CHAPTER 1:
INTRODUCTION TO THE STUDY
1.0 Introduction
In this paper, chapter one provides an overview of the research project titled "Attitudes of Malaysian Facebook users toward Social Networking and Ecommerce". The background of the research, statement of the research problem / research question, research objectives, significance and scope of study have been covered in this chapter.
1.1 Background of the Research
Today, Facebook has emerged as a leading social networking site and that it has gained unprecedented influence and popularity across the world. In the context of Malaysia, a large number of active Facebook users are not only using it regularly but are also addicted to it to such an extent that Facebook has become an integral part of many Malaysian’s lifestyles and everyday activities, and thus Facebook is truly ingrained in many Malaysian’s daily lives.
According to Alexa, the leading provider of free global web metrics, Facebook.com is now ranked the 2nd Top Sites in Malaysia, just after Google. Besides that, there are approximately 8 million sites linking to Facebook.com (Alexa, 2013). Further drawing upon the statistics from the Internet World Stats (2013), as of 31 December 2012, Facebook users constitutes 47 percent of penetration rate or around 13.6 million users in relation to the total population of the country (29.2 million), whilst Facebook users comprises 77 percent when compared with the total Internet users (17.7 million) (Figure 1.1).
Figure 1.1 Asia Internet Use, Population Data and Facebook Statistics
(Source: Internet World Stats)
In accordance with the Malaysian Digital Consumer Report 2011 released by Nielsen Malaysia, a leading company in global information and measurement, Malaysian netizens (users of the Internet) spend more time online than with any other media, recording an average of 19.8 hours every week (Figure 1.2), being the most time spent among different media (Adoimagazine.com. 2011). More importantly, when go online, Malaysians mainly immerse themselves in social networking sites including Facebook, reporting that three-quarters or 71 percent are stay connecting with friends and family through these sites, recording a 24 percent growth from the year 2009 (Nielsen. 2011).
Figure 1.2 Average weekly hours spent on different media by Malaysia netizens
(Source: Nielsen’s Digital Consumer Report 2011)
In addition, by sourcing from Facebook.com, Ishak (2012) has summarised numerous facts to evidence the extent of Facebook being highly addictive nowadays (Figure 1.3), just to name a few, (i) more than 2 billion pieces of content (web links, news stories, blog posts, notes, photos, and so forth) shared every week; (ii) more than 10 million users become fans of Pages every day; (iii) People that use Facebook on their mobile devices are almost 50 percent more active on Facebook than non-mobile users.
Figure 1.3 Facts about Facebook. (Source: Facebook)
With the widespread use of Facebook, not only has it grown in popularity but it has also turned into a necessity in Malaysian’s daily lives and social needs (Ishak, 2012). Notably Facebook can now be easily accessible through such mobile devices as the iPhone, Android, and the Blackberry, which give a 24-hour window for advertising to the myriads of audiences (Zirkle, 2012).
Owing to the vast number of users on Facebook, E-commerce companies start to follow and to be where the prospective customers spend most of their time. This makes more sense for those companies attempt to increase the visibility of their company (Zirkle, 2012). Further, this could be why many companies were attracted to join in for marketing and advertising purposes. Drawing upon Facebook’s third-quarter earnings of 2013, its revenue from advertising was US$1.8 billion, and this strong result indicates that Facebook is well-positioned as an advertising medium (Cohen, 2013). Additionally, it is highlighted that when B2B companies use Facebook’s custom audiences to match their email lists to Facebook, they typically report a 20 to 30 percent average match rate, whereas B2C companies often report 70 to 80 percent. This clearly justify that most of their audience are targetable on Facebook (Yu, 2013).
In any case, it is so vital that E-commerce companies to realise and appreciate two implications Facebook has on businesses. First, Facebook is a locus gathering a large pool of consumers; second, this social networking site is also a source of consumer information and a channel of disseminating information to establish market presence (Zhao, Grasmuck & Martin, 2008). The social networking-Facebook transformed into an e-Marketing tool that enables companies to access the market, learn about consumer trends, and communicate to consumers, in a way that could translate into market share and revenue (Albee, 2010).
On the other hand, in recent years, E-commerce (electronic commerce) has been the most exciting IT adoption to business. It was no longer the privilege of large corporations since small firm and even every individual can now afford to use a network, namely the Internet, for business (Hassan & Ali, 2012). Furthermore, there are now sufficient evidences showing that the Internet has changed the way in which consumers purchase goods and services (Forsythe & Shi, 2003). Despite consumers have no interest in the technology by itself, the Internet is recognised for its ability to enhance their shopping experiences and facilitate them make better decision (Burke, 2002). In effect, more people are getting more comfortable with the interactions in e-commerce, which take place through the retailer’s website (Park & Kim, 2003).
Besides, the Internet provides new customer-retention possibilities through the management of relationships between companies and consumers because through the Internet, consumers can access to more product or service information, and a wider range of products than they would have otherwise (Eastlick, Lotz & Warrington, 2006; Cyr, Head & Ivanov, 2009). As a matter of fact, companies are also offered with more ample opportunities to connect and interact with consumers online than ever before (Elliot & Speck, 2005), and thus E-commerce companies need to act fast to ensure they stay abreast of and stay one step ahead of the curve (Hardwarezone.com. 2011).
