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Nankai Business Review International

Analyzing customer satisfaction: users perspective towards online shopping


Urvashi Tandon, Ravi Kiran, Ash Sah,
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Urvashi Tandon, Ravi Kiran, Ash Sah, (2017) "Analyzing customer satisfaction: users perspective
towards online shopping", Nankai Business Review International, Vol. 8 Issue: 3, pp.266-288, https://
doi.org/10.1108/NBRI-04-2016-0012
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NBRI
8,3 Analyzing customer satisfaction:
users perspective towards
online shopping
266 Urvashi Tandon
School of Humanities and Social Sciences, Thapar University, Patiala, India, and
Ravi Kiran and Ash Sah
Thapar University, Patiala, India

Abstract
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Purpose – This study aims to identify and analyse the key determinants influencing customer satisfaction
towards online shopping in India.
Design/methodology/approach – The literature concerning major attributes of website functionality,
perceived usability, perceived usefulness and customer satisfaction in online retailing were reviewed. Data
were collected from 365 respondents active in online shopping for examining the constructs. The model was
empirically tested using structural equation modelling.
Findings – The findings of the study reveal that perceived usefulness and website functionality have a
positive impact on customer satisfaction, whereas perceived usability had a significant but negative impact
on customer satisfaction.
Practical implications – This research will help online retailers to attract and motivate new customers
for online shopping and existing customers to extend it in their daily purchase. Online retailers can improve
post purchase satisfaction and eventually increase online customers.
Originality/value – This is one of the preliminary study dealing with customer satisfaction towards
online retailing in India. The scale has been extended to include items like satisfaction with cash on delivery
mode of payment not included in previous scales. The scale of perceived usefulness has also been deepened by
adding time performance, product performance and promotional performance.
Keywords Online shopping, Customer satisfaction, Perceived usefulness, Perceived usability,
Website functionality
Paper type Research paper

1. Introduction
Indian retail industry in India is one of the largest industries. According to Indian Council
for Research and International Economic Relations estimates, it is employing around 8 per
cent of the population and accounts for over 10 per cent of India’s gross domestic product.
With the introduction of internet and its extensive adoption, the retail buying is shifting
towards online mode through products and services namely travel, financial services,
apparels, personal care products, gadgets and many others. An estimate arrived by Singh
et al. (2012) on internet users with gadgets is summarized in Table I. The reliance on online
retailing can be gauged through the facts that its size in Indian market estimated as US
$14bn in 2012 is projected to reach US$74bn by 2017 (Singh et al., 2012). Although online
Nankai Business Review
International
retailing is still a very minute part of overall retail in India (0.1 per cent), it is expected to
Vol. 8 No. 3, 2017
pp. 266-288
grow at a faster pace (reaching approximately 2 per cent by 2017), and over the next decade
© Emerald Publishing Limited
2040-8749
its presence will be even more significant (Singh et al., 2012). Overall online retailing will
DOI 10.1108/NBRI-04-2016-0012 lead the growth with 55 per cent increase (Varshney, 2013).
Internet retailing in India is eyed as green pasture, but little is known about the factors Analyzing
which lead to customer satisfaction of Indian online shoppers. As the practice of online customer
retailing grows, a comprehensive and thorough understanding of factors leading to
customer satisfaction becomes essential. Previous researchers have studied factors
satisfaction
influencing B2C e-commerce adoption and satisfaction which highlight the significance of
variables like perceived usefulness (Bhattacharjee, 2001; Devaraj et al., 2002; Luarn and Lin,
2005; Ha and Stoel, 2009; Hernandez et al., 2009; Liao and Shi, 2009; Wu 2013), perceived
usability (Flavian, et al., 2006; Casalo et al., 2008; Kim and Eom, 2002; Ranganathan and
267
Ganapathy, 2002), website characteristics (Prasad and Ansari, 2009; Khare and Rakesh,
2011; Teo, 2002; Mukherjee and Nath, 2007; Nair, 2009; Maditinos and Theodoridis, 2010;
Gehrt et al., 2012). These factors have been treated individually and a comprehensive
integrated model has not evolved. Such an integrated model is also lacking in Indian
context. Considering these limitations, the present study, therefore, combines all the three
dimensions, i.e. website functionality, perceived usability and perceived usefulness, to arrive
at a comprehensive model so that online retailers can get an insight into factors which
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intensify online purchase which in turn will help them to expand their activities.
Generally, most of the models in technology adoption have been derived from the
research conducted in western countries and are relevant mainly in western context (Palvia,
2013). These models focus on the culture and habits of developed counties only. Therefore,
an attempt is made in this study to understand whether a similar trend is followed in India
or not. There has been an enhancement in online shopping activity from the past decade in
developing Asian countries, but the research in these countries is much less as compared to
western countries (Omar et al., 2011). Further, emerging countries have assorted socio-
economic and regulatory aspects which place an increasing demand for substantiation of
models developed by western countries (Hinson and Boateng, 2007). In contrast to developed
countries, developing countries not only lack in infrastructural facilities but also lack in
internet access which is limited, costly as well as slow (Kapurubandara, 2009). The slower
e-Business adoption rate in emerging economies has been explained as resulting from
environmental, managerial and organizational constraints (Molla and Licker, 2005). Other
researchers have noted that emerging economies are often confronted with several issues
such as lack of e-Business policies and regulation, inadequate telecommunication and
internet infrastructure, lack of trust in e-Business use and concerns about security issues
regarding e-Business implementation (Zhao et al., 2008).
Some similar works undertaken in India have been studied in length and are reported
here. Kiran et al. (2008) found that accurate information about product’s features and
product warranties affect online shopping confidence among Indian consumers. Nair (2009)
in his study of Bangalore metropolitan area found that major perceived problems in online
shopping are lost orders, security and privacy getting compromised, unsatisfactory quality
of products inadequate grievance-handling mechanisms, delay in obtaining products and a

