2006:58

MASTER' S THESI S
Customer Satisfaction
Service Quality in Online Purchasing in Iran
Rana Mostaghel
Lule University of Technology
Master Thesis, Continuation Courses
Marketing and e-commerce
Department of Business Administration and Social Sciences
Division of Industrial marketing and e-commerce
2006:58 - ISSN: 1653-0187 - ISRN: LTU-PB-EX--06/58--SE


Customer Satisfaction: service quality in
online purchasing in Iran



Supervisors:
Dr. Amir Albadvi
Dr. Moez Limayem


Referee:
Dr. Aghdasi


Prepared by:
Rana Mostaghel


Tarbiat Modares University Faculty of Engineering
Department of Industrial Engineering

Lulea University of Technology
Division of Industrial Marketing and E-Commerce

MSc Joint PROGRAM IN MARKETING AND ELECTRONIC COMMERCE



2006




2













The customers mind is still closed to us; it is a black
box that remains sealed. We can observe inputs to
the box and the decisions made as a result, but we can
never know how the act of processing inputs truly
happens

John E. G. Bateson


3
Abstract

The findings of this research are mostly useful to those (managers, web
designers, etc.) who intend to penetrate the Iranian market with least cost,
time and energy. The results indicate the most important web quality factors
through Iranian online shoppers perspective. In the last few years, a
significant growth has been noticed in the Internet- based services in the pure
Internet businesses as well as the traditional enterprises, which are
developing their online services. One of the key challenges of online
businesses is how they manage service quality, which holds a significant
importance to customer satisfaction. In addition of success stories we should
be aware of problems; in year 2000 nearly 900 US online firms were shut
down, 31% of them were online retailers (Minjoon Jun, 2004). The purpose of
this research is to rank the quality factors perceived to be most important in
relation to the use of online shops. The questionnaire utilized was based on
the SERVQUAL instrument that identifies five quality dimensions in service
environments.








4
Acknowledgements

First of all I would like to express my sincere gratitude to my
supervisors, Dr. Moez Limayem at division of Industrial Marketing and
Electronic Commerce of Lule University of Technology, Sweden, for his
intelligent guidance and helpful advice during the whole process, and Dr. Amir
Albadvi at division of Industrial Engineering and Electronic Commerce of
Tarbiat Modares University, Iran, for his very helpful supports.

I would like to thank all the participants who contributed to my work, not
just for their responses, but also for the good suggestions they made and their
kind help.

Special thanks to my husband, family and friends for their consideration
and support during all the process.



Rana Mostaghel
Fall-2005


5
Table of Content

CHAPTER 1 ............................................................................................................................................. 9
INTRODUCTION.................................................................................................................................... 9
1. INTRODUCTION ............................................................................................................................. 9
1.1 BACKGROUND............................................................................................................................... 9
1.1.1 E-commerce...................................................................................................................... 10
1.1.2 Online Retailing................................................................................................................ 10
1.1.3 E-commerce in Iran.......................................................................................................... 15
1.1.4 Customer Satisfaction....................................................................................................... 15
1.1.5 Service Quality ................................................................................................................. 17
1.2 PROBLEM DISCUSSION................................................................................................................ 18
1.3 RESEARCH PROBLEM AND RESEARCH QUESTION ....................................................................... 21
1.4 DEMARCATION............................................................................................................................ 21
1.5 DISPOSITION OF THE THESIS ........................................................................................................ 21
CHAPTER 2 ........................................................................................................................................... 23
LITERATURE REVIEW...................................................................................................................... 23
2. LITERATURE REVIEW.................................................................................................................. 23
2.1 CUSTOMER SATISFACTION.......................................................................................................... 23
2.1.1 What we need to measure? ............................................................................................... 28
2.1.2 Techniques to measure customer satisfaction................................................................... 30
2.1.3 Virtual organizations and customer satisfaction .............................................................. 31
2.2 DIMENSIONS AND DETERMINANTS OF SERVICE QUALITY ............................................................ 33
2.2.1 Conceptualization of e-services ........................................................................................ 37
2.2.2 E-service quality ............................................................................................................... 39
2.3 MEASURING ELECTRONIC SERVICE QUALITY.............................................................................. 41
CHAPTER 3 ........................................................................................................................................... 44
RESEARCH METHODOLOGY.......................................................................................................... 44
3. METHODOLOGY.......................................................................................................................... 44
3.1 RESEARCH PURPOSE ................................................................................................................... 44
3.2 RESEARCH APPROACH................................................................................................................ 46
3.2.1 Quantitative Approach...................................................................................................... 46
3.2.2 Qualitative Approach........................................................................................................ 47
3.3 RESEARCH STRATEGY................................................................................................................. 48
3.3.1 Survey ............................................................................................................................... 49
3.3.2 Pilot test............................................................................................................................ 49
3.4 SAMPLE SELECTION.................................................................................................................... 49
3.5 DATA COLLECTION..................................................................................................................... 52
3.6 DATA ANALYSIS ......................................................................................................................... 53
3.7 VALIDITY AND RELIABILITY....................................................................................................... 53
3.7.1 Validity ............................................................................................................................. 53
3.7.2 Reliability.......................................................................................................................... 54
3.8 FRAME OF REFERENCE ................................................................................................................ 55
3.8.1 Customer Satisfaction and Service Quality ...................................................................... 56
3.8.2 Different tools for measuring Online Service Quality ...................................................... 56
3.8.2.1 SERVQUAL..........................................................................................................................56
3.8.2.2 WebQUAL ............................................................................................................................57
3.8.2.3 E-SERVQUAL......................................................................................................................57
3.8.2.4 E-SEQUAL ...........................................................................................................................58
3.8.2.5 E-S-QUAL.............................................................................................................................58
3.8.3 Conceptual Framework .................................................................................................... 58
3.8.4 SERVQUAL dimensions in relation to online Purchasing................................................ 59
CHAPTER 4 ........................................................................................................................................... 63


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EMPIRICAL DATA PRESENTATION.............................................................................................. 63
4. EMPIRICAL DATA PRESENTATION............................................................................................... 63
4.1 OVERVIEW OF THE SAMPLE......................................................................................................... 63
4.2 QUANTITATIVE DATA PRESENTATION ......................................................................................... 64
4.2.1 Sample and Response rate................................................................................................ 65
4.2.2 Descriptive statistics......................................................................................................... 65
CHAPTER 5 ........................................................................................................................................... 70
DATA ANALYSIS AND CONCLUSION............................................................................................ 70
5. DATA ANALYSIS AND CONCLUSION ............................................................................................ 70
5.1 THE MOST IMPORTANT DIMENSIONS OF SERVICE QUALITY.......................................................... 70
5.2 COMPARING WEB QUALITY FACTORS BETWEEN IRANIAN AND AMERICAN CUSTOMERS.............. 73
5.3 THE MOST IMPORTANT FACTORS OF SERVQUAL...................................................................... 76
5.4 IMPLICATIONS FOR PRACTITIONERS............................................................................................ 78
5.5 IMPLICATIONS FOR THEORY........................................................................................................ 79
5.6 IMPLICATIONS FOR FURTHER RESEARCH .................................................................................... 79
RESOURCES.......................................................................................................................................... 81
APPENDIX I: QUESTIONNAIRE....................................................................................................... 86
APPENDIX II: TABLES ....................................................................................................................... 91





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List of Tables
Table 1: Top 40 E-retailers according to their satisfaction score.......................................................... 12
Table 2 : Top 100 Internet retail companies .......................................................................................... 14
Table 3 : These firms lost money before paying overhead costs during the 1999 to 2000..................... 20
Table 4: research strategies ................................................................................................................... 48
Table 5:Reliability Statistics................................................................................................................. 55
Table 6: Satisfaction of respondents with the equipment they use ......................................................... 67
Table 7: The use of the web.................................................................................................................... 68
Table 8: Websites ranked by frequency of visits..................................................................................... 68
Table 9: the top five with highest scores of importance ......................................................................... 68
Table 10: The bottom five with lowest scores of importance.................................................................. 69
Table 11: The top ten of service quality factors with highest scores of importance............................... 72
Table 12: The bottom ten of service quality factors with lowest scores of importance .......................... 73
Table 13: The top ten with highest score on importance from Iranian and American perspective........ 74
Table 14: The bottom ten with lowest scores of importance from Iranian and American perspective... 75
Table 15: Ranked SERVQUAL factors according to their importance mean......................................... 77
Table 16: Paired Samples Test........................................................................................................... 77
Table 17: Number of respondent by gender ........................................................................................... 91
Table 18: Number of respondents by Field of education........................................................................ 91
Table 19: Number of respondents by age.............................................................................................. 91
Table 20: importance of and satisfaction with aspects of web quality ................................................... 92
Table 21: Importance of SERVQUAL factors......................................................................................... 93


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List of Figures
Figure 1: Correlation between customers' expectations and customer satisfaction............................... 17
Figure 2 : A conceptual model of service quality................................................................................... 18
Figure 3: Dependence between quality, satisfaction and profitability................................................... 20
Figure 4 : Customer satisfaction continues improvement ...................................................................... 27
Figure 5 : The circle of satisfaction ....................................................................................................... 27
Figure 6: The Principle of pre-study...................................................................................................... 28
Figure 7: Customer satisfaction measurement method .......................................................................... 29
Figure 8: Measuring customer satisfaction............................................................................................ 29
Figure 9 : A Research Model for the Antecedents and Customer Satisfaction of Cyber Shopping Store
(CSS)....................................................................................................................................................... 30
Figure 10: Customer contact customer focus matrix .......................................................................... 32
Figure 11 : The e-service offering.......................................................................................................... 41
Figure 12: Relationship between service quality and customer satisfaction based on SERVQUAL...... 59
Figure 13: Pie chart; number of respondents by gender........................................................................ 66
Figure 14: Bar chart; number of respondents based on their educations field..................................... 66
Figure 15: Bar chart; number of respondents by age. ........................................................................... 67












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Chapter 1
Introduction

1. Introduction

The background of the selected area is introduced in the first chapter. Then,
the problem area will be next discussed to provide a deeper understanding about the
research area for reader. The problem discussions end with a research problem and a
specific research question. In the end of this chapter the contribution of this research
is also presented.
1.1 Background
The background of the research area is provided in this section. It contains the
general idea of e-commerce and online retailing as one of the major sectors in e-
commerce in the company of a list of top 40 e-retailers who have the most satisfaction
scores in the world (Foresee, spring 2005). Likewise, a brief introduction of e-
commerce situation in Iran is brought here. This section also describes the importance
of service quality and it's relationship with customer satisfaction.


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1.1.1 E-commerce
There are many definitions for e-commerce. What Vladimir Zwass in 1996
believed is: "Electronic commerce is the sharing of business information, maintaining
business relationships, and conducting business transactions by means of
telecommunications networks". Is not very far from what Jelassi in 2005 said:
"Electronic commerce, or e-commerce, is more specific than e-business and
can be thought of as a subset of it. Electronic commerce deals with the facilitation of
transactions and selling of products and services online, i.e. via the Internet or any
other telecommunications network" (Tawfik Jelassi & Albrecht Enders, 2005). This
was an academic definition for e-commerce, what practitioners believe is: "E-
commerce is often referred to as e-business and it is generally classified into four
types: B2B: business-to-business; B2C: business-to-consumer; C2C: Consumer-2-
Consumer; C2B: consumer-to-business" (Christian N.Madu and Assumpta A. Madu,
2002).
According to the Forrester, the research organization (www.forrester.com), the
fast growth of e-commerce in the developed countries and the value added which they
gain through it; Woke up the lagged countries completely and make them revise their
marketing and commerce strategies; in order to compete in the world markets, This
organization also predicts that e-commerce in the world will rise from 354 million
USD in 2001 to 10 trillion USD in 2005.
1.1.2 Online Retailing
We are witnessing the fast growth of e-retailers all around the world. Although
B2B plays a bigger role in portion of e-commerce rather than B2C; they both are
surpassing the bricks and mortar section.
Despite of many online visitors, most of them just try to find more information
instead of purchasing online. These websites are essential e-CRM (Customer
Relationship Management) tools for retailers in order to survive in this competitive
market, add-value services are needed to keep differentiation with the rivals.
After emerging of e-commerce many firms start-up their websites to be the
pioneers in this field, but during the mid-2000 many bubbles burst. Story of survived


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companies would lead us to better understanding of their strengths and powers. Larry
Freed has provided an Internet Retailers list of top 40 Retailers by sales volume in
Table 1 which shows whose online revenue was greater in 2004 (Larry Freed,
ForeSee Results, Spring 2005). Customers are lifeblood of an organization, so their
satisfaction is the top goals of the firms. In table 1 top 40 e-retailers are ranked by
their satisfaction score.


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Table 1: Top 40 E-retailers according to their satisfaction score



Source: Larry Freed, 2005



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From table 1 it is understood that amazon.com, had the greatest volume of
online sales in 2004, dell.com and officedepot.come are in the second and third
positions respectively.
Companies could not follow constant rules to be successful in online markets.
There is not a list of actions that lead companies to more profit or more customer
satisfaction. Goods are mostly available with good qualities, prices are very
competetive nowadays, so being the best in the market and remaining in that place is
not easily possible. Innovative strategies should be taken for customer relationships,
web site designing, after sales service and so on to survive in cyber markets.
Richard A. Feinberg, and Rajesh Kadam and Leigh Hokama, have provided
top 100 online retailers in 2002 (See table 2). Netflix.com considered as the best firm
which satisfied its customers more than others while amazon.com gained highest
volume revenue in 2004. "Netflix launched its movie rental service in 1999 with the
goal of using the DVD format and the Internet to make it easier for people to find and
get movies they will enjoy" (Netflix.com, 2005-09-29). What is amazing here is that
Netflix.com is not mentioned in top 100 e-retailers in 2002 (table 2) and suddenly it
exceeds amazon.com in customer satisfaction in 2004. This shows how e-markets are
competitive and even pioneer companies should be aware of new comers.