1.2 Statement of the Research Problem / Research Question
While the advent of the Internet and the World Wide Web (the Web) enable virtually anyone to run a business electronically, it stimulates competition at the same time. Since the explosion of the E-commerce, companies are forced to review the way they run their business, given that their online competitors who are not based locally may even pose a threat, for these online competitors are aggressively seeking to win their loyal customers over. This literally denotes that there are growing rivalries out there, which result in stiffer competition facing most companies day by day. Generally, E-commerce applications with consumer-driven share significant goals, namely to attract potential buyers, transact products and services, and build customer loyalty through individual courteous treatment and engaging community features (Turban & Volonino, 2010). Given all these facts, it has become essential for those E-commerce companies to reach and engage both their existing and potential consumers, by employing an appropriate platform that can drive greater sales revenue.
Ideally, Facebook appears as the most appropriate platform to interact with consumers considering its extremely large user base and that it is a proven site where people spend the vast majority of time on when they are online, albeit there are countless websites on the Internet today. Particularly when Facebook’s avid users spend so much time online, this should serves as a solid rationale for companies to reconsider and even redefine their marketing strategies so as to reach out to their target customers in a more effective way.
Despite that, unlike a visitor to an organization’s website, a Facebook user does not log on to Facebook with the expectation to interact with an organization (Vorvoreanu, 2009). As a result, how to grab the Facebook users’ attention has become a subject that is high on the agenda at many companies. Not surprisingly, this could have contributed to the tremendous popularity social network marketing has gained nowadays. There are increasing numbers of web-based companies started to focus their marketing strategies on such social network platforms as Facebook with the purpose of maximizing the likelihood the Facebook users to be induced to their own organization’s website, on condition that their ad-driven social network-based marketing campaign is appealing enough for the Facebook users (Trattner, 2013).
Most importantly, consumers’ shopping and purchasing behaviour has changed as the number of vendors available to them via the Internet and other means has grown (Korner & Zimmermann, 2000). Given the ultimate power consumers have in the marketplace, it is thus absolutely imperative for E-commerce companies to acquire a greater understanding of the attitudes of Facebook users who have already been identified as the high-potential group of consumers, and to work with their attitudes if E-commerce companies intend to effectively acquire and retain more customers, then eventually profit from them. Recognising all these facts, coupled with a deeper understanding of the related variables that contribute to the success of E-commerce can the E-commerce companies survive and even thrive in the dynamic and competitive business environment, especially in today’s globalised world.
Naturally, the question that follows is: what would be the related variables that contribute to the success of E-commerce? That is the question that the masses are asking particularly after the failures of numerous pure business-to-consumer (B2C) E-commerce companies, yet such failures have not stopped the tide of millions of both large and small businesses. Therefore, in response to this question, this research project is a study aimed to look into the most critical component of E-commerce, namely the website quality dimensions that can influence attitudes of consumer, specifically Facebook users, and result in their willingness to buy: the dimensions are Trust, Information and Ease-of-Use. Reason being only through the examination of these dimensions that can determine Facebook users’ attitudes leading to their willingness to purchase, then can E-commerce companies be driven to sort out effective solutions to negative effects, and discover new ways to improve their websites quality or to make the best use of the positive effects on their presently existing websites.
1.3 Objectives of the Research
The aim of the study is to critically examine the influence of E-commerce website quality dimensions on attitudes of Facebook users in particular, which can ultimately lead to their willingness to buy from the vendor.
The objectives of the study are as follows:
i. To determine the effect of various E-commerce’s website quality dimensions on consumers’ attitudes toward purchasing from the vendor.
ii. To determine the effect of consumers’ attitudes toward an E-commerce website on their willingness to purchase from the vendor.
1.4 Significance of the Study
The continual switching of business paradigm, being from a traditionally brick-and-mortar store to web-based (Internet) purchases lead to a concern as to whether the similar factors that found influencing traditional purchases will affect web-based purchases as well. Under the circumstances, this study is aimed at describing the factors that affecting online Facebook users’ attitudes and their willingness to buy in turn. The significance of the study can be viewed from two perspectives.
Firstly, from the consumer’s perspective, this research project can make them aware that there are numerous advantages of E-commerce, for instance, convenience in terms of time-saving and energy-saving, broader selection of products, much lower price, and easier accessibility of product information before making final purchase. Additionally, this project could create consciousness among consumers that the e-commerce is becoming an essential trends in this modern IT-based era so that they know that there are others shopping options available out there, other than in-store traditional shopping.
Secondly, from the vendor’s prospective, this research is important to put the E-commerce vendor on the alert for the influential factors which are to be examined in this research project, as to how and to what extent these factors affect or stimulate the consumers attitudes and ultimately lead to their willingness to buy from the vendor. As in this study, the website quality as a multidimensional construct is what web designers or E-commerce vendors need to focus on. This could possibly give them some insights in investing their existing web site features for this will influence site visitor satisfaction and thereby contribute to increased traffic and sales, or at least to increase the number of visitors to their website. Last but not least, the result of this research is meant to provide a better understanding and the general knowledge about e-commerce and also serve as a practical and valuable reference for both researchers and practitioners in the related topic.
1.5 Scope of the Study
This research report starts with a section of description of the contents in which the problem statement and objectives are identified. Then the second section is regarding the literature review including the consumer attitudes, E-commerce, website quality and its dimensions comprising trust, information and ease-of-use, as well as the theory of reasoned action (TRA). The next section will explore the research methodology with theoretical framework presented and hypothesis generated. Thereafter, the information gathered through questionnaires will be analysed using SPSS and presented in the following section. Accordingly, the findings of the study will be evaluated to address the objectives of the study. The last part of this report is ended with conclusion and discussion of the project.
