Factors affecting customer satisfaction on retailers website a study of vietnam electronics and appliances industry

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 ELECTRO

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

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

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

TABLE OF CONTENTS

ABSTRACT i

TABLE OF CONTENTS ii

LIST OF FIGURES iv

LIST OF TABLES v

CHAPTER 1: INTRODUCTION 1

1.1 Research Background 1

1.2 Research Problems 5

1.3 Research Objectives 7

1.4 Research Significance 7

1.5 Research Scope 7

CHAPTER 2: LITERATURE REVIEW 9

2.1 Theoritical Background 9

2.2 Customer satisfaction 10

2.3 Factors affecting customer satisfaction on retailers’ website 10

2.3.1 Website elements related to information influence on customer satisfaction 11

2.3.2 Website elements related to service influence on customer satisfaction 13

2.3.3 Website elements related to system influence on customer satisfaction 14

2.4 Research Model 15

2.5 Summary 16

CHAPTER 3: RESEARCH METHODOLOGY 17

3.1 Research Process 17

3.2 Research sampling method 19

3.3 Measures of the constructs 20

3.4 Data collection procedure 23

3.5 Data analysis method 24

3.5.1 Descriptive analysis 24

3.5.2 Reliability analysis 24

3.5.3 Exploratory Factor Analysis (EFA) 25

3.5.4 Multiple regression analysis 25

3.5.5 Summary 25

CHAPTER 4: RESULTS AND ANALYSIS 27

4.1 Sample description 27

4.2 Cronbach’s alpha test 28

4.3 Exploratory Factor Analysis (EFA) 31

4.4 Pearson Correlation Coefficient 38

4.5 Hypotheses testing 39

4.6 Discussions of the findings 44

4.7 Sumarry 46

CHAPTER 5: CONCLUSION AND IMPLICATIONS 48

5.1 Conclusion 48

5.2 Implications of this research 50

5.3 Research limitations and implications for future research 51

REFERENCES 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

LIST OF FIGURES

Figure 1.1 Step 1 Searching 3

Figure 1.2 Step 2 Finding Information 3

Figure 1.3 Step 3 Order Taking 4

Figure 1.4 Step 4 Payment 5

Figure 1.5 Step 5 Confirmation 5

Figure 2.1 The proposed research model 15

Figure 3.1 Research Process 18

Figure D.1 Histogram of SATIS dependent variable 69

Figure D.2 Normal P-P Plot of regression standardized residual 69

LIST OF TABLES

Tables 3.1 Measurement scales 1 20

Tables 3.2 Measurement scales 2 23

Table 4.0 Sample Characteristics 28

Table 4.1 Cronbach’s Alpha results 29

Table 4.2 First KMO and Bartlett’s Test for independent variables 31

Table 4.3 First Pattern Matrix 32

Table 4.4 Removal process during EFA 33

Table 4.5 Final Pattern Matrix 34

Table 4.6a Final total variance explained 36

Table 4.6b Cronbach’s alpha summary after EFA 37

Table 4.7 Pearson Correlation Coefficient 39

Table 4.8a Coefficients 40

Table 4.8b The summary of overall value 1 41

Table 4.9 Cofficients 1 41

Table 4.10 The summary of overall value 2 41

Table 4.11 Coefficient 2 42

Table 4.12 ANOVA results 43

Table 4.13 The result of testing hypotheses 43

CHAPTER 1: INTRODUCTION

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 VND1.66 trillion 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

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:

- 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 1.1 Step 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

Firgure 1.2 Step 2 Finding Information

- Step 3: Order taking Enter personal information on the items that the website request Number of these items depending on retailers

Firgure 1.3 Step 3 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

Firgure 1.4 Step 4 Payment

- Step 5: Confirmation Confirm the order information and contact the hotline if problems arise

Firgure 1.5 Step 5 Confirmation

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

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.,2011) 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

1.3 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

1.4 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

1.5 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

1.6 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

Chapter 2: Literature Review In this chapter, some literatures are reviewed concerning the customer satisfaction and the factors that impact on customer satisfaction when shopping on retailers’ website Finally, the proposed research model for the adoption with the electronics and appliances retailers’ website will be presented