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Table 2 : Top 100 Internet retail companies

Source: Richard A. Feinberg, and Rajesh Kadam and Leigh Hokama, 2002


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1.1.3 E-commerce in Iran

In Iran Internet is used mostly in the universities for research purposes, the
Internet stations through out the cities are used for very limited activities such as
checking e-mails and making long distance telephone calls. Therefore the penetration
of e-commerce in Iran is in its early stages. The proof for this claim is the EIU
(www.EIU.com) rating report that in 2000 says: according to economic, financial
policies and political strategies among 60 countries Iran is the 59th, based on
telecommunication infrastructures Iran has the 56th place and for the e-commerce
58th. Obviously E-commerce is something new for this country; however its
expected to grow steadily in the near future.
Being the follower in this field, we should utilize the opportunities and avoid
the risks. By analyzing the success stories and finding their critical success factors,
and also studding the trend of on line retailers which have been vanished, we will be
in a better position to set our policies and strategies. There are many researches which
have been done in the field of online retailing around the world, while many retailers
launch their websites it is time to lead them in the appropriate way. Academicians
should localize the foreigners results to help Iranian firms to reach the world
standards.
Here is some of the Iranian online retailers: www.cdkadeh.com , www.aftab.ir
, www.namabazar.net , www.softcity.ir, www.ketabak.com, www.iranebooks.com,
www.gooyabooks.com, www.mohammadbook.com, www.jahantasvir.com,
www.aryanatash.com, www.eshopbuilder.ir, www.ghaem.biz, www.pardakht.com,
www.vaseteh.com
1.1.4 Customer Satisfaction
To understand the importance of customer satisfaction, consider these facts:
customers with problems usually don't react and only 4% of them complain; normally
a person with problem tells 9 other people about it; while satisfied customers tell 5
other people about their good experiment; keeping a current customer costs about 1/7


16
of the cost of acquiring a new customer; retaining a current employee costs one tenth
of hiring and training a new one.
These facts; highlights the crucial role of satisfying customers which brings
employee satisfaction; hence, the profit maximization of the company.
Therefore, organizations need to understand that to what extend their
customers would be satisfy. Customer satisfaction in marketing context has specific
meanings: Anders Gustafsson, Michael D. Johnson, & Inger Roos (2005) brought
customer satisfaction definition as customer's overall evaluation of the date. This
satisfaction has positive influences on retaining customers among different variety of
services and products. In service based enterprises; service quality directly affects
customer satisfaction.
Ingrid Fecikova, (2004) interpreted satisfaction as a feeling which results
from a process of evaluating what was received against that expected, the purchase
decision itself and/or the fulfillment of needs/want.
Satisfaction refers to achieving the things we want. If satisfaction interprets as
"not going wrong" the firm should decrease complaint which by its own is not
sufficient. In order to satisfy customers, company should improve its services and
products. Figure 1 illustrates correlation between customers' expectations and
customer satisfaction. Customers with less expectation are more satisfied: companies
by adding innovative features would easily increase customer satisfaction. In contrast,
when customers are unaware of improvements but critical of losses in existing quality
are less satisfied and expect more.



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Figure 1: Correlation between customers' expectations and customer satisfaction
Source: Ingrid Fecikova, 2004

One of the main ingredients of success in the market place is customer
satisfaction. Jochen Wirtz (2003) listed the results of customer satisfaction as
follows : repeat purchase; loyalty; positive word-of-mouth and Increased long term
profitability.
Therefore, companies should measure their customers' satisfaction to fortify
their strengths and improve their weaknesses.
1.1.5 Service Quality
A conceptual model of service quality, through empirical research, developed
by Parasuraman et al. (1985). The model highlights the following five service quality
gaps:
(1) Gap1. Consumer expectations management perceptions of consumer
expectations.
(2) Gap 2. Management perceptions of consumer expectations service
quality specifications actually set.
(3) Gap 3. Service quality specifications actual service delivery.
(4) Gap 4. Actual service delivery external communications about service.
(5) The final gap Gap 5 is the result of the four other gaps. (J. Cox and
B.G. Dale, 2001)
The figure 2 shows these 5 gaps in the conceptual model of service quality.



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Figure 2 : A conceptual model of service quality
Source: Parasuraman et. al. , 1985

1.2 Problem Discussion
Although the internet channel increasingly has been used by many online
shops; but many online retailers are shut down. In a competitive market place
understanding customers needs become crucial. Therefore, companies have moved
from a product-centric to a customer-centric position. Customer retention is directly
influenced by customer satisfaction. Retention is a major challenge particularly in
internet based services, as customers can easily switch from one service provider to
another at low cost (Khalifa and Liu, 2003). Considering the high costs of acquiring
new customers and the apparently high customer turn over of many online services, it
is very important to study the determinants of customer satisfaction (Van Rie,
Lijander & Jurriens 2001).


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Customer satisfaction is the key factor determining how successful the
organization will be in customer relationships (Reichheld, 1996), therefore it is very
important to measure it. Total quality management (TQM) is based on the idea of
customer satisfaction a management approach of an organization centered on
quality, based on the participation of all its members and aiming at long-term success
through customer satisfaction and benefits to all members of the organization and to
society (ISO 8402). The achievement of true customer satisfaction involves:
customer oriented culture; an organization that centers on the customer; employee
empowerment; process ownership; team building; and Partnering with customers and
suppliers.
In the other words:
improvement of the firms reputation and image;
reduction of customer turnover; increased attention to customer needs in TQM
planning;
reduction of marketing costs and, vice versa, lower transaction costs;
reduction of costs related to product/service failures;
and, lastly, increased satisfaction among personnel and greater stability of the
workforce. ( David M. Szymansk, 2000)

There are several benefits for quality to be found via market research,
particularly in measuring the satisfaction levels of current customers, determining
customer needs for product development, and analyzing customer retention and
loyalty. To better manage customer satisfaction, firms spend millions on effectively
tracking the methods that guarantee customer satisfaction, because the quantitative
measurement of customer satisfaction is a great help for comprehensively measuring
the effect of product quality on customer behavior.
As what Ingrid Fecikova, 2004 illustrates in Figure 3; Customer
satisfaction as discussed above leads to profitability and service quality is the main
factor of it, especially in online trading, so it is clear that service quality indirectly
affects the stakeholders benefits.


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Figure 3: Dependence between quality, satisfaction and profitability
Source: Ingrid Fecikova, 2004

USA TODAY (12/04/2000), reported 30 firms with negative gross marginal in
1999, as table 3 shows all these online retailers lost money. These dotcoms were
bubbles which burst in 2000. Nowadays we mostly hear about the benefits of Internet
and usually forget the harmful losses which may threat our businesses.
Table 3 : These firms lost money before paying overhead costs during the 1999 to 2000

Source: USA TODAY, 2000-04-12: www.usatoday.com/money/dotcoms/dot038.htm



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For keeping online retailers alive with logical profits; retaining customers
must be the foremost aim. Customer satisfaction, as we discussed before, has the most
important effect on customer stickiness and in order to narrowing down we focus on
service quality as one of the customer satisfactions factors.
1.3 Research Problem and Research Question

Based on problem discussion our research problem is formulated as follows:

To understand the most important dimensions of service quality that affect customer
satisfaction in online purchasing in Iran.


Research Question

Based on above stated research problem the following research question has
been developed:

Q1. What are the most important service quality factors in online purchasing through
Iranian perspective?
Q2. Does environment effect the customers exceptions from service quality factors?

1.4 Demarcation
Since the aspects of chosen problem area are many, the researcher has tried to
narrow down the focus. The aim of the research is to find the most important service
quality dimensions that affect customer satisfaction in online purchasing in Iran. In
the literature part, we will introduce theories related to service quality and satisfaction
in order to give a clear idea about the specific area to the reader and to explain the
proper context of the study.
1.5 Disposition of the thesis
This thesis is divided into five chapters. In the first chapter the background of
the selected research area is presented followed by a problem area discussion that
ends with the research problem and the research question. In chapter two theories and


22
previews studies related to the topic will be presented. Methodology is fully brought
in chapter three which would be ended by frame of reference that shows the exact
road map of the study. Chapter four presents the data which is gathered through the
online survey. And last but certainly not least, chapter five is about the data analyzing
and will be finished by conclusion and further studies.



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Chapter 2
Literature review

2. Literature review

This chapter will give an overview of literature and models that are related to
the research problem presented in the previous chapter. This chapter will introduce
the concepts of customer satisfaction, service quality, relation between customer
satisfaction and service quality, traditional service quality dimensions, online service
quality dimensions and service quality model of online retailing in order to give a
clear idea about the research area.
2.1 Customer Satisfaction
There are two principal interpretations of satisfaction within the literature of
satisfaction as a process and satisfaction as an outcome (Parker and Mathews, 2001).
Early concepts of satisfaction research have typically defined satisfaction as a post
choice evaluative judgment concerning a specific purchase decision (Oliver, 1980;
Churchill and Suprenant, 1992; Bearden and Teel, 1983; Oliver and DeSarbo, 1988).


24
The most widely accepted model, in which satisfaction is a function of
disconfirmation, which in turn is a function of both expectations and performance
(Oliver, 1997). The disconfirmation paradigm in process theory provides the
grounding for the vast majority of satisfaction studies and encompasses four
constructs expectations, performance, disconfirmation and satisfaction (Caruana et
al., 2000). This model suggests that the effects of expectations are primarily through
disconfirmation, but they also have an effect through perceived performance, as many
studies have found a direct effect of perceived performance on satisfaction (Spreng
and Page, 2001). Swan and Combs (1976) were among the first to argue that
satisfaction is associated with performance that fulfils expectations, while
dissatisfaction occurs when performance falls below expectations. In addition, Poisz
and Von Grumbkow (1988) view satisfaction as a discrepancy between the observed
and the desired. This is consistent with value-percept disparity theory (Westbrook
and Reilly, 1983) which was developed in response to the problem that consumers
could be satisfied by aspects for which expectations never existed (Yi, 1990). The
value-percept theory views satisfaction as an emotional response triggered by a
cognitive-evaluative process (Parker and Mathews, 2001). In other words, it is the
comparison of the ``object to ones values rather than an expectation.
Customers want a meeting between their values (needs and wants) and the
object of their evaluations (Paker and Mathews, 2001). More recently, renewed
attention has been focused on the nature of satisfaction emotion, fulfillment and
state (Parker and Mathews, 2001). Consequently, recent literature adds to this
perspective in two ways. First, although traditional models implicitly assume that
customer satisfaction is essentially the result of cognitive processes, new conceptual
developments suggest that affective processes may also contribute substantially to the
explanation and prediction of consumer satisfaction (Fornell and Wernerfelt, 1987;
Westbrook, 1987; Westbrook and Oliver, 1991). Second, satisfaction should be
viewed as a judgment based on the cumulative experience made with a certain product
or service rather than a transaction-specific phenomenon (Wilton and Nicosia, 1986).
There is general agreement that: Satisfaction is a persons feelings of pleasure
or disappointment resulting from comparing a products perceived performance (or
outcome) in relation to his or her expectations (Kotler, 2003, p. 36). Based on this


25
review, customer satisfaction is defined as the result of a cognitive and affective
evaluation, where some comparison standard is compared to the actually perceived
performance. If the perceived performance is less than expected, customers will be
dissatisfied. On the other hand, if the perceived performance exceeds expectations,
customers will be satisfied. Otherwise, if the perceived expectations are met with
performance, customers are in an indifferent or neutral stage.
Customer satisfaction is defined as a customers overall evaluation of the
performance of an offering to date. This overall satisfaction has a strong positive
effect on customer loyalty intentions across a wide range of product and service
categories (Gustafsson, 2005).
The satisfaction judgment is related to all the experiences made with a certain
business concerning its given products, the sales process, and the after- sale service.
Whether the customer is satisfied after purchase also depends on the offers
performance in relation to the customers expectation. Customers form their
expectation from past buying experience, friends and associates advice, and
marketers and competitors information and promises (Kotler, 2000).
Factors which determine the extent of expectations are: customer needs, total
customer value and total customer cost. It is mentioned by researchers who study
customer choice that choosing a product or service is only one of the stages customers
go through. A purchase decision is influenced by the buyers characteristics. These
include cultural, social, personal and psychological factors. In addition to the buyers
characteristics, a purchase decision is influenced by the buyers decision process. The
typical buying process develops through five stages: 1 new recognition; 2
information search; 3 information evaluation; 4 purchase decision; and 5 post-
purchase evaluation (Chaston, 2001).
Searching for information is a key stage of a consumers decision-making
process and may include a search for both internal and external information. As the
perceived risk of a purchase decision increases, consumers search for more
information in order to cope with uncertainties about the potential positive or negative
consequences ( Jihye Park, 2005).


26
Although buyers may skip or reverse some stages, basically they pass
sequentially through all five stages in buying a product. Value reflects what
customers do in evaluating, obtaining, using and disposing of the product or service.
Values can be defined as principles or standards of an individual as a whole. They
reflect an individual judgment as to what is valuable or important in life. Customer
delivered value is a result of comparison of total customer value with total customer
cost.
Information about the opinion of the customer regarding a product or service
is of essential importance, and can be obtained in several ways, such as customer
surveys, phone interviews, and customer panel discussions. It is also important to
measure customer orientation continuously. (Rampersad, 2001).
What the company thinks its customer wants Is not necessarily the same as
What the company thinks it has to offer is not necessarily the same as What the
company actually offers is not necessarily the same as How the customer experiences
this is not necessarily the same as What the customer really wants (Hubert
Rampersad, 2001).
Mohamed Zairi (2000) developed figure 4 which shows in order to have a
continuous improvement of customer satisfaction there should be a cycle which starts
with listening to voice of customers then analyzing their comments, developing
actions and at the end implementing. Figure 4 illustrates this cycle:



27


Figure 4 : Customer satisfaction continues improvement
Source: Zairi, 2000

To have a thorough satisfaction firstly the good working condition is needed to
bring satisfied employees which leads to loyal employees and by preparing all this,
good production would be followed which influenced on Customer satisfaction and
make them loyal and as mentioned before high profit is about customer retention.

Figure 5 : The circle of satisfaction


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2.1.1 What we need to measure?
Organizations can understand the satisfaction of their customers through the
number of problem calls; the number of complaints by e-mail, phone, etc.; and/or the
number of returned products (Werth, 2002 [? changed sentences]).
It is somehow the measurement of customer dissatisfaction (no satisfaction)
and offers a possibility for the elimination of falls, not a possibility for product
development and product innovation. Companies should gather and analyze the
suitable data, which will provide relevant information to real customer satisfaction. It
is important to measure the right things, i.e. what is really important for the
customers. There is the possibility of wrong specifications or misinterpretations of
what a customer actually wants (Kekale, 2001) (the gap between what companies
think customers probably want and what customers really want). Criteria for the
measurement of customer satisfaction must be defined by the customer. Many
organizations determine the criteria for measurement internally, but suppliers
rarely have an accurate understanding of customer priorities (Hill, 1996). It is a
problem with measuring the performance dimensions that are not critical drivers of
value to the customers (value in the eye of customers, not in the eye of organizations).
The solution for this problem, to provide real insight into the market needs, is to filter
out irrelevant information and concentrate on the few dimensions that really matter.

