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DETERMINANTS INFLUENCING CONSUMERS' PURCHASE INTENTON TOWARDS AIRLINE ELECTRONIC TICKETING (E-TICKETING)

Chapter I

Background of the Study

Introduction

Nowadays technology makes one's life easier, the regular access to the Internet has become normal routine of people mainly the younger generation. According to Internet World Stats (2017), as of March 2017 there were a total of 54 million Internet users in Philippines which shown a 2600.0% user growth since 2000.

With the above data it only shows that with the help of internet and technology airline consumers likes to purchase tickets online.  

The rapid advancement and development of technology has changed the consumers' manner to purchase goods and services. Many business owners have started to use IT approach as an alternative marketing tool to pursue the objectives of cost efficiency and create a competitive advantage.

Many industries are already adopting the used of Internet for marketing strategies. The trend of commercialization on Internet has found the development of e-ticketing particularly in airline industry. E-ticketing started in United States and it was first adopted by United Airlines back in 1994. In the beginning there was a less acceptance of e-tickets due to security, because before with the used of paper tickets it can give the traveler a security. But years later due to the popularity of internet, consumers for airline industry starting to embrace the new trend of paperless ticket.

According to International Air Transport Association (IATA, 2017), on 1 June 2008, the industry moved to 100% electronic ticketing and the paper ticket became a thing of the past. Apart from substantial cost savings for the industry of up to US$3bilion per year. Moreover e-ticketing is a worry free for passengers who do not need to worry about misplacing or losing their tickets and it is easy to make changes to traveler itineraries.

In 2007, the country's flag carrier Philippine Airlines was the first carrier to fully adopt the e-ticketing and currently all airlines in the Philippines are already using the e-ticketing technique. According to PAL President Jamie J. Bautista 'E-ticketing is a major step towards building a comprehensive electronic commerce system in PAL ' a strategic investment that we expect will yield long term-benefits', (www.philippineairlines.com). Nowadays many Filipinos with bank accounts likes to make a payment electronically instead of taking out cash, to take advantage of the growth of e-commerce in the Philippines most of the airlines are improving their services with the used of e-ticketing.

Statement of the Problem

This study will be conducted to find out the determinants influencing consumers' intention towards electronic ticketing. The study seeks the following questions:

1. How may the respondents' demographic profile be decided in terms of:

a. Gender

b. Age

c. Occupation

d. Monthly Income

e. Highest Educational Attainment?

2. How may the respondent's airline E-ticket purchase behavior be described?

3. How may the determinants influencing the respondents' intention towards airline E-ticketing be assessed in terms of:

a. Convenience

b. Security

c. Perceived Usefulness

d. Perceived ease of use

e. Perceived risk?

4. How may the respondents' purchase intention towards airline E-ticketing be assessed?

5. Is there significant relationship between the respondents' assessment of the determinants influencing their intention towards airline E-ticketing and their assessments of their purchase intention towards the same?

Null Hypothesis

There is no significant relationship between the respondents' assessments of the determinants influencing their intention towards the airline E-ticketing and their assessment of their purchase intention towards the same?

Significance of the Study

As stated, Technology or Internet has become a wide used tool to the people especially to the younger generation. The end results of this study are beneficial to provide useful data to the following:

' Airline Companies ' with the use of e-ticket the airline companies could be benefited in many ways such as they could save billion annually on paper which in return they could give competitive promotional prices to passengers. Another one is with e-tickets booked online the airline companies could save time and cut down labor hours.

' Passenger/Travelers ' with the e-ticket passengers can book and buy their e-ticket online at their own convenience.

' Online Agents or Travel Agencies ' the study will also beneficial for online agents as they could easily booked a ticket to their customers online, with the availability of the online booking online agents can book their customers according to their preference. They could also save on the cost of maintaining printers for the tickets as well as ticket inventory control.

' Future Researchers ' this study might be beneficial to the future researcher who may have similar topic and they can used this study as their references.

Scope and Limitation

This study focused on providing insight on the consumers' purchase intention towards the use of airline e-ticketing. The researcher is unfolding the elements that can make the consumers to adopt airline e-ticketing services. There are limitation in doing the study, which are compared to the original study adopted from the study of 'An Analysis of the Determinants Influencing the Consumers' Intention Towards Adoption of E-Ticketing on Transportation in Malaysia' this study focuses only on airline e-ticketing and the e-ticketing from railways and bus are not included. And the questionnaires are distributed only in IQOR Philippines Inc. as the researchers' main respondents.