Chapter 3: Research Methodology This chapter presents brief description of the research methodology used for the research This includes the research process, researcg sampling method, measures of the constructs, data collection procedures and data analysis methods

Chapter 4: Results and Analysis In this chapter, the evaluation of measures and the result of testing hypotheses are described There are four parts in this chapter: sample description, evaluation and refinement of measurement scales, hypotheses testing and result explanation

Chapter 5: Conclusion and Implications This chapter performs the main results of the research, the contribution of the study in management theory and practice as well as the limitations of the study for future research direction

CHAPTER 2: LITERATURE REVIEW

In this chapter, some literatures are reviewed concerning the customer satisfaction and the factors that impact on customer satisfaction when shopping on retailers’ website Finally, the proposed research model for the adoption with the electronics and appliances retailers’ website will be presented

2.1 Theoritical Background

In our study, I adopt expectancy-value theory (EVT) as our overarching theory (Fishbein, 1963) EVT explains how individuals’ attitudes towards objects and actions are formed, describing the mental calculations that individuals undertake to develop attitudes Specifically, EVT states that when individuals receive information about an object or action, they develop a belief about that object or action These beliefs can either be developed from nothing, with no prior belief about the object or action, or if the individual already possesses a belief about the object or action, that preexisting belief can be modified based on the new information that has been presented (Song et al., 2011)

After developing or updating their belief, the individual assigns a value to each attribute upon which the belief is based Finally, an expectation is formed based on the beliefs and values This expectation, formed by a mental calculation about the beliefs and values, is called an attitude (Fishbein & Ajzen, 1975) Thus, EVT states that information shapes individuals beliefs, which in turn shape those individuals’ attitudes This theory is particularly relevant to the questions that I am investigating I am examining what information, design elements, and usability features of websites clearly convey information

to individuals According to Fishbein (1963), external stimuli influence the formation of online shoppers’ beliefs When information is comprehensive and when technology is used

to present that information clearly, beliefs can be affected I am also investigating what beliefs influence one of the most important of customers’ attitudes: satisfaction

I apply EVT to explain that after external stimuli help online shoppers form beliefs, the shoppers perform mental calculations to form an attitude, specifically, to form a degree of

satisfaction My conceptual framework aligns with EVT and shows that information, in the form of external stimuli, shapes customers’ salient beliefs This assertion is supported by recent e-commerce research that shows that environmental stimuli, including the characteristics of websites, influence customers’ cognitive and affective reactions (Parboteeah, Valacich, & Wells, 2009) Customers’ salient beliefs are then used to help customers formulate an attitude: their degree of satisfaction I now begin the development

of the specific hypotheses that we test in this study

2.2 Customer satisfaction

According to Khristianto, Kertahadi and Suyadi (2012), customer satisfaction is commonly viewed as a result of comparison between the consumption expectation and experience; and customer satisfaction is achieved when the final deliverable (i.e.,experience) meets or exceeds a customer’s expectation Satisfaction can be defined as

an individual’s feelings towards a variety of factors that affect a given situation (Song et al., 2011)

Customer satisfaction is when products and services meet the expectation of the consumers It is very important that consumers are content with the products and services provided by the particular website as satisfied customers are likely to be loyal and make repetitive purchases which will increase profitability of that particular e-commerce company (Jiradilok et al., 2014)

2.3 Factors affecting customer satisfaction on retailers’ website

One of the key questions in e-commerce research is how customer satisfaction can be influenced The literature suggests each research is different mainly by the antecedent factors of customer satisfaction since the researchers chose the variables and factors best suit for each circumstance in their perception

Christian & France (2005) proves that customers satisfied the most were privacy (Technology factor), Merchandising (Product factor), and convenience (Shopping

factor); also followed by trust, delivery, usability, product customization, product quality and security

Sadeh et al (2011) concluded that there are seven characteristics of website quality influence on satisfaction of customers: research facility, provides detailed information, privacy and security, interaction facilities and contact, speed and facility of access, availability of relevant download, reliable and up-to-date information

Kim and Stoels (2004) studied the influences of website quality dimensions on shopper satisfaction They identified six variables of website quality and empirically examined the direct effects of these dimensions on customer satisfaction Results confirmed the direct relationship between website quality and customer satisfaction