1.6 Conclusion
On the whole, this chapter has conferred about the background of the research and problem statement that are meant to underpin the objectives, significance and scope of this study. This chapter serve as the basis to move on to the next chapter regarding literature review.
CHAPTER 2:
LITERATURE REVIEW
2.0 Introduction
This study draws upon five primary areas of research in the literature: (i) Consumer Attitude, (ii) Electronic Commerce, (iii) Social Networking Site – Facebook, (iv) Website Quality including Trust, Information and Ease-of-Use, and (v) Theory of Reasoned Action (TRA). In this section, the pertinent studies in each area from the literature is provided. With the information reasoned from the literature, the theoretical framework and hypotheses have been created accordingly. Also, the questions in the questionnaire used to conduct the survey and collect data for this research project has been adapted from the relevant literature.
2.1 Consumer Attitudes
Consumer attitudes refers to a mixture of beliefs, feelings, and behavioural intentions of a consumer toward some objects (Perner, 2010). An attitude fulfils a personal motive and simultaneously influence consumers’ habits of shopping and buying (Dean, 2010). Through perception, motivation and learning, consumers’ attitudes are formed and consumers make decision based on these psychological factors (Wu, 2003). By leveraging the understanding of consumer attitudes, the behaviour of consumers can be predicted. In this regard, data concerning online consumers’ purchasing behaviour is essential for companies to determine their online retail strategies for website design, online advertising, market segmentation, product variety and inventory holding and distribution (Lohse, Bellman & Johnson, 2000).
Studying of attitudes is so indispensible to attaining the purpose of total customer understanding that will help companies to be aware of the motivation and decision-making approaches used by customers (Dean, 2010). With better customer understanding comes better awareness of customers’ actual wants and value in the E-commerce context (Solomon, 2009).
2.2 Electronic Commerce (E-commerce)
2.2.1 Definition of E-commerce
E-commerce has become known as a peremptory in contemporary companies (Chatterjee, Grewal & Sambamurthy, 2002). E-commerce in a business-to-consumer (B2C) context means "the process of buying and selling products or services using electronic data transmission over the Internet and the World Wide Web (the Web)". It also encompasses activities supporting those market transactions, such as advertising, marketing, customer support, security, delivery, and payment (Ngai & Wat, 2002; Turban & Volonino, 2010). With the opening of the Internet to the business world, E-commerce has grown exponentially to the extent that the term E-commerce has become synonymous with "doing business via the Internet" (Turban & Volonino, 2010). In other words, the Internet, the Web and E-commerce are now key industry drivers as it has changed how many companies do business and it has created new channels for their consumers.
According to Laudon & Laudon (2014), in the E-commerce applications, a large number of companies have gone through several major stages as E-commerce matures in the world of business, including B2C E-commerce moves from simple Web storefronts to interactive marketing capabilities that provide a personalised shopping experience for consumers, and then toward a totally integrated Web store that supports a range of consumer shopping experiences. In addition, B2C E-commerce is moving toward a self-service model wherein consumers configure and customise the products and services they wish to buy, aided by configuration software and online consumer support as and when needed.
Throughout the research, it came to the researcher’s notice that there is a common misunderstanding on both terms, namely the Internet and the Web. People use these two terms interchangeably, assuming they are identical, but in fact that is not the case. Due to the importance of these two components on E-commerce, it becomes necessary to shed some light on this before moving forward. In a nutshell, the Internet itself is a vast network of computing devices interconnected globally that supports a broad range of interactions and communications between its devices; whereas the Web is one application using the Internet as its carrying network, and it is described as graphical interface to worldwide resources, comprising a massive collection of Web documents called Web pages linked through hyperlinks and URLs (Uniform Resource Locators, meaning specific Web address) (Belanger & Slyke, 2012; Floorwalker, 2013; Beal, 2013; Gil, 2013). As such, it is important to note that the Internet and the Web are interrelated but definitely not interchangeable. Today, noticing that there are over 100 billion public web pages on the Web (Gil, 2013).
2.2.2 E-commerce in Malaysia
In Malaysia, E-Commerce is promoted by the rapid use of Information and Communication Technologies (ICT) and the initiatives by Malaysian government toward a knowledge-based economy (Jehangir et al, 2011), in tandem with Malaysia’s Economic Transformation Programme (ETP) in which Hi-tech is a priority (The Guardian, 2013). For instance, Multimedia Development Corporation (MDC) has been driving the growth of E-commerce by establishing a master plan with four principal focused areas, being boosting confidence in online-trading context, preparing regulatory framework, setting up a digital subscriber base, and instituting an electronic payment system (Noor, 2011).
In fact, E-commerce in Malaysia has started booming since the year 2011 but not yet mainstream (Hassan & Ali, 2012; Wong, 2013). As illustrated in the following milestones chart, since after the year 2011, there are more foreign E-commerce companies started entering the local market such as Rakuten and Zalora. With reference to consumers uptake or market competitiveness, two main milestones were identified, being the "Now everyone can fly!" by AirAsia in 2001 and coupon frenzy following the launch of Groupon in 2011 (Wong, 2013).
Figure 2.1 E-Commerce History & Milestones in Malaysia (Source: e-commerce.milo)
While both online buyers (Figure 2.2) and E-commerce spending (Figure 2.3) in Malaysia show an encouraging growth over years based on the statistical data by Department of Statistics Malaysia, nevertheless Jehangir et al (2011) point out that security and privacy are the main barriers in the implementation of E-Commerce and making transactions online because both companies and consumers are facing the difficulties and lacking trust to go online for business purposes.