Particulars 2005 2012 2015 2020

People with internet access 0.025 0.110 0.300 0.800


Mobile phone subscribers 0.150 0.930 1.000 1.100
Smart phone users 0.001 0.040 0.250 0.450
Laptop and notebook users 0.001 0.012 0.050 0.150 Table I.
Penetration of
Source: Technopak Advisors Report, 2012 technology (bn)
NBRI non-existing goods return policy. Prasad and Aryasri (2009) revealed convenience, web store
8,3 environment, online shopping enjoyment and customer service have a significant impact on
willingness to buy online. Khare and Rakesh(2011) in covering Indian students found that
utilitarian shopping value for online shopping websites affects intention to purchase most.
Gehrt et al. (2012) explored Indian shopping orientations and identified segments namely
value singularity, quality at any price and reputation and recreation and suggested that
268 value singularity segment need to be targeted in India. Thamizhvanan and Xavier (2012)
established that impulse purchase orientation and prior online purchase experience have a
significant impact on purchase intention.
Although, these studies are conducted in India generally covering Indian online shoppers
but are geography specific with limited sample size and some on only students attitude and
behaviour. Present study, therefore, attempts to address these limitations by investigating
the online shopping behaviour of Indian online shoppers. In this perspective, this research
will understand online shopping deeply and extensively and develops a model of customer
satisfaction. The scale is extended to cover satisfaction with cash on delivery (COD) which is
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exclusively applicable to India and other developing nations having online shopping
scenario and has been tested in present study.

2. Theoretical background and research model


2.1 E-commerce acceptance models
Theoretical models such as technology acceptance model (TAM) (Davis, 1989) and theory of
planned behavior (Ajzen, 1991) have used intensely by various researchers to understand
the user acceptance behaviour of online shoppers. Vijayasarathy (2004) established
Augmented TAM to predict consumer intentions to use online shopping by adding privacy
and security as new variables. Kim and Forsythe (2007) extended TAM by adding
innovativeness and technology anxiety. Rezaei et al. (2014) studied Malaysian consumers
and extended TAM by adding perceived value, trust, internet literacy and privacy concern.
Smith et al. (2011) examined the role of culture in influencing online shopping by adopting
TAM. However, the parsimonious nature of TAM is identified as key limitation (Tong,
2010). Further, most of the researchers have validated new dimensions of TAM but have not
deepened the constructs. Therefore, this study to build a comprehensive model examines
customer satisfaction and integrates website functionality, perceived usability and
perceived usefulness and deepens the construct of perceived usability and perceived
usefulness.

2.2 Customer satisfaction


In marketing, customer satisfaction is one of the most examined constructs. Customer
satisfaction plays a prominent role in competitive environments of e-commerce because of
its impact on retaining old customers and introducing new customers. Satisfaction is a key
determinant in customer’s decision to continue or discontinue their association with the
product or service (Chung and Shin, 2010). In an online environment, customer satisfaction
is one of essential keys, leading to the increasing customer retention, and long-term growth
of online stores (Chen et al., 2012) and intention to repurchase (Yiu et al., 2007). Behavioural
intention has received much consideration from few years and is extensively used in the
models of technology acceptance. Behavioural intention is defined as a person’s intention to
perform various behaviours (Ajzen, 1991). Khalifa and Liu (2007) empirically validated
relationship among customers’ satisfaction and intention to repurchase. Wang and Head
(2007) suggested that satisfaction positively affects online repurchase intention. Tsai and
Huang (2007) found positive relationship between satisfaction and online purchase intention
among customers of Taiwan. Similarly, attitude is defined as degree of one’s positive Analyzing
feelings about participation in online shopping. A person with positive attitude is expected customer
to make an online purchase. Pavlou and Fygenson (2006) highlighted an essential role of
attitude in shaping intention to participate in online shopping. Ha et al. (2010) also suggested
satisfaction
the role of positive attitude in formation of customer satisfaction. Chen et al. (2012)
ascertained that positive attitude extensively influences online purchase. Satisfied
customers are more likely to repurchase more in the future than dissatisfied customers
(Garcia et al., 2012). Hence, in regards to the online environment, customer satisfaction plays 269
a considerable role in the decision-making for online shoppers and increasing repetitive
purchases (Gupta and Kim, 2010). To improve business performance and increase the level
of consumer satisfaction, online retailers should have a clear and deep understanding of the
antecedents of consumer satisfaction in the online environment.
Because online shopping environment is unlike traditional retail environment
(Ranganathan and Ganpathy, 2002), therefore, key drivers of customer satisfaction may also
be dissimilar. Flavian et al. (2006) found that greater usability has positive influence on user
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satisfaction. Udo et al. (2010) examined dimensions of web service quality and found that
web service quality and website content have a positive impact on customer satisfaction.
Tandon et al. (2016) empirically analysed customer satisfaction in online shopping
environment and confirmed perceived ease of use and perceived usefulness as significant
determinants. Zhang et al. (2012) validated user computer proficiency, perceived
convenience and perceived security as determinants influencing user satisfaction with
e-services. Alam and Yasin (2010) recognized website design, reliability, product variety and
delivery performance as important antecedents of customer satisfaction in online shopping.
But there are few studies which have explored online shopping in Indian context and
little is known about the construct of online shopping customer satisfaction. Therefore, the
present study has been undertaken to study relationship of website functionality, perceived
usability and perceived usefulness with customer satisfaction.

