1.1 Research Background and Motivation
After decades of technological development, the Internet is now rapidly reshaping industries and changing business models (Zwick, 2002). With increased usage of the World Wide Web (WWW), on-line shopping is becoming a new trading mode and preferred by consumers. Consumers just need to surf on the Internet, browse some information, and then compare the prices of different merchandise and retailers. Compared to brick-and-mortar environments, the Internet retailers have lower operation cost, and they also offer a more flexible and convenient way for consumers to shop. On-line shopping is now established as a major trend for suppliers and consumers.
With this growth in electronic commerce (e-commerce), there are more and more consumers ordering books from on-line bookstores in Taiwan. In contrast to traditional physical bookstores, many of which have gone bankrupt, the average growth rate of on-line bookstores is 80%. For example, the growth rate of BOOKS.com was 65% in 2006 and the amount of business volume was NT $1.15 billion, while business volume of the KingStone on-line bookstore was 0.7 billion, an increased 100%. Because of the more convenient and cheaper shopping channels, ordering books on the Internet is clearly becoming a significant market.
The Internet has changed people’s consumption habits (Hsu, 2007). As more and more consumers use Web channels, companies must focus on their e-services, including all cues and encounters that occur before, during, and after transaction (Parasuraman, Zeithaml and Malhotra, 2005). Managers of companies with a Web presence are recognizing the issue of service quality as strategically important (Slywotzky and Morrison, 2001). To deliver superior service quality, managers of companies with a Web presence must first understand how consumers perceive and evaluate online customer service (Parasuraman et al., 2005).
The retailing delivery (RD) system provides an easy on-line shopping process, safe payment method and quick delivery service for e-retailing (Feng and Huang, 2006). The RD service also provides consumers with a self pick-up approach for delivery of merchandise, so it is popular for those who cannot conveniently use home
delivery service. Therefore, shopping on the Internet and picking-up at convenience stores is the major logistics model for on-line bookstores in Taiwan, and more than 90% of the customers who order books from on-line bookstores will choose the RD service for their logistics way. However, the BOOKS.com provides only 7-11.com service, and the KingStone on-line bookstore provides CVS.com service which includes three families of convenience stores (Family.com, Hi-Life.com, and OKcvs.com). The retailing delivery (RD) service is very important for on-line bookstores, but these two major on-line bookstores have different RD systems. For this reason, to find out the relationship between logistics service quality and customer loyalty is an important issue for managers of on-line bookstores.
Recently, many researchers thought that the existence of switching costs may cause customers to be not loyal who are satisfied with the service, and the loyal customers may be not satisfied with the service. This study aims to use SEM to understand the relationship between website service quality, logistics service quality, switching cost and customer loyalty. It is important to understand the crucial factors in a choice of on-line bookstores for customers since this can help managers to develop strategies to increase their market share.
1.2 Research Objective
Based on the research background mentioned above, there are several objectives of this study:
1. Develop the website service quality and retailing delivery logistics service quality scales for on-line bookstores, and use Rasch model to refine the scales.
2. Use structure equation model (SEM) to investigate the relationship among e-service quality, logistics service quality, perceived sacrifice, service value, customer satisfaction, switching costs and customer loyalty.
3. Confirm the relationships among the research constructs of BOOKS.com and KingStone, and find out the differences between them.
4. Use Importance-Performance Analysis (IPA) to discuss the relations of level of customers’ expected service quality (importance) and level of customers’ perceived service quality (performance).
5. Provide suggestions on developing strategies for the managers of on-line
1.3 Research Scope
This study is focus on Business to Customer (B2C) business model. And the purpose is to find out the crucial factors that will influence customer loyalty from customers’ viewpoint.
The major research subjects of this study are the main on-line bookstores in Taiwan, BOOKS.com and KingStone on-line bookstore. To understand the opinion of customers, an on-line survey will be administered to the customers of on-line bookstores.
The research scope of this study is shown in Figure 1.1.
Figure 1.1 Research Scope
1.4 Research Procedure
The research procedure of this study is shown in Figure 1.2.
Figure 1.2 Research Procedure
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Research Background and Motivation
Specify Research Objective and Scope
Literature Review
Retailing Delivery Constructs
Research Framework Development
Questionnaire Design
Conducting On-line Survey
Data Analysis
Result Analysis and Discussion
Conclusion and Strategy Suggestion On-line Bookstores with RD
Chapter1 outlines the research background, motivations, objectives and scope.
The remaining of this study is organized as follows: Chapter2 describes some background about on-line bookstore and retailing delivery (RD), in addition, it also introduces the previous literature related to service quality, service value, customer satisfaction, switching costs, customer loyalty. Chapter3 presents the research framework and introduces the research methodology. Chapter4 includes the descriptive results of measurement variables and the results of data analysis. Chapter 5 is a summary of the crucial findings and contributions of this study, moreover it also discusses some limitations of this research.
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