Figure 2.2 Online buyers in Malaysia (Source: Department of Statistics Malaysia)
Figure 2.3 E-commerce spending in Malaysia (Source: Department of Statistics Malaysia)
In any event, as per the MasterCard Worldwide Online Shopping Survey conducted in the year 2011 among 25 countries, consumers in Malaysia were found shopping online more and have become confident about online security. Based on the findings, the number of people who shopped online in Malaysia increased by 12 percent relative to 55 percent in the year 2010 (Business Times. 2012). Even more promisingly, according to a study conducted by Nielson Company as authorised by PayPal pertaining to the online shopping trends of consumers in Malaysia, the findings disclosed that there were already 1.1 million Malaysians shopping online, amounting to a total spending of MYR1.8 billion in the year 2010 and was forecasted to reach MYR5 billion in the year 2014 (Figure 2.4) (Hardwarezone.com. 2011; Wong, 2013).
Figure 2.4 Malaysia’s E-commerce market size (Source: Nielson & PayPal Analysis, 2011)
Another study commissioned by Internet payment service provider PayPal also revealed that Malaysians were spending more on local websites with transactions up to RM825 million, compared with foreign websites that recorded only RM627 million in receipts in the year 2010. The study interviewed 400 Malaysian online shoppers aged 18 and above in the year 2011, in which they were questioned about their online and mobile shopping transactions last year (Ho, 2011). The result disclosed the top seven things Malaysians pay for online (Figure 2.5). All the mentioned studies has supported that E-commerce is flourishing in Malaysia and it has great potential in the mainstream of modern Malaysian’s digital lives.
Figure 2.5 Top seven things Malaysians pay for online (Source: Nielsen company)
2.3 Social Networking Site – Facebook
Facebook was founded in February 2004 by a Harvard University student, Mark Zuckerberg (Phillips, 2007). Facebook was an exclusive online social network for college students that evolved into a public social network opened to the world. It was actually not opened for business until late 2007. Thereafter, we started to see public relations, marketing, and advertising on Facebook (Vorvoreanu, 2009). A great majority of organisations have jumped on the social networking bandwagon. Large and small organisations alike maintain Facebook fan pages and groups. For example, AirAsia, the leading budget travel airline, possesses more than 20 different Facebook pages and groups that targeted at promoting its services (Ishak, 2012).
With the social networking website, namely Facebook, companies through interaction with worldwide consumers is accommodated in real time (Boyd & Ellison, 2007). The outcomes for companies using Facebook as an eMarketing tool is subject to perspectives of consumers towards the social networking site. In any case, there is no doubt that the Facebook platform indeed provides companies with more touch point to reach existing and prospective customers. It is more than merely another medium for communicating because Facebook users make advantageous use of the site not only to interact with friends, to create and display connections among users (Boyd & Ellison, 2007), to maintain relationships within their social network (Stern & Taylor, 2007), to create and express their identities online (Zhao, Grasmuck & Martin, 2008), but also to discover more about brands, products and organizations (Vorvoreanu, 2009). In fact, this gives critical and useful insights about customers and their preferences.
Indeed, Facebook is expected to give companies more data about what kinds of users click on what kinds of advertising, and about their navigations on the Internet before and after they click on an advertisements (Sengupta, 2012). Facebook is also expected to make the companies highly visible to both existing and prospective customers, given its pivotal role in providing companies with a channel to get massive exposure for their businesses as well as a proven platform to communicate with and associate with the customers, which can keep customers coming back (Zirkle, 2012). In addition, there is a study indicates that more than 50 percent of Facebook fans feel more inclined to buy from brands they are social with online (eMarketer, 2010).
Even so, this is not to say that absolute marketing success is secured by Facebook. In the same way that other online tools do, implementation requires a strategic perspective to ensure the desired outcomes, and reaching results is a process entailing preparation, resources, competencies, monitoring and evaluation (Sheldon, 2008). Thus, it is vital to keep realistic expectations when it comes to the marketing outcomes of using Facebook (Treadaway & Smith, 2010) because the results rely on how well E-commerce companies employ the site as a marketing tool. Nonetheless, most brands want to have a presence on Facebook, but they do not quite understand who sees their pitches and unsure if they lead to bigger sales (Sengupta, 2012).
According to the eMarketer’s study revealed in 2010, the main reason individuals added an organization as a "friend" on Facebook is to learn about specials or sales, and new product features or services (Haigh, Brubaker & Whiteside, 2013). It has been discovered that men made use of Facebook to meet new people whereas women engaged Facebook to maintain existing interpersonal relationships. On the other hand, organizations exploit Facebook to serve both purposes, maintaining relationships and making new "friends" (Sheldon, 2008), as well as to boost stakeholders’ attitudes, perceptions, and purchase intention (Haigh, Brubaker & Whiteside, 2013).
Stakeholders are found to have then shifted from visiting organizations’ websites to visiting Facebook pages. In the past researches, corporate websites has been studied as a public relations tool to communicate directly with the key publics. However, the recent study conducted by Haigh, Brubaker & Whiteside (2013) examined Facebook as a public relations tool. On another note, based on Vorvoreanu’s (2009) findings, users were not likely to "friends" an organization when they first started having a presence on Facebook. Nevertheless, in the Haigh, Brubaker & Whiteside’s (2013) study, it showed that users now ‘friend’ and interact with organizations on Facebook in less than five minutes a day.
Within the span of just a few years, we have seen thing has changed from reluctance to willingness of Facebook users to have interactions with organisations. The said shifting could best reflect how fast the field is changing. Without any doubt, the vagaries of the economy could also play a role in the circumstances.
