A study on the factors affecting online transactions

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A study on the factors affecting online transactions

Posted: May 31, 2011 |Comments: 0
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A study on the factors affecting online transactions
By: ALIREZA BAYAT & HAMIDREZA HADJALI
Abstract
Literally, the exponential growth in e-commerce since the advent of internet and its adoption in marketing by incumbents like Amazon . com have made the behavior of the consumer through virtual market an elaborated critical issue for marketers and researchers a topic of interest and concern . Essentially, myriad numbers of studies have been conducted by researchers and scholars, however, still the lack of proper and thorough model is felt by online product /service providers. Basically, these paper manipulated four essential factors Perceived Ease of Use (PEU), Perceived Usefulness(PU), Satisfaction and Intention to Purchase(IP) online in the IT arena(virtual market) have been scrutinized and evaluated to help web designers and IT experts to design company’s online interface ( websites) with their targeted market more appropriate and pertinent to maximize business’s to increase sale by maintaining their consumer loyalty and frequent purchasing. Theoretically, a random sampling method along with Technology Acceptance Model (TAM) applied to examine the relationship between these factors while IPT considered dependant variable and the other three factors were categorized as the independent variables.

Introduction
For advent of the internet to the marketing arena by incumbents like amazoon. com understanding the behavior and attitude of the consumers online long has been the topic of the interest for marketer and thereby for scholars too. Primarily, the nature of shopping online is different from shopping offline where consumers can actually see, touch, and make eye-contact with seller . thus; the experience that the consumer would gain will differ substantially. As long as, the shopping experience of the consumers is deemed to be the determinants of myriad number of the consumers behavioral traits and attitudes, understanding the determinants of the consumer behavior and critical factors that would affect consumer experience both negatively and positively is noteworthy and a critical scope for extensive study and research.
Due to the fact that each probable online shopper would have defined different objectives for shopping a specific product/ service multitude number of variables has found to be significant in this arena. However, All the applied methodologies to study these variables can be categorized into three or four groups. Some researchers focus their attention to the websites environment and structure, in contrast with this folk some study the applicability of the website i. e. method of utility. However the most controversial and interesting field study encompasses the behavior and experience of the consumer that would amount to the frequent buying behavior and intention to purchase online and consumer loyalty (Featherman, & Pavlou, 2003).
First and foremost, this paper sheds light on some specific area in online consumer behavior including the relationship between consumer satisfactions, perceived ease of use, perceived usefulness, and intention to purchase online. Mainly, by establishing six hypothesis four confirmatory and two exploratory, this study attempts to extend the body literature spectrum in the field of study.

Key words: consumer satisfaction, perceived ease of use, perceived usefulness, intention to purchase online, online consumer behavior.

Technology Acceptance Model (TAM)
Davis et al (1989) explained TAM as a theoretical institution to elucidate and forecast the acceptance of information technology. Chiefly, this theory stemmed from Theory of Reasoned Action (TRA), which identifies tow factors of attitude and intention to perform, as motivators of social behavior (Fishbein & Ajzen, 1975) . Based on TRA, time and accessible context are two underlying factors that peoples intend to behave based on them.
Literally, Total Acceptance Model theorized by Davis et al (1989), explicate the way peripheral factors affect attitude and behavioral intention.
Satisfaction
Primarily, consumer satisfaction is defined as the accumulated consumer experience (Johnson, 2001; Olsen, 2002). Moreover, there are multitudes of studies which identify consumer satisfaction as the fundamental determinant of repurchase intention (Olsen, 2007; Szymanski & Henard, 2010). DeLone & McLean (1992) pointed out satisfaction as the highly applied factor for measure of online retailer success. Thus, satisfaction can be used as one the significant determinates of the repurchase intention.
H1: there is positive relationship between online customers’ satisfaction and repurchase
intention.
Perceived Usefulness, Perceived Ease of Use
Primarily, Perceived Usefulness (PU) refers to the evaluation of the value offered by applying updated IT in particular situation that reflects performance and usefulness and productivity (Davis, 1993, 1989).
Perceived Ease of Use (PEU) refers to the user expectation regarding to the endeavor that they would face while working with system (Davis, 1993, 1989). Chiefly, these two concepts indicate to the personal evaluation of users about a particular system (Davis, 1993).
Literally, PU and PEU are tow distinctive but associated factors. Technology Acceptance Theory held perceived usefulness and perceived ease of use the as the primary and secondary determinants of behavioral intention regarding to IT adoption .
In TAM, perceived usefulness is a major belief factor, and perceived ease of use is a secondary belief factor in determining behavioral intentions toward using information technology (Davis, 1989; Gefen et al ,2003 ; Gefen et al , 2004 ; Moon,& Kim , 2001;Yu et al, 2005; Hsu et al, 2004; Featherman, & Pavlou, 2003) .
Attributed Moon and Kim (2001) maintained that perceived ease of use and perceived usefulness increase willingness and intention to apply the internet to access to online market. More over, Gefen and Straub (2004) highlighted that these two factors along with trust factor have a significant effect on the intention to purchase online.
Attributable to the previous studies in addition to the empirical observation and evaluation , it can be outlined that perceived ease of use and perceived usefulness are two significant determinants of the users intention to buy online. Thus , following hypothesis can be unearthed :
H2: there us a positive relationship between perceived ease of use and intention to
purchase online.
H3: perceived usefulness is positively related to the intention to purchase online.
Featherman and Pavlou (2003) pointed out defined perceived ease of use as the metal endeavor that a user would have bear in while applying a new information system.
Literally, the higher the ease of use of an information technology, the higher the level of productivity and enhancement which are the solid indicators of the perceived usefulness (Moon, & Kim, 2001).
Suh & Han (2003) has detected the significant positive effect of perceived ease of use on perceived usefulness. Therefore, this study determines to establish a hypothesis built on this relationship.
H4: perceived ease of use and perceived usefulness are directly related to each other.
Based on qualitative studies in this research and particularly responses to the open ended question some evidences were found about the probable relationship between perceived ease of use and perceived usefulness on consumer satisfaction, thus I established two unsupported hypothesis to examine in this study.
H5: there is appositive relationship between perceived usefulness and intention to purchase online.
H6: there is positive relationship between perceived ease of use and intention to purchase online.