Definition of Terms

1. Online Ticket or E-ticket - refers to a technique for documenting sale, tracking usage and accounting for a passenger's transportation without requiring the issue of paper value documents (Ng-Kruelle, Swatman & Kruelle, 2006).

2. Convenience - According to, discovered that convenience is at the heart of what fundamentally drives demand for the Internet (Kare-Silver, 2001)

3. Security - The condition of being protected from or not exposed to danger; safety (Maeve Maddox, 2017)

4. Perceived usefulness - is defined as the degree to which a person believes that using a particular systems would enhance his or her job performance (Fred D. Davis, 1989)

5. Perceived ease of use - The degree to which a person believes that using a particular system would be free of effort (Fred D. Davis, 1989)

6. Perceived risk - Perceived risk is the uncertainty a consumer has when buying items (Lura Lake, 2017).

7. Determinants - in marketing determinants are those aspects about products and services that determine why consumers buy products. These attributes may vary among different types of products, depending on which industry a small company is in. (Suttle R., 2017)

8. Consumers - a person who buys goods or services for personal needs and not for resale or to use in the production of other goods for resale (Harcourts., H., 2010)

9. Purchase intention - is related with consumers' behavior, perception and their attitude (Jaafar., Siti)

Acrnonym

' IATA - International Air Transport Association

' E-ticket ' electronic ticketing

Chapter II

Review of Related Literature & Studies

According to the website http://searchmicroservices.techtarget.com, an e-ticket (electronic ticket) is a paperless electronic document used for ticketing passengers, particularly in the commercial airline industry. Virtually all major airlines now use this method of ticketing. United Airlines was the first airline to issue electronic tickets, back in 1994. A decade later however, only 20% of all airline tickets were electronic. The industry was missing out on an opportunity to save costs and make travel for passengers easier. In June 2004, IATA set an industry target of 100% ET in four years (IATA 2017).

Theoretical Framework

Figure 1: Paradigm

The figure was paradigm of the study of Fok Lai Feel., Loo Chooi Yin., et al., 2012., in the paradigm it shows that there's a relationship from the respondents' profile to the purchase behavior towards e-ticketing, while the respondents purchase behavior towards e-ticketing are being influenced by the determinants influencing respondents intention towards airline e-ticketing which are convenience, security, perceived usefulness, perceived ease of use and perceived risk. These five variables are correlated to the respondents purchase Intention towards Airline Ticket

Technology Acceptance Method (TAM) was developed by Fred D.Davis, An information systems theory that models user acceptance. The model includes two main factors influencing individual Information System (IS) use: perceived usefulness (will the system enhance my job performance?) and perceived ease-of-use (how difficult will it be to use the system?). TAM has been extended to include social influence and normative beliefs of others. The model proposed that a number of factors may affect an individual's intention and decision of how and when a user will adopt when a new technology is introduced.

Through the review of related literature, it demonstrate that the theory of TAM is one of the most popular theories use to explain consumers' intention and behavior in an online shopping. Over the years, TAM model is always used to carry out research on the intention to use e-ticketing, both perceived usefulness and perceived ease of use have positive impact on intention to use e-ticketing (Al-Maghrabi, Basahel & Kamal, 2011; Dehbashi & Nahavandi, 2007; Wan & Che, 2004).  

In doing this study, they are five variables are taken into consideration to examine the determinants influencing consumers purchase intention towards airline electronic ticketing.

Foreign Literature

According to Sam, M.F.M., Tahir,M.N.H., 2009, In order to strengthen competitiveness, service provider should pay more attention on website quality in the form of improving the website usability, design and information quality. This is because these factors might influence online purchase intention.

While e-ticketing creates cost savings for the airlines companies, travelers get their benefits in terms of convenience. The travelers do not need to carry a paper ticket, which means that the tension of misplacing a ticket is eliminated (Sulaiman, A., Ng, J., Mohezar, S., 2008). The study also indicated as well the possible risk of buying tickets online, it is the fear of financial loss by using credit card, which is credit card fraud is the top critical factor in buying airline tickets.