2.3.1 Social Networking Site – Facebook in Malaysia
Based on the statistics of Malaysia Facebook demographics monitored by Socialbakers, the most popular provider of social media network statistics and analysis, the largest age group is currently 18-24, followed by the users in the age of 25-34; whereas, there are 54 percent male users whilst 46 percent female users in Malaysia (Socialbakers, 2013). In Malaysia, 80 percent of affluent Malaysians (those with a household income above RM5,000) use Social Networking sites, including Facebook (Ishak, 2012). Nowadays, it appears that the opinions of bloggers and friends have become more powerful than advertisements (Ishak, 2012).
Figure 2.6 User Age Distribution on Facebook in Malaysia
(Source: Socialbakers Statistics of Malaysia Facebook Demographics)
Figure 2.7 Male versus Female User Ratio on Facebook in Malaysia
(Source: Socialbakers Statistics of Malaysia Facebook Demographics)
Drawing upon the report published by comScore, Inc, a leader in measuring the digital world, Social Networking-Facebook accounts for one third of all time spent online in Malaysia, or more specifically, one in every three minutes spent online. The findings of the report also showed that among 11 million Internet users who aged 15 and older in Malaysia, 87.9 percent or around 9.9 million visitors visited Facebook.com, which ranked as the second most-visited online property (Figure 2.2). Additionally, it is found that Social Networking took the lead as the most-engaging content category in Malaysia, recording 32.1 percent of all time spent online Internet users (Figure 2.3). This supports that recognition of Social Networking’s significance and interest in Social Networking is surging when it comes to Malaysian’s everyday lives and to digital marketing strategies (comScore. 2011). Given this, the growth of Facebook as the central online activity in digital lives of Malaysians and the top online destination in Malaysia is indeed indisputable nowadays.
Figure 2.8 Top Online Properties by Unique Visitors by August 2011 based on Total Malaysia Visitors Aged 15+ Accessed the Internet from a Home or Work Location in Malaysia.
(Source: comScore Media Metrix)
Figure 2.9 Top Online Categories by Share of Total Minutes by August 2011 based on Total Malaysia Visitors Aged 15+ Accessed the Internet from a Home or Work Location in Malaysia. (Source: comScore Media Metrix)
2.4 Website Quality
Websites are a valuable point of contact for nearly all companies; therefore, it is essential to evaluate the effectiveness or quality of the website in order to understand whether or not the company is furnishing the type and quality of information and interaction that satisfy website users (Kim & Stoel 2004). This is fundamental for those companies selling goods and services on their websites. Companies should note that customers must first be satisfied and happy with their online experience on their website, then only they will consider to revisit their website. Hence, the evaluation of website quality has become a prime concern for companies.
Website quality is composed of multiple dimensions and thus it is recognised as a multidimensional construct as empirically evidenced in prior research studies (Kim & Stoel, 2004; Zhang & von Dran, 2002). Therefore, Kim & Stoel (2004) highlight that one should not regard website quality as a single general construct, and that when it comes to evaluating website quality, one should distinguish between its different dimensions and its impact on a web user’s behaviour. In other words, evaluating website quality should cover web-user perceptions toward different dimensions rather than a single overall measure. With this approach, retailers and their website designers would be enabled to pinpoint specific areas of website quality that call for attention so as to enhance users’ perceptions and to help forward their subsequent purchase decisions. Further, with such information, the website designers could effectively make improvement to those specific areas by reallocating resources.
2.4.1 Trust
As described by Corritore, Kracher & Wiedenbeck (2003, p. 740) online trust is about "an attitude of confident expectation in an online situation or risk that one’s vulnerabilities will not be exploited". Trust may result from a consumer’s belief that an online vendor demonstrates ability, benevolence or integrity (McKnight, Choudhury & Kacmar, 2002).
E-commerce trust (e-trust), as the most important aspect of e-commerce systems adoption (Hwang & Kim, 2007; Teo & Liu, 2007), is also one of the key aspects of e-commerce customer relationship management (e-CRM) (Malhotra, Kim & Agarwal, 2004). This is because from the perspective of vendors, trust is the key to building customer loyalty on the web and loyalty is about gaining the trust of the right customers (Reichheld & Schefter, 2000), as well as to maintaining the continuity of the buyer-seller relationships (Anderson and Weitz, 1989). Jarvenpaa, Tractinsky & Vitale (2000) point out that consumers’ attitude and perceived risk are influenced by their trust in an Internet store, which consequently affect their willingness to buy. Their study separates online shopping from traditional commerce and indicate that trust is critical for online transactions. Indeed, trust has become critical for its role as a key predictor of customer decisions in the online shopping setting has been continuously supported by numerous studies such as Grazioli & Jarvenpaa, 2000; Gefen, Karahanna & Straub, 2003; McKnight, Choudhury & Kacmar, 2002; Pavlou & Gefen, 2004). Moreover, trust is often viewed as the vitally important prerequisites to ensure the success of E-commerce (Hoffman, Novak & Peralta, 1999; Pavlou, Liang & Xue, 2007), and as a key driver to the success of E-commerce (Urban, Amyx & Lorenzon (2009). This is because lack of trust is the most obvious impediment that could deter consumers from making purchase online, and Pollach (2005) also alerts that lack of transparency through privacy policy statements on a company website can weaken the company’s trustworthiness.