2.3 Website functionality and customer satisfaction


Researchers have used different perspectives with varying scopes to investigate how websites
influence online purchases. Website functionality refers to the extent to which website operates
in the way it is structured and is expected to perform as users’ desire (Bertot et al., 2006).
Websites can be appraised on the basis of functions performed such as atmospherics of website
(Prasad and Aryasri, 2009; Ha and Stoel, 2009), whereas others focussed on ease to use features
of website (Khare and Rakesh, 2011; Dholakia and Zhao, 2010) and usability (Hernandez et al.,
2009; Chen et al., 2010; Lee and Kozar, 2012). Scholars have developed attributes to predict
security features of website (Tandon et al., 2016; Nair, 2009; Stefani et al., 2006; Maditinos and
Theodoridis, 2010; Gehrt et al., 2012; Rezaei et al., 2014), website service quality (Wolfinbarger
and Gilly, 2003; Nair and Prabhakar, 2007; Lin and Sun, 2009), navigability (Nair, 2009; Lee and
Kozar, 2012) and coordinating products on website (Chen et al., 2010) which lead to customer
satisfaction. Wolfinbarger and Gilly (2003) identified the dimensions of website design
(usability, information availability, product selection and appropriate personalization),
fulfilment/reliability, customer service and privacy/security. These dimensions are consistent
with the findings of other studies. Lee and Kozar (2012) found that social networking features
including Facebook, YouTube and twitter are becoming pervasive; e-business sites have
rushed to integrate these social networking features into their websites, enabling enhanced
interactive communications in between consumers or between consumers and companies.
Adding social networking features enhance the credibility by providing online customers
alternative trustful sources of information rendered by other social networks. Kim and Stoel
NBRI (2004) identified six dimensions: web appearance, entertainment, informational fit-to task,
8,3 transaction capability, response time and trust. Trabold et al. (2006) concluded that drivers
such as price perceptions, ease of returns and refunds and privacy experience differ across
sectors. Stefani et al. (2006) and Seffah et al. (2008) included security as a functionality factor in
their research. Dholakia and Zhao (2010) emphasized on “Ease of finding what you are looking
for” and “clarity of product information” as two attributes for generating positive ratings of
270 online retailing. Palmer (2002) explained the importance of customization as an important
predictor of website functionality. Liang et al. (2007) suggested customization as an important
functionality factor which increases user satisfaction by limiting information overload on users.
Gehrt et al. (2012) identified website design as important functionality factor. Calisir et al. (2010)
in his study identified security, search options, user-guidance and customisability as important
functionality factors. Guo et al. (2012) found that website design, information quality, payment
method, e-service quality, product quality and delivery service are positively related to
customer satisfaction of online retailing. Liu et al. (2008) suggested information quality, website
design, merchandise attributes, transaction capability, security, payment, delivery and
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customer service are strong antecedents of customer satisfaction. Negative website


performance will affect the internet more than the positive performance
Online consumers are target-oriented shoppers. If they do not find what they are looking for,
they would immediately switch to another website. Therefore, website features are important
for customer satisfaction and need to be taken into greater depth. The proposed features
identified through literature review include, security and privacy, website design, experiential
features, navigational characteristics and consistency feature of website. These features will
have a positive impact on customer satisfaction. The existing literature makes us deduce that
these factors are actually the dimensions of single construct, namely, “website functionality” in
this study. This study thereby proposes website functionality consists of five dimensions
security and privacy, website design, experiential features, navigational characteristics and
consistency feature and has significant positive relation with customer satisfaction. Therefore,
the hypothesis proposed in this study is as under:
H1. Website functionality has a significant positive relation with customer satisfaction.

2.4 Perceived usability and customer satisfaction


Perceived usability has been revealed as a crucial factor in internet shopping. It is frequently
associated to ease-of-use and is considered a critical factor for the development of electronic
commerce (Flavian et al., 2006, Casalo et al., 2008). Kim and Eom (2002) found that usability is
significant for achieving satisfaction. Ranganathan and Ganapathy (2002) also mention to the
importance of usability in identifying the key dimensions of website quality. Roy et al. (2001)
established the relationship of trustworthiness and usability and suggested that online
retailers need to pay attention to ease of navigation, ease of learning, perception and support
while designing online shopping website. Nielsen (2012) proposed that usability is concerned
about the ease with which the user is capable of learning to manage the system, the ease of
memorizing the basic functions, the grade of efficiency with which the site has been designed,
the degree of error avoidance and general satisfaction of the user in terms of manageability.
Thus, usability is defined as ‘‘a quality attribute that assesses how easy user interfaces are to
use’’ (Nielsen, 2012). The concept of usability considers the following factors:
 the ease of understanding the structure of a website, its functions, interface and
the contents that can be observed by the user;
 simplicity of use of the website in its initial stages;
 the speed with which the users can find what they are looking for; Analyzing
 the perceived ease of site navigation and purchase in terms of time required and customer
action necessary to obtain the desired results; and satisfaction
 the ability of the users to control what they are doing and where they are at any
given moment.
Tandon et al. (2015) hypothesized that perceived usability comprising of ease of ordering, 271
ease of understanding, ease of use and ease of purchase. Palmar et al. (2002) found five
usability factors such as navigability, site content, interactivity, responsiveness and
download delay important for customer satisfaction. Venkatesh and Agarwal (2006)
proposed a usability model examining link between content, ease of use and promotion as
important usability constructs. Kim and Stoel (2004) found ease of understanding of website
as an important dimension triggering online purchase Lee and Kozer (2012) investigated
dimensions of online shopping websites and purchase intentions and found that
telepresence readability and content relevance had a direct influence on online purchase.
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Hence, the related hypothesis proposed in this study is:


H2. Perceived usability has a significant positive relation with customer satisfaction.

2.5 Perceived usefulness and customer satisfaction


Perceived usefulness is defined as the extent to which a consumer believes that online
shopping will enhance his or her transaction performance (Chiu et al., 2009). According to
Davis (1989), individuals form behavioural intentions towards online shopping based
largely on a cognitive appraisal of how it will improve their shopping performance.
Perceived usefulness has emerged as significant predictor of behavioural intention in
TAM and is foremost factor affecting attitude towards online purchase (Celik, 2011).
Bhattacherjee (2001) suggested that customer prefer to acquire a product when such
usage is perceived to be useful. Alreck et al. (2009) argued that online merchants who
concurrently endorse both time-saving and quicker accomplishment of tasks win more
buyers than those focusing on only one of those benefits. Chiang and Dholakia (2003) also
confirmed significant relationship of the time dimension of convenience and intention to
buy. Rohm and Swaminathan (2004) hypothesized variety seeking, recreation, time and
effort savings as a part of online shopping; however, time savings were found
insignificant in the study. Zhou et al. (2007) found that if customer’s probability that
online shopping would increase their efficiency leads to repeated purchases. Ha and Stoel
(2009) suggested that customer’s perception of usefulness and attitude towards online
shopping influence intention to buy online. Chen and Barnes (2007) argued that perceived
usefulness is an antecedent of online shopping. Hernandez et al. (2009) found that self-
efficacy and usefulness are two important perceptions in explaining the behaviour of
experienced consumers, whereas ease of use does not have a significant impact on
experienced shoppers. Tong (2010) on comparing consumers of China and USA
highlighted invariant effect of perceived usefulness in online shopping. Luarn and Lin
(2005) suggested that greater the perceived usefulness greater will be the number of
transactions. Rezaei et al. (2014) in a research on Malaysian consumers also found
significant effect of perceived usefulness in online repurchase intentions.
To study the impact of perceived usefulness on customer satisfaction in India, following
hypothesis is developed with the help of above discussion:
H3. Perceived usefulness has a significant positive relation with customer satisfaction.
NBRI 2.6 Research model
8,3 Based on above discussion, an overview of the research model has been presented through
Figure 1. Online shopping is a consequence of customer satisfaction. It is hypothesized that
website functionality, perceived usability and perceived usefulness may lead to customer
satisfaction. Website functionality is driven by security and privacy, experiential factor,
website design, navigation characteristics and consistency feature, whereas perceived
272 usability is driven by ease of ordering, ease of use, ease of understanding and ease of
navigation. Similarly, perceived usefulness is predicted by time performance, product
related usefulness and promotional usefulness. Customer satisfaction has been proposed as
the second order dependent variable driven by behavioural intention and attitude to buy.

