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Contents
Contents................................................................................................................. 2 EXECUTIVE SUMMARY............................................................................................3 From the various literature reviews searched, few very appropriate ones came with variables which affect consumer behavior during online shopping experience. What was left was the weighted index for all these variables. The service marketing attributes can be classified in core and supplementary products. ............................................................................................................... 3 Chapter 1: INTRODUCTION.....................................................................................4 Chapter 2: LITERATURE REVIEW.............................................................................5 Online retail in India-...........................................................................................5 Drivers Affecting Development of Positive Attitudes of Customers in Online Shopping............................................................................................................. 5 The Kano Model.................................................................................................10 Chapter 3: OBJECTIVES, RESEARCH QUESTONS & HYPOTHESES..........................14 Research Methodology:.....................................................................................14 Chapter 4: CONCLUSION & FINDINGS...................................................................15 CONCLUSION AND SUGGESTIONS.....................................................................40 BIBLIOGRAPHY......................................................................................................41 ANNEXURE............................................................................................................42
EXECUTIVE SUMMARY
From the various literature reviews searched, few very appropriate ones came with variables which affect consumer behavior during online shopping experience. What was left was the weighted index for all these variables. The service marketing attributes can be classified in core and supplementary products. This research paper categorizes them according to a model, to put them in respective scale. The scale is based on the satisfaction index of the respondents and the satisfaction index is calculated through KANO MODEL. The KANO MODEL categorizes the variables into attractive features, must-bes, linear etc. These features are calculated through a matrix which is formed with a help of special questionnaire format used in KANO MODEL. The results tell the satisfaction index of all the variables taken from literature reviews. The satisfaction index will help in forming the overall strategy for various e-retailers. A graph tells how important a variable is to keep it or not, according to the present scenario of that eretailer. A start-up e-retailer wont be able to focus on every aspect hence for him, must-be variables are really important without which satisfaction will take a huge hit. A well-established e-retailer should focus on all the attractive features so as to maximize the satisfaction of the respondents. Also what features wont matter much can be seen through dissatisfaction index and those can be easily avoided without much affecting satisfaction of the customers.
Chapter 1: INTRODUCTION
The retail infrastructure has witnessed a transformation across the world with the rapid growth of e-commerce, especially in the past two decades. India, swiftly emerging as an important economic country, with its economy growing at more than 9% annually and online retail services rising rapidly in recent years, is imperative to understand the factors that influence Indian consumers regarding their use of the internet for retail buying. According to Internet And Mobile Association of India (IAMAI) and Indian Market Research Bureau (IMRB), the size of e-commerce industry will touch the figure of Rs. 9,210 crore by the end of 2008. Culture plays a role in forming the attitudes of consumers towards online buying. Therefore, cultural conventions and regulations must be studied to tap the target consumers of a country. India has a collectivist and high context culture with ever increasing internet users, recorded to be 21 million in March 2006 (Cube, March,2006). The internet represents a huge marketing opportunity, as the use of technology as a means of conducting businesses continues to rise. The number of people accessing the internet and entering into commercial transactions has been on the rise, and online shopping has been a growing phenomenon all over the world. Such transactions have been witnessed for both organizational as well as personal buying and the trend will continue to rise through online retailing. (Y, 1991), describes an e-market as ... an inter-organisational information system that allows the participating buyers and sellers to exchange information about prices and product offerings. (K L. C., 2000), define it as, a way of conducting business by companies and customers performing electronic transactions through computer networks One may define
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online-retailing as use of an electronic media through which the customer and the marketer may enter into a transaction for sale and purchase, so as to benefit both the parties in the long run.