In the context of e-commerce, trust continues to be a high-priority issue since buying online from an unfamiliar vendor a product or service is a challenge that faces consumers. Unlike the physical market, they are unable to have the full shopping experience of touching and feeling a product. Further, unlike the vendor-shopper relationship built in traditional retail settings, the primary communication interface with the vendor is an information technology artefact, namely the website (Cyr, Head & Ivanov, 2009). In tackling these concerns, companies have to use signals that aim to lessen uncertainty in circumstances in which the consumer is not conversant with the products or services, thus the only indicator of the way the company will behave towards the consumer is the website; in other words, its design and contents must evoke online trust in the company (Vila & Kuster, 2011). Jarvenpaa, Tractinsky & Vitale (2000) also declare that trust serves as a control mechanism especially when the exchange relationships involve uncertainty, vulnerability, and dependence.
Taking the above previous studies into consideration, the following hypothesis has been created accordingly.
2.4.2 Information
Perceived informativeness is defined as the ability to furnish target customers with the necessary information. This dimension is linked to consumer beliefs concerning economic benefits (Kim, Kim, & Park 2010). In general, online consumers engage in considerations before making a decision, and in gathering of product information. In that case, online consumers are willing to gather beneficial and useful information as to specific product information over the web. Elliot & Speck (2005) justify that perceived informativeness can be helpful for online customers to make better decisions and also to enhance attitudes toward websites. Ranganathan & Ganapathy (2002) underline that the higher level of information quality, the more adequate the information about products or services could be provided on business-to-consumer (B2C) web sites, thereby allowing for easy access to information through search engines, and also facilitating consumers in their evaluation processes.
Wolfingbarger & Gilly (2001) emphasise the critical element influencing consumers’ buying behaviour in the e-commerce context has to be centred on the availability of information. The availability of information is not only the product or service information but also the convenience and personalisation that aimed at retaining consumers. It contingent upon the extent to which the information can be used by consumers to forecast their possible satisfaction with next purchases. For that reason, the success of online stores is to be conditioned by the capability to tailor the information to consumers’ needs and expectations and this is the requisite for attracting a consumer in an online store (Bakos, 1997). In fact, The unique benefits to the consumer lie with the performance of the online shopping transaction itself, including time-saving, improved convenience and minimised risk of dissatisfaction (Wolfingbarger & Gilly, 2001). Palmer’s (2003) work proves that a proper layout can heighten usability, whilst product information and variety of product presentations can improve website informative content.
Based on these prior studies’ findings, a hypothesis can be derived as follows.
2.4.3 Ease-of-use
Perceived ease-of-use relates to the degree to which a consumer believes that it would be free of effort to shop online (Davis, 1989). On another note, Davis, Bagozzi & Warshaw (1989) asserts that an improved ease-of-use may conducive to enhanced performance, while Venkatesh & Davis (2000) affirms that ease-of-use would also have a direct impact on perceived usefulness and behavioural intention. Another study proves that trust, perceived ease of use, perceived usefulness and enjoyment are significant positive predictors of customers’ repurchase intentions (Chiu et al, 2009).
In accordance with the Expectation-Confirmation Model of Information Systems continuance (ECM-IS) (Bhattacherjee, 2001), perceived ease-of-use is also considered as an element of post-adoption expectation and is believed to have a positive influence on repurchase intention. The impact of perceived ease-of-use upon perceived usefulness in the online shopping environment has been evidenced by the prior researches (Devaraj, Fan & Kohli, 2002; Gefen, Karahanna & Straub, 2003; Pavlou, 2003).
Therefore, the hypothesis below is accordingly developed from these past researches.
2.5 Theory of Reasoned Action (TRA)
The theory of reasoned action (TRA) is coined by Ajzen & Fishbein (1980), as summarized by Teo & Liu (2007), which is employed to assess the psychological processes that manifest observed relationships among beliefs, attitudes, intentions, and behaviours. The theory affirms that the individual’s attitude toward the behaviour controls intention to perform behaviour, and a person’s beliefs determine his/her attitude. TRA has been extensively accepted and adopted to a wide range of disciplines and circumstances. The present empirical researches have demonstrated that trust is significantly related to attitude, and attitude positively expresses purchase intention of people (Macintosh & Lockshin, 1997; Chow & Holden, 1997). In recent studies, TRA is also employed as the theoretical base on building of trust (Mcknight & Chervany, 2001), particularly in the e-commerce context (Jarvenpaa, Tractinsky & Vitale, 2000).
Trust can be regarded as a belief, expectation, confidence or sentiment regarding intention and/or possibly behaviour of an exchange partner, for this reason, it is suggested to be directly related to the attitudes toward purchasing from a vendor and indirectly related to consumers’ willingness to buy through purchasing attitudes. Willingness to buy can be described as the probability that the buyer intends to purchase the product (Dodds et al, 1991). Due to the sense of affiliation and identification with the vendor, trust is likely result consumers in focusing more on the positive motivation (Teo & Liu, 2007). The results of Teo & Liu’s (2007) study also appear to support TRA. Their study showed that consumers’ trust toward an E-commerce vendor has significantly positively related to their attitude toward the vendor, and favourable attitude is positively related with customers’ willingness to buy. This finding is in agreement with the results revealed in the previous empirical studies, such as Jarvenpaa, Tractinsky & Vitale (2000) and Chow & Holden (1997).
Judging from these previous researches, a hypothesis can consequently be formed as follows.
2.6 Theoretical Framework
Figure 2.6 Theoretical Framework with hypothesis
2.7 Summary of Hypotheses
The theoretical framework and literature cited above underlie the following four hypotheses:
2.6 Conclusion
Overall, the discussions and findings of the prior studies and researches has enabled the formation of hypotheses and the theoretical framework, which function as the root of this study. With these fundamental information, the questionnaire is convincingly established so that the researcher can also proceed to conduct data collection. Next, chapter three deals with the research methodology applied for this study.