According to the website www.sellingpower.com there are few types of perceived risk and they are functional risk, financial risk, physical risk, social risk. The website also stated that sales people who pay attention to minimizing perceived risk have a competitive advantage.

Where in according to International Journal of New Technology and Research 2015, There are four types of perceived risk that are positively related on online consumer buying behavior and these are security risk, financial risk, time and convenience risk and psychological risk. Where in according to these author Arshad, A., Zafar, M., Fatima, Iffat., Khan, S.K., 2015, security risk and financial risk goes to the relationship online consumer buying behavior and these relationships indicates that security risk and financial risk must be low in order to get a high and positive online buying behavior. Time and convenience risk goes to the relationship that indicates that lesser the risk greater the positive buying response expected from online buyers. Whereas psychological risk indicates that greater the internet experience greater positive response is expected from online buyers.

According to Chiu et al., 2005, Perceived usefulness for online purchase can be defined as the prospective consumer's subjective probability that using the internet will efficiently facilitate his or her purchasing.

The literature reviews above explain the types of perceived risk that will affect the buying behavior of the consumers based on those risks. It is also explain the perceived usefulness in purchasing online for goods and services.

Foreign Studies

According to Kare-Silver (2001), discovered that convenience is at the heart of what fundamentally drives demand for the Internet. Likewise, Wolfbinger and Gilly (2001) found that the most important attributes of online shopping to consumers are convenience and accessibility. It is the same case with airline e-ticketing most of the consumers of airline would want to save time and effort by going to the nearest travel agency. Therefore the customer for the airline services can easily book a ticket through an online e-ticketing at their own convenience.

Kolsaker, Lee-Kelly and Choy (2004) also stated that convenience is mentioned as the key online buying driver resulting from factors such as availability to shop at home 24hr /7 days a week, usability, speed and time savings, provision of delivery services by suppliers and information capacity. There is also an empirical study done by Delafrooz, Paim and Khatibi (2011) that concluded that there was a significant and positive relationship between convenience and attitude toward online shopping since online shopping is more convenient comparing to shopping in-store.

Convenience as the important variable that had been proven by the study that there is a positive relationship between perceived convenience of the e-ticketing and the consumer's intention towards online e-ticketing. Based on the previous foreign literature there are distinctive recognitions towards the relationship with consumers' intention to buy tickets online. However, it is necessary to examine whether convenience will affect consumers' intention on purchasing e-ticket online for airline industry.

Upon introduction of the technology of e-commerce, many consumers were concern about their credit card information to be given out due to the possibility of getting hacked. The consumers could hardly predict that the intended party would not use their personal data to different purpose. This is one of the reasons why security is always questionable among consumers' intention of using e-ticketing.

 According to Allred, Smith & Swinyard, 2006; Paynter & Lim, 2001, customers would only prefer to e-ticketing only if they were confident with the security of the payment system while Kolsaker et.al. (2004) examined that respondents need to be guaranteed about the safety of online transaction and some service back-up from vendor.

Littler and Melanthiou (2006) also stated that consumers have difficulties in doing an analysis on whether  certain website contains risks and viruses once they log into the system since they are not as familiarized as professional people.

According to Akhter, 2006, as there is existence of uncertainty and due to many complications present in e-commerce, online consumers reflect on whether their financial information such as credit cards are safe to be sent to a dealer through the use of the Internet, and therefore most consumers has a fear of providing their credit card information through internet transaction.

In relation of the fact that security is one of the major concerned of the consumers intention of buying tickets online in view on past studies, the relationship between security and consumer's intention of using e-ticketing system for airline services is implemented to examine the variable of security.

According to Davis (1989), Perceived usefulness is defined as 'the degree to which a person believes that using a particular system would enhance his or her job performance'. This follows by the definition of the word useful: 'capable of being used advantageously.' Davis (1989) also observed that perceived is defined in the TAM model as the operation associated with a programmed the item works by pertaining to end users to drive them to adapt with the determination to define the fundamental construct in the users' behavioral intention. According to the theory of TAM model, perceived usefulness is by the same token influenced by perceived ease of use due to the easiness of the course of action.

