2004:266 SHU MASTER'S THESIS Perception of Service Quality in E-commerce An Analytical Study of Internet Auction Sites Atanu Nath Liu Zheng Luleå University of Technology MSc Programme in Electronic Commerce Department of Business Administration and Social Sciences Division of Industrial marketing and e-commerce 2004:266 SHU - ISSN: 1404-5508 - ISRN: LTU-SHU-EX--04/266--SE Abstract E-commerce as we know today has burgeoned with the advent of the World Wide Web and the subsequent mass acceptance and usage of it. Its huge potential for commercial and transactional purposes has not yet been fully tapped. One of the newer areas of marketing theory application in the context of the Internet, or more specifically E- Commerce is Service Marketing. In this paper, we explore the possibility of extending the existing tools for assessing and measuring service quality as perceived by customers to the context of purely virtual enterprises. Our aim is to see whether there are differences perceived by customers in service quality across online service based companies; and identify the attributes responsible for any such perceived differences; and the areas in which customers do not distinguish between providers. Confirmation and disconfirmation of a set of hypotheses is used to determine the distinctions based on variances between the identified attributes. Our findings indicate customers today set purely internet based service companies apart based on tangibility, reliability, and responsiveness of the companies rather than their perceived credibility and security in services offered. This indicates a blurring down of the divisions between online and offline service providing companies in the customer’s mind. Our interpretation of this blurring down of division is that e-commerce and transactions online has gained maturity and customers no longer feel trepidation regarding the often touted issues of credibility and security exclusive to online entities. Rather, today they are more concerned with who is able to provide them with better service with respect to their product centric worries that are more traditional in nature. Our recommendation for marketers would be to stop viewing themselves as purveyors of online or off-line services, but rather as purveyors of simply “services” and ensure quality therein. The customer has stopped caring whether service is delivered online, or off-line; for them the novelty of receiving services online has worn out, with the resultant expectations that quality in the more traditional aspects of service delivery would match at least that received offline. It is time the marketers stopped worrying where to position their selves along the click and mortar spectrum, and follow the customer’s lead. 2 Acknowledgements First we would like to acknowledge our parents, who have been the lifelong source of inspiration in any and all of our endeavors. We would also like to express our gratitude to our supervisor, Professor Lennart Persson, who guided us along the way and helped us achieve our goal; and Professor Esmail Salehi-Sangeri. We would also like to extend our warmest thanks to our families and to those that helped us in any way in the writing of this thesis. Luleå. December 2004. Atanu Nath Liu Zheng 3 Table of Contents Chapter 1.........................................................................................................................8 1.1 Introduction ...........................................................................................................8 1.2 Background ...........................................................................................................8 1.2.1 The increasing importance of services industries and its characteristics...........9 1.2.2 Web based services .........................................................................................9 1.2.3 Web Service quality dimensions....................................................................10 1.2.4 The central role of quality in web based services:..........................................10 1.3 Problem Discussion & Justification......................................................................11 1.4 Research Statement:.............................................................................................11 1.5 Research questions:..............................................................................................12 1.6 Hypothesis formulation:.......................................................................................12 1.7 Implication of the research:..................................................................................12 Chapter 2....................................................................................................................... 14 Literature review: ..........................................................................................................14 2.1 Services ...............................................................................................................14 2.2 Service quality:....................................................................................................15 2.3 Service quality dimensions and measurement.......................................................17 2.4 Web service quality: ............................................................................................20 2.4.1 Information availability and content:.............................................................20 2.4.2 Ease of use (Usability): .................................................................................21 2.4.3 Privacy/Security:...........................................................................................21 2.4.4 Graphic style:................................................................................................22 2.4.5 Fulfillment/reliability: ...................................................................................22 2.4.6 Other Web service qualities:..........................................................................22 2.5 Dimensions of web service quality.......................................................................23 2.6 Measuring web service quality.............................................................................25 2.7 e-Servqual as a tool for measuring web service quality: .......................................27 2.8 Customer Satisfaction and service quality ............................................................28 2.9 Models showing the link between service quality measurement and satisfaction: .30 2.10 Conceptual model for web service quality:.........................................................32 2.11 Emerged Theoretical framework:.......................................................................34 Chapter 3....................................................................................................................... 36 Methodology.................................................................................................................36 3.1 Research Purpose.................................................................................................36 3.1.1 Exploratory Research....................................................................................37 3.1.2 Descriptive Research.....................................................................................37 3.1.3 Explanatory Research....................................................................................37 3.2 Research Approach..............................................................................................38 3.2.1 Deductive vs. Inductive.................................................................................39 3.3 Research strategy.................................................................................................39 3.4 Data Collection Methods .....................................................................................40 3.4.1. Online Survey vs. Offline(traditional) ..........................................................40 4 3.4.2 Using Secondary data....................................................................................41 3.5 Sample selection..................................................................................................41 3.6 Data Analysis Methods........................................................................................42 3.6.1 Instrument for data analysis...........................................................................42 A. SERVQUAL for electronic assistive technology services..............................42 B. Anova Single Factor Analysis .......................................................................43 3.7 The validity and reliability of research findings....................................................43 3.8 Methodology Summary........................................................................................45 Chapter 4....................................................................................................................... 46 Test subjects and Data collection...................................................................................46 4.1 Chosen Test sites for analysis ..............................................................................46 4.1.1 Tradera.com..................................................................................................46 4.1.2 Ebay.com......................................................................................................47