Figure 6: The Principle of pre-study

For evaluation of information, which we will achieve by pre-study, we can use
the histogram. The histogram shape shows how some questions in the questionnaire
were understood by respondents. For example: no-rectangular distribution means


29
misunderstanding a question, etc. After a simple pre-study the companies can find
support for their assumptions and simultaneously create a new, more effective,
questionnaire. If we have a set of customer demands and expectations we can translate
them into technical product features by using, e.g. the QFD methodology. Very
important also is determining the specific features, which mean a limited number of
critical measures in order to avoid information overload. There are various methods
(various approaches) for (to) the measurement of customer satisfaction.
The following figure illustrates some different kind of customer satisfaction
measurement. (Figure 7 and Figure 8)

Figure 7: Customer satisfaction measurement method



Figure 8: Measuring customer satisfaction
Source: Ingrid Fecikova, 2004
Ho and Wu (1999) identified five antecedents of customer satisfaction to be
appropriate for online shopping on the Internet. These are logistical support, technical
characteristics, information characteristics, homepage presentation and product
characteristics (see figure 9).



30

Figure 9 : A Research Model for the Antecedents and Customer Satisfaction of Cyber
Shopping Store (CSS)
Source: Ho and Wu 1999
In this model they explained Logistical Support means quick response to
customers needs, providing communication channels (i.e., e-mail or fax), quickly
delivering goods for customers, and providing after services. Technology factors
indicate modern computer and network facilities and well-structured information
systems. Information factors means reliable output information and secure transaction.
Homepage presentation includes ease to use interface and detail information of goods.
Product characteristics indicate variety of goods and lower prices for goods (Ho and
Wu 1999).
2.1.2 Techniques to measure customer satisfaction
Market research techniques to measure customer satisfaction which are:
customer satisfaction survey methodologies;
focus groups to study customer satisfaction issues;
standardized packages for monitoring customer satisfaction; and
various computer software.

Logistic support
Technical
characteristics
Information
characteristics
Homepage
presentation
Product
characteristics
Customer Satisfaction


31
There are some problems with typical customer satisfaction measurement
techniques such as focus groups, survey methodologies and customer satisfaction
software. These include:
Analytical - concerned with techniques, formal procedures, systems, and so
on;
behavioral - concerned with the attitudes, beliefs, perceptions, motivation,
commitment and resulting behavior of the people involved in the process; and
Organizational - concerned with the organizational structure, information
flows, management style and corporate culture, i.e. the context in which the
process is conducted (Piercy, 1996). (Ingrid Fecikova, 2004)

2.1.3 Virtual organizations and customer satisfaction

The fast growing Internet technology introduced a new digital economy on a
virtual environment. Cox and Dale (2001) define that: . . . E-business or e-enterprise
is the term used has shifted to competitiveness along with staff and customer
satisfaction in order to achieve long-term success. Surveys and research carried out by
a variety of sources (for example, Active Media Research LLC, 2000; PR Newswire,
2000) have shown that the medium of the Internet and the development of e-
commerce are progressing extremely fast on a global scale. However, while the
Internet acts as a faster and less costly platform for consumers and businesses it has
inadvertently increased the importance of customer satisfaction. Caruso (2000) reports
that IT and business executives from all industries surveyed in the Information and
Business Week survey agree that generating new sources of revenue is not the main
goal of deploying e-business applications. In fact, this factor ranked well behind
creating or maintaining a competitive edge, improving customer satisfaction, and
keeping pace with the competition (Dalton, 1999). Heskett et al. (1994) assert that the
importance of customer satisfaction is to achieve good financial performance in
services in the physical world, and the same can be said of e-commerce where a
customer can be lost if unable to access a Web site or if the experience proves
unsatisfactory. It is clear that e-commerce will dramatically change the way business
operates with large-scale changes requiring a similarly large-scale focus on the needs
of the customer. Ody (2000), emphasize that the main reasons why customers go onto
the Internet are to find information or buy a product or service with an emphasis on
convenience and speed. Ziff-Davies (2000) maintains that the concept of the Internet


32
has raised customers sensitivity to fast customer service. An overview of virtual
organizations is presented by Aboelmaged and Tunca (1999).
Figure 10 illustrates the customer contact-customer focus matrix for the
Internet companies. In Figure 10, the Y-axis shows the level of customer contact on
the Internet companies. The X-axis, however, shows the level of customer focus.
Customer contact level of the Internet companies is highly dependent on the nature of
the business. While a bookstore, for instance, has a high customer contact, the content
providers could have relatively lower customer contact. Customer focus, on the other
hand, crucially depends on strategic decisions. The highest customer satisfaction can
be reached, where both the customer contact and the customer focus is high. A
company with a high customer contact and focus is likely to be a ``winner, while in
a high to define a business that has a virtual presence or Web site on the Internet
either to promote brand awareness or enable-e-commerce. Customer contact
environment, if the customer focus is low, then the company is likely to be a ``loser.
The loser causes the highest customer dissatisfaction and is very likely to disappear in
a competitive environment. (Nasser Alomaim, Mustafa Zihni Tunca, Mohamed Zairi,
2003)

Figure 10: Customer contact customer focus matrix
Source: Nasser Alomaim, Mustafa Zihni Tunca, Mohamed Zairi, 2003




33
2.2 Dimensions and determinants of service quality
Gronroos (1984), Lehtinen and Lehtinen (1982) and Czepiel et al. (1985)
have considered the service quality of the service encounter as two different
dimensions, one being technical or output quality and the other functional or process
quality. These dimensions were assessed according to attitudes and behavior,
appearance and personality, service mindedness, accessibility and approachability of
customer contact personnel.
Czepiel et al. (1985) not only pinpointed the process and outcome quality
dimensions but also identified three different dimensions of the service encounter,
distinguishing between customer perceptions, provider characteristics and production
realities. They suggested that these covered common crucial characteristics in service
delivery and that the determinants of satisfaction were therefore similar in each case.
For the customer perceptions and production realities, they listed elements which
were then judged along a continuum. The customer perceptions included purpose,
motivation, result, salience, cost, reversibility, and risk. The production realities
related more to elements such as technology, location, content, complexity and
duration. These two dimensions can be compared to the customers perception of a
Web site and the complexity or speed of the technology involved. The third
dimension of provider characteristics relates to the expertise, attitude and
demographic attributes of the staff.
Edwardsson et al. (1989) expanded further these two types of service quality,
and summarized four aspects of quality which affect customers perceptions:
(1) Technical quality;
(2) Integrative quality;
(3) Functional quality; and
(4) Outcome quality.

Technical quality refers to the skills of the personnel and design of the service
system. In e-commerce, these two aspects are hidden from view and are not
experienced directly and therefore cannot be judged by the customer. Integrative
quality is concerned with how the different parts of the service delivery system work
together. This is crucial in e-commerce because the customer must have a positive


34
experience online and if relevant a positive experience offline. For example, if a
customer buys a product through a companys Web site, then a smooth running
system will correctly translate that order and payment, and deliver the product as
promised. The third aspect is functional quality which means the manner in which the
service is delivered. As for Gronroos (1984) and Lehtinen and Lehtinens (1982)
definition of functional quality, the meaning is the same and is relevant to e-
commerce in so far as the layout and accessibility of a Web site is concerned, without
the direct human contact or physical environment. Outcome quality is when the actual
service meets the promised service and the customers needs and expectations. This is
true in the case of e-commerce just as much as for businesses in the physical world. If
a customer is dissatisfied, he or she is unlikely to visit that shop or buy from the Web
site again. The likelihood of non purchase is greater on the Internet due to the ease
with which customers can click to a competitors Web site. Even though this type of
research had considered the matter of customers perception of quality, it was
Parasuraman et al. (1985; 1988) who addressed the issue as to how the customer
makes an assessment of service quality. They came up with ten determinants that can
be used to measure service:
(1) Access (approachability and ease of contact);
(2) Communication (informing and listening to customers);
(3) Competence (possession of required skills and knowledge to perform the
service);
(4) Courtesy (demeanour and attitude of contact personnel);
(5) Credibility (trustworthiness and honesty);
(6) Reliability (consistency of performance and dependability);
(7) Responsiveness (timeliness of service and willingness of employees);
(8) Security (freedom from danger, risk or doubt);
(9) Tangibles (physical evidence of service); and
(10) understanding/knowing the customer (making an effort to understand the
customers needs).

Credibility is an assessment that can be made before using a service and this
has the same bearing in e-commerce generally, a customer will only make a
transaction in e-commerce after having had some kind of recommendation from an
external source, whether it be through advertising or by word of mouth. Security is of
critical importance when making transactions online. Usually, the Web site will
indicate that it is a secure Web site so that customers can give, for example, credit
card details, without worrying about other people accessing this information. Other


35
determinants such as understanding the customer and access are also relevant to the e-
commerce marketplace. A Web site must be available at all times and does not have
opening and closing hours like a normal high street bank or shop. To understand the
customer, a clever Web site has cookies which recognize repeat customers and do this
by asking a new customer to register some kind of user word like an e-mail address
which they enter on each occasion that they access the Web site. In this way,
customers can be sent information by e-mail or offered purchasing suggestions on re-
entering a Web site depending on what they have previously bought. The aim is to
meet the customers needs and provide the kind of personalization that a regular
customer would get from contact personnel in a BAM environment. Communication
is difficult on the Internet because the interaction between the Web site and the
customer is often one way, the Web site providing information to the customer. It is
only if a Web site offers a telephone number or e-mail address that the customer
communicates with the company directly, and in most cases, e-mail queries receive
standard e-mail replies that may not respond directly to the query. In a similar way,
courtesy and competence can be said to be almost non-existent during the Web site
experience. The customer will generally navigate a Web site if it is easy to use but he
or she will not be able to judge what the personnel are like behind this interface or if
they have the required skills to perform a service. It is only through the customer
service option that this can be assessed and even then, an automatic reply e-mail
message is often devoid of human characteristics.
Tangibles are for the most part irrelevant for measuring service quality in e-
commerce as the customer only interacts with the Web site. Therefore, the customer
cannot have opinions about the physical properties used to deliver a service. Most e-
commerce companies either have their own warehouses for fulfilling orders for
products to be sent out, or ensure suppliers do this directly. The activity may take
place far away from where the customer is sitting and so is not applicable.
Responsiveness and reliability are, however, applicable because they relate to what
the company promises. Reliability could be judged, for example, by the correct
product being received by the customer within 48 hours. This is important for any
business and relates to the whole interaction between the interface and the back-end
processes of fulfillment. Responsiveness as such is slightly more indiscernible,
especially whilst directly interacting with the Web site. If the customer has a problem,


36
the customer service option of telephone or e-mail is how to report this and it is here
that the companys ability to respond well and at a reasonable speed is judged. This is
also relevant if fulfillment is part of the service and the customer has to send back an
item or it is late arriving.
Parasuraman et al. (1988, 1988) subsequently reduced these ten determinants
to five, the following first three being the original ones and the other seven original
ones categorized into (4) and (5): (1) Tangibles; (2) Reliability; and (3)
Responsiveness; (4) Assurance (knowledge and courtesy of employees); and (5)
Empathy (caring, individualized attention the firm provides its customers).
These five determinants were used in their SERVQUAL measurement
instrument (1988b). Johnston et al. (1990) carried out similar research using empirical
data in ten UK service organizations which resulted in 12 determinants, some of
which were similar to the ten determinants of Parasuraman et al. (1985): (1) Access;
(2) Appearance/aesthetics; (3) Availability; (4) Cleanliness/tidiness; (5) Comfort; (6)
Communication; (7) Competence; (8) Courtesy; (9) Friendliness; (10) Reliability; (11)
Responsiveness; and (12) Security.
Four out of the five new determinants, appearance, cleanliness, comfort and
friendliness, refer to service delivery within a physical sense and are therefore not
relevant to the Internet experience. The fifth new determinant, availability, is very
relevant because it can refer to the availability of a Web site, just as much as to the
availability of what service or product the e-business is offering and whether customer
service contacts can help. The empirical research carried out by Johnston et al. (1990)
was only on management perceptions of service and not from the customers
perspective; therefore Johnston and Silvestro (1990) carried out further research
taking account of the latter and added five more determinants: (1)
Attentiveness/helpfulness; (2) Care; (3) Commitment; (4) Functionality; and (5)
Integrity.
The first three again refer to the staff performing the service and are therefore
unsuited for use as service quality measures over the Internet. However, functionality,
which here means serviceability and fitness for purpose, and integrity can be judged
by a customer because they refer directly to the Web site.