Bai et al (2008) studied the direct effect of website quality on customer satisfaction and purchase intention in China Results indicated that website quality directly affects customer satisfaction and customer satisfaction directly influences their intention

Song et al (2011) showed that satisfaction is an attitude which is influenced by three factors: information quality, service quality and system quality These factors is affected by the website elements divided into 3 groups: website elements related to information include general information, specific information, website elements related to service include order taking, convenience, confidence, care taking, billing and payment, procedural efficiency, website elements related to system include system usability

Building from Song et al (2011) as well as earlier research, we posit that there are 9 website elements divided into 3 groups (website elements related to information, website elements related to service, website elements related to system) influence on customer satisfaction on retailers’ website

2.3.1 Website elements related to information influence on customer satisfaction

Websites with a specific set of features are created to attract users for the purpose of exchanging values In addition, online users voluntarily visit the site, and the site’s

organization responds to their queries and communicates based on a set of quality factors for a positive customer experience (Sharma & Lijuan, 2014) According to Ghasemaghaei and Hassanein (2013), information has a critical role in customer’s decision making process,

as it would guide them due to absense of physical interaction with the product in the online environment Guo et al (2012) identify four dimensions of information quality, include accuracy, content, format and timeliness Park and Kim (2003) define information quality based on how customers perceive the quality of information given by online retailer websites

Information quality refers to e-commerce content issues and covers the completeness, accuracy, format and currency aspects of information delivered by e-commerce marketplaces (Wixom & Todd, 2005) The information category of web elements contains not only general information about products and online vendors but also specific information about critical features of an e-commerce website that attract traffic to the site (Agarwal & Venkatesh, 2002) When customers navigate websites, they investigate the website and the products available there (Piccoli et al., 2004)

In e-commerce, information is generally presented on websites through different technological features and design elements We argue that the amount and accuracy of this information causes customers to perceive that the information is of high quality Well-designed websites that use current technology and present thorough information are understood by the customer to be indicative of high quality According to Song et al (2011),

we identified 2 elements related to web information and have possitive impact on information quality: general information, specific information

Besides, according to previous researchs (Song et al, 2011; DeLone & McLean, 2003), information quality is of great importance to customer satisfaction Delarosa & Susilo (2013) also explain that information quality is very important in the information search and evaluation stages of customers

Therefore, within the scope of this study, we hypothesied that web elements related to information have a possitive impact on customer satisfaction

H1a: General information elements possitively affects customer satisfaction

H1b: Specific information elements possitively affects customer satisfaction

2.3.2 Website elements related to service influence on customer satisfaction

Customers who have experienced a high level of service will visit that e-commerce website repeatedly, and the financial success of these companies will be enhanced by high service quality (Kim & Lee, 2002; Fang & Holsapple, 2007).The service category includes elements that have to do with the services offered along with the online sale of the product According to Song et al (2011), the service elements category includes order-taking, billing and payment, convenience, confidence, care taking, and procedural efficiency

Order-taking is a supplementary service that is related to the shopping and purchase process Billing and payment are combined acts that present a bill and collect payment (Song & Zahedi, 2005) Convenience means that the website provides convenient access to information that is available elsewhere throughout the website (Piccoli et al., 2004) Confidence refers to the idea that websites demonstrate how they take care of their customers or how they provide extra help to customers (Piccoli et al., 2004) Care-taking is

a supplementary service that addresses ways of ensuring the safety of customers’ purchase details and personal information (Piccoli et al., 2004) Finally, procedural efficiency refers

to services given to customers when they want to express satisfaction or dissatisfaction and

to procedures that solve specific problems that occur in normal procedures (Piccoli et al., 2004; Song & Zahedi, 2005)

Organizations participating in e-commerce are able to create value through these elements by improving services to their customers using different types of advanced information technologies (Piccoli et al., 2004) When uncertainty and risk can be mitigated, customers will be more likely to feel that they are receiving quality service We argue that service-related elements affect online customers’ perception of service quality given by retailers (Hwang & Kim, 2007)

In addition, previous studies has identified that service quality impacts customer satisfaction Perceived service quality, often measured using the SERVQUAL instrument,

has various dimensions, such as responsiveness, reliability, tangibility, assurance, and empathy Researchers have shown that these dimensions impact user satisfaction (Jarvenpaa