3. Research methodology
3.1 Survey instrument
After literature review, a self-administered questionnaire was developed to capture the data
from the users of online shopping. Wherever possible initial scale was taken from previously
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validated measures in online purchase satisfaction and then reorganized and adapted to
current content. Prominent website functionality items reported by Prasad and Aryasri
(2009), Ha and Stoel (2009) and Wolfinbarger and Gilly (2003) were included in this study.
Similarly, the items of perceived usability were adopted from studies such as Flavian et al.
(2006) and perceived usefulness were adapted from the studies such as Devaraj et al. (2002),
Hernandez et al. (2009) and Wu (2013). But new scale items such as “Online retailers provide
a wide assortment (variety) of products than traditional stores” and “Online discounts and
promotions are often attractive and detailed order submission helps in purchasing as per my
budget” have been analysed in scales of organized retailing (Jhamb and Kiran, 2012). As far
as perceived usefulness is concerned, providing of discounts which are often attractive
makes it imperative to include these items in the scale of online shopping as well which have
never been tested until recently. The items of dependent variable and overall satisfaction
were adapted from studies of Devaraj et al. (2002) and Hernandez et al. (2009). In addition,
lack of familiarity in the use of credit and debit cards besides apprehension of misuse of

SANDP WEBD EXPF NAVC CONSF


1

WEBSITE
EASEUND
FUNCTIONAITY

EASEPUR
1 BI
1 PERCEIVED CUSTOMER
EASEUSE
USABILITY SATISFACTION

ATB
EASEORD

PERCEIVED
USEFULNESS
1

Figure 1.
Measurement model TIMECON PROUSE PROMUSE
these has favoured the adoption of “COD” mode, and, accordingly, it has been included in Analyzing
the study. Because online retailing is in the emerging stages in developing countries these customer
items are of utmost importance for online retailing (Appendix I).
satisfaction
3.2 Data collection procedures
To get accurate responses and reduce ambiguity, a preliminary questionnaire was
distributed to a pilot group of 50 people selected on the basis of convenience sampling. This
pilot group consisted of academicians and management experts. The pilot group not only
273
answered the questions but also suggested some changes in the wording and relevance of
questions. Their suggestions were incorporated to refine the questionnaire. This procedure
helped to improve the response clarity. The final questionnaire had close-ended questions on
a five-point Likert scale. Population of this research comprised North Indian internet savvy
consumers who had some online shopping experience. Only those respondents who had
some prior experience of online shopping were targeted. A total of 1,500 questionnaires were
administered to respondents in North Indian states such as Jammu and Kashmir, Punjab,
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Haryana, Chandigarh, Himachal Pradesh and Delhi. The respondents were contacted in
shopping malls, offices and banks, etc. After repeated rounds of visits and reminders
through emails, a total of 550 responses were obtained. Careful examination revealed some
incomplete questionnaires. From these, 365 usable and complete questionnaires were
retained for analysis with a response rate of 18.25 per cent.
To remove non-response bias, the questionnaires were closely monitored, and only those
questionnaires complete in all respects were included in the survey. The sample distribution
of early and late responses was taken and compared on the basis of their demographic
characteristics. The mean difference in the key variables across early (n = 250) and late
respondents (n = 115) was tested. No significant difference between the groups was found
indicating absence of non-response bias. There is high correlation between the items of
website functionality, perceived usability and perceived usefulness when measured in the
same survey. Therefore, the common method bias was checked. All the variables were
subjected to a principal components factor analysis with varimax rotation. The analysis
revealed ten factors with each construct accounting for 0.50 per cent of variation. Thus, no
general factor was noticeable. To check multicollenearity, variance inflation factor values
were calculated. All the values were within the threshold limits indicating multicollenearity
is not present.

3.3 Demographic profile of respondents


The above table shows the basic characteristics of the consumers surveyed. Out of the 365
respondents, 61.64 per cent were male and 38.36 per cent were female. Among the
respondents, 54.8 per cent were between 18 and 30 years of age followed by 28.7 per cent in
middle age group of 31-45 years, and 16.5 per cent were above 45 years of age. A substantial
number of respondents (46.3 per cent) indicated that they have been shopping online from
one-three years followed by 39.7 per cent who had been shopping from internet since one
year. Majority of respondents (41.6 per cent) had purchased two-five products from internet
followed by 30.4 per cent who had purchased more than five products from internet in past
year. It appears that significant number of respondents were well educated, i.e.
postgraduates and graduates, of young age and enjoying average income.

4. Data analysis
The data analysis comprises of two stages. The first confirms the factor structure of
measurement items of customer satisfaction, website functionality, perceived usability and
NBRI perceived usefulness. The second investigates the relative importance of each independent
8,3 variable in customer’s satisfaction.