37
Johnston (1995) added another determinant, flexibility, after carrying out
further research on these 17 determinants in retail banking. This was used to describe
a willingness and ability on the part of the service worker to amend or alter the
nature of the service or product to meet the needs of the customer (Johnston, 1995).
In an e-commerce transaction, there is little flexibility because what an e-business
offers can be customized to a certain degree but not changed during the course of the
service delivery.
Gro nroos (1990) has also undertaken further research into the determinants
of service quality based on his earlier model. He offered six criteria of good perceived
service quality: (1) Professionalism and skills; (2) Attitudes and behavior; (3)
Accessibility and flexibility; (4) Reliability and trustworthiness; (5) Reputation and
credibility; and (6) Recovery.
The first five of these are similar to the five determinants of Parasuraman et al.
(1988) and therefore merit equivalent arguments put forward above, when applied to
the world of e-commerce. The sixth determinant, recovery, has become an important
factor in service quality. Lewis (1999) notes that effective service recovery can
enhance customer loyalty and provoke increased positive word-of-mouth
communication. Looking at this in terms of a Web site, service failure will most likely
be due to the system crashing and could be caused by the company or customer. If
there is a consistent problem accessing the Web site or while using it, then a customer
should complain but they are more likely to click to another competitors Web site
rather than spend time complaining and therefore service recovery becomes
immaterial. However, if there is a problem with billing or fulfillment, recovery does
become an issue (i.e. to replace a damaged product or an incorrectly delivered
product).
2.2.1 Conceptualization of e-services
Customer perceived service quality has been theoretically represented as
consisting of two dimensions. Berry and Parasuraman (1991) distinguish a process
and an outcome dimension, whereas Gronroos (1990) makes a distinction between
functional and technical quality. The process or functional quality refers to ``how
the service is delivered, while the outcome or technical quality refers to ``what


38
customers receive, the benefits of using the service. Gronroos et al. (2000) propose
that for services offered on the Internet the traditional service concept, consisting of
the core service, facilitating and supporting services, needs to be extended with a
fourth factor, the user interface. As noted by Gronroos et al. (2000), it is often
difficult to differentiate between facilitating and supporting services. A term that has
been coined to more generally denote services that are not part of the core service is
supplementary services (Anderson and Narus, 1995). Facilitating and supporting
services are both closely connected with the core service. For an online bookseller
facilitating services could be search facilities, an invoice archive and secure payment
methods. Book reviews and personal recommendations could be interpreted as
supporting services. In addition, independent, though related products that are neither
facilitating nor supporting the core service can be offered through the portal site. In
the case of a medical portal, we could think of self-contained products, such as
specialized financial services, insurances, a travel agency, an option to purchase
medicine online, etc.
Szymanski and Hise would suggest preserving the adjective
``complementary for those products, in order to distinguish them from
supplementary services. Whereas supplementary services have the potential to add
value to the core service, complementary services are self-contained products that do
not add value to the core service, but have the potential to add value to the portal in its
entirety. Finally, the functionality, outlook, logic and usability of the site constitute
the user interface. Core, supporting and complementary services can be interpreted as
``what customers receive. The user interface and, at least to a certain extent, the
facilitating services describe ``how the service is delivered to customers.
Supplementary services are used to differentiate the service from similar competing
offerings and to add value to customers (Anderson and Narus, 1995; Gronroos et al.,
2000).
However, Anderson and Narus (1995) observe that companies often misuse
them by not investigating which supplementary services customers actually need and
value. The authors suggest that ``customers are understandably happier when they are
offered services for free (Anderson and Narus, 1995, p. 77). However, when
supplementary services are not customized to the targeted customer segment but


39
offered indiscriminately and unprofitably to everyone, their added value can be
limited, both to consumers and to the firm. Anderson and Narus addressed inter-firm
services, but their observations seem to apply to private customers as well (Zeithaml
et al., 2000). Because of the high costs involved in the upkeep and development of
supplementary services, it seems especially important for companies to find out
whether they are positively valued by customers and how they affect satisfaction and
e-loyalty.
All components of the e-service offer are expected to influence overall
satisfaction with a portal site offering, if customers perceive them to be superior to
their expectations, compared to competitors e-offerings or similar services of the
``brick-and-mortar kind. It seems likely that the added value of a complementary
service, as defined above, will depend not only on its individual quality, but also on
the degree of fit with the core service offering.
2.2.2 E-service quality
Using online trading sites can be described as a complex process that can be
divided into sub-processes, such as retrieving or exchanging information and articles,
or ordering books. Each of the four service components could be described in terms of
process and outcome, and could also be analyzed into sub-dimensions and quality
determinants. For example, customers may be satisfied with the responsiveness and
user-friendliness of a search engine but dissatisfied with the reliability of the search
outcome. It is assumed that the un/successful process or outcome of an interaction
influences customers overall satisfaction with the Web site. However, most likely the
customer will not evaluate each sub-process in detail during a single visit to a Web
site, but will perceive the service as an overall process and outcome, unless one of the
service elements stands out as especially positive or negative. The same applies to a
series of interactions within a customer e-service relationship. In a study of critical
incidents with SST, Meuter et al. (2000) found that positive incidents were rare and
that dissatisfying incidents were often caused by process failure, such as lost orders.
The process and outcome dimensions of an e-service can thus be divided into
more specific service quality dimensions. The best-known evaluation dimensions are


40
the five proposed in the SERVQUAL model (Parasuraman et al.,1988): tangibility,
responsiveness, reliability, assurance and empathy.
Parasuraman and Grewal (2000, p. 171) suggest that research is needed on
whether ``the definitions and relative importance of the five service quality
dimensions change when customers interact with technology rather than with service
personnel. Since the dimensions were developed from, and for, interpersonal
encounters, in our opinion the content description and scale items would have to be
reformulated before they can be meaningfully used in an e-service context. For
example, tangibility could be replaced with the user interface. Responsiveness could
refer to the companys responses to customers requests and the speed of order
confirmation. Reliability could relate to the on time delivery of ordered goods,
accurate supply of information and error freeness of links. Assurance could refer to
the safety of on-line transactions and the policy for using personal information by the
company. Assurance refers to a general trustworthiness, which has been considered
one of the most important drivers of e-service satisfaction (Petersen, 2001; Urban et
al., 2000; Wingfield and Rose, 2001). Finally, empathy could be interpreted as the
degree of customization of communications and the service providers awareness of
customers personal needs.
Evaluation and relevance of these dimensions may vary for different e-
services and could even vary between features. For example, customers expect high
responsiveness from a search engine but may tolerate slower financial transactions if
they lead to increased security (assurance). To what extent the five dimensions
actually capture customer perceptions of e-service quality and which trade-offs might
exist remains to be shown. The five dimensions were not tested systematically in the
focal study. Consumer evaluations of services can be impacted by the choice of a
comparison standard (Cadotte et al., 1987; Zeithaml et al., 1993). Meuter et al. (2000)
found that satisfying incidents of SST were most often related to a comparison with
traditional or other SST services, and Szymanski and Hise (2000) found that
convenience in comparison with traditional stores was an important determinant of
overall satisfaction. Thus, customers appear to use experience-based norms (Cadotte
et al., 1987) and traditional services as comparison standards for SSTs and e-services.
However, e-service expectations seem to be of less importance as a comparison


41
standard (Zeithaml et al., 2000) Empirical studies have demonstrated that consumer
benefits of using SST include convenience (Meuter et al., 2000; Reichheld and
Schefter, 2000; Szymanski and Hise, 2000; Zeithaml et al., 2000), saving time and
money (Meuter et al., 2000), avoiding interpersonal interaction (Dabholkar, 1996;
Meuter et al., 2000), and being in control (Dabholkar, 1996; Zeithaml et al., 2000).
Features of the user interface, such as site design (Szymanski and Hise, 2000) and
ease of use (Dabholkar, 1996; Meuter et al., 2000; Zeithaml et al., 2000), affect
service quality perception and satisfaction. However, Meuter et al. (2000) found that
technology was only mentioned in the context of dissatisfying incidents. Similarly,
financial security and other assurance aspects may also affect e-satisfaction only in
the case of problems (Szymanski and Hise, 2000; Zeithaml et al., 2000).


Figure 11 : The e-service offering
Source: Szymanski and Hise, 2000; Zeithaml et al., 2000
2.3 Measuring electronic Service Quality
Measurement of service quality delivery through Web sites is in its early
stages. The overwhelming majority of measurement scales have been developed in


42
business, either by individual companies or consulting firms that sell the scales to
businesses. Many of these measures are ad hoc and have not been validated,
potentially leading to poor managerial decisions. Academic researchers are starting to
work in this area, but no comprehensive scale has been published that captures the
dimensions and attributes in a rigorous and psychometrically sound way. This leads to
confusion when manager are trying to improve electronic service, for service
components must be fully understood from the customers point of view to improve
perceptions. The scales and measures developed by consulting firms and businesses
differ in their dimensions and attributes, and most academic work has focused on a
limited set of variables rather than a full view of electronic service quality ( Valarie A.
Zeithaml, 2002).
The dimensions of e-service quality Parsu, Arvind and Valerie Zeithmal have
focused on conceptualizing and measuring e-SQ, and particularly in determining the
dimensions of the construct. They used a three-stage process involving exploratory
focus groups followed by two phases of empirical data collection and analysis. Their
research indicates that e-SQ has seven dimensions that form two scales: a core e-SQ
scale and a recovery scale. Four dimensions efficiency, reliability, fulfillment, and
privacy form the core e-SQ scale that can be used to measure customer perceptions
of service quality. These dimensions and their definitions are: (1) Efficiency refers to
the ability of the customers to get to the Web site, find their desired product and
information associated with it and check out with minimal effort. (2) Fulfillment
incorporates accuracy of service promises, having products in stock and delivering the
products in the promised time. (3) Reliability is associated with the technical
functioning of the site, particularly the extent to which it is available and functioning
properly. (4) The privacy dimension includes assurance that shopping behavior data
are not shared and that credit card information is secure.
They call this the core e-SQ scale because these are the main dimensions that
consumers want in shopping on the Internet. Most consumers use the Web for its
shopping facilitation, and do not expect the personal interaction and warmth that they
expect from traditional service firms.
They found, however, that three other dimensions become salient when online
customers run into problems responsiveness, compensation and contact. They


43
conceptualized these dimensions as constituting e-SQ recovery. The recovery-SQ
scale includes the personal service aspects:
(1) Responsiveness measures the ability of a company to provide appropriate
information to customers when a problem occurs, have mechanisms for
handling returns and providing online guarantees.
(2) Compensation is the dimension that involves receiving money back, return
shipping and handling.
(3) Contact points to the need of customers to be able to speak to a live customer
service agent online or through the phone requiring seamless multiple
channel capabilities on the part of e-tailers.













44









Chapter 3
Research Methodology

3. Methodology

This chapter will present detailed idea about the research will be conducted.
This includes the purpose of the research, research approach, research strategy,
sample selection methods, data collection methods and data analysis methods. At the
end of this methodology part validity and reliability issues will be discussed to follow
the quality standards of the research. Then frame of reference which brings a
thorough road map of study is provided next.

3.1 Research Purpose
Early in any research study, one faces the task of selecting the specific design
to use. A number of different design approaches exist but, unfortunately, no simple


45
classification system defines all the various that must be considered (Cooper &
Schindler, 2003).
Research can be classified in terms of their purpose. Accordingly, Saunders,
Lewis & Thornhil (2003) mentioned that they are most often classified exploratory,
descriptive or explanatory while Cooper and Schindler (2003) categorized in
descriptive and causal. This way the essential difference between descriptive and
causal studies lies in their objectives. If the research is concerned with finding out
who, what, where, when, or how much, then the study is descriptive. In a causal
study, we try to explain relationships among variables.
Exploratory research is useful when the research questions are vague or when
there is little theory available to guide predictions. At times, research may find it
impossible to formulate a basic statement of the research problem. Exploratory
research is used to develop a better understanding (Hair, Babin, Money & Samoel
2003). Exploratory studies are a valuable means of finding out what is happening, to
seek new insight, to ask questions and to assess phenomena in a new light. It is
particularly useful if researcher wish to clarify the understanding of a problem. There
are three principle ways of conducting exploratory research: a search of the literature,
talking to experts in the subject, conducting focus group interviews (Saunders, Lewis
& Thornhill 2003)
In contrast to exploratory studies more formalized studies are typically
structures with clearly stated hypotheses or investigative questions. Formal studies
serve a variety of research objectives:
- Descriptions of phenomena or characteristics associated with subject
population (the who, what, when, where, and how of a topic) .
- Estimates of the proportions of a population that have these characteristics.
- Discovery of associations among different variables (Cooper & Schindler,
2003).

Generally things are described by providing measure of an event or activity.
For example, which brands are most preferred? What advertisements are most
effective? These are the questions that can be answered by descriptive research.
Descriptive research designs are usually structured and specifically designed to


46
measure the characteristics described in a research question. Hypotheses, derived
from the theory, usually serve to guide the process and provide a list of what needs to
e measured (Hair, Babin, Money & Samouel 2003). The object of descriptive research
is to portray an accurate profile of persons, events of situations. It is necessary to have
a clear picture of the phenomena on which researcher wish to collect data prior to the
collection of the data (Saundrers, Lewis & Thornhill 2003).
Studies that establish causal relationships between variables may be termed
explanatory studies. The emphasis here is on studying a situation or a problem in
order to explain the relationship between variables (Saunders, Lewis & thornhill
2003). Explanatory studies are designed to test whether one event causes another
(Hair, Babin, Money & Samouel 2003).
The purpose of the research is descriptive. The data has been collected through
questionnaire, is aimed to understand the most important factors of service quality.
3.2 Research Approach
The knowledge claims, the strategies and the method all contribute to a
research approach that tends to be more quantitative, qualitative or mixed (Creswell
2003).

3.2.1 Quantitative Approach
Quantitative approach is one in which the investigator primarily uses post
positivist claims for developing knowledge (i.e. cause and effect thinking, reduction
to specific variables and hypotheses and questions, use of instrument and observation,
and the test of theories), employs strategies of inquiry such as experiments and
surveys and collects data on predetermined instruments that yield statistical data
(Creswell 2003).

Quantitative research is frequently referred to as hypothesis-testing research.
Characteristically, studies begin with statements of theory from which research


47
hypotheses are derived. Then an experimental design is established in which the
variables in question (the dependent variables) are measured while controlling for the
effects of selected independent variables. Subject included in the study are selected at
random is desirable to reduce error and to cancel bias. The sample of subjects is
drawn to reflect the population (Newman & Benz 1998).
The procedures are deductive in nature, contributing to the scientific
knowledge base by theory testing. This is the nature of quantitative methodology.
Because true experimental designs require tightly controlled conditions, the richness
and depth of measuring for participant may be sacrificed. As a validity concern, this
may be a limitation of quantitative designs (Newman & Benz 1998)
3.2.2 Qualitative Approach
Qualitative research is multi method in focus, involving an interpretive,
naturalistic approach to its subject matter. This means that qualitative researchers
study things in their natural settings, attempting to make sense of, or interpret,
phenomena in terms of the meanings people bring to them (Newman & Benz 1998).
Qualitative approach is one in which the inquirer often makes knowledge
claims based primarily on constructivists perspectives (i.e., the multiple meaning of
individual experiences, meaning socially and historically constructed, with an intent
of developing a theory or pattern) or advocacy/participatory perspectives (i.e.,
political, issue-oriented, collaborative or change oriented) or both. It also uses
strategies of inquiry such as narratives, phenomenology, ethnography, grounded
theory studies or case studies. The researcher collects open-ended, emerging data with
the primary intent of developing themes from the data (Creswell 2003).
Since the purpose is to understand the most important dimensions of service
quality from the Iranian customers perspective, quantitative research is found to be
more appropriate for this study.