& Todd, 1996; Kettinger & Lee, 1997, 2005)

Therefore, within the scope of this study, we hypothesied that website elements related

to service have a possitive impact on customer satisfaction

H2a: Order taking elements positively affect customer satisfaction

H2b: Billing and payment elements positively affect customer satisfaction

H2c: Convenience elements positively affect customer satisfaction

H2d: Confidence elements positively affect customer satisfaction

H2e: Care taking elements positively affect customer satisfaction

H2f: Procedural efficiency elements positively affect customer satisfaction

2.3.3 Website elements related to system influence on customer satisfaction

According to previous research, system quality greatly influences the level of end user satisfaction (DeLone & McLean, 1992, 2003; McKinney et al., 2002; Wixom & Todd, 2005)

Many different types of technology have been employed in e-commerce websites to help make websites more usable Search capabilities, filtering capabilities, and grouping capabilities have been shown to be effective in improving usability in other research (Song

& Zahedi, 2005) In addition to these established capabilities that improve usability, the layout of the website, the ability to choose various payment options, the capability to review previous orders, and the ability to store and manage personal information are all examples

of how retailers are making websites more user-friendly for customers We can posit that web elements related to system usability influence on system quality

Therefore, within the scope of this study, we hypothesied that web elements related to system usability have a possitive impact on customer satisfaction

H3: System usability elements positively affect customer satisfaction

2.4 Research Model

Base on above literature reviews, the relationship between factors affect to customer satisfaction and customer satisfaction is briefly described in the figure 2.1 Our framework suggested that online customers’ satisfaction is an attitude that impacted by 9 groups of website elements related to information quality, service quality and system quality

Figure 2.1: The proposed research model

H1a: General information elements positively affects customer satisfaction

H1b: Specific information elements positively affects customer satisfaction

H2a: Order taking elements positively affect customer satisfaction

H2b: Billing and payment elements positively affect customer satisfaction

H2c: Convenience elements positively affect customer satisfaction

H2d: Confidence elements positively affect customer satisfaction

H2e: Care taking elements positively affect customer satisfaction

H2f: Procedural efficiency elements positively affect customer satisfaction

H3: System usability elements positively affect customer satisfaction

Customer satisfaction is when products and services meet the expectation of the consumers (Jiradilok et al., 2014) One of the key questions in e-commerce research is how customer satisfaction can be influenced Building from EVT as well as earlier research, we posit that there are 9 website elements divided into 3 groups (website elements related to information, website elements related to service, website elements related to system) influence on customer satisfaction on retailers’ website

According to previous researchs (Song et al, 2011; DeLone & McLean, 2003), we hypothesied that web elements related to information include general information and specific information have a possitive impact on customer satisfaction According to Song et

al (2011), the service elements category includes order-taking, billing and payment, convenience, confidence, care taking, and procedural efficiency Within the scope of this study, we hypothesied that website elements related to service have a possitive impact on customer satisfaction According to previous research, we hypothesied that web elements related to system usability have a possitive impact on customer satisfaction (DeLone & McLean, 1992, 2003; McKinney et al., 2002; Wixom & Todd, 2005)

Finally, base on the agurement above, we proposed a research model with 9 hypotheses

CHAPTER 3: RESEARCH METHODOLOGY

This chapter presents brief description of the research methodology used for the research This includes the research process, researcg sampling method, measures of the constructs, data collection procedures and data analysis methods

3.1 Research Process

Due to the underlying study, the researcher will simply choose quantitative approach for achieving the purpose of the study Quantitative research approach is based on the development of testable hypotheses and theory Base on idea of Kenova and Jonnasion (2006), quantitative investigations tend to measure “how often” or “how much” Through utilizing this method, the researcher would measure service quality and the level of customer satisfaction in online electronics and appliances stores in Vietnam

To collect the quantitative data, the survey method will be used and eventually the data will be analyzed by using statistical techniques The research process of this study is described in the figure 3.1

Figure 3.1: Research Process

Firstly, research problem will be defined, and then research objective, research scope & significant will be identified to be the target of solving defined research problem After that, this study will conducte a literature review to review some relevant theories about factors influencing customer satisfaction to find out the suitable one to Vietnamese electronics and appliances retail websites model and build the hypotheses for this study From this, a preliminary questionnaire will be developed basing on questions used in some previous studies Next step is research design:

Pilot study: after finishing the preliminary questionnaire, the researcher conducted the indepth interviews with 10 people in Ho Chi Minh City to obtain the correct items in the context of Vietnamese consumers, check the content and meaning of words used in the

initial measurement scales and modify them to be more suitable and understanding in Vietnamese Although most of the measures of the constructs were mentioned in the previous literature, but they might make some misunderstandings when translate it to Vietnamese Therefore, this step is necessary to make them appropriate and easy to understand in the context of studying During the interview, the author received some significant feedback and suggestions from the interviewees to make the improvement for the official questionnaire (See Appendix E)

Main survey: will be conducted in many methods such as sending online survey through mail, social network, or sending the hard copy of survey directly to customer of appliances and electronics retailers Data collection will be done two weeks later

After that, collected data will be cleaned and used to test reliability of scale and validity

of questionnaire through Cronbach’s alpha coefficient and Exploratory Factor Analysis (EFA) method Multiple regression method will be used to evaluate the hypotheses which the implication and finding will be stated and reported

3.2 Research sampling method

The respondents are selected through purposive sampling Purposive sampling used is judgment According to Sekaran (2006), judgment involved the choice of subjects who are

in the best position to provide the information using non probability methods Therefore, group of people who have knowledge about particular problem can be selected as the sample element The target respondent is online electronics and appliances stores customer because after they try service, they can evaluate it exactly from customer perspective

According to DeCoster, J (2004), minimum sample size used in statistic analysis should

be is equal to or greater than five times of the number of independent variables, but not less than 100 to generate reliable results:

n >= 100 and n >= 5k (where k is the number of variables)

This research has 33 variables, as a result, the minimum sample size required to run EFA

in this research is: n = 5 x 33 = 165

Otherwise, Tabachnick & Fidell (2001) stated that the minimum sample size in case of multiple regression should be: n = 50+8m (where m is the number of independent variables) Apply this formula for 9 independent variables of this research, we have the minimum sample size for multiple regression as follow:

n = 50 + 8 x 9 = 122

Summarily, with 37 variables and 9 independent variables, this research needs 185 samples at least to take EFA and regression Hence, 300 surveys were distributed to target respondents to take the data for analysis

3.3 Measures of the constructs

The first set of constructs, are related to the web elements represented on electronics and appliances stores websites We asked participants how these elements were presented on the website they interacted with For example, participants were presented with the statement,

“the online electronics and appliances store provides information about different shipping options.” Participants were then asked to respond to this statement on a five-point Likert scale that ranged from “strongly agree” to “strongly disagree”

Tables 3.1: Measurement scales 1

General Information

GenInfo1 XXX provides contact information

about how they can be contacted

Song, Baker, Lee, Wetherbe, 2011

GenInfo2 XXX physical stores exist in my area in

addition to the XXX website

Specific Information

SpecInfo3 XXX provides information about the

good and a picture of it

Song, Baker, Lee, Wetherbe, 2011

SpecInfo4 XXX provides a detailed description of

the appliances or electronics SpecInfo5 XXX includes price information in the

appliances or electronics listing SpecInfo6 XXX offers the capability to check the

appliances or electronics availability SpecInfo7 XXX offers the capability to view

larger pictures of the appliances or electronics

Convenience

Convenience8 XXX operates an uncluttered web page Song, Baker, Lee,

Wetherbe, 2011 Convenience9 XXX categorizes electronics and

appliances on the main web page Confidence

Confidence10 XXX provides information about

CareTak12 XXX provides information about the

privacy and security of my information

Song, Baker, Lee, Wetherbe, 2011

CareTak13 XXX provides information about

repairs when problems arise with the appliance or electronic

CareTak14 XXX provides information about the

security of the purchase transaction

CareTak15 XXX offers the capability to cancel a

previously placed order

Procedural efficiency

ProEffic16 XXX provides information from other

customers who have rated or evaluated the product

Song, Baker, Lee, Wetherbe, 2011

ProEffic17 XXX offers the capability of checking

whether the product I desire is presently

in stock at the local XXX location(s)

Order Taking

OrderTak18 XXX offers the capability to view my

account (change shipping address, change stored credit card information, change password for my account, etc.)