accessed, viewed, compared against other alternatives on price and product-related information, so that a purchase decision can be taken and a transaction can occur. In todays world, access is facilitated through global technological networks. Access also depends on factors like internet connection quality and website design and appearance. A well-designed user interface system reduces the consumers efforts in searching information, making comparisons and making the final purchase decision. Interactive tools lead to easier access for the consumers, facilitate two way communications and thus have favourable effects on consumer purchase decisions (Sahney, 2008)
Performance In the context of online shopping, performance by a firm is its ability to first, present an offering on the web and second, to transact with the customer so as to leave both the parties well off, most efficiently and effectively. The retailers website acts as a platform of interaction between an online retailer and a buyer. A customer should be able to search the web and order with ease. Speed, loading, navigation and all such aspects of computer technology are important and affect ease of use. Interpersonal interaction between the retailer and the buyer is an important consideration especially to bring about the human element and the resulting relational benefits. This interpersonal element in the selling and buying situation is important even in online transactions (K Y. H., 2003). Also, audiovisual impact through the website and its product or service offering are crucial for effective performance, both for functional and hedonic benefits. Security Security pertains to trust and confidence in the online retailer with respect to issues of finance and privacy. Research in the past has clearly illustrated the importance of security during and after online purchases. Issues of trust, confidence, and risk, either with the payment mode or with matters of privacy are always present in the buyers mind (M, 2003). Establishing, communicating and maintaining customers trust and confidence, and a feeling of security is an integral part for a successful e-retailing strategy.
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Information The quantity, relevance and authenticity of information provided by the retailer, is an important factor that affects the building of positive attitudes in consumers, to buy online. The marketer needs to customize the information about products and services to meet the customers needs and wants (Y, 1991) The internet provides facilities for navigation and searching information about the products and services, their brands, features, price and also the availability status, shopping cart and delivery. This encourages and facilitates customers to make online purchases (Charles B. Broersma, August 13, 2004). Another aspect of information that needs to be addressed is in terms of post-transaction elements like delivery schedules, warranty services, return and exchange policies, post-sales services and related technical support. Transaction Once a consumer has accessed the website, obtained information about the product and service offerings and finally made a decision to buy online, the transaction is entered into. Transaction is the result of the interplay between all the factors that have been mentioned above, viz., access to a website quickly and speedily, the product and service information, assurance, trust and security, overall performance and functional and hedonic pleasures. (Sahney, 2008).The variables that came after study were as follows-
Figure 1
Figure 2-
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An attribute is considered a Reverse attribute if its presence causes dissatisfaction and vice versa. Thus, for the meaningful integration of the VOC into the subsequent processes of product development, it is important to do the following: Keep Must-be attributes. Add a good number of One-dimensional and Attractive attributes. Avoid Indifferent attributes as many as possible. Avoid Reverse attributes. However, in addition to the aforementioned classification of product attributes (i.e., customer needs), the Kano model provides a format for obtaining customer answers for each potential customer attribute. Figure 3 shows an example of such format. As seen from figure 3, a customer (respondent) has to select one of the states out of Like, Must-be, Neutral, Livewith, and Dislike from the functional side, stating his/her level of satisfaction, if the attribute is added to the product. The customer also has to select one of the states (out of the same choices) from the dysfunctional side, stating his/her level of satisfaction, if the attribute is not added to the product. Note that the case shown in figure 3shows that a customer selects Like from the functional side (room heater has a steamer) and Neutral from the dysfunctional side (room heater does not have a steamer). The combination of functional and dysfunctional answers is then used to identify the status of the attribute in term of: (1) Must-be, (2) One-dimensional, (3) Attractive, (4) Indifferent, or (5) Reverse.
Figure 3-
Kano Questionnaire
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All possible combinations of customer answers and the corresponding type of product attribute are summarized in Table 1. As seen from Table 1, besides the above mentioned five types of attribute, there is one more type of attribute called Questionable. This occurs when one selects Like or Dislike from both functional and dysfunctional sides (i.e., when an answer does not make any sense). However, while responding to Kano questionnaires, the respondents are allowed to choose any combination of the answers from the functional and dysfunctional sides. The answers may vary a lot because the respondents are driven by demographic factors (age, profession, income group, sex, etc.), psychographic factors (attitude, value, life-style, etc.) and so on. For example, recall the case shown in figure 3, where in a respondent has chosen Like from the functional side and Neutral from the dysfunctional side. This combination makes the underlying attribute an Indifferent attribute (refer to Table I). Unlike in figure 3, another respondent might choose Like from the functional side and Must-be from the dysfunctional side. This makes the attribute (steamer) a Must-be attribute, rather than an Indifferent attribute. Some other respondent might answer it further differently making it a Reverse attribute, however. Therefore, a quantitative aggregation process is needed to compute the diverse answers and finally determine the status of the underlying product attribute. Otherwise, the subsequent product development processes do not get any benefit from the customer needs assessment process or customer needs assessment does not add any value to the product development processes, as such.