48
3.3 Research strategy
Research strategy will be a general plan of how researcher will go about
answering the research questions that has been set by researcher. It will contain clear
objectives, derived from research questions specify the sources from which researcher
intend to collect data and consider the constraints that researcher will inevitably have
such as access to data, time, location and money, ethical issues (Thornhill et. al.,
2003).
Based on the conditions 1) form of research question 2) requires control over
behavioral events and 3) focus on contemporary events five research strategies were
identified in social science. These are experiments, surveys, archival analysis,
histories and case studies (see table 4).

Table 4: research strategies

Strategy Form of research
question
Requires control
over behavioral
events?
Focuses on
contemporary
events?
Experiment How, why Yes Yes
Survey Who, what, where,
how many, how
much
No Yes
Archival analysis Who, what, where,
how many, how
much
NO Yes/No
History How, why No No
Case study How, why No Yes
Source: Yin , 1994, p.6

Most important condition for selecting research strategy is to identify the type
of research question being asked. Who, What, Where, How and Why are
the categorization scheme for the types of research questions. Two possibilities need
to investigate by asking the What question. First, some types of what questions are
justifiable for conducting an exploratory study and the goal is to develop pertinent
hypotheses and propositions for further inquiry. Any of the five research strategies
can be used in that situation- exploratory survey, exploratory experiment, or an
exploratory case study. The second type of what question is actually form a how
many or how much line of inquiry and the outcomes from a particular situation.


49
The survey or archival analysis is more favorable than other strategies. If the
researcher needs to know the how question, the better strategy will be doing history
or a case study.
Since question in this study is based on what question and this what question
is actually form a how many and investigator has no control over the actual
behavioral events, Survey is found to be a more appropriate approach in order to gain
a better understanding of the research area. Survey is more appropriate for
quantitative study.

3.3.1 Survey
The survey strategy is popular and common strategy in business research that
is usually associated with the deductive approach. Survey allows the collection of
large amount of data from a sizeable population in a highly economical way.
Questionnaire, structured observation and structures interviews are often falls into this
strategy (Thornhill et. al., 2003). In this study a survey has been done.

3.3.2 Pilot test
A pilot test is conducted to detect weaknesses in design and instrumentation
and to provide proxy data for selection of a probability sample. It should, therefore,
draw subjects from the target population and simulate the procedures and protocols
that have been designated for data collection (Cooper and Schindler, 2003)

3.4 Sample Selection
The basic idea of sampling is that by selecting some of the elements in a
population, researcher may draw conclusions about the entire population. There are
several compelling reasons for sampling, including: lower cost, greater accuracy of
result, greater speed of data collection and availability of population selection (Cooper
& Schindler 2003).


50

Selecting the sampling Method
Selection of the sampling method to use in a study depends on a number of
related theoretical and practical issues. These include considering the nature of the
study, the objectives of the study and the time and budget available. Traditional
sampling method can be divided into two categories: probability and non- probability
sampling (Samuel et. al., 2003).

Probability sampling is most commonly associated with survey-based research
where researcher needs to make inferences from the sample about a population to
answer the research questions or to meet research objectives (Saunders et. al., 2003).
In probability sampling, sampling elements are selected randomly and the probability
of being selected is determined ahead of time by the researcher. If done properly,
probability sampling ensures that the sample is representative (Hair et. al., 2003)

Non-probability sampling provides a range of alternative techniques based on
researcher subjective judgment (Saunders et. al., 2003). In non-probability sampling
the selection of elements for the sample is not necessarily made with the aim of being
statistically representative of the population. Rather the researcher uses the subjective
methods such as personal experience, convenience, expert judgment and so on to
select the elements in the sample. As a result the probability of any element of the
population being chosen is not known (Samuel et. al. 2003).

According to Samuel et. al., 2003 most non-probability sampling methods are:

Convenience sampling
Convenience sampling involves select sample members who can provide
required information and who are more available to participate in the study.
Convenience samples enable the researcher to complete a large number of interviews


51
cost effectively and quickly but they suffer from selection bias because of difference
of target population (Hair et. al., 2003).

Judgment sampling
Researchers judgment is used to select sample element and it involves for a
specific purpose. Group of people who have knowledge about particular problem they
can be selected as sample element. Sometimes it referred as a purposive sample
because it involves a specific purpose. Judgment sampling is more convenience and
low cost involvement. (Hair et. al., 2003)

Quota sampling
Objective of quota sampling is to have proportional representation of the strata
of the target population for the total sample and the certain characteristics describe the
dimensions of the population (Cooper & Schindler 2003). In quota sampling the
researcher defines the strata of the target population, determines the total size and set
a quota for the sample elements from each stratum. The findings from the sampling
cannot be generalized because of the choice of elements is not done using a
probability sampling methods (Samouel et. al. 2003).

Purpose of this research is to classify the service quality dimensions in online
shopping from the Iranian shoppers. For the study sample has been selected from the
cloob.com members; because this group has more experience of e-commerce and
online shopping than the rest of people in Iran. Sample was selected by using
judgment because some criteria were followed during the sample selection:

Sample should be more familiar with using Internet;
Sample should have experience of using Online purchasing;



52
The questionnaire was divided into three parts in order to let responders more
time to concentrate on each question.

3.5 Data Collection

There are two major approaches to gathering information about a situation,
person, problem or phenomenon. Sometimes, information required is already
available and only need to be extracted. However there are times when the
information must be collected. Based upon these broad approaches to information
gathering data are categorized as: Secondary data and Primary data. Secondary data
are collected from secondary sources such as govt. publications, personal records,
census (Ranjit Kumar 1996) and primary data are collected through: observation,
interviews and/or questionnaires (Hair et. al., 2003). According to Creswell (2003)
data collection procedure in qualitative research involve four basic types:
Observations, Interviews, documents and audio-visual materials.
In this study quantitative survey is used as data collection method. Since the
aim of the study is classifying service quality dimensions in online purchasing from
the customers point of view, the main focus thus is customer. A questionnaire was
prepared to get idea about the customers experiences in online shopping. The
questionnaire divided into three parts and published on www.cloob.com; which is an
Iranian online club. About 500 persons out of 6000 users replied. A survey is a
procedure used to collect primary data from individuals. The data sought can range
from beliefs, opinions, attitudes and lifestyles to general background information on
individuals such as gender, age, education and income as well as company
characteristics like revenue and number of employees. Surveys are used when the
research involves collecting information from a large sample of individuals (Samuel
et. al., 2003).
The questionnaire was developed based on research question and frame of
reference. The logical structure of questionnaire followed the order of service quality
dimension in the frame of reference. For understanding the importance and


53
satisfaction of each service quality dimension a 5-scale was used (1=very unsatisfied,
3= neutral, 5= very satisfied).
Once came up with the first draft of questionnaire, ten questionnaires were
handed out to the students of TMU and they were asked whether the questions made
sense to them and were they easy to understand. After refining questions, the well-
improved questionnaire was developed.

3.6 Data Analysis
After collecting all the data the process of analysis begins. To summarize and
rearrange the data several interrelated procedure are performed during the data
analysis stage (Zikmund 2000).
For quantitative data analysis, statistical tools of Microsoft excel and SPSS are
used for data input and analysis. The statistics results were presented by graphical
form with detail description.
3.7 Validity and Reliability
In order to reducing the possibility of getting the answer wrong, attention need
to be paid to two particular on research design: reliability and validity ( Saunders et.
al., 2003).

3.7.1 Validity
Validity is concerned with whether the findings are really about what they
appear to be about (Saunders et. al., 2003). Validity defined as the extent to which
data collection method or methods accurately measure what they were intended to
measure (Saunders et. al., 2003). Cooper & Schindler (2003) believe that validity
refers to the extent to which a test measures what we actually wish to measure. There
are two major forms: external and internal validity. The external validity of research
findings refers to the datas ability to be generalized across persons, settings, and


54
times. Internal validity is the ability of a research instrument to measure what is
purposed to measure (Cooper & Schindler, 2003).

Numbers of different steps were taken to ensure the validity of the study:

Data was collected from the reliable sources, from respondents who are more
experienced to using online shopping;
Survey question were made based on literature review and frame of reference
to ensure the validity of the result;
Questionnaire has been pre-tested by the responded before starting the survey.
Questionnaire was tested by at least ten persons;
Data has been collected through two weeks, within this short period of time no
major event has been changed with the related topic.

3.7.2 Reliability
According to Saunders et. al., 2003, reliability refers to the degree to which
data collection method or methods will yield consistent findings, similar observations
would be made or conclusions reached by other researchers or there is transparency in
how sense was made from the raw data. Cooper & Schindler (2003) have defined
reliability as many things to many people, but in most contexts the notion of
con83sistency emerges. A measure is reliable to the degree that it supplies consistent
results. Reliability is a necessary contributor to validity but is not a sufficient
condition for validity.
Reliability can be assed by the following questions (Easterby-Smith et al.,
2002: p.53):
(1) Will the measures yield the same results on other occasions?
(2) Will similar observation be reached by other observers?
(3) Is there transparency in how sense was made from the raw data?

SPSS software offers Reliability Analysis Statistics: Reliability analysis
allows you to study the properties of measurement scales and the items that make
them up. The Reliability Analysis procedure calculates a number of commonly used
measures of scale reliability and also provides information about the relationships
between individual items in the scale. Intraclass correlation coefficients can be used to
compute interrater reliability estimates.


55
Statistics: Descriptive for each variable and for the scale, summary statistics
across items, inter-item correlations and covariances, reliability estimates, ANOVA
table, intraclass correlation coefficients, Hotelling's T2, and Tukey's test of additivity.
Models. The following models of reliability are available:
Alpha (Cronbach). This is a model of internal consistency, based on the
average inter-item correlation.
Split-half. This model splits the scale into two parts and examines the
correlation between the parts.
Guttman. This model computes Guttman's lower bounds for true reliability.
Parallel. This model assumes that all items have equal variances and equal
error variances across replications.
Strict parallel. This model makes the assumptions of the parallel model and
also assumes equal means across items.
Numbers of different steps were taken to ensure the reliability of the study:

Questionnaire was divided into three parts in order that responders could
concentrate more on each question;
The theories that have been selected for the study was clearly described and
research question has been formulated based on the previous theory. Data has
been collected based on the frame of reference that was drawn from the
discussed theories. The objective is to make sure that if another investigator
will follow the same procedures and used the same questionnaires objects, the
same conclusions would be made.
Alpha Cronbach test has also been taken for the 50 items (service quality
factors) and as table 4 shows the result was 0.960 which is more than .8 and
confirmed the reliability of the questions.

Table 5:Reliability Statistics




3.8 Frame of reference
This part will provide the conceptual framework based on literature review. This
section will explain the key factors, variables and relationships among theories or
models and provide theoretical overview. The conceptualization helps to answer the
studys research question. This conceptual framework will also guide the data
collection of this study.

Main purpose of this study is to rank service quality dimensions from Iranian
online shoppers perspective. Based on the objectives of the study the research
Cronbach's
Alpha N of Items
.960 50


56
question focus on what are the most important service quality dimensions which
affect customers satisfaction in online purchasing in Iran.
3.8.1 Customer Satisfaction and Service Quality
Service quality and customer satisfaction are inarguably the two core concepts
that are at the crux of the marketing theory and practice (Spreng and Mackoy, 1996).
In todays world of intense competition, the key to sustainable competitive advantage
lies in delivering high quality service that will in turn result in satisfied customers
(Shemwell et al., 1998). The prominence of these two concepts is further manifested
by the cornucopia of theoretical and empirical studies on the topic that have emanated
over the past few years. Therefore, there is not even an iota of doubt concerning the
importance of service quality and customer satisfaction as the ultimate goals of
service providers. (G.S. Sureshchandar, Chandrasekharan Rajendran R.N.
Anantharaman, 2002)
A basic agreement emanating from the wide range of literature on service
quality and customer satisfaction is that service quality and customer satisfaction are
conceptually distinct but closely related constructs (Parasuraman et al., 1994;
Dabholkar, 1995; Shemwell et al., 1998).


3.8.2 Different tools for measuring Online Service Quality
Based on literature review Im taking the online service quality dimensions
identified by different authors; to understand the most important dimensions from the
Iranian online customers. Different tools for measuring Service Quality are followed:
3.8.2.1 SERVQUAL
By the use of SERVQUAL scale it is possible to compare customers
expectations and their perceptions of actual performance (Parasuraman and Zeithaml,
1990). This scale has been developed for the service sector and has five generic
dimensions or factors: (1) Tangibles: Physical facilities, equipment and appearance of
personnel; (2) Reliability: Ability to perform the promised service dependably and
accurately; (3) Responsiveness: Willingness to help customers and provide prompt
service; (4) Assurance (including competence, courtesy, credibility and security):
Knowledge and courtesy of employees and their ability to inspire trust and


57
confidence; (5) Empathy (including access, communication, understanding the
customer): Caring and individualized attention that the firm provides its customers.

3.8.2.2 WebQUAL
WebQUAL (Barnes et al, 2001) is an on-line questionnaire which is applied to
assess customers perceptions of the quality of Web sites. The questionnaire is
completed by customers and the qualitative customer assessments are converted into
quantitative metrics that are useful for management decision-making. WebQUAL
allows comparisons to be made between E-Commerce environments in the same
domain, or for the same E-Commerce environment over time. WebQUAL has been
iteratively developed through its application to a number of domains, from university
Web sites, through to auction sites, book store Web sites, and even Wireless
Application Protocol (WAP) sites on mobile phones. One of the major influences in
its development has been the communications theory and, therefore, WebQUAL is
particularly suited for assessing the information quality of information-intensive E-
Commerce environments. The WebQUAL instrument is being iteratively refined by
applying and adapting it to a variety of E-Commerce domains.
3.8.2.3 E-SERVQUAL
E-SERVQUAL (Zeithaml et al, 2002) is a conceptual model of service quality
for E-Tailing environments. It is based on the traditional (off-line) service quality
framework called SERVQUAL (Parasuraman, et al. 1994) and has been derived from
an exploratory research involving focus groups and two phases of empirical data
collection and analysis. This process produced seven service quality characteristics:
efficiency, reliability, fulfillment, privacy, responsiveness, compensation, and
contact. These characteristics represent the criteria customers use to evaluate on-line
services. For example the characteristic responsiveness has the criteria: ability to get
answers to questions, quick delivery and updates on status of order. E-SERVQUAL
can be used as a framework by marketing managers to assess the service quality of E-
Tailing environments.