Song, Baker, Lee, Wetherbe, 2011

OrderTak19 XXX offers the capability to track an

order after purchase

Billing and Payment

BillPay20 XXX provides information about

different shipping options

Song, Baker, Lee, Wetherbe, 2011

BillPay21 XXX offers the capability to use

different payment options (e.g Credit cards, PayPal, e-check, etc.)

System Usability

SystemU22 XXX offers the capability to search

within a group of items based on several criteria (e.g brand, price, etc.)

Song, Baker, Lee, Wetherbe, 2011

SystemU23 XXX offers the capability to search for

appliances or electronics by typing a keyword in a search box

SystemU24 XXX offers the capability to view

appliances or electronics by brand SystemU25 XXX offers the capability to view

appliances or electronics by price level

Second we examine customer satisfaction The constructs was measured on a five-point Likert scale (strongly disagree–strongly agree) All constructs were drawn from previous literature and questions were adapted or modified for this study The refinement procedure included a pilot study with 10 participants

Tables 3.2: Measurement scales 2

Customer Satisfaction

Satis1 All things considered, I am

very satisfied with XXX

Wixom & Todd, 2005

Satis2 All things considered, I am

very pleased with XXX Satis3 All things considered, I am

very delighted Satis4 My interaction with XXX has

been satisfying

3.4 Data collection procedure

The executing method of data collection for this research is quantitative The responses

of respondents through questionnaire will be the primary data for this research 300

questionnaires were distributed using two main ways: 50% online by Google drive form (via e-mail, facebook) and 50% directly in hard copies

3.5 Data analysis method

In this part, the researcher assessed the validity and reliability of measurement scales by using Cronbach’s alpha and exploratory factor analysis (EFA) Finally, multiple regression was used to examine the relationship between independence variables and dependence variables IBM SPSS statistic software (version 22) was used to analyse the data Besides, to draw diagrams, researcher also used a combination of tools from Microsoft Excel 2010

3.5.1 Descriptive analysis

Descriptive analysis was used to describe general view of the sample characteristics, in which the mean scores of the measurement scales were calculated to show customers’ assessment on different facets influencing their satisfaction Using 5-point Likert scale, when the score was equal to 3 referred to acceptable/neutral, the score was greater than 3 is considered good or agreement, whereas when the score was lower than 3, it is considered not good and need to be improved or as an disagreement

3.5.2 Reliability analysis

Alpha was developed by Lee Cronbach in 1951 to provide a measure of the internal consistency of a test or scale; it is expressed as a number between 0 and 1 Internal consistency describes the extent to which all the items in a test measure the same concept or construct and hence it is connected to the inter-relatedness of the items within the test Internal consistency should be determined before a test can be employed for research or examination purposes to ensure validity In addition, reliability estimates showed the amount of measurement error in a test (Tavakol & Dennick, 2011) According to Nunnally

& Burnstein (1994), the measurement scales could be accepted if their Cronbach’s alpha

>=0.6 and the item - total correlation of every items >=0.3

3.5.3 Exploratory Factor Analysis (EFA)

The primary objectives of EFA are to determine the number of factors affecting the measures and the strength of the relationship between each factor and each observed measure (DeCoster, J., 2004) In this research, Principal Component Analysis (PCA) was used as a method to extract the factors with Varimax as a rotation technique

The result is considered to be acceptable when following conditions are met (Pallant, 2005): The sample size should be equal to or greater than 150, and there should be at least five cases for each variable In this research, 33 variables are used, hence the required minimum sample size for EFA is 165 The valid responses are 192, therefore data of this research are considered valid for EFA

Factor analysis is appropriate to data if: The Kaiser-Meyer-Olkin value (KMO) is 0.6 or greater The Bartlett’s test of sphericity is statistically significant: p < 0.05

The number of factors is determined when: The components have an eigenvalue of 1 or more The total variance explained by these components should be above 50% Factor loading criteria should be 0.5 or more to ensure a practical significance