4.1 Reliability and validity


To assess measurement model, reliability and validity of the proposed measurement model,
confirmatory factor analysis was followed by exploratory analysis. In construct website
274 functionality, navigation characteristics (3), website design (3) and security and privacy (4)
were retained for further analysis, but experiential features (2) and consistency feature of
website (2) were omitted due to unclear factor structure and poor loadings. Similarly, ease of
use (3), ease of purchase (3), ease of understanding (4), ease of ordering (4) in the construct
perceived usability and perceived time performance (3), product related usefulness (2),
promotional usefulness (4) from perceived usefulness were retained for further analysis.
Behavioural intention (5) and attitude to buy (3) were also retained for further analysis. The
instrument exhibits convergent validity (average variance extracted (AVE) > 0.50 in all
occasions), composite reliability (values > 0.70 in all occasions) and discriminant validity
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(AVE estimate of each construct is larger than the squared correlations of this construct to
any other construct) (Table II).

4.2 Structural model


Based on the relationships proposed in Figure 1 and subsequent analysis depicted in
Tables II and III all the first-order independent variables namely navigation characteristics,
website design, security and privacy, ease of use, ease of understanding, ease of purchase,
ease of ordering, perceived time performance, product-related usefulness and promotional
usefulness load on the three second-order independent variables website functionality,
perceived usability and perceived usefulness. Next the hypothesized second -order model
was estimated using AMOS20.0 on all the three second-order independent variables. The
AMOS output of (CMIN/df = 3.047, GFI = 0.941, CFI = 0.928, TLI = 0.90, RMSEA = 0.07)
indicated an acceptable fit with the data (Tables IV, V, VI and VII).

4.3 Path analysis


The next step involved was testing of the structural model and corresponding theoretical
relationships. The path relationships within the research model were analysed by structural
equation modelling using AMOS 20. The overall fit indices of the research model are shown
acceptable (CMIN/df = 3.1, GFI = 0.935, CFI = 0.922, TLI = 0.90, RMSEA = 0.07). This
indicates that the hypothesized model is the reasonable presentation of the structures
underlying the observed data. The structural model with standardized weights is shown in
Figure 2. Website functionality had a positive effect on customer satisfaction (standardized
regression weights = 0.456, p < 0.001) thereby supporting H1. Similarly, perceived
usefulness also had a significant positive effect on customer satisfaction (standardized
regression weights = 0.370 p < 0.001) accepting H3. But on the other hand, perceived
usability had a significant but negative relationship with customer satisfaction
(standardized regression weights = 0.480 p < 0.01 thereby rejecting H2.

5. Discussion and conclusion


The findings of the study provide interesting insights into the factors leading to customer
satisfaction in an online environment. The study empirically identified attributes of website,
perceived usability and perceived usefulness leading to customer satisfaction and deepens
the construct of perceived usefulness.
Demographic characteristics N = 365 Response Valid (%)
Analyzing
customer
Gender satisfaction
Male 225 61.64
Female 140 38.36
Age
18-30 200 54.8
31-45 105 28.7
275
Above 45 60 16.5
Education qualification
Undergraduate 100 27.4
Graduate 89 24.4
Post graduate 176 48.2
Nature of consumer
Student 158 43.3
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Self-employed 42 11.5
Service 165 45.2
Annual income
Less than 3.5 lakhs (Less than US$5,830$) 201 55.0
3.5-6 lakhs (US$5,830-10,000) 95 26.1
More than 6 lakhs (More than US$10,000) 69 18.9
Number of hours spent on internet in a week
Less than 7 h 110 30.1
8-16 h 126 34.5
More than 16 h 129 35.3
Number of years of online shopping
Less than one year 145 39.7
One-three years 169 46.3
More than three years 51 14.0
Hours spend on online shopping in a month
Less than 2 h 152 41.6
2-6 h 168 46.0
More than 6 h 45 12.4 Table II.
Number of products purchased online in a month Frequency
Less than two 73 20.0 distribution for
Two-five 152 41.6 respondent’s
More than five 140 30.4 demographics

Early respondents (250) Late respondents (115)


Construct Mean SD Mean SD

Website functionality 3.63 0.83 3.69 0.84


Perceived usability 3.90 0.77 3.94 0.77
Perceived risk 3.98 0.75 4.01 0.76 Table III.
Customer satisfaction 3.89 0.6 3.95 0.55 Non-response bias
NBRI Variables Items Standard loadings SE CR Composite reliability AVE VIF
8,3
Website design WD4 0.57 1
WD3 0.81 0.185 8.359 0.74 0.50 1.438
WD2 0.74 0.186 8.392
Navigation NAV1 0.66 0.095 9.373
NAV2 0.65 0.114 8.291 0.75 0.51 1.837
276 NAV3 0.82 1
Security and privacy SP1 0.62 0.132 8.331
SP2 0.8 0.177 9.402 0.82 0.52 1.554
SP3 0.81 0.17 9.385
SP4 0.63 1
Ease of use EASEU1 0.71 0.085 10.595
EASEU2 0.85 0.085 12.067 0.82 0.60 1.824
EASEU3 0.75 1
Ease of purchase EASEP1 0.82 0.125 8.336
EASEP2 0.61 0.119 6.741 0.78 0.55 1.768
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EASEP3 0.77 1
Ease of understanding EASEUND1 0.75 0.113 9.605
EASEUND2 0.8 0.101 9.183 0.82 0.55 2.055
EASEUND3 0.68 0.092 8.905
EASEUND4 0.73 1
Ease of order EASEORD1 0.63 0.085 9.022
EASEORD2 0.8 1 0.76 0.51 1.624
EASEORD3 0.7 0.091 8.762
Promotional usefulness PUSEF1 0.84 0.051 17.548
PUSEF2 0.86 1 0.84 0.57 1.504
PUSEF3 0.66 0.056 13.229
PUSEF4 0.61 0.053 11.782
Time convenience TIMECON1 0.62 0.155 8
TIMECON2 0.73 0.144 8.817 0.75 0.50 2.055
TIMECON3 0.78 1
Product usefulness PROUSE1 0.85 1 0.87 0.79
PROUSE2 0.92 0.092 8.286 1.673
Behavioural intention BI1 0.71 0.032 15.393
BI2 0.67 0.029 13.942
BI3 0.72 0.033 16.052 0.84 0.52 1.385
BI4 0.65 0.028 14.103
BI5 0.84 1
Table IV. Attitude to buy ATB1 0.8 0.039 19.748
The measurement ATB2 0.86 0.039 18.185 0.87 0.69 1.477
model ATB3 0.82 1