Table 1:
Kano Evaluation
Quantitative aggregation of customer answers obtained by using the Kano questionnaire has been studied by many authors. Earlier studies suggested a straightforward frequency- based calculation in aggregating the customer answers. Recent studies do not follow this idea.
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Complex mathematical procedures are suggested in this regard wherein both analytical and computational intelligence based approaches are found. The goal is to utilize the ability of decision models and computational intelligence so that the customer answers becomes useful for the subsequent processes of product development. Some of the studies recommend slight modification of the Kano questionnaire for the sake of quantitative analysis. (Tamaki, 2010)
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Research questions
1. What all factors are important when forming consumer satisfaction? 2. Is the scenario changing? 3. What all factors are important when removing consumer dissatisfaction?
Sampling method:
Probability sampling will be used so as to get a good mix of consumers, who shop both online and offline. Sample size: A sample of 80 will be taken.
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Tools:
Basically SPSS software for analysing will be used.
Limitations:
There can be some systematic error generated due to not matching of observation and secondary data and what company actually thinks.
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The analysis is done with the help of KANO MODEL which has been explained earlier. The variables have been bifurcated into 2 forms 1. Functional form. 2. Dysfunctional form. Functional form is basically the positive perspective of any variable and dysfunctional is the negative perspective of the same variable. The matrix made out of these variables is shown. This matrix is made for every respondent and that too for every variable. Few of these matrixes are shown below. The first question is about Service Attribute: PERFORMANCE
Q1a: How would you feel if the order is not ambiguous? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q1b: How would you feel if the order is ambiguous? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
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Table 2
customer requirement s
DYS- FUNCTIONAL
I like I it.
Q
expect Im neutral.
A
it.
A
I dislike it.
O
FUNCTIONAL
I like it.
R I I I E
I expect it.
R I I I E
I dislike it.
1- Attractive feature (A) 2- Expected feature (E) 3- Reversal (inconsistent response) (R) 4- One dimensional or linear feature (O) 5- Questionable response (Q) 6- Indifferent response (I)
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The highlighted element is the perception of consumer towards order being ambiguousEXPECTED FEATURE. It is obvious from customers point of view that the order should not be ambiguous. Similarly next question is
Q2a: How would you feel about not taking the risk of delayed delivery?
I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q2b: How would you feel about taking the risk of delayed delivery?
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Table 3
customer requirement s
DYS- FUNCTIONAL
expect Im neutral.
A
dislike
FUNCTIONAL
I like it.
R I I I E
I expect it.
R I I I E
I dislike it.
1- Attractive feature (A) 2- Expected feature (E) 3- Reversal (inconsistent response) (R) 4- One dimensional or linear feature (O) 5- Questionable response (Q) 6- Indifferent response (I)
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Hence it shows that no risk of delayed delivery is an added advantage for the company and would come under enhancing service attribute. The third question is-
Q3a: How would you feel about not waiting for a site to load? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q3b: How would you feel about waiting for a site to load? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
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Table 4
customer requirement s
DYS- FUNCTIONAL
I like I it.
Q
expect Im neutral.
A
dislike
it.
A
it.
O
FUNCTIONAL
I like it.
R I I I E
I expect it.
R I I I E
I dislike it.
1- Attractive feature (A) 2- Expected feature (E) 3- Reversal (inconsistent response) (R) 4- One dimensional or linear feature (O) 5- Questionable response (Q) 6- Indifferent response (I)
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Hence it shows that waiting for a site to load is an added advantage for the company and would come under enhancing service attribute.
Collecting all 78 responses across different variables gave a clearer picture of the satisfaction index. Frequency graphs are made for all 78 responses and the biggest responses attribute is considered to be the dominating one
Figure 4
This shows that this feature is prerequisite and without which the satisfaction level would decrease.
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Figure 5
It is seen that the risk is almost expected feature but a lot of people are indifferent towards this variable, which means they consider other features more important for measuring their satisfaction levels.
Figure 6
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It is seen that the waiting is somewhat expected feature but a lot of people are indifferent towards this variable, which means they consider other features more important for measuring their satisfaction levels.
Figure 7
It is seen that the getting prompt confirmation is somewhat attractive feature but a lot of people are indifferent towards this variable, which means they consider other features more important for measuring their satisfaction levels.
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Figure 8
It is seen that the simplicity is almost expected feature but a lot of people are indifferent towards this variable, which means they consider other features more important for measuring their satisfaction levels.