According to Kim & Song, 2010, the perceived usefulness of the website usually depends on the efficiency of technological characteristics such as advanced search engines and the personal service provided by the service provider to consumers. In-depth information from the website must be provided to the consumers to help them make a decision when purchasing a goods or services.

According to Leelayouthayotin, 2004, the users perceived usefulness toward online purchase intention included save time, cool, fun or enjoyable, excitement, entertainment, companionship, free or flexibility, informative or resourceful, convenience and comparative shopping.

Since Internet gives a two-way communication and can also provides speed and number of information to users. With this customers will develop confidence in using internet to purchase products or services.

According to Davis 1989, perceived ease of use is defined as the degree to which a person believes using a particular online service system would enhance their performance.  While Bign'' et al.,2010; Kim, Kim & Shin, 2009; Li & Huang, 2009; Moon & Kim, 2001,  stated that perceived ease of use is identified having a significant influence on consumer intention as the easier the usage of website an Internet user perceives, the greater the trust in the website's honesty, thus resulting in higher consumer intention

A previous study conducted by Mohd, R.M.J., Nurhidayah. B., Noor, A.Z.M., et al., (2016), perceived ease of use grants buyers to effortlessly comprehend and digest the information before they decide to make an advisable choice. By using online shopping, the purchase activity can save time and effort. Therefore, perceived ease of use is very important in influencing customers' intention in making online purchases.

According to Nistor, C. (2011), there are two mechanisms by which it influences consumer's intention to purchase online: (1) perceived ease of use has a direct effect on intention, and an indirect effect on intention via perceived usefulness, and (2) it is an initial hurdle that users have to overcome for acceptance, adoption, and usage of a system.

Perceived ease of use allows consumers to simply understand and grasp the information before making a wise choice. Buying through internet can save the consumer time and effort. Furthermore, the ease of using online system can develop efficiency and as well as increase consumer satisfaction. For that reason, perceive ease of use plays a significant part in influencing consumer intention online purchase.

Consumer perceived risk in marketing was first discussed by (Bauer, 1960); this topic has been discussed widely which led to numerous definition.

Perceived risk in consumer behavior theory helps explain why often consumers do not move from the desire stage to the action stage, that is, make the actual purchase decision (Liu Tian-Que, 2012). According to (Boksberger, Bieger & Laesser, 2007; Martin & Camarero, 2008), perceived risk caused consumers uncertainty due to high level risks existing with online shopping in the virtual.

Bign'', et al. (2010) asserted that perceived risk has a negative impact on the consumer's attitude towards airlines tickets online shopping because of non-shoppers' worries that there will be a theft of embezzler when using credit card as the payment method and it concerns with transaction privacy and confidentiality.

According to Lee, K.S., & Tan, S.J. (2003), in accessing and making online buying, individuals encounter a host of risk. In fact, consumers perceive a higher level of risk when purchasing through Internet compared with traditional retail transactions. According to Ko, H., J. Jung, J. Kim, and S.W. Shim, (2010)., perceived risk is the possibility of loss in achieving a favorable outcome while consumers doing online shopping, indicating individuals feeling of uncertainty with the possibility of negative outcome in their online purchasing.

The exchange of information via the Internet can bring about several risks that either are caused by functional defects or security problems in information and communication technical systems (system-dependent uncertainty) or can be explained by the conduct of actors who are involved in the online transaction (transaction specific uncertainty) (Grabner-Kraeuter, 2002)

Perceived risk has found influencing consumer intentions to purchase an e-ticket negatively because of those unwanted risk that may occur upon purchasing online. As a result, perceived risk should provide clarification   on consumers' intention when using online services. Perceived risk must be considered to provide an explanation on the consumers' intention to use online services.

The above studies will help the researcher to understand better its independent variables on how these variables can be a big impact to the buying behavior of the consumers. From the previous studies conducted by foreign researchers it shows that there are five (5) variables that can have a big impact on this study and based from the previous study the researcher will now have an additional support in writing the study about the determinants influencing consumers' purchase intention towards airline electronic ticketing.

Local Literature

According to the recent survey of MasterCard., 2015, three out of every five or 59% of the online population in the Philippines access the internet to shop. The study by MasterCard also finds that Filipinos turn to the internet to shop for the following categories: 38.4% airline tickets, 35.1% home appliances and electronic products, 31% clothing and accessories, 29.9& hotels and 29.4% computer software.