5.1 Website functionality


The objective of this research had been to identify features of website functionality that lead
to customer satisfaction. Measurement model analysis indicated that navigation
characteristics of websites followed by website design and security and privacy are the
significant dimensions of website functionality. Navigation has been included in several
studies as an important factor leading to online purchase (Wolfinbarger and Gilly, 2003;
Hernandez et al., 2009 and Calisir et al., 2010). This indicated consumers aspire to find
relevant information with least efforts through graphical components, hyperlinks,
sequences and layout. Researchers have also observed positive evaluation of security and
privacy and website design in USA (Ha and Stoel, 2009; Lee and Kozar, 2012; Dholakia and
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Variables EASEORD ATB BI TIME CON PRO USE PROMUSE EASEUSE EASE PUR EASE UND S AND P WEBD NAV

EASEORD 0.74
ATB 0.057 0.90
BI 0.161 0.469 0.80
TIMECON 0.354 0.332 0.530 0.73
PROUSE 0.249 0.353 0.436 0.541 0.93
PROMUSE 0.190 0.248 0.380 0.462 0.524 0.83
EASEUSE 0.201 0.394 0.400 0.409 0.328 0.256 0.86
EASEPUR 0.267 0.426 0.423 0.533 0.325 0.286 0.391 0.81
EASEUND 0.324 0.423 0.405 0.448 0.327 0.349 0.408 0.437 0.81
SANDP 0.241 0.296 0.236 0.323 0.223 0.202 0.194 0.254 0.398 0.80
WEBD 0.109 0.258 0.377 0.331 0.213 0.262 0.301 0.408 0.287 0.245 0.80
NAV 0.235 0.357 0.411 0.478 0.407 0.335 0.438 0.505 0.449 0.434 0.406 0.76

Note: The square root of AVE is shown in italics

Table V.
customer
Analyzing

discriminant validity
matrix and
The correlation
277
satisfaction
NBRI First order Second order latent variable Standardised estimate SE C.R p
8,3
Website design Website functionality 0.53 0.093 9.58 ***
Navigation characteristics Website functionality 0.76 1 ***
Security and privacy Website functionality 0.51 0.108 8.722 ***
Ease of use Perceived usability 0.60 0.087 10.341 ***
Ease of purchase Perceived usability 0.68 0.107 10.984 ***
278 Ease of understanding Perceived usability 0.64 1 ***
Ease of ordering Perceived usability 0.39 0.117 6.644 ***
Table VI. Promotional usefulness Perceived usefulness 0.55 1 ***
Structural model of Time convenience Perceived usefulness 0.83 0.132 9.748 ***
Product usefulness Perceived usefulness 0.64 0.106 10.341 ***
website functionality, Behavioural intention Customer satisfaction 0.75 1 ***
perceived usability Attitude to buy Customer satisfaction 0.63 0.099 9.955 ***
and perceived
usefulness Notes: ***p < 0.001; CMIN/df = 3.047; GFI = 0.941; CFI = 0.928; TLI = 0.90; RMSEA = 0.07
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Hypothesis Independent variable Path Dependent variable Path coefficient p Result

H1 Website functionality fi Customer satisfaction 0.456 *** Supported***


H2 Perceived usability fi Customer satisfaction 0.483 ** Not-supported**
Table VII. H3 Perceived usefulness fi Customer satisfaction 0.370 *** Supported***
Results of hypothesis
testing Notes: ***p < 0.001; **p < 0.01

Figure 2.
Path digram and
causal relationships
Zhao, 2010), Greece (Maditinos and Theodoridis, 2010), Spain (Hernandez et al., 2009), Analyzing
Singapore (Teo, 2002), China (Lin and Sun, 2009; Guo et al., 2012; Lu et al., 2013; Sharma and customer
Lijuan, 2014) and India (Nair, 2009; Gehrt et al., 2012). This indicates that security and
privacy protection is an important driver of website functionality. While consumers may be
satisfaction
benefitted from online purchases, but concerns about privacy and security are an important
issue demanding attention of online retailers. Online retailers need to maintain the home
page simple with easily readable fonts and universally understood symbols. The contents
need to be spread evenly across web pages. Moreover, online retailers need to work upon the
279
interactive display of information on their websites leading to final purchase.

5.2 Perceived usability


‘Ease of use’, “ease of understanding”, “ease of ordering” and “ease of purchase” appeared as
significant variables. These are in line with previous study (Tandon et al., 2016). The easy to
use features of online retailer’s website, ease in finding information about products, easy to
track, modify, cancel orders and making comparisons are the benefits which consumers are
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looking for. These findings are in synchronization with similar studies where ease of
ordering, ease of use, ease of understanding and ease of purchase have been observed as
dimensions of perceived usability by respondents in countries such as Missouri, Canada,
Spain and USA (Kim and Eom, 2002; Flavian et al., 2006; Casalo et al., 2008; Lee and Kozer,
2012). One crucial finding of the study which needs further discussion and research is “Ease
of ordering”. Although it was found significant but had less loading than ease of purchase,
ease of use and ease of understanding. This signifies that ease of ordering is important for
general usability, but consumers are still finding difficulty in placing, tracing, replacing and
cancelling the orders once placed. This can be improved by adding features such as online
chat, virtual tour, instructions about payment and feedback.

5.3 Perceived usefulness


The study confirms “Perceived time performance” as strongest indicator of perceived
usefulness followed by “promotional usefulness” and “product related usefulness” as
important dimensions of perceived usefulness. The results are in corroboration with
previous studies which focussed on time and effort savings as key factors leading to online
shopping (Alreck et al., 2009; Rohm and Swaminathan, 2004; Zhou et al., 2007). This signifies
that Indian consumers too prefer shopping online and believe that it saves their time and
they get better discounts than brick and click stores.