CHAPTER 3:
RESEARCH METHODOLOGY
3.0 Introduction
In this chapter, the methodology used for data collection and hypothesis testing has been discussed in detail, including the research design, sampling procedures, sampling technique, data collection methods, primary data and secondary data, research instrumentation/measurement.
A survey method is utilized for this research and to be done through by e-mailing. Data is to be collected through the use of a questionnaire, using a five-point Likert scale and including questions adapted from prior research studies, which had been previously tested for high validity and consistency. The questionnaire is aimed at collecting information about respondents’ background, daily usage of Facebook (in hours), The questionnaire is clearly divided into four parts, containing questions about respondent’s socio-demographic profile in Part A, whilst from Part B to Part C, respondents will be asked to rate their level of agreement on a five-point Likert scale (values: 1 = strongly disagree, 2 = disagree, 3 = neutral (neither agree nor disagree), 4 = agree, and 5 = strongly agree). Note for the questionnaire, ‘shop from’ is defined as using the Internet to research, browse for, or compare the prices of products or services, but not necessarily buy the item. As for Part D, respondents will be asked to rate their level of willingness on a five-point Likert scale (values: 1 = very low, 2 = low, 3 = neutral (neither low nor high), 4 = high, and 5 = very high).
Thereafter, the completed questionnaire will be used to evaluate knowledge about consumers’ attitudes toward E-commerce and the three website quality dimensions as well as their willingness to buy.
A purposive sampling method will be used and the sample size is 150 Facebook users in Malaysia who are working adults and with buying power in particular. The e-mail addresses will be solicited through friend’s recommendation. E-mails will be sent to invite Malaysian Facebook users and their friends to participate in the survey.
The selected respondents will be receiving the questionnaire via e-mail. A notification will be sent via e-mail requesting their participation in the survey prior to e-mailing out the questionnaire to them. This is to ensure that respondents satisfy the condition and also to seek their consent and cooperation to answer all questions, or at least those that are absolutely necessary. In addition to that, an informal interview will be conducted and the target interviewee will be the student researcher’s friends and classmates in order to obtain more opinions and thoughts about the Facebook and E-commerce. A list of 10-questions has been prepared accordingly for this purpose.
The data analysis method to be used is Quantitative Analysis. Excel spreadsheet will be used to do some basic data analysis tasks such as graphs or charts will be used to illustrate quantitative data. The data will also be analysed using SPSS. SPSS is a computerised statistical analysis package, used for the analysis of social science data (Quinlan, 2011). Pearson correlation test is to be used to measure the relationship between the independent variables and the dependent variables. Also, T-test will be applied to examine the differences between willingness to buy between male and female Facebook users. Meanwhile, the One-way ANOVA test will be employed to examine the differences between willingness to buy and education background.
Research Ethics
Ethics is the application of moral principles and/or ethical standards that guide and govern our behaviour or conduct in human relationships (Burns & Burns, 2008; Quinlan, 2011). Put simply, ethics can be defined as a process of reasoning in terms of the right thing to do (Quinlan, 2011). It is important to understand that ethical issues and dilemmas are embedded in the research process and they have no easy answer since none of the issues are black or white but rather various shades of grey (Burns & Burns, 2008). The researcher is well aware of the ethical issues and have a basis on which to develop one’s own choice of appropriate behaviour in the various situations that may meet when conducting research. One of the key components in the system of ethical protections is the participant’s rights that revolve around many important issues, including the right to voluntary participation and informed consent, the right to privacy and confidentiality (Bryman & Bell, 2011).
In compliance with these ethical considerations, the researcher ensures that participants not be coerced into participating in this research project, and that participants are given sufficient details of the study so they can make an informed decision whether or not to participate. In addition to that, the participants are also be informed of the right to end their participation at any time during the research process, and to even have their responses excluded from the final report. Apart from that, this research guarantees participant confidentiality as they are assured that identifying information will not be made available to anyone who is not directly involved in the study. The principle of anonymity is applied in this study, which essentially means that the participant will remain anonymous throughout the study, for the anonymity standard is a stronger guarantee of privacy (Cooper & Schindler, 2011).
Primary and Secondary Data/Sources
Primary data is that collected by the researcher for analysis, that is, new data. In this study, the primary data is collected through questionnaire distributed via online survey website called SurveyMonkey. Secondary data is the important type for literature reviews as it is information that already exists, for example, government records such as census data and previous research studies located through database and library searches. Secondary sources are consulted before any research design is considered as they shed light on the research topic, relevant methodologies and existing knowledge. Secondary data can also be the initial trigger for the recognition of a research problem or opportunity, as indicated above in this study.
3.1 Sample
For this study, Facebook users have been chosen for several reasons. First, there are enormous amount of users on Facebook owing to the domination of Facebook over Internet population and penetration (World Stats. 2013; Alexa, 2013). That is to say, accessing to users on Facebook is literally accessing to 77 percent of the existing and potential consumers out of total Internet users. Second, a recent research study by Ishak (2012) has revealed that affluent Malaysians are using Facebook. In other words, Facebook users are most likely to possess the purchasing power. Third, Facebook is the top online destination and central online activity in Malaysian’s digital lives (Nielsen. 2011; comScore. 2011). This implies that when users spend so much time on Facebook once go online, they are much more accessible than users on other social media.