Figure 2: Top Categories for Online Spend (MasterCard., 2015)

On the other hand with the study conducted by Master Card, security of the payment facility (89.7 percent) and the speed of transactions (88.5 percent) are one of the top considerations that the online consumers are taking into account (Pedroso, K, 2015).

Most of Filipino consumers do their shopping online according to the study of commissioned by Visa international. The Visa eCommerce Consumer Monitor 2014 also reveals that the top reasons for online shopping are convenience (58 percent), price (47 percent), and deals (46 percent) (Torres., T, 2015).

According to the online publication of Newsbytes Philippines 2013, PinoyTravel, the first online provincial bus booking service in the Philippines, was launched recently to give Filipinos and visiting tourists the convenience of checking bus schedules and booking their provincial bus tickets online. The service eliminates the hassle of queuing at bus stations for tickets in order to travel to destinations in the Philippines. Commuters would only need to visit www.pinoytravel.com.ph or download the free Android app from the Google Play Store to browse for and book their tickets. With the presence of online booking Filipinos can easily book their tickets online, the inconvenience cause by the unavailability of ticket online will be lessen.

According to the article of SunStar Cebu., 2015, there is robust potential for e-commerce to grow in the Philippines, on the back of the country's strong 41 percent Internet penetration rate. Robert Gantuangco, director and co-founder of Digital Commerce Association of the Philippines (DCOM.ph) stated that 'Almost all Filipinos now are mobile, with 25 percent of the population smartphone users. This makes the Philippines a prime market for e-commerce,' said Gantuangco during the recently held Cebu ICT-BPM Conference.

According to www.investphilippines.info,'With Internet penetration increasing exponentially in the Philippines, and the growing number of consumers who are turning to the Internet to conduct product research and ensure they are getting the best price or deal, this trend provides an apt environment to convert online researchers to make online purchases,' Nielsen Philippine managing director Stuart Jamieson said in a statement.

The local literatures above state that with the growth of e-commerce in the Philippines lead the Filipino consumers to shop online rather than the traditional way of shopping. These local literatures will give support to the researcher on how important to pursue the study about determinants influencing consumers' purchase intention towards airline electronic ticketing.

Local Studies

As per Garcia, J.L., 2005, technology is a great deal in the improvement of a society. In the Philippines, technology has provided convenience and opportunities for majority of Filipinos. Catching up with the global trends, Filipinos have easily adjusted to the demands of technology, using it to the fullest that their resources can.

According to the latest Nielsen Global Survey of E-Commerce Q1 2014, Filipinos are adopting the use of online to purchase airline tickets and tickets for movies, exhibitions, sports games and live performances. According to the survey by Nielsen Global Survey, 55% of Filipinos likes to buy airline tickets while 46% are the ones who make a hotel reservation.

 Filipinos are increasingly going online to purchase travel services and tickets for events such as movies, live performances, exhibitions and sports games. More than half of online Filipinos (55%) intend to buy airline tickets/reservations online within the next six month, while 46 percent plan to make hotel reservations (See chart Below).

Figure 3

While in the study conducted by Mateo, F.P. (2011) state that out of all the factors, self-efficacy has the most influence on online shopping habits and beliefs. In terms of normative influence, less intimate sources such as friends, colleagues, online websites, and fellow online shoppers are the most influential referents on purchasing decisions. This study is shows that online peers are the most influential factors that affect the online purchase behavior of the consumer.

The local studies above shows the figures on how Filipinos adopting the e-commerce and its show that how it is important to know the buying behavior of the consumers online and with this study it will be an eye opener for the reader on what are the determinants influencing consumers' purchase intention towards airline electronic ticketing.

Chapter III

RESEARCH DESIGN AND PROCEDURE

This chapter focuses on the detailed methodology used in collecting data in order to test the hypotheses in the previous chapter. Research Method, respondents of the study, sampling technique, research instrument, validation of questionnaire and statistical tools used are included in this chapter.