5.4 Customer satisfaction


Analysis of this study reveals that customer satisfaction of online purchasing is predicted
by both behavioural intention and attitude to buy. This is in-line with previous studies
(Pavlou and Fygenson, 2006; Wang and Head, 2007; Tsai and Huang, 2007) and holds good
for Indian scenario as well.

5.5 Relationship between customer satisfaction, website functionality, perceived usability and
perceived usefulness
As listed in Table VII website functionality and perceived usefulness collectively affect
customer satisfaction, whereas perceived usability has a significant but negative
relationship with customer satisfaction.
Among the factors affecting customer satisfaction in online shopping website
functionality has relatively larger effect. There are earlier studies supporting positive
NBRI evaluation of navigation characteristics, security and privacy and website design as
8,3 discussed in Section 5.1. But in the present study, website functionality has emerged as the
most important factor in adoption of online retailing.
The results for perceived usefulness for customer satisfaction were also significant. This
is in consistence with research findings of studies conducted in Europe and USA (Ha and
Stoel, 2009; Lee and Kozer, 2012; Rose et al., 2012), Spain (Hernandez et al., 2009) and China
280 (Wu, 2013; Liao and Shi, 2009; Lin and Sun, 2009; Chen et al., 2010) and Greece (Maditinos
and Theodoridis, 2010). So this is true for Indian scenario and has been supported through
results of the present research.
One interesting finding of this study is significant but negative relationship of perceived
usability with customer satisfaction. This is in contrast with earlier studies which found
positive evaluation of perceived usability and customer satisfaction (Kim and Eom, 2002;
Palmar, 2002; Flavian et al., 2006; Pearson et al., 2007; Lee and Kozer, 2012). As usability is a
quality attribute that assesses how easy user interfaces are to use (Neilson, 2012). These
results have added implications for Indian retailers to focus on improving interface to instil
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more confidence on online customers.

6. Implications and conclusions


6.1 Implications for theory
This research has important implications for researchers, academicians as well as online
retailers. This study also has a higher relevance in developing countries where switch over
to internet based retail purchase had been much after the active adoption by Western
countries. The findings of this study have advanced our understanding of under researched
topic of customer satisfaction towards online shopping in India.
For academic audience of developing nations, this sets an outline for further research, as
it is one of the initial study in these geographical areas. First, the study validated the
consolidated role of website functionality, perceived usability and perceived usefulness
against their causative role of their sub-factors in understanding customer satisfaction
towards online shopping in India. The present study implies the critical factors, viz.,
navigation characteristics, website design and security and privacy associated with website
functionality, time performance, product-related performance and promotional performance
associated with perceived usefulness leading to customer satisfaction, thus refining the scale
for developing countries.
Second, the study also conceptualized perceived usefulness as multidimensional
construct, thereby deepening the existing scale by adding time performance, product-related
usefulness and promotional usefulness as key dimensions of perceived usefulness. The
present study also refines the scale of customer satisfaction by including COD mode of
payment as a new dimension of customer satisfaction befitting Indian environment.
The present study has extended the application of previous theoretical frameworks
regarding technology adoption by validating instruments of website functionality,
perceived usefulness, perceived usability and customer satisfaction in context of developing
countries.

6.2 Implications for practice


The findings of the present study are useful for online retailers also in various ways. Online
retailers can get valuable insights about factors leading to customer satisfaction. Based on
the findings, they can understand important indicators leading to improving customer
satisfaction, and this will instil increased consumer confidence for online shopping. Online
shopping enables a change in the consumer’s buying habits, and this necessitates some
more time to adjust to this change in buying practices. Online retailers need to be little Analyzing
empathetic towards people. Therefore, as found in this study to retain customers, online customer
retailers should pay particular attention to website design, navigation characteristics and
security and privacy. One important finding of this study is that there is a significant but
satisfaction
negative relationship of perceived usability with customer satisfaction indicating that
people still find difficulty in understanding the procedures of online shopping. People are
not well versed with process of online shopping and find difficulty in tracking orders,
replacing orders once placed and cancelling orders. This can be reduced by improving 281
quality of information, instructions about payment and virtual tour through the website.
Features such as online chat, forums, feedback also infuse confidence in online shopping.
The frequently asked questions page mentioning all the questions which a customer may be
cautious to ask from customer care executives can further instil confidence among people. In
addition, consumers need to be acquainted with the policy of replacements and an effective
query handling software is the need of the hour. Competent sales staff well versed with
regional dialects and language will help in providing local touch.
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This study provides significant suggestion to online retailers who are in the early stages of
website design. First, there is a need to lay focus on attractive and vibrant web pages which
should be easy to upload and make website user friendly. Second, the designers need to focus
more on graphics, picture display and interaction-related issues. This may lead to increase in
sales. The contents need to be spread evenly across web pages. Moreover, online retailers need
to work upon the interactive display of information on their websites leading to final purchase.
Further, in spite of best assurances given by online retailers, e-shoppers consider security
and privacy still a matter of concern. Thus, online retailers must invest on security software to
enhance best online security as it is the basic requirement. One such challenge viewed
commendably is COD mode of payment as a secure and trusty way to overcome this fear. COD
model is inducing customers to switch to online purchasing and there are less chances of faulty
product being delivered as customer can check the product and then make payment. But it
needs to be extended to all pin codes of the country. Further, a detailed privacy statement needs
to be posted and should not only specify what the online store does with the customer data but
also specify what it does not do (Sharma and Lijuan, 2014; Gehrt et al., 2012). Online retailers
need to instruct consumers to use and comprehend online shopping by developing more
friendly user-training materials. An online demonstration before their start may acquaint them
with the online purchasing. Increased focus on above mentioned features will help enhance
customer satisfaction thereby leading to an increase in online sales.