58
3.8.2.4 E-SEQUAL
E-SEQUAL (Dawson et al., 2003), is a service quality framework that is
empirically grounded and integrates e-CRM and HCI strategies for the effective
design and development of E-Tailing environments. E-SEQUAL can provide
guidance to E-Businesses regarding integration of front- and back-end business
processes, and across different customer touch points such as phone, fax, e-mail, and
so on. It can be applied as an evaluation instrument to guide Web designers,
marketing professionals, developers and usability professionals to come up with
requirements for integrating customers expectations of service quality, value and
usability into the design of E-Tailing environments.
3.8.2.5 E-S-QUAL
E-S-QUAL (Parasuraman,A., Zeithaml, Valarie A, Malhotra, Arvind; 2005) is
for measuring the service quality delivered by Web sites on which customers shop
online. Two stages of empirical data collection revealed that two different scales were
necessary for capturing electronic service quality. The basic E-S-QUAL scale
developed is a 22-item scale of four dimensions: efficiency, fulfillment, system
availability, and privacy. The second scale, E-RecS-QUAL, is salient only to
customers who had non-routine encounters with the sites and contains ii items in three
dimensions: responsiveness, compensation, and contact. Both scales demonstrate
good psychometric properties based on findings from a variety of reliability and
validity tests and build on the research conducted on the topic.
3.8.3 Conceptual Framework
Based on the narrow down scope of literature review above, the relationship
between service quality and customer satisfaction can be shown in figure 12. The five
Service quality dimensions have been selected from the SERVQUAL. In the
SERVQUAL instrument, 50 statements measure the performance across these five
dimensions. For each statement, the expectation and the experience of a customer are
determined. There is some criticism on the long-term stability of the results of the
SERVQUAL scale (Lam and Woo, 1997) and on the general applicability of the five
dimensions (Buttle, 1996; Crosby and LeMay, 1998). Although alternative models
have been proposed for the measurement of service quality, the SERVQUAL scale


59
has been widely used by academics and practitioners to measure service quality.
Therefore, this model has been used as a point of reference in this Thesis.



Figure 12: Relationship between service quality and customer satisfaction based on SERVQUAL

3.8.4 SERVQUAL dimensions in relation to online Purchasing

Tangibles
Examples of the tangibles factor are has up-to-date equipment, physical
facilities are visually appealing and materials are visually appealing. These aspects
might be even more important in e-business as there is no face-to-face contact
between the customer and an employee. The visual aspects of the equipment (i.e. the
Web site) are the only visual contact between a customer and an organization.
Therefore, the need to have well functioning and good-looking Web sites is
paramount. There are a great number of customers who abandon their shopping carts
on the Internet because they get frustrated with the technology or the design and lay
out of the Web site interface (Hager and Elliot, 2001).
The visual aspects of Web sites are also judged differently by the people of
different age. While young people may be attracted by flashy graphics, sounds and a
Service Quality
Dimensions
(SERVQUAL)
Tangibles
Reliability
Responsiveness
Assurance
Empathy
Customer
Satisfaction in
Online
Purchasing


60
high-speed interface, older people do not want blinking texts that are hard to read or
animations that distract from the use of the Web site (Houtman, 2002). Although a
number of Web sites offer users the opportunity to customize the Web site to their
needs, this customization process is mostly aimed at the content of the Web site and
not at the graphics, animations and sounds.

Reliability
Some of the aspects in the reliability factor have to do with doing what is
promised and doing it at the promised time. Although many organizations seem to
think that the major reason why customers shop via the Internet is because of the low
prices, this does not always need to be the case. Some organizations found out the
hard way that there are also a lot of customers shopping via the Internet because of
convenience considerations (Riseley and Schehr, 2000). If customers cannot trust an
organization to do what they ask, those customers will be dissatisfied. Price line, for
example, ran into big problems by the end of 2000 because of its focus on the lowest
prices. People could buy a plane ticket at a very low price, but because of possible
inconvenient flying times there was a big risk for customers. This resulted in
dissatisfied-customers who were happy to trade off Price lines discounts for the
convenience of a competitor (Riseley and Schehr, 2000).

Responsiveness
One of the aspects in the responsiveness factor is gives prompt service. The
amount of time it takes to download a Web page appears to be of great importance to
the users of the Internet. Research in 1999 found that fewer than 10 percent of users
leave a Web site if page response time is kept below 7 s. However, when it rises
above 8 s, 30 percent of users leave. When delays exceed 12 s, a staggering 70 percent
of users leave a Web site (Cox and Dale, 2001, 2002). It can be assumed that people
expect Web sites to be even quicker than in 1999 because of the technological
advances. Thus, it is very important for organizations to have a Web site that is quick,
but on the other hand users expect Web sites to be visually appealing. As the number
and size of animations, pictures and sounds increase to make a Web page more
visually appealing, the time it takes to download that Web page will also increase,


61
which is judged negatively by users. Hence, there is a trade-off between the looks of a
Web site and the speed of that site. Organizations will have to try to find the right
balance between good looks and speed. The trade-off between looks and speed is
complicated by companies demand that their Web sites convey the corporate image
(Manning et al., 1998). The design department of a company wants Web pages to be
easily recognizable as belonging to that company. In their view, Web pages have to
display company and product logos as well as other graphics that underscore the
corporate identity. These graphics add to the overall size of Web pages and thereby
increase the download time for Internet users. It is questionable whether users are
willing to accept slower pages in return for more logos and graphics that do not
improve the functionality of the Web site (although they might improve the visual
appeal).

Assurance
One of the aspects in the assurance factor is knowledge to answer questions.
Customers expect to find everything they want on a Web site. In a bricks and mortar
store, people feel comfortable with a limited inventory. On the Internet, people are not
satisfied if they cannot find everything they want. Web shops need to have great depth
of inventory and rich and relevant product information (Dayal et al., 2002). Two other
aspects in the assurance factor are employees can be trusted and feel safe in your
transactions with employees. First, there is the risk for users to share personal
information with an organization they do not know. Research on this topic (Statistical
Research Inc., 2001) shows that at least 50 percent of users are very concerned about:
misuse of credit card information given over the Internet; selling or sharing of
personal information by Web site owners; and cookies that track customers Internet
activity. Second, the same research shows that two-thirds of active Web users
typically abandon a site that requests personal information and one in five has entered
false information to gain access to a Web site. Aspects in the assurance factor that
could be very important in e-business are (Daughtrey, 2001):
availability of a formal privacy and confidentiality policy on a Web site;
secured access to a Web site (that customers are prompted to acknowledge);
general reputation of supplier;
certifications or guarantees of assurance; and


62
reports of experiences of other customers.
The first aspect in this list is also acknowledged by the International
Organization for Standardization in Geneva. The Code of Practice for Information
Security Management (ISO/IEC 17799:2000) provides a basis for establishing and
maintaining the means of handling sensitive data (Daughtrey, 2001). Certifications
and guarantees of assurance are also important in e-business. More and more
organizations are trying to obtain certification by an objective, consensus-based
standard, just as they did earlier with quality management standards (Daughtrey,
2001). These organizations are becoming aware of the advantages of such
certification in relation to customers trust in these organizations.
Empathy
In the dimension of empathy there are several aspects that are usually not
found on a Web site. Because of the fact that there is no human interaction, Web sites
normally do not offer personal attention. To achieve this, a number of Web sites have
a design that can be personalized by the users of these sites, so people can have their
own version of the Web site. This kind of Web site design is aimed at giving users the
experience of getting personal attention. The idea is that the more a Web site is
tailored to a particular customers needs, the more likely that customer will return
again and again (The Economist, 2001). The most advanced technologies in this area
aim to create a face-to-virtual-face interaction. A friendly looking face of a virtual
assistant on your screen is supposed to make customers feel more comfortable. With
the use of artificial intelligence, the virtual assistant can suggest products or services
that might be of interest to a customer based on previous purchases and on reactions
to the questions of the virtual assistant. The latter possibility of asking users of a Web
site questions via a virtual assistant will enable companies to tailor their offerings to
the wishes of the user to prevent customer dissatisfaction. The only purpose of all
these technological gadgets is to add one of the Webs key missing ingredients:
warmth (The Economist, 2001).



63









Chapter 4
Empirical Data Presentation

4. Empirical Data Presentation

This chapter will present data that has been collected through quantitative
survey. At first we give an overview of the website which uploaded the questionnaires
that means the sample population and after that the data will be presented according
to the research questions and the variables identified in the frame of reference.
4.1 Overview of the sample
Cloob.com is a virtual Iranian society website that people can have their
profiles, web logs, list of friends, photo album, clubs, sending & receiving messages,
online shopping, sending SMS, online advertising and etc. Cloob.com has 88309
active members, and 20968 more has been invited and there are 6508 clubs in this site
(based on August 24, 2005 reports). Its members are all aware of e-commerce, as they
could rent a flat or buy a car from this website.


64
Main purpose of this study is to understand the most important dimensions of
service quality in online shopping sector from the Iranian perspective. Based on the
objectives of the study the sample should be familiar with using Internet and also it
should have experience of using online purchasing.
Based on the facilities which cloob.com provides its 88309 members; it is
obvious that its members are all familiar with using Internet and e-commerce. So, the
members of Cloob.com were seemed to be the best sample for this study.
4.2 Quantitative data presentation
Online survey has been conducted based on the structured questionnaire. The
questionnaire has been developed based on the variables that were identified in the
frame of reference.
The purpose of the questionnaire survey was to develop empirical evidence on
the quality factors of Web sites that are important to people who are familiar with the
Internet and frequent Internet users. The survey comprised the following questions:
Personal information (gender, age, education);
Respondents use of Internet (equipment, frequency of use);
Specific web sites that are visited by respondents (a predefined list of 6
categories of web sites); and
Aspects of web quality (a predefined list of 50 aspects).

The core of the questionnaire consists of the list of aspects of Web quality. For
every aspect we ask the respondent to indicate the importance of that aspect and at the
same time we ask for their satisfaction with that aspect. The structure of the questions
is based on the SERVQUAL scale (Zeithaml et al., 1990). The aspects have been
defined according to the categories of the model developed by Cox and Dale (2001,
2002) and are as follows:
clarity of purpose;
design;
communication;
reliability;
service and frequently asked questions;
accessibility and speed;
product or service choice;


65
order confirmation;
product purchase;
user recognition;
extra service; and
Frequent buyer incentives.

For each of these categories a number of aspects have been defined in the
questionnaire.
The questionnaire has been discussed with experts in the field of e-commerce
and a pilot study has been conducted amongst a small number of students. This lead to
an improved questionnaire which has been used for the research presented in this
paper.
I divided questionnaire into 4 parts in order to have better results. The first part
has 19 questions and was about the respondents personal information. The other three
questionnaires were about different aspects of service quality based on SERVQUAL.

4.2.1 Sample and Response rate
All the cloob.com members had access to the questionnaires (approximately
88,000) a link and a brief introduction about the study were provided on their personal
page. For the first part of questionnaire; responses were received from 730 persons.
After three days the second part was uploaded and 550 responded, then for the third
part 207 and the forth part 255 responses were received. The number of responses
from online survey was rather low (approximately 0.829 percent of the number of
members), however, acceptable for this type of survey.
4.2.2 Descriptive statistics
We were trying to give weight through Iranian Internet users perspective, as
was mentioned before our sample expected to be Internet frequent user and familiar
with electronic commerce. The demographic statistics are provided within figures
1

13, 14, and 15 which describe gender, education, and age respectively.

1
Relative tables are provided in appendix II


66
Pie chart in figure 13 shows that more than half of responders were male.
About 730 had replied the questionnaires out of which only 245 were female. Please
find table 13 in appendix II which provides clear statistics.











Figure 13: Pie chart; number of respondents by gender.
Bar chart in figure 14 illustrates respondents fields of study in seven given
categories plus others option. About 56 percent of respondents were engineer that is
408 persons and approximately 28.5 percent of them chose others. Managers were
4.8% of repliers stand in third position and 3.8% were accountants. As it is showed in
figure 14 the fifth category was medicine (2.6%) next group with 2.3 percent was
marketing specialists. The number of persons in the field of Social science was very
close to marketing (1.2%). And only 1% was active in law. It is obvious that most of
our sample was technical people and very small number of it was specialist in law.



















Figure 14: Bar chart; number of respondents based on their educations field.


Engineering
Medicine
social science
Law
Accounting
Marketing
Management
Others
Field of education
0
100
200
300
400
500
F
r
e
q
u
e
n
c
y
Field of education


67
<21 21-25 26-30 31-35 >36
Age
0
100
200
300
400
F
r
e
q
u
e
n
c
y
Age
The majority of sample was 31 to 35 years old, figure 15 shows about 260
persons were more than 35 years old. Iran is a young country and they supposed to be
the nerdiest group but to our surprise very small number of respondents (12 persons)
were less than 21 years old.














Figure 15: Bar chart; number of respondents by age.

Table 6 shows the respondents use of the Internet in terms of the quality of
their own equipment. They are absolutely satisfied with their PCs (Personal
computers) and also feel fine about printing over the web but dissatisfied with
connection speed and downloading from the web. Overall the respondents are rather
satisfied with their hardware but it seems they have problem with the Internet Service
providers (ISP) and/or telephone lines .
Table 6: Satisfaction of respondents with the equipment they use
Mean
PC 4.098
Printing from the web 3.426
Connection speed 2.920
Downloading from the web 2.865
Note: On a five-point scale from very dissatisfied to very satisfied

Table 7 has summarized the frequencies of respondents Internet visits. They
visit the Internet on an average 15 times per week, and approximately spend an hour
per visit. So, it is clear that they are frequent users of Internet.





68
Table 7: The use of the web
mean
Easy to find relevant information 3.538
Easy to use web page links 3.812
Easy to find the desired web site 3.632
Time spent on one site 17.589 min
Time on the web per Internet visit 58.797 min
Number of Internet visits per week ~ 15 visits
Note: If not indicated otherwise, on a five-point scale from very difficult to very easy

It is interesting to note that the types of Web sites that are used most often by
respondents are: search engines and the web sites that are less frequently used are:
Secondhand shops (see table 8).