Research method
Instrument
This study is to examine the relationship between four variables that are found to be significant according to the past literature in the relative context. Then instrument which has been maneuvered for measuring these four variables consist of 5 part in which in the first part demographic of the sample like age , gender , income , ethnicity and so on and so forth are measured . likewise in the remaining four part each of four variable of perceived ease of use , perceived usefulness , satisfaction, intention to shop online are measured by ,manipulating a five point Likert Scale ,ranged from “strongly disagree” to “strongly agree”.
Sample’s descriptive statistics
Appling random sampling method 50 participants selected randomly from a wide spectrum of the 35 Malaysians, 6 Chinese, 6 Indians, and 3 participants from other nationalities in which 22 were male and 26 were female. Among them 19% were form elementary school, 54. 7% from high school, 17% college degree, 20. 8% graduate degree.
Measures
Theoretically, the perceived usefulness have been measured by a four-item scale established by Venkatesh and Davis (1996). Likewise the perceived ease of use items have been extracted from the same authors which is a three –item scale.
Intention to continuous use of shopping online is measures by a two item scale coined by Fishbein & Ajzen (1975). whereas satisfaction has in this study has been measured by a four-item scale coined by Ghani et al . , (1991).
Confirmatory Factor analysis
Nonetheless, that all the elements for measuring the variables of interest are extracted form part of previously established questionnaires, a factor analysis has been conducted to measure the consistency of the construct.
As shown in the table . 1 all the factor loading are above value 0. 5 , indicating that all the elements are significant (Hair, Anderson, Tatham & Black, 1995). all the Coronbach alpha values are above the standard value of 0. 7 , that denotes to the internal consistency of all the elements which measuring their relative factor. Furthermore, all the explained variances values as another measure of internal consistency along with Coronbach Algh are above 0. 7 which again indicate to a well consistency of the elements relative to their corresponding factor.

Table. 1 Model Test of Reliability and Internal Consistency
F a c t o r
Factor Loading
t-value
Reliability
Coronbach ?
Explained Variance
Perceived Usefulness(PU)