Figure 9
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Providing extensive information is one of the core service attributes in service marketing this is brilliantly verified by this bar graph. People find it an attractive feature which means that it increases the satisfaction level exponentially if provided.
Figure 10
Here product tracking is again an attractive feature. Generally people want to stay inprocess delivery process for that tracking system of the products purchased is the best thing available. Hence it is attractive feature.
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Figure 11
It is seen that the receive individual attention during the purchase process is somewhat attractive feature but a lot of people are indifferent towards this variable, which means they consider other features more important for measuring their satisfaction levels.
Figure 12
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This would be the most obvious attribute that should be expected feature as customers least expected want would be that whatever they bought should arrive.
Figure 13
Uncertainty about warranties is not there is an attractive feature and it will always increase the satisfaction levels if included.
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Figure 14
It is seen that the refunds are made correctly and promptly is somewhat attractive feature but a lot of people are indifferent towards this variable, which means they consider other features more important for measuring their satisfaction levels.
Figure 15
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It is seen that the personal details are not divulged to other Customers is almost expected feature but a lot of people are indifferent towards this variable, which means they consider other features more important for measuring their satisfaction levels.
Figure 16
The site that is structurally well-arranged is an attractive feature and it will always increase the satisfaction levels if included.
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Figure 17
It is seen that the personal the site is aesthetically beautiful is almost attractive feature but a lot of people are indifferent towards this variable, which means they consider other features more important for measuring their satisfaction levels.
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Figure 18
This shows that this feature is prerequisite and without which the satisfaction level would decrease.
Figure 19
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You get discounts on the products you want to buy is an attractive feature and it will always increase the satisfaction levels if included.
Figure 20
This is an attractive feature and it will always increase the satisfaction levels if included.
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34
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F REQUENC % Y
variables Attractive Expected One dimensional Indifferen Questionable coefiecient of coefficient of dominant reverse feature feature or linear feature t response response satisfaction dissatisfaction characterestics
19.2
24.4
28.2
28.2
0.0
0.0
0.47
-0.53
23.1
26.9
15.4
34.6
0.0
0.0
0.38
-0.62
20.5
17.9
10.3
51.3
0.0
0.0
0.31
-0.69
g ettingprompt confirm ation throug e-mail h simplicity in purchase transactions extensive product information is provided product tracking process is included receive individual attention duringthe purchase process able to interact with the sales person to resolve all uncertainties and doubts
16.7
14.1
5.1
64.1
0.0
0.0
0.22
-0.78
7.7
41.0
7.7
43.6
0.0
0.0
0.15
-0.85
56.4
5.1
6.4
32.1
0.0
0.0
0.63
-0.37
69.2
0.0
0.0
30.8
0.0
0.0
0.69
-0.31
46.2
0.0
0.0
53.8
0.0
0.0
0.46
-0.54
79.5
0.0
0.0
20.5
0.0
0.0
0.79
-0.21
5.1
66.7
11.5
16.7
0.0
0.0
0.17
-0.83
51.3
14.1
15.4
19.2
0.0
0.0
0.67
-0.33
37
26.9
6.4
3.8
62.8
0.0
0.0
0.31
-0.69
5.1
21.8
2.6
70.5
0.0
0.0
0.08
-0.92
57.7
9.0
9.0
24.4
0.0
0.0
0.67
-0.33
th s is e ite a th a es etic lly b u l ea tifu y a g en ou re iv ra a re nd u iq eg s n u ood tob y u y g ou et d c ntson is ou th p u ts e rod c y w n to ou a t y g ou et c p en r om lem ta yg w th ifts ith e p u tsy rod c ou w n tob y at u
43.6
5.1
5.1
46.2
0.0
0.0
0.49
-0.51
28.2
20.5
29 .5
21.8
0.0
0.0
0.58
-0.42
47.4
9.0
15 .4
28.2
0.0
0.0
0.63
-0.37
48.7
9.0
9.0
33.3
0.0
0.0
0.58
-0.42
Table 5
This table show the coefficient of satisfaction and dissatisfaction and according to which how relevant should a variable is can be found. The highlighted variables are the variables that are high on satisfaction levels, which mean these must be included so as to increase the satisfaction levels of a consumer. Following is the graph for indexes to give a clearer picture.
