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 APPLIANCES INDUSTRY ID: 22120097 MASTER OF BUSINESS (Honours) SUPERVISOR: Dr PHAM NGOC THUY HO CHI MINH City - Year 2015 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 factors that affecting customer satisfaction with specific information is the most important factor Keywords: customer satisfaction, electronics and appliances, retailers’ website, online shopping ii TABLE OF CONTENTS ABSTRACT .i TABLE OF CONTENTS ii LIST OF FIGURES iv LIST OF TABLES v CHAPTER 1: INTRODUCTION 1.1 Research Background 1.2 Research Problems 1.3 Research Objectives 1.4 Research Significance 1.5 Research Scope CHAPTER 2: LITERATURE REVIEW 2.1 Theoritical Background 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 iii 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 iv LIST OF FIGURES Figure 1.1 Step Searching Figure 1.2 Step Finding Information Figure 1.3 Step Order Taking Figure 1.4 Step Payment Figure 1.5 Step Confirmation 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 v LIST OF TABLES Tables 3.1 Measurement scales 20 Tables 3.2 Measurement scales 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 41 Table 4.9 Cofficients 41 Table 4.10 The summary of overall value 41 Table 4.11 Coefficient 42 Table 4.12 ANOVA results 43 Table 4.13 The result of testing hypotheses 43 CHAPTER 1: INTRODUCTION 1.1 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 so in the next 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 ecommerce 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 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 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 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 Finding Information 58 APPENDIX A – QUESTIONNAIRE IN ENGLISH Dear Mr/Ms, I am Dinh Thien Phuc, a graduate student of ISB, University of Economics HCMC I’m researching for the Factors affecting customer satisfaction on retailers’ website in a study of Vietnam electronics and appliances industry I hope that you can spend you time to help me answer this survey Your personal information will be secured If you have any concern or feedback about this, please contact me through my email: phucdinh001@gmail.com or cellphone 0906 800 501 Part A: General Information Have your ever shoped for electronics or appliances online, through retailers’ website? Yes (Please go on to the next questions) Which retailers’ website have you bought from? Nguyễn Kim Điện máy Xanh ợ Lớn How long since your last time shopping on retailers’ website? Those products were buy from which retailers’ website? Nguyễn Kim Điện máy Xanh ợ Lớn ……… Name X as retailer in your last online shopping to answer next questions: Part B: Main Survey 59 Strongly Disagree Disagree Normal Agree Strongly Agree Please indicate your evaluation of the statements below about X’s … provides contact information about how they can be contacted … introduce its physical stores in my area website by ticking Box No Box No (√) in the 1: appropriate boxes, Strongly 5: Strongly with: Disagree Agree And with different level type in the box number 2, and I found that X’s website… General information Specific information … provides information about the good and a picture of it … provides a detailed description of the appliances or electronics 5 … includes price information in the appliances or electronics listing … offers the capability to check the appliances or electronics 5 availability … offers the capability to view larger pictures of the appliances or electronics Convenience … operates an uncluttered web page … categorizes the appliances or electronics on the main web page Confidence 10 … provides information about satisfaction guarantees 11 … provides information about the product’s warranty 5 Care Taking 12 … provides information about the privacy and security of my information 13 … provides information about repairs when problems arise with the appliance or electronic 60 14 … provides information about the security of the purchase 5 5 address, change stored credit card information, change password for 5 5 5 5 transaction 15 … offers the capability to cancel a previously placed order Procedural Efficiency 16 … provides information from other customers who have rated or evaluated the product 17 … offers the capability of checking whether the product I desire is presently in stock at the local XXX location(s) Order taking 18 … offers the capability to view my account (change shipping my account, etc.) 19 … offers the capability to track an order after purchase Billing and Payment 20 … provides information about different shipping options 21 … offers the capability to use different payment options (e.g Credit cards, PayPal, e-check, etc.) System usability 22 … offers the capability to search within a group of items based on several criteria (e.g brand, price, etc.) 23 … offers the capability to search for appliances or electronics by typing a keyword in a search box 24 … offers the capability to view appliances or electronics by brand 25 … offers the capability to view appliances or electronics by price level Customer satisfaction All things considered, I am 26 … very satisfied with XXX 27 … very pleased with XXX 61 28 … very delighted 29 … My interaction with XXX has been satisfying Part C Personal Information Gender: □ Man □ Woman □ 18 – 25 years old □ 25 – 35 years old Age: □ > 35 years old Marriage: □ Single □ Married Job: □ Housewife □ Office staff □ Unemployment □ Student □ Others Monthly income (VND): □ Less than millions □ –