0. 843
0. 51
1. using my favor shopping website can improve my shopping performance
0. 754
16. 6
0. 58
2. using my favor shopping website can increase my shopping productivity
0. 698
15
0. 48
3. using my favor shopping website can increase my shopping effectiveness
0. 852
26. 8
0. 68
4. I find using my favor shopping website is useful
0. 785
16. 87
0. 61
Perceived Ease of Use (PEU)
0. 821
0. 53
1. learning to use my favor shopping website would be easy for me
0. 789
17. 3
0. 61
2. I find my favor shopping website easy to use
0. 721
16. 2
0. 52
3. my interaction with my favor shopping website is clear and understandable.
0. 801
18. 5
0. 62
Satisfaction
0. 795
0. 55
1. using my favorate shopping website can improve my shopping performance,
0. 687
14. 3
0. 47
2. using my favorate shopping website can increase my shopping productivity,
0. 655
14. 2
0. 42
3. using my favorate shopping website can increase my shopping effectiveness
0. 713
15. 7
0. 49
4. I find using my favor shopping website is usefu
0. 712
15. 7
0. 48
Intention to Purchase(IP)
0. 834
0. 5
1. I intend to use the Web (e. g. purchase a product or seek product information).
0. 821
22. 3
0. 65
2. Using the World Wide Web for purchasing a product is something I would do.
0. 742
16. 3
0. 59
3. I could see myself using the World Wide Web to buy a product.
0. 678
13. 9
0. 48
Measure of sampling adequacy = 0. 76 ?2 = 50. 153
As it can be seen in Table. 2 the rage of the mean for all the variables is between 3. 2 and 3. 87 . pertaining to the Likert Scale which has been applied in this study it can be point out that all the respondents were to some extent agree and rather positive toward evaluating factors .
Table . 2 Descriptive statistics of model
F a c t o r
Mean
Std. deviation
PU
3. 76
0. 96
PEU
3. 2
1. 43
IR
3. 87
0. 87
IP
3. 65
1. 03
SAT
3. 47
1. 2

A Pearson test of correlation have been conducted and results is demonstrated in Table . 3 . contrasting each value with its corresponding P-value it can be interpreted that all the variables are associated with each other.
Table . 3 Pearson correlation
PU
PEU
IP
SAT
PU
1. 00
PEU
0. 578a
1. 000
IP
0. 768
0. 398b
1. 000
SAT
0. 423
0. 654
0. 549c
1. 000
a:P< 0. 01
b:P< 0. 05
c:P< 0. 01

in accordance with Bagozzi and Yi (1988 ) a value of ?2 which is higher than 0. 3 is considered good and as long as this value for the study is well above 0. 3 the model fit can be regarded as good.
Similarly , other indices for the study as shown in Table . 4 satisfied its relative condition . in essence , according the results of the model fitness the model can be assumed fitted and ready to be used to analyze the examining hypothesis.

Table . 4 Model Fit Summery
Measure
Recommended
Value
Magnitude
?2

50. 153
?2/df
less than 3
3. 1
goodness-of-fit index (GFI)
higher than 0. 9
0. 798
root mean square error of approximation (RMSEA)
less than 0. 08
0. 052
adjusted goodness-of-fit index (AGFI)
higher than 0. 8
0. 965
comparative fit index (CFI)
higher than 0. 9
0. 966
non-normalized fit index (NNFI)
higher than 0. 9
0. 965
non-normalized fit index (NNFI)
higher than 0. 9
0. 899

Analysis
In principle, a Multiple Regression Analysis is conducted to examine the hypothesis between factors.
As illustrated I the diagram PEU is significant determinant of the satisfaction to purchase online which in fact support H6. likewise , PU and PEU and SAT are strongly predicting the online purchase intention which in turn satisfy the H2 and H1and H3 . However, H4, H5 were rejected in this study.

Perceived ease of use
H2 ?=0. 05388*
H4 ?=0. 063

Intention to purchase online
Perceived usefulness
Satisfaction
H1 ?=0. 045*
H3 ?=0. 061*
H5 ?=0. 074
H6 ?=0. 054*

Conclusion
In this study consumer satisfaction is found to have a strong effect on the online purchase intention which is consistent with previous finding (Olsen, 2007; Szymanski & Henard, 2010). Presumably, perceived ease of use of the website application has strong effect on the consumer satisfaction, however it is noteworthy to mention that for crafty and sophisticated consumer this factor may be redundant and should be replaced with factors like security and privacy. Surprisingly, the impact of perceived usefulness on the satisfaction has been found not significant. Mainly there will be one viable explanation over this effect which is perceived contribution of purchasing online on the individual performance and particularly the value that they may acquire in return of effort and time which they may dedicate on online shopping is again redundant for experienced users. They may get a valuable deal by means of several clicking on the targeted website in minimum amount of time. Merely, this fact would indicate to the defect of the TAM model in this respect. Beside satisfaction, Perceived ease of use has a significant effect on perceived usefulness, vividly because the amount of time that random user would consume for getting a fix value. all the findings were in accord with previous findings in the field of study , moreover two new relationship of PU and PEU on satisfaction has been analyzed by which the PU effect on SAT has been rejected and PEU effect has been supported by this study.

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A study on the factors affecting online transactions

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