Dien May Xanh in 2014 only reach 7% of total revenue, while this rate in Thien Hoa is 10%. Designing effective websites requires an understanding of how website elements and technological features of website affect customer’s beliefs and what beliefs impact on the level of customer’s satisfaction (Song et al., 2011) Studying online behavior of customers has been one of the most important research agendas in e-commerce during the past decade (Chen, 2009). Most of the recent research and debate is focused on the identification and analysis of factors that one way or another can influence or even shape the online customer satisfaction (Miles et al., 2000; Liu and Arnett, 2000; Cockburn and McKenzie, 2001; Liao and Cheung, 2001; McKnight et al.,2002; Joines et al., 2003; O’Cass and Fenech, 2003). In Vietnam, the research of Ngo and Gim (2014) concluse that perceived of economic benefits (PEB), perceived of merchandise (PM), and perceived payment benefits (PPB) have significant direct effects on consumer’s behavior adoption of online shopping.
In fact there is a little researchs has been done in the context of Vietnam online electronics and appliances retailers. TIEU LUAN MOI download : skknchat@gmail. Research Objectives The main objective of this research is to investigate the usefulness and applicability of theoretical model in measuring customer satisfaction on electronics and appliances retailers’ websites: - Examine the influence of the website elements to customer satisfaction on electronics and appliances retailers’ websites. Research Significance This study results help the electronics and appliances retailers in Vietnam understand how customers’ beliefs and attitudes impact the shopping experience on their website.
An understanding of these beliefs and attitudes has the potential to help them break the online purchase barrier of customer, then increase the stickiness of their websites and also to help increase customers’ willingness to purchase goods from them. Research Scope This research conducts on customers in Ho Chi Minh city, which is the biggest city in Vietnam. It also gathers all business activities with an aggregate population from many different provinces and social levels in our country. This study focuses on the customer experience on the retail website, on the influence of the elements on the website to their satisfaction when shopping.
We do not consider other factors may affect customer satisfaction as brand, promotion, facilities. Research Structure This thesis is organized into five chapters: Chapter 1: Introduction. This chapter presents the research background of the study, research problems, research objectives, research significance, research scopes, and the research structure. TIEU LUAN MOI download : skknchat@gmail.