Research Method

This research used descriptive and correlational method to identify the influence of determinants which are convenience, security, perceived usefulness, perceived ease of use and perceived risk on consumers' intention towards airline e-ticketing. According to Malhotra and Peterson, 2006, a descriptive research design is a type of conclusive research that has its major description of something, usually a market characteristic or their functions. While Waters., J. (2017) stated that a  correlational study is a quantitative method of research in which you have 2 or more quantitative variables from the same group of participants, & you are trying to determine if there is a relationship (or covariation) between the 2 variables (that is, a similarity in pattern of scores between the two variables, not a difference between their means) Therefore, these method are useful in describing the customers purchase intention towards airline e-ticket.

Respondents of the study

This research considered BPO Company in Clark Freeport Zone, specifically IQOR Philippines Inc. some of the employees were asked to answer the questionnaire intended for the study. According to the Manpower Report for the Month of July 2017 of Clark Development Corporation, Clark Freeport Zone, IQOR has a total number of population of four thousand six hundred (4, 600) employees (See Appendix #). Using the total population of IQOR, the researcher calculated the sample size using Raosoft online calculator, with 5% margin of error, the sample size is three hundred fifty five (355).

Figure 3: Raosoft online

Sampling Technique

The sampling technique that used in this research study is probability sampling technique. Probability sampling involves the selection of a sample from population, based on the principle of randomization or chance (Statistics Canada, 2013).

The type of probability sampling technique that was used in this research study is simple random sampling where each member of the population has an equal chance of being included in the sample.

Research Instrument

A questionnaire was used in collecting the data needed to get the desired output of the study. The researcher customized the questionnaire used by Fok Lai Feel., Loo Chooi Yin., et al., 2012., in the researchers study entitled "An Analysis Of The Determinants Influencing The Consumers' Intention Towards Adoption of E-ticketing on Transportation in Malaysia" conducted at the Universiti Tunku Abdul Rahman.

Validation of Questionnaire

The Questionnaire was validated from the help of the researchers' adviser to evaluate its contents. The suggestions of the researchers' adviser were taken into account then the questionnaire was revised. A sample group of BPO employees further validated the questionnaire to ensure the acceptability of the questionnaire.

Likert scale was used in this study for the respondent answer in the questionnaire. According to Edmonson, 2005, the Likert Scale was created by Rensis Likert in 1932 to measure consumer attitudes. Likert (1932) developed the principle of measuring attitudes by asking people to respond to a series of statements about a topic, in terms of the extent to which they agree with them, and so tapping into the cognitive and affective components of attitudes (Saul Mcleod 2008)

Scale Value Description

1 Strongly disagree (SD)

2 Disagree (D)

3 Disagree to a Certain Extent (OCE)

4 Agree to a Certain Extent (ACE)

5 Agree (A)

6 Strongly Agree (SA)

Statistical tools used

The following statistical tools are analyzed for the data gathered:

Frequency Distribution

A frequency distribution is an orderly arrangement of data classified according to the magnitude of the observations. When the data are grouped into classes of appropriate size indicating the number of observations in each class we get a frequency distribution (TutorVista.com). Frequency distribution is applied to analyzed respondents' demographic profile in part A for instance gender, age, occupation, monthly income and highest educational attainment likewise with the general information in part B. To analyze the data collected in part C of the questionnaire the researcher used the mean and average to measure the central tendency of the data.

Pearson's Correlation Analysis

Pearson's correlation coefficient is known as the best method of measuring the association between variables of interest because it is based on the method of covariance.  It gives information about the magnitude of the association, or correlation, as well as the direction of the relationship (Statistics Solution, 2017). In this study, this analysis is chosen to determine the co-variation between the five independent variables and consumers' intention towards airline electronic ticketing.

Mean

The mean is equal to the sum of all the values in the data set divided by the number of values in the data set (Lund Research Ltd, 2013). The ratings given to the questionnaire in the survey were summed to get an assessment of the overall consumers' intention towards airline electronic ticketing.

Mean rating:

5.50 ' 6.00 Strongly Agree (SA)

4.50 ' 5.49 Agree (A)

3.50 ' 4.49 Agree to a Certain Extent (ACE)

2.50 ' 3.9 Disagree to a Certain Extent (OCE)

1.50 ' 2.49 Disagree (D)

1.0 ' 1.49 Strongly disagree (SD)

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