7. Limitations of the study and further areas of research


An important limitation of the study is that it was conducted for respondents from North
India. Although to remove this constraint an effort was made to compare results with the
studies conducted in south and west as well. Another limitation is that of slightly lower
response rate than expected. As the present study is an exhaustive study covering website
design, perceived use, perceived usefulness and customer satisfaction of online retailing and
this required more time to fill the questionnaire. This limitation was reduced by sending
more questionnaires and finally getting 365 responses. The final analysis was conducted
using only those questionnaires, which were complete in all aspects.
The study has found out important predictors of customer satisfaction of online retailing.
The study has also identified weak relationships of customer satisfaction and factors
influencing customer satisfaction. Increased attention may be accorded to these factors in
future to improve their predictability. There is also a need to validate the model through
case studies of online retailers. The model may be tested covering different cultural groups
NBRI and may include rural and semi-urban areas also having limited access to technology
8,3 adoption to increase the application. The research may be extended to test mediating effects
among constructs, for example, perceived usability and perceived usefulness may mediate
the relationship between website functionality and customer satisfaction. Additional
research areas can cover post-purchase behaviour, the negative experiences if any and
satisfaction attributes.
282
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Appendix 1 Analyzing
customer
satisfaction
Scale items and
their literature
support Scale Items

Website functionality: (Items adapted from Prasad and Ansari, 2009; Ha and Stoel, 2009; Dholakia and Zhao, 2010; Chen
287
et al., 2010; Maditinos and Theodoridis, 2010; Wolfinbarger and Gilly, 2003; Lin and Sun, 2009)
Website The attractive colour scheme of online retailing websites facilitates shopping.
design WD2
The graphics displayed in websites provide ease for ordering product. WD3
Shopping online is an exciting experience. WD4
Website Navigation Pictures of products are downloaded quickly. NAV1
functionality
The search function at the websites is helpful. NAV2
The websites allow easy return to the previous display pages. NAV3
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Security and The websites have adequate security measures. SP1


privacy
I feel safe while using my credit card/debit card on the websites.SP2
I trust that the websites will not give my personal details to other websites
without my permission. SP3
Online retailers offer user memberships for surfing on the password protected
web pages within the website. SP4
Perceived usability: (Items adopted from Flavian et al., 2006; Casalo et al., 2008; Tandon et al., 2015)
Ease of use It was easy for me to learn internet shopping. EASEUSE1
Internet shopping websites are easy to use. EASEUSE2
Navigation for internet shopping is easy for me. EASEUSE3
Ease of Online retailers provide ample information. EASEPUR1
purchase
Information provided by online retailers help me to purchase product.
EASEPUR2
Successful initial purchasing builds confidence for further purchasing.
EASEPUR3
Perceived usability Ease of The language used by online retailers is easy to understand. EASEUND1
understanding
**Display pages lead to further detailed information. EASEUND2
**Process of transaction on the web is easy to understand. EASEUND3
It is easy to place orders online. EASEUND4
Ease of It is easy to track orders placed online. EASEORD1
ordering
It is easy to modify orders placed online. EASEORD2
It is easy to cancel orders placed online. EASEORD3
It is easy to replace orders placed online. EASEORD4
Perceived usefulness (Items adopted from Devaraj et al., 2002; Ha and Stoel, 2009; Nair, 2009; Hernandez et al., 2009; Lin and
Sun, 2009; Liao and Shi, 2009; Tandon et al., 2015; Wu, 2013)
Time Online shopping enables me to accomplish shopping more quickly than
convenience traditional stores. TIMECON1
Online shopping helps me to find product information within the shortest time
frame. TIMECON2
Shopping online takes less time from search of products to transaction.
TIMECON3

Perceived usefulness Product **Online retailers provide a wide assortment (variety) of products than
usefulness traditional stores. PROUSE1
Online retailers provide more information about the features of products than
traditional stores. PROUSE2
Table AI.
(continued) Measurement scales
NBRI
8,3 Scale items and
their literature
support Scale Items

Promotional While shopping on internet I can find some products that are not easily available
usefulness in physical storesPROMUSE1
**Online discounts and promotions offered are often attractive. PROMUSE2
288 **Detailed order submission helps in purchasing as per my PROMUSE3
Online shopping facilitates comparative analysis of similar products. PROMUSE4
Customer satisfaction (Items adopted from Devaraj et al., 2002; Hernandez et al., 2009; Maditinos and Theodoridis, 2010)
Behavioural I am satisfied with product range offered by online retailers. BI1
intention
I am satisfied with the quality of products offered online. BI2
I would continue to purchase products online. BI3
Customer I recommend online shopping websites to other people.BI4
satisfaction
Online shopping is a satisfying experience as it offers customised product at my
convenience. BI5
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Attitude to Products purchased online have measured up to my expectations.ATB1


buy
I am satisfied with the way online retailers carry out transactions. ATB2
**New scale items **I am satisfied with the COD mode of online retailers.ATB3

Table AI. Note: ** indicates new scale items

About the authors


Ms Urvashi Tandon is a Research Scholar at Thapar University. She holds an MBA degree and is
completing her Phd in Online Retailing in School of Humanities and Social Sciences, Thapar University.
Her research has been published in Information Development, GBMR, IJEMR, JEKEM. Urvashi Tandon
is the corresponding author can be contacted at: urvashiguptav@gmail.com
Dr (Ms) Ravi Kiran is a Professor School of Humanities and Social Sciences at Thapar University. She
is having 25 years of teaching experience. Professor Ravi Kiran completed her PhD in Industrial
Management from Thapar University, Patiala. Her research areas of interest are industrial management,
business economics, e-business and intellectual property rights. She has published more than 101 papers
in refereed journals including renowned publishers Sage, Francis and Taylor, Emerald and Springer. She
has published 55 papers in National/International Conferences and has 12 book chapters. She has
completed six research projects including AICTE Major Project on IPRs in Pharmaceutical Sector of
India. She is on the editorial board of International journals and referee of many journals listed in SSCI,
Thomson Reuters. She has travelled widely in many countries including Hongkong, Bangkok, Australia,
Singapore and Dublin Ireland for presenting papers, keynote address and for academic collaboration.
Dr Ash Sah is working as an Assistant Professor in the area of Economics & Econometrics in Thapar
University. He is a doctorate in Finance from University of Hyderabad India and has ten research
publications to my credit. In addition to this, he has published a book on Data Analysis Using MS-Excel.
His areas of interest are financial markets and macroeconomics. He has got expertise in SPSS, Eviews and
Data Analysis in Excel as well. A book on ‘Data Analysis Using Microsoft Excel’ and a research project for
National Stock Exchange (NSE) on Stock Market Seasonality are his other credentials.

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