Table 8: Websites ranked by frequency of visits
Mean
Search Engines 3.906
Music Stores 2.527
E-shops 2.433
Book Stores 2.118
Movie Stores 1.972
Secondhand Products 1.567
Note: On a five-point scale from never to once a day or more


Table 9 shows that, top five and table 10 shows the bottom five of the
importance (expectations) and the satisfaction (experiences) are brought based on
predefined aspects related to the quality of web sites. Service quality factors have
been ranked by their importance score.
Table 9: the top five with highest scores of importance
Service quality factors
Importance
mean
Satisfaction
mean
1 Access is fast
4.294 3.648
2 Information is found with a minimum of clicks
4.186 3.651
3 24 x 7 x 365 user accessibility
4.156 3.980
4 Brand image is important
4.105 3.840
5 Finding your way on the web site is easy
4.104 3.635









69
Table 10: The bottom five with lowest scores of importance
Service quality factors
Importance
mean
Satisfaction
mean
46 A customer platform is provided for exchange of ideas
3.558 3.817
47 Web sites that focus on brand awareness have a store locator
3.506 3.652
48 The user is invited into a frequent buyer program
3.482 3.714
49 Links are provided to pages on related products and services
3.469 3.648
50 The user can make a purchase without web site registration
3.338 3.600
Comparing the importance scores in different rows, it is understood that all the
service quality factors are important and have very tiny differences with each other
which is a proof to their tight solidarity.
Respecting Iranian society and technical facilities for Internet users it was
expected that top service quality factors based on their importances scores weighted
for basic factors such as speed of connection, safekeeping strategies, etc. which are
available in table 9 and is an absolute proof to our expectation. A complete analysis
of these tables could be found in the next chapter.


70









Chapter 5
Data Analysis and conclusion

5. Data Analysis and conclusion

Collected quantitative data has been presented in the previous chapter.
Chapter 6 brings the analyzed data according to the research question which tries to
rank the service quality dimensions based on Iranian online shoppers perspective.
The ranked service quality factors between Iranian online shoppers (target
population) are compared with the American students (a research was done by
Iwaarden & Wiele, 2003). Finally, we have the conclusion and a discussion about
possible areas that further research could be conducted.

5.1 The most important dimensions of service quality
Iranian customers were assumed to be in need of basic facilities,
infrastructures, of electronic commerce through out the previous chapter. Now let us
see what statistics say:


71
In table 11 the importance (expectations) and satisfaction (experiences) are
summarized based on predefined aspects related to the quality of web sites. The top
ten aspects seem to relate the basic infrastructure of e-commerce. Responders believe
that the most important aspect of service quality must be fast Access, as they were
asked about their PC satisfaction in table 7 (Satisfaction mean is: 4.098) they are
pretty satisfy with their own systems, the main problem is the telecommunication
system in Iran. Broad Band is not available for everybody. Although Iran provides the
cheapest Internet service in the world (Based on Payam Radio news on September 1,
2005); but the quality of service (QoS) is poor and not acceptable.
The second important factor (Information is found with a minimum of
clicks) is again related to the first problem. After having difficulties to access the
Internet the user wish to get the needed information as fast as possible without
disturbing irrelevant information.. It also refers to the design of the website;
customers do not want complicated pages which they should spend lots of time to get
simple information.
The third factor is 24 x 7 x 365 user accessibility which shows how it is
bothering to go on a website to buy a CD and they ask you to come another day
because today is weekend and their service is not available now!! It is a must that
users have accessibility to the site at any time he or she wishes, 24 hours in any day.
The forth factor is Brand image customers want to be sure about what is
behind websites. Customers who buy a product on the Internet, would like that the
web sites and the organizations behind them to be trustworthy. The next important
web quality is design of web sites according to find our way on it must be easy; the
privacy and security policies must be available for users; i.e. customers must be aware
of to what extend they have privacy and security. Responders strongly believe that a
website also should provide well programmed search options, direct instructions and a
standard navigator bar.









72
Table 11: The top ten of service quality factors with highest scores of importance
Service quality factors
Importance
mean
Satisfaction
mean
Delta
S-I
Access is fast
4.294 3.648 -0.65
Information is found with a minimum of clicks
4.186 3.651 -0.54
24 x 7 x 365 user accessibility
4.156 3.980 -0.18
Brand image is important
4.105 3.840 -0.26
Finding your way on the web site is easy
4.104 3.635 -0.47
The privacy policy is accessible
4.073 3.566 -0.51
The security policy is accessible
4.035 3.392 -0.64
There are well programmed search options
3.979 3.718 -0.26
Instructions are directly available
3.968 3.677 -0.29
A standard navigation bar, a home button and back/forward button
are available on every page
3.957 3.902 -0.06


The bottom ten aspects seem to relate to extra services such as A customer
platform is provided for exchange of ideas or Web site animations are meaningful
and information such as Tax and/or other charges are clearly detailed or An email
address for queries and complaints is provided. Apparently respondents do not find
these extras very important in their use of the Internet.
It seems that Customer Relationship Management; some how, does not play a
big role in attracting customers and make them stick to websites by this time. They
mostly care about speed of connection and safekeeping and safety of their visits and
shopping.
The gaps between experiences and expectations (satisfaction minus
importance) (see table 12) are widest for the aspects that respondents perceive as most
important. The aspect with the largest gap is access is fast (satisfaction score 3.648
and importance score 4.294). In the top ten aspects there are no aspects with a positive
delta, meaning that for every aspect the experience is less than expected. In the
bottom ten aspects there are seven aspects with a (very small) positive delta: An
email address for queries and complaints is provided, Different payment options are
stated clearly, The home page features options for new and registered users, A
customer platform is provided for exchange of ideas , Web sites that focus on brand
awareness have a store locator, The user is invited into a frequent buyer program,
Links are provided to pages on related products and services, The user can make a
purchase without web site registration. Respondents are quiet satisfied with these
features of the web sites.


73

Table 12: The bottom ten of service quality factors with lowest scores of importance
Service quality factors
Importanc
e mean
Satisfaction
mean
Delta
S-I
41 Web site animations are meaningful
3.632 3.513 -0.12
42 It is easy to print from the web
3.606 3.497 -0.11
43 An email address for queries and complaints is provided
3.605 3.760 0.15
44 Different payment options are stated clearly
3.579 3.704 0.13
45 The home page features options for new and registered users
3.559 3.574 0.01
46 A customer platform is provided for exchange of ideas
3.558 3.817 0.26
47 Web sites that focus on brand awareness have a store locator
3.506 3.652 0.15
48 The user is invited into a frequent buyer program
3.482 3.714 0.23
49 Links are provided to pages on related products and services
3.469 3.648 0.18
50 The user can make a purchase without web site registration
3.338 3.600 0.26


In conclusion, respondents believe that all the aspects of web quality are
important (Importance mean starts from 3.338) but the Access is fast is the most
important factor among the others and they are not satisfied with current connection
speed but feel pretty fine with extra services.

5.2 Comparing web quality factors between Iranian and
American customers

People in different countries have different cultures, attitudes, believes, etc.
These varieties also affect their online purchasing. Here The top ten highest and the
ten bottom lowest web quality scores of importance for the American perspective are
compared with the Iranian perspective (based on the research on 293 American
students that has been done by Iwaarden and Wiele, 2002).
Table 13 illustrates the top ten highest scores of importance from the eyes of
Iranian and American users. It as is showed with grey color only three aspects are
common between them (Fast access, Finding your way on the web site is easy
and There are well programmed search options). That means both groups strongly
expect web sites to provide fast access, easy navigating design and well functioning
search options.



74
Although the telecommunication systems in U.S.A are totally different and
much advanced than Iranian systems we can see here that access must be fast and
people do not want to spend their times for opening pages searching and struggling
for what they want.

Table 13: The top ten with highest score on importance from Iranian and American perspective
Iranian perspective American perspective
1 Access is fast

Finding your way on the Web site is easy 5*
2 Information is found with a minimum of clicks

Access is fast 1*
3 24 x 7 x 365 user accessibility A complete overview of the order is presented
before final purchase decision
19*
4 Brand image is important

Tax and/or other charges are clearly detailed 40*
5 Finding your way on the web site is easy

The registration process is simple 23*
6 The privacy policy is accessible Access to anticipated delivery times is
available at all times
20*
7 The security policy is accessible All relevant order confirmation details sent by
e-mail
38*
8 There are well programmed search options Order cancellation and returns details are
confirmed within three days
37*
9 Instructions are directly available Order-tracking details are available until
delivery

33*

10 A standard navigation bar, a home button and
back/forward button are available on every
page
There are well programmed search options 8*
Note:*The factors rate which is given by Iranian online shoppers.

Lets see the American perspective factors states in which position of Iranians
list: the two first factors as are shown in table 13 are placed in 5th and 1st Persian list
respectively. A complete overview of the order is presented before final purchase
decision placed in 19th; Tax and/or other charges are clearly detailed is in 40th;
The registration process is simple hold the 23rd place; Access to anticipated
delivery times is available at all times is in place 20th; All relevant order
confirmation details sent by e-mail is in 38th; Order cancellation and returns details
are confirmed within three days holds 37th; Order-tracking details are available
until delivery is in 33rd; and There are well programmed search options is the 8th
factor through Iranians perspective. In overall, only three factors are selected in top
ten through both groups and the rest of factors are in 19
th
to 40
th
position of Iranians


75
list (the right column of table 13 shows the positions of Americans perspective
factors in table 20).

In table 14 the bottom ten with lowest scores of importance are provided. As
the grey color says there are four common aspects that they both less care about
websites: Web site animations are meaningful, A customer platform is provided
for exchange of ideas, The user is invited into a frequent buyer program and
Links are provided to pages on related products and services.
These extra services may have the first attraction but customers give them last
priority among the other web quality factors. For instance, many web designers
believe that meaningful animations bring spirit to a web site but as we have figured
out by statistics customers do not really expect this feature.
A frequent buyer program is set up by many managers and they suppose that
online buyers are impresses by these services; however, our studies have proved that,
compared with after services, customers do not pay much attention to these services.

Table 14: The bottom ten with lowest scores of importance from Iranian and American perspective
Iranian perspective American perspective
41 Web site animations are meaningful Searches on related sites are provided

35*

42 It is easy to print from the web The privacy policy is accessible

6*

43 An email address for queries and complaints is
provided
The security policy is accessible

7*

44 Different payment options are stated clearly The Web site contains company details

25*

45 The home page features options for new and
registered users
Scrolling through pages and text is kept to a
minimum
29*

46 A customer platform is provided for exchange
of ideas
Links are provided to pages on related
products and services
49*
47 Web sites that focus on brand awareness have a
store locator
Web site animations are meaningful

41*

48 The user is invited into a frequent buyer
program
A customer platform is provided for exchange
of ideas

46*
49 Links are provided to pages on related products
and services
The user is invited into a frequent buyer
program
48*

50 The user can make a purchase without web site
registration
Brand image is important

4*
Note:*The factors rate which is given by Iranian online shoppers.



76
What is interesting here is that three aspects which are: The security policy is
accessible, The privacy policy is accessible and Brand image is important
available in the top ten column of Iranian perspective and also in bottom ten column
of American perspective. It shows Iranian responders need to know more about the
security of their visits and shopping. Brand image give buyers a kind of guarantee for
what they deal, from this point of view we understand that how much Iranian cares
about the safety aspects while American shoppers show very less attention to these
policies. Please consider the right column of table 14 that shows the positions of
Americans perspective factors in table 20.
In Iran people face many problems when they buy or sell something, one of
the reasons is that the policies, instructions and laws are not very clear for both sides.
Again in online shopping Iranian afraid of same problem, they seek for guarantees,
clear security policies in order to reduce their risks of purchasing.
5.3 The most important factors of SERVQUAL
Jos Van Iwaardenm and Ton Van der Wiele, 2003 clustered the aspects of
service quality in table 15 and showed how they compatible with five factors of the
SERVQUAL. The importance mean was brought in order to find each SERVQUAL
dimension an importance mean and in table 15, which is the summery of table 15,
illustrate the ranked SERVQUAL factors based on their importance scores.
Tangible is recognized as the most important factor (see table 16); therefore, a
well functioning and good-looking web site is paramount. Assurance is the second
one. Responders want a website to have a formal privacy, confidentiality policy,
secure access and certifications or guarantees of assurance. Looking at tables 13 and
14 we come to this conclusion that Iranians are more concerned about security than
the Americans.
Also Iranian online shoppers ask organizations to honor their promises such as
on time delivery and after sale services. In other words they ask for reliability of the
company.



77
Responsiveness is the next thing they do care about; how websites give
prompt services. Online shoppers expect good responses when they contact web sites
through e-mail or phone call.
And after all of the other web quality factors they want is personal attention
which Empathy refers to. Customization has the last priority among the other aspects
through Iranian online shoppers.