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Figure 21
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The value proposition that should be changed should include1. Extensive product information is provided 2. Product tracking process is included
3. Interaction with the sales person to resolve all uncertainties and doubts during
It is seen that most of these variable are supplementary service attributes rather than core service attributes. As it is said that supplementary service attributes are generally used to differentiate or enhance the service levels of an organization, it is well-reflected in the responses and the indexes made. Apart from that from any start-up e-retailer organization it wont be possible to account in every service attribute mentioned. The indexes also tells another set of variable which if included will increase the satisfaction level, but if not included WILL DECREASE satisfaction level. Hence these variables are kind of threshold without which the organization wont be able to sustain. 1. Product tracking process is included
2. Interaction with the sales person to resolve all uncertainties and doubts during
Another aspect is the variables which can be avoided in order to enhance value proposition
1. Simplicity in purchase transactions 2. Personal details are not divulged to other Customers 3. Getting prompt confirmation through e-mail.
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BIBLIOGRAPHY
Charles B. Broersma. (August 13, 2004). Hone your Unique Value. The Central New York Business Journal , 19. Cube. (March,2006). Syndicated Research of Technology Group@IMRB. K, L. C. (2000). Exploring the Factors Associated with Web Site Success. Information & Management , 23-33. K, Y. H. (2003). Internet Retail Customer Loyalty: The Mediating Role. International Journal of Service Industry Management , 483-500. M, M. B. (2003). E-Trust: The Influence of Perceived Interactivity on. Marketing Intelligence & Planning , 123-128. Sahney, S. (2008). Consumer Attitude Towards Online Retail. The Icfai University Press. Tamaki, A. M. (2010). Analysis of Kano-Model-Based Customer needs. Wiley Online Library. Y, B. J. (1991). A Strategic Analysis of Electronic Marketplaces. MIS Quarterly , 295-310.
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ANNEXURE
QUESTIONNAIRE
Service Attribute: PERFORMANCE Q1a: How would you feel if the order is not ambiguous?
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I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it.
Q2a: How would you feel about not taking the risk of delayed delivery?
Q2b: How would you feel about taking the risk of delayed delivery?
Q3a: How would you feel about not waiting for a site to load? I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q3b: How would you feel about waiting for a site to load?
Q4a: how would you feel about getting prompt confirmation through e-mail?
Q4b: how would you feel about not getting prompt confirmation through e-mail?
I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q5b: how would you feel about complexity in purchase transactions? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q6a: how would you feel if extensive product information is provided? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q6b: how would you feel if extensive product information is not provided?
I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
I like it.
Q7b: how would you feel if product tracking process is not included? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Service attribute: PERSONALIZATION Q8a: how would you feel if you receive individual attention during the purchase process? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q8b: how would you feel if you wont receive individual attention during the purchase process? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q9a: how would you feel if you are able to interact with the sales person to resolve all uncertainties and doubts during and after the purchase process?
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I like it.
Q9b: how would you feel if you are not able to interact with the sales person to resolve all uncertainties and doubts during and after the purchase process? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Service attribute: RELIABILITY AND TRUST Q10a: how would you feel if Orders are fulfilled accurately? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q10b: how would you feel if Orders are not fulfilled accurately?
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I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it.
Q11a: how would you feel if uncertainty about warranties is not there?
I dislike it.
I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it.
Q12a: how would you feel if refunds are made correctly and promptly?
Q12b: how would you feel if refunds are not made correctly and promptly?
Q13a: how would you feel if youre personal details are not divulged to other Customers?
Q13b: how would you feel if youre personal details are divulged to other Customers?
I dislike it.
Service attribute: AESTHETICS Q14a: how would you feel if the site that is structurally well-arranged?
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I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it.
Q14b: how would you feel if the site that is not structurally well-arranged?
Q15b: how would you feel if the site is not aesthetically beautiful?
Q16a: how would you feel if you are given rare and unique goods to buy?
I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q16b: how would you feel if you are not given rare and unique goods to buy?
Service attribute: PROMOTION Q17a: how would you feel if you get discounts on the products you want to buy? I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q17b: how would you feel if you dont get discounts on the products you want to buy? to buy?
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I like it. I expect it. Im neutral. I can tolerate it. I dislike it. I like it. I expect it. Im neutral. I can tolerate it. I dislike it.
Q18a: how would you feel if you get complementary gifts with the products you want to buy?
Q18b: how would you feel if you dont get complementary gifts with the products you want I like it. I expect it.
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