3.2 Instrument
3.3 Questionnaire Layout
QUESTIONNAIRE LAYOUT SOURCE
Part A: The demographic profile of the respondent
Age, Marital Status, Gender, Education level, Daily usage of Facebook (Hours). Teo (2002);
Teo & Liu (2007).
Part B: Attitudes toward E-commerce
Question (1) Using the Internet to shop from the vendor is pleasant.
Question (2) Using the Internet to shop from the vendor is a good idea.
Question (3) The idea of using the Internet to shop from the vendor is attractive.
Question (4) I like the idea of using the Internet to shop from the vendor.
Question (5) I am confident that buying online is a good decision.
Taylor & Todd (1995);
Jarvenpaa & Tractinsky (1999);
Jarvenpaa, Tractinsky & Vitale (2000);
Teo & Liu (2007).
Part C: Website Quality
(I) Trust
Question (1) I feel safe in my transactions with the website.
Question (2) I trust the website to keep my personal information safe.
Question (3) The e-commerce vendor provides reliable information.
Question (4) The e-commerce vendor keeps promises and commitments.
Question (5) The e-commerce vendor is trustworthy.
Doney & Cannon (1997);
Macintosh & Lockshin, 1997;
Jarvenpaa & Tractinsky (1999);
Jarvenpaa, Tractinsky & Vitale (2000);
Gefen (2000);
Ranganathan & Ganapathy (2002);
Kim & Stoel (2004);
Teo & Liu (2007).
(II) Information
Question (1) The information available on the website is correct and complete.
Question (2) The website adequately meets my information needs.
Question (3) The information on the website is effective.
Question (4) The website allows me to interact with it to receive tailored information.
Question (5) I can interact with the website in order to get information tailored to my specific needs.
Chen & Wells (1999);
Liu & Arnett (2000);
Lin & Lu (2000);
Ranganathan & Ganapathy (2002);
Aladwani & Palvia (2002);
Zhang & von Dran, (2002);
Kim & Stoel (2004).
(III) Ease-of-use
Question (1) The online retailer’s web site has an organised appearance.
Question (2) The display pages within the website are easy to read.
Question (3) The website labels are easy to understand.
Question (4) The layout of the online retailer makes it easy to browse for the product you want.
Question (5) Overall, the layout of the online retailer makes it easy to navigate the site.
Liu & Arnett (2000);
Chen & Wells (1999);
Barnes & Vidgen (2001);
Ranganathan & Ganapathy (2002);
Aladwani & Palvia (2002).
Part D: Willingness To Buy
Question (1) The likelihood that I would return to the vendor’s website is
Question (2) The likelihood that I would purchase online from the e-commerce vendor is
Question (3) If I were going to buy a product, the probability of buying the product online is
Question (4) My willingness to buy product(s)/service(s) online from the vendor is
Question (5) The probability that I would consider buying online from the vendor is
Macintosh & Lockshin, 1997;
Jarvenpaa & Tractinsky (1999);
Jarvenpaa, Tractinsky & Vitale (2000);
Teo & Liu (2007).
3.8 Conclusion
CHAPTER 4:
PRESENTATION AND ANALYSIS OF DATA
4.0 Introduction
4.1 Survey Findings
4.7 Conclusion
CHAPTER 5:
FINDINGS OF THE STUDY
5.0 Introduction
5.7 Conclusion
CHAPTER 6:
CONCLUSIONS AND RECOMMENDATIONS
6. 0 Introduction
How Facebook makes use of its users’ information and how those users react is the next figuring. Facebook is presumed to give marketers more data about what kinds of users click on what kinds of advertising, and about their navigations on the Internet before and after they click on an advertisements. In that case, future research should make comparisons between the impact of a website and that of a Facebook page. Since the type of information and format it is displayed is varied, the impact on stakeholders may be varied as well. The communication strategies used on fan pages versus organization pages could also be explored. How ‘updating’ affects perceptions of stakeholders could also be verified in future studies. They may expect Facebook pages to be updated faster than the average of every 15 days (Haigh, Brubaker & Whiteside, 2013). Further studies should explore other factors that affect attitude towards online purchasing behaviour in a wider range of population and higher representativeness of sampling method.
On the other hand, despite the high-growth potential of retail e-commerce and growing interests on online purchase in Malaysia, there is a noticeable lack of understanding about the characteristics of online shoppers in Malaysia and its possible impacts on consumer marketing (Osman, Chan & Bei, 2010). After all, this is mainly attributed to the fact that online purchase is considerably new in Malaysia and just about to take its place as an alternative shopping medium for consumers to shop for goods and services. To effect sales, Internet access speeds have to be upgraded to a level fast enough to meet or exceed consumers’ expectations. Security and trust issues are main hindrances to online purchasing. Hence, brand equity is the first concern that businesses should work on enhancing as it would be an approach of reassuring their shoppers so that anything sold by them is perceived as reliable. In addition, when they make their policy clear on the Internet, consumers know what they are dealing with and they will have the confidence to buy (Teo, 2002).
Such a contradiction again could manifest how quickly the field is changing, especially in this Digital Age in which people are much more easily and instantly exposed to enormous amount of information and knowledge on the Internet, which could eventually alter their ways of thinking and influence their attitudes over time. What was being resisted yesterday might be accepted in today society. ‘Change forms the context within which we exist. "Nothing stands still; not only do things change, but everything is changing all the time" (Redmill, 1997). Therefore, this should justify why consumer attitude is worth on-going studying.
At the moment, there are limited studies published on E-commerce in Malaysia, and the latest ones such as
6.3 Conclusion