Table 15: Ranked SERVQUAL factors according to their importance mean
SERVQUAL factors
Importance mean
1
Tangibles
4.00617
2
Assurance
3.81200
3
Reliability
3.76427
4
Responsiveness
3.75300
5
Empathy
3.67750

What should be noticed here is the very little difference between importance
scores of SERVQUAL factors. Respondents expect a web site to provide all of the
web quality factors (the last factor has 3.67750 score) but above all a web site should
function properly.
In order to compare the satisfaction and Importance scores a hypothesis has
been conducted: H0: 1 = 2, H1: 1 2 and through t-test we reached to table 17.
As both lower and upper Interval of the difference has the same, plus, sign so we
understand that people are not satisfied with what they have experienced.
Table 16: Paired Samples Test
Paired Differences t df Sig. (2-tailed)
Mean
Std.
Deviation
Std.
Error
Mean
95% Confidence
Interval of the
Difference
Lower Upper
Pair 1 Importance
mean -
Satisfaction
mean
.089324 .221611 .031341 .026343 .152305 2.850 49 .006
Note: degree of freedom (df): n-1





78
5.4 Implications for Practitioners
Customers have access to almost unlimited information about what they want
to buy with variety of products available for them by the emergence of Internet and
Web technology. Hence, it is not easy for break-and-mortar or online retailers to gain
and sustain competitive advantages based only on a cost strategy in retailing market.
Rather, defining customers needs and preferences, and their related quality
dimensions have increasingly become a key driving force in enhancing customers
satisfaction and attract more customers. Identification and ranking of customers
expectations of the online retailer services provide a frame of reference for ranking
customers preferences of service quality.
This study ranked fifty factors of service quality based on Iranians
perspective. Obviously, in order to maintain a high level of overall service quality,
online retailers should pay attention to all these dimensions brought in this study. A
proof for this claim is the importance scores mean that starts with 3.338, given by
responders, that is even the last factor is seen important. However, to strengthen
competitiveness in the extremely competitive market, given limited organizational
resources, it is recommended that online retailers should focus on the main five key
dimensions, reliability; tangibles; empathy; assurance; and responsiveness, in order to
achieve high level of service quality and customer satisfaction simultaneously.
More specifically, the following implications are recommended to online
retailers:
First and foremost, speed of access to the web site may be the critical
determinant of the success of the online retailers. Since the access to the Internet is
not so fast in Iran, online visitors prefer to connect to those websites which could be
opened easier and faster. Therefore, to satisfy the customers, online retailers should
build websites without huge flashes, graphics, and images which may increase the
size of page and take more seconds to appear. Besides, the structure of the website
plays a big role here, as the number of clicks for achieving the desired information
depends on the design of the website. Hence, it is important for managers to consider
the different ways of reaching specific information on the website.


79
Second, 24 hours user accessibility factor indicate that websites are expected
to be available all the time and all the days of the week. Managers should insist on
reputation of website and try to avoid the non responding situations. If anything
happened that made the website down for a while; relevant information about the
problem and the time it would be backed should be provided.
Third, assurance dimension implies that customers should be aware of privacy
limits and security policies. Managers should allocate specific space for introducing
protection and privacy policies that are accessible for customers and give a thorough
understanding about the way website is kept secure.
5.5 Implications for Theory
The main purpose of the study is to rank the online service quality dimensions
through Iranian customers perspective in online retailing sector and aim to describe
how different environments could affect preferences of service quality factors.
Theoretically this study extends the knowledge body of service quality and customer
satisfaction by enriching the Iranians preferences in online retailing sector, and based
on existing theories, this study tested five key service quality dimensions in online
retailing context.
More specifically, concerning research question one the majority of the
findings for this study supported the existing literature. The new findings were
discovered from quantitative empirical data. Online service quality dimensions ranked
through Iranians perspective and compared with Americans. It also increased and
enhanced understanding about relative importance service quality dimensions.

5.6 Implications for Further Research
With the development of e-commerce and web technology, some areas which
are not covered in this study are interesting and need to be explored. In addition, the
limitation and shortcoming of this study also provide implications for future research.
Future research could add extensions to this study.



80
This research needs further analysis. While this research yields a number of
very interesting results, we believe that there are a number of things that should be
done to confirm our results as well as to expand our hypotheses.
Firstly, with the number of Internet users now over one billion, a small group
of online users in Tehran is not enough. Hence, research with larger samples that pose
the same or similar questions would be appropriate.
Secondly, various languages, religions, cultures and a host of other factors
may be important to user's impression of the quality of a web site.
At the end, in this competitive market, service quality is one of the key
elements which bring value added for companies. Online retailers are focusing on
making their websites more appealing in order to increase their stickiness.
Practitioners need to understand the factors that make people to visit a website; spend
some time and make them purchase online. Researchers all around the world are
talking about "loyal customers": they spread the good word-of-mouth, not to shift to
competitor easily, spend more money and are cheaper to attract. Practitioners should
be aware of all factors which are affecting the behavior of their customers.
Respecting this critical issue for e-business, we believe more studies are
needed to fulfill our e-world with superior facilities and make life easier and better.






81
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86
Appendix I: Questionnaire

1. Please indicate your field of study [tick four boxes maximum]?

Engineering Medical
Marketing Management
Social Science Accounting
Law other

2. Please indicate your age?

< 21 21-25 26-30 31-35 > 35

3. Please indicate your gender?

Male Female

4. Please indicate the extent to which you visit the following web sites?

never once a
year
Once a
month
Once a
week
Once a day
or more
Book stores

Music stores

Movies stores

Secondhand Products

Search engines

E-shops


Very
dissatisfied

neutral

Very
satisfied
5. How satisfied are you with the pc you use?

6. How satisfied are you with the connection speed?

7. How satisfied are you with the ability of your printer to
print directly from the web?

8. How satisfied are you with the ability to download from
the web to your own pc or discs?

9. How easy is it to find the desired web site?

10. How easy is it to use web page links?

11. How easy is it to find relevant information?


12. On average per internet visit what time do you spend on a specific web site? [minutes]

< 1 1-5 26-15 16-30 >30

13. On average per internet visit what time do you stay on the web? [minutes]

<15 15-30 31-60 61-120 >120

14. On average per week what is the number of internet visits?

<2 2-5 6-10 11-20 >20



87
15. In relation to the web sites you use:


Left Right
Please indicate on a five
point scale the extent to
which you find the
following statements
important
Please indicate on a five
point scale the extent to
which you are satisfied
or dissatisfied with the
following statements
1= not important
2=
3=neutral
4=
5=very important
Very dissatisfied=1
=2
Neutral=3
=4
Very satisfied=5

Clarity of purpose
1 2 3 4 5
1. The purpose is clear
.
1 2 3 4 5
3. Finding your way on the
web site is easy


4. Instructions are directly
available


Design
5. The number and type of
links are meaningful


6. Navigation is consistent
and standardized


7. A standard navigation bar,
a home button and
back/forward button are
available on every page


8. Opening of new screens is
kept to a minimum


9. It is easy to print from the
web


10. Information is found with
a minimum of clicks


11. There are well
programmed search options


12. Forms to enter personal
details are self explanatory



88
Communication
13. Scrolling through pages
and text is kept to a
minimum


14. Colors, pictures and
images are consistent,
relevant and clear


15. Web site animations are
meaningful


Reliability
16. The security policy is
accessible


17. The privacy policy is
accessible


18. The web site contains
company details


19. External validation of
trustworthiness is important


20. Brand image is important



Service and Frequently Asked Questions
21. An email address for
queries and complaints is
provided


22. Queries or complaints are
resolved within 24 hours


23. User feedback is sought to
measure customer
satisfaction


24. Information is provided to
Frequently Asked Questions
and answers


25. The Frequently Asked
Questions and answers
contain links that take the
user to the relevant page(s)





89
Accessibility and speed
26. 24 x 7 x 365 user
accessibility


27. Page availability
information is given on entry


28. Access is fast


29. Graphics and animations
do not detract from use


Product or service choice
30. Full product or service
characteristics are available


31. Full details of product or
service pricing are available


32. Required stock information
is available throughout the
buying process



Order confirmation
33. Tax and/or other charges
are clearly detailed


34. Terms and conditions of
sales are accessible


35. Access to anticipated
delivery times is available at
all times


Product purchase
36. The user can make a
purchase without web site
registration


37. Different payment options
are stated clearly


38. . A complete overview of
the order is presented before
final purchase decision


39. All relevant order
confirmation details are sent
by e-mail within 24 hours



90
40. Order tracking details are
available until delivery


41. Order cancellation and
return details are confirmed
within three days

User recognition
42. The registration process is
simple


43. Registration process details
are retained


44. The home page features
options for new and
registered users


Extra service
45. A customer platform is
provided for exchange of
ideas


46. Links are provided to
pages on related products
and services


47. Searches on related sites
are provided (e.g. a
flight/hotel search on travel
sites )


48. The user can customize the
web site and the information
is retained (e.g. seat and meal
preferences on travel sites)


49. Web sites that focus on
brand awareness have a store
locator

Frequent buyer incentives
50. The user is invited into a
frequent buyer program


51. The web site offers free
shipping and handling within
a set of rules




91
Appendix II: Tables


Table 17: Number of respondent by gender
Frequency Percent
Valid Female
245 33.6
Male
482 66.0
Total
727 99.6
Missing System
3 .4
Total
730 100.0


Table 18: Number of respondents by Field of education
Frequency Percent
Valid Engineering 408 55.9
Medicine 19 2.6
Social Science 9 1.2
Law 7 1.0
Accounting 28 3.8
Marketing 17 2.3
Management 35 4.8
Others 207 28.4
Total 730 100.0



Table 19: Number of respondents by age
Frequency Percent
Valid <21 12 1.6
21-25 30 4.1
26-30 92 12.6
31-35 334 45.8
>36 260 35.6
Total 728 99.7
Missing System 2 .3
Total 730 100.0





92
Table 20: importance of and satisfaction with aspects of web quality
Ranked with highest scores on importance
Importanc
e mean
Satisfaction
mean
Delta
S-I
1 Access is fast
4.294 3.648 -0.65
2 Information is found with a minimum of clicks
4.186 3.651 -0.54
3 24 x 7 x 365 user accessibility
4.156 3.980 -0.18
4 Brand image is important
4.105 3.840 -0.26
5 Finding your way on the web site is easy
4.104 3.635 -0.47
6 The privacy policy is accessible
4.073 3.566 -0.51
7 The security policy is accessible
4.035 3.392 -0.64
8 There are well programmed search options
3.979 3.718 -0.26
9 Instructions are directly available
3.968 3.677 -0.29
10
A standard navigation bar, a home button and back/forward button
are available on every page
3.957 3.902 -0.06
11
The user can customize the web site and the information is retained
(e.g. seat and meal preferences
3.956 3.858 -0.10
12
Colors, pictures and images are consistent, relevant and clear
3.950 3.812 -0.14
13 Navigation is consistent and standardized
3.919 3.616 -0.30
14 Graphics and animations do not detract from use
3.913 3.807 -0.11
15 Full details of product or service pricing are available
3.890 3.767 -0.12
16 Opening of new screens is kept to a minimum
3.881 3.689 -0.19
17
The web site offers free shipping and handling within a set of rules
3.875 3.841 -0.03
18 Terms and conditions of sales are accessible
3.865 3.591 -0.27
19
A complete overview of the order is presented before final purchase
decision 3.853 3.822 -0.03
20 Access to anticipated delivery times is available at all times
3.831 3.75 -0.08
21 Queries or complaints are resolved within 24 hours
3.824 3.682 -0.14
22 User feedback is sought to measure customer satisfaction
3.813 3.550 -0.26
23 The registration process is simple
3.811 3.827 0.02
24 Page availability information is given on entry
3.789 3.784 -0.01
25 The web site contains company details
3.778 3.594 -0.18
26
Information is provided to Frequently Asked Questions and answers
3.765 3.660 -0.10
27
The Frequently Asked Questions and answers contain links that take
the user to the relevant page(s)
3.758 3.773 0.02
28 The number and type of links are meaningful
3.756 3.541 -0.21
29 Scrolling through pages and text is kept to a minimum
3.733 3.633 -0.10
30 The purpose is clear
3.728 3.937 0.21
31 Full product or service characteristics are available
3.723 3.689 -0.03
32 Registration process details are retained
3.721 3.888 0.17
33 Order tracking details are available until delivery
3.691 3.9 0.21
34
Required stock information is available throughout the buying
process
3.688 3.619 -0.07
35
Searches on related sites are provided (e.g. a flight/hotel search on
travel sites ) 3.678 3.780 0.10
36 External validation of trustworthiness is important
3.676 3.571 -0.10
37 Order cancellation and return details are confirmed within three days
3.674 3.727 0.05
38
All relevant order confirmation details are sent by e-mail within 24
hours
3.673 3.851 0.18
39 Forms to enter personal details are self explanatory
3.667 3.658 -0.01
40 Tax and/or other charges are clearly detailed
3.646 3.541 -0.10
41 Web site animations are meaningful
3.632 3.513 -0.12
42 It is easy to print from the web
3.606 3.497 -0.11


93
43 An email address for queries and complaints is provided
3.605 3.760 0.15
44 Different payment options are stated clearly
3.579 3.704 0.13
45 The home page features options for new and registered users
3.559 3.574 0.01
46 A customer platform is provided for exchange of ideas
3.558 3.817 0.26
47 Web sites that focus on brand awareness have a store locator
3.506 3.652 0.15
48 The user is invited into a frequent buyer program
3.482 3.714 0.23
49 Links are provided to pages on related products and services
3.469 3.648 0.18
50 The user can make a purchase without web site registration
3.338 3.600 0.26

Table 21: Importance of SERVQUAL factors

Importance
mean
Reliability
3.76427
A complete overview of the order is presented before final purchase decision 3.853
Tax and/or other charges are clearly detailed 3.646
Different payment options are stated clearly 3.579
All relevant order confirmation details are sent by e-mail within 24 hours 3.673
Access to anticipated delivery times is available at all times 3.831
Terms and conditions of sales are accessible 3.865
Order tracking details are available until delivery 3.691
Order cancellation and return details are confirmed within three days 3.674
Full details of product or service pricing are available 3.890
The registration process is simple 3.811
Full product or service characteristics are available 3.723
Registration process details are retained 3.721
The web site offers free shipping and handling within a set of rules 3.875
Access is fast 4.294
The user can make a purchase without web site registration 3.338
Tangibles
4.00617
Finding your way on the web site is easy 4.104
Information is found with a minimum of clicks 4.186
Navigation is consistent and standardized 3.919
There are well programmed search options 3.979
Instructions are directly available 3.968
Opening of new screens is kept to a minimum 3.881
Empathy
3.67750
Links are provided to pages on related products and services 3.469
Searches on related sites are provided (e.g. a flight/hotel search on travel sites ) 3.678
A standard navigation bar, a home button and back/forward button are available on every
page 3.957
It is easy to print from the web 3.606
Assurance
3.81200
The security policy is accessible 4.035
The privacy policy is accessible 4.073
External validation of trustworthiness is important 3.676
The web site contains company details 3.778
Brand image is important 4.105
Page availability information is given on entry 3.789
The user is invited into a frequent buyer program 3.482
A customer platform is provided for exchange of ideas 3.558
Responsiveness
3.75300
The Frequently Asked Questions and answers contain links that take the user to the relevant
page(s) 3.758


94
Information is provided to Frequently Asked Questions and answers 3.765
Queries or complaints are resolved within 24 hours 3.824
User feedback is sought to measure customer satisfaction 3.813
An email address for queries and complaints is provided 3.605