Customer Loyalty In E-commerce

This presentation based on the Customer loyalty in e-commerce: an exploration of its antecedents and consequences, published by Srini S. Srinivasana, Rolph Andersona, Kishore Ponnavolub.
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Presenter: H.P.D Jayathilaka 2007ICT031 22.03.2011 y Source y y y y y y : Journal of Retailing, Volume 78, Number 1, Spring 2002 , pp. 41-50(10) Press : Pergamon Press Publisher : Elsevier Language : English Document Type : Research article Affiliations : Drexel University, 19104, Philadelphia, PA, USA Publication date: 2002-03-01 Srini S. Srinivasan Associate Professor, Marketing Drexel University, Philadelphia, PA 19104, USA Kishore Ponnavolu Partner McKinsey & Company Rolph Anderson Marketing - Professor Drexel University, Philadelphia, PA 19104, USA y Introduction y Objectives of the Research y Concept of customer loyalty y Eight factors potentially influencing e-loyalty y Consequences of e-loyalty y Methodology and results y Conclusion U.S. Census Bureau s Monthly Retail Trade Survey 2010 y E-retailing y E-commerce y Advantages y compare and contrast product & services y minimal expenditure of personal time or effort y E-loyalty y Understanding of the antecedents of e-loyalty y Identify managerially actionable factors that impact in e-loyalty y Investigate the nature of their impact y Focused on repeat purchase behavior y Behavioral or Attitudinal dimensions y True Loyalty y Spurious Loyalty y Preferential, Attitudinal and Behavioral response toward one or more brands in a product category over a period of time. y As a customer s favorable attitude toward the e-retailer that results in repeat buying behavior y Conduct Interviews y Individuals y Online Customers y Executives in e-commerce y Professional e-commerce web designers - 42 - 15 - 15 - 12 y Online shopping behavior y Between 90 min to two hours 1. 2. 3. 4. 5. 6. 7. 8. Customization Contact interactivity Cultivation Care Community Choice Convenience Character y Ability of an e-retailer to tailor products, services, and the transactional environment to individual customers y Increases the probability of their wish to buy y Perception of increased choice by enabling a quick focus on customer wants y Lead to a better real match between customer and product y Dynamic nature of engagement, between an e-retailer and customers y Problems y hard to navigate y insufficient information y response time for inquiries y Solutions y interactive search process y Better navigational process y Increase information y The extent to e-retailer provides relevant information and incentives to customers y Frequency of desired information and cross-selling offers y E.g.: y Amazon.com - related to their past purchases y Paul Frederick email notifications about offers y Attention that an e-retailer pays to all the pre and post- purchase customer interface activities y immediate transactions y long-term customer relationships Solutions y No breakdown in service - Minimize disruptions y Informed about the availability of products y Status of orders y An online social entity comprised of existing and potential customers y Exchange of opinions and information regarding offered products and services y Virtual communities of customers y y y y y comment links chat rooms buying circles Individual customers on group Shared interest y Offer a wider range of product categories and a greater variety of products y Alliances with other virtual suppliers Benefits y Reduce Opportunity cost y Reduce Time y One-stop shopping y Refers to the extent to which a customer feels that the web site is simple, intuitive, and user friendly Features of convenience website y short response time y provide fast completion of a transaction y Minimizes customer effort y overall image or personality that the e-retailer projects to consumers through the use of inputs y text, style, graphics, colors, logos, and slogans or themes on the website jewelry retailer - high quality graphics Behavioral consequences non-loyal Loyal y Direct implications of loyalty y positive word-of-mouth y willingness to pay more y negatively related to their search for alternatives y Website hosting survey y Random sample of 5,000 customers y An e-mail invitation y Respondents would be automatically entered in a drawing for a prize of $500 y produced 1,211 usable responses 24% 01 Generate the initial pool of scale items Conducted in-depth discussions - 30 Individuals 02 online shoppers, site administrators, information technology professionals 03 Six academic researchers then evaluated pretested with 25 random online shoppers 04 y Avoid using the same set of responses to refine the scale items and evaluate the hypotheses y an exploratory data set (n - 180) y a confirmatory data set (n - 180) y model estimation data set (n - 851) y An exploratory factor analysis - determine whether the scale items loaded as expected y Calculated Cronbach s alphas for scale items y LISREL measurement model y unrestricted model y restricted model LY E-loyalty; C1 Customization; C2 Contact interactivity; C3 Cultivation; C4 Care; C5 Community; C6 Choice; C7 Convenience; C8 Character Consequence of e-loyalty - seemingly unrelated regressions SRi WMi WPi -Search for alternatives by individual i; -Word-of-mouth of individual i; - Willingness to pay of individual i; y Identified 8 factors that potentially affect e-loyalty y Highest elasticity with respect to Character and Care y Positive impact on positive word-of-mouth and willingness to pay more y Managerial perspective y Establish early warning systems y Use the scale items to benchmark e-retailing activities y Competitors to identify their comparative strengths and weakness y Research perspective y provides an early conceptualization of the relevant antecedents of e-loyalty y provide a basis for the further study y Does not take individual-level variables Eg: y customer inertia y reposed trust y Satisfaction y e-retailing depends to a large extent on the characteristics of the products and services being marketed yVisit www.mclanka.com for request a quote