3.5.4 Multiple regression analysis

In this research, Multiple Linear Regression method was used to test the research model and hypotheses Pallant (2005) explains the conditions to accept the result are: The sample size is: n > 50 + 8m (where m is the number of independent variables) No multicollinearity

is found Normality and linearity should exist

We also use R-square value to express how much of the variance in the dependent

variable was explained by the model

3.5.5 Summary

To collect the quantitative data, the survey method will be used and eventually the data will be analyzed by using statistical techniques The respondents are selected through purposive sampling Purposive sampling used is judgment The target respondent is online

electronics and appliances stores customer because after they try service, they can evaluate

it exactly from customer perspective

The responses of respondents through questionnaire will be the primary data for this research 250 questionnaires were distributed using two main ways: 50% online by Google

drive form (via e-mail, facebook) and 50% directly in hard copies

Descriptive analysis was used to describe general view of the sample characteristics, in which the mean scores of the measurement scales were calculated to show customers’ assessment on different facets influencing their satisfaction In the next step, the researcher tested the reliability of the measurement scales by Cronbach’s alpha According to Nunnally

& Burnstein (1994), the measurement scales could be accepted if their Cronbach’s alpha

>=0.6 and the item - total correlation of every items >=0.3 Then the researcher do EFA test

to determine the number of factors affecting the measures and the strength of the relationship between each factor and each observed measure Finally, Multiple Linear

Regression method was used to test the research model and hypotheses

CHAPTER 4: RESULTS AND ANALYSIS

In this chapter, the evaluation of measures and the result of testing hypotheses are described There are four parts in this chapter: sample description, evaluation and refinement of measurement scales, hypotheses testing and result explanation

4.1 Sample description

300 surveys were sent to target respondents who are young customers such as students and office staffs And there were 210 responses in which 18 were not valid because respondent did not answer over 30% of mandatory questions or they filled in the same option for all questions As a result, 192 valid answers could be used to analyze, means that validity rate was 77% The sample characteristics are showed in the table 4.0

Table 4.0: Sample Characteristics

Description Number or respondents Percentage (%)

of the respondents were young, more than 70% of these respondents were in the age of

18-25, and around 30% of them were 26-35 years old, over 35 years old people are only 0.5% This result showed that shopping electronics and appliance online more focused on youth Mostly young people are interested in this kind of service

84.9% of the respondents are students and office staffs, who are at the high education level and quite familiar with the features of retailers’ website The highest levels of income were under 6 millions VND per month (54.2%) and from 6 to 10 millions VND per month (18.8%) Office staffs (47.4%) and students (37.5%) are the highest levels of job title

4.2 Cronbach’s alpha test

This research will use Cronbach’s alpha to examine the reliability of variables in the questionnaire through following coefficients: Cronbach’s alpha coefficient: the scale is

reliable when this coefficient is 0.6 or more Corrected Item – Total correlation: variables are acceptable when this coefficient is 0.3 or more

Table 4.1: Cronbach’s Alpha results

Scale Mean if Item Deleted

Scale Variance

if Item Deleted

Corrected Item – Total Correlation

highest reliability It showed that the respondents understood these questions very well and answered them very attentive

The Cronbach’s alpha of 4 scales: General information (0.577), Confidence (0.509), Procedural efficiency (0.547), Order taking (0.587) were quite low, some or all of these variables will be excluded But its Cronbach’s alpha still higher than 0.5, all the Corrected Item - Total Correlation values were over 0.3, and these items had a very important meaning

to the model, so the author temporarily retained these variables for further analysis in the Exploratory factor analysis (EFA)

4.3 Exploratory Factor Analysis (EFA)

According to the research model, there are 9 factors with 23 observed variables that influence to customer satisfaction of online shoping on retailers’ website For the next step, EFA method with Promax rotation was used to analyze 23 observed variables of these 9 factors and 4 variables of customer satisfaction factor KMO (Kaiser-Meyer-Olkin) test and Bartlett test were also used to measure the compatibility of sample

Table 4.2: First KMO and Bartlett’s Test for independent variables

KMO and Bartlett's Test

It showed that the KMO values of all factors (0.832) were bigger than 0.7 and the Bartlett’s Test significance (0.000) is smaller than 0.05 This meant observed variables had the correlation with each other and EFA factor analysis was appropriate because these results met the conditions required by EFA method

Table 4.3: First Pattern Matrix