SHAH ABDUL LATIF UNIVERSITY,

KHAIRPUR

Article work assigned by:- Sir Rehman Gul

Gilal

Group Members:-
Sheeraz Ali Khuhro (BBA-16-75)
Abdul Wahab Abbasi (BBA-16-06)
Muhammad Asad Samo (BBA-16-57)
The Effect of Online Customer Service on
Customer Purchase Decision

Introduction
As the world is growing faster in every field so development comes
not only in the ways of doing work in a better and efficient way but also
to motivate the people by offering them good, quick and fast services.
Services not only in the sense of physical stores but also in the online
stores. Because online shopping behaviour and environment is
fundamentally different from that of conventional retail environment. E-
commerce competition among different companies has taken place so
every company is trying to provide a better experience to their
customers by offering them better services in different areas like
delivery, shipping, tracking, return. In this fast world everyone wants to
get a quick and better service within a minimum time period from order
to receipt of any product. So for saving the time of customers companies
are now trying to provide the better facilities to online customers. So
many researches has been conducted to find the more convenient ways
in order to facilitate the customers in a efficient and effective way. The
experience of successful e-business shows that satisfaction with the
quality of service determines the success or failure of an e-commerce
enterprise (Reichheld & Schefter, 2000; Santos 2003).

The service quality is more important factors in affecting the online

customers shopping decision rather than price, because when a
customer experience a poor service from an online retailer, he or she will
stops buying products from that retailer. Online customer experience
also depend upon how well people interact with the computers (Hoque &
Lohse 1999, Griffith et al, 2001). So many factors were identified by
different researchers that can affect the buying pattern of online
customers. During the information search stage, the in ternet offers
extensive benefits to web customers by reducing g their search cost and
increasing shopping convenience, vendor choices and product optiond(
Bakos 1998, Alba et al 1997). There is also a great impact of website on
online customers shopping experience that is used by a company to run
their business. Design element of website such as ease and fun of
navigation are important when any customer interact (Wolfinbarger and
Gilly 2001). In online shopping the level of customers satisfaction can be
determined by the service quality(Fornell1992, Martensen, Gronholdt &
Kristensen 2000). The key role of online store is to provide information
about the price as well as about product in order to reduce the search
cost of consumers. (Bakos 1997).

Now a days tracking system has also got the great importance
because when customer order for any product then his mind is diverted
to that product that where it has reached so for removing that difficulty
companies are now using tracking system by which they will provide the
information to the customer about their products that where it has
reached.

Online customers also conscious about the default of any product.

Because they only see the pictures of that product but not physically
they touch that product, so they require a return policy from the
companies in case of any default, customers bear a risk if any company
have no any return policy. Most companies external information events
to attract new customers and to keep existing customers. Customer
loyalty is depend upon how much a customer is satisfied with the
companies offering and their services, so customer satisfaction mediates
the relationship between perceived quality and customer loyalty.
Customer loyalty is considered to be important because of its positive
effect on long term profitability. The purpose of this study is to find the
effect of online customers shopping experience on their satisfaction.
Literature Review
Many studies have been made on online customer shopping and
experiments were conducted by so many peoples in order to find the
convenient ways (not only in service but in different forms) which is the
crucial requirement for the satisfaction of every customer in this
electronic world.

Different authors argued differently based on their studies and

experiments.

2.1 Customer service:

According to Alba (et al,1997)The consumers reduce their decision

making efforts in online shopping environment that provide vast
selection information, screening, reliability and product comparison.
Bakos (1997)argued that key role of online store is to provide
information about the price as well as about product in order to reduce
the search cost of consumers. According to Lohse and spiller,(1998)
consumer want communication in a careful, continuous and in a useful
way without restriction of any geographic barriers.

As many studied showed that the customer service has the direct impact
on the customer satisfaction bucause when customer get good services
than he will be satisfied and become the loyal.

So we have expexted from the past studies that customer service is

positively associated with the customer satisfaction.
H.1: customer service is positively associated with the customer
satisfaction.

2.2 Shipping

Hoque and Lohse (1999) stated that: search cost of consumers and time
required for the processing of information may be reduced by a well-
designed user interface. Wolfinbarger and Gilly (2001)said that:When
the consumers make online shopping they get unique benefits such as;
time saved, more convenient dis-satisfaction risk reduced. According to
Moth (2012) The key factor of customer satisfaction are the free shipping
and the delivery.

Post purchase services has also great impact on the customer

satisfaction. So shipping is also one of the great post purchase services
offered by so many companies to their customers in order to satisfy
them and make them loyal with the company. As the past studies had
also stated that shipping is also one of the great source to attract the
customers, through this services customers get the things at their homes
without making any effort.

So we expexted from the past studies that the shipping service has also
a great impact on the customer satisfaction.
H.2: shipping services is positively associate d with the customer
satisfaction.

2.3 Tracking services.

From the previous studies we have observed that the customer

satisfaction and shipping service has also a positive relaionship. The
customer get satisfies when they are getting sach a great services like
traking through this services customer get update about their delivery
that where it has been reaxhed at aspecific time. So comoanies
providing these services by simply connecting a chip with the ordered
that hes been delivered to the customer and and customer can check it
with the code orivided by the company.

So we have expected that this type of service is one of the new and
atrractive way to customers who become very concious about their
orderd products.

H.ous about their orderd products.

H.3: Tracking service is positively associated with he customer
saticfaction.
2.4 Return services

Most of the companies are now working on this type of the service
because now a days consumers are more concious about the life of the
products and they think that how we can check the products beore
purchase so they have threats that either that product is perfect or not or
there may be chances of damage during the delivery system, so for
avoiding those threats customers require some king of guranttees

As different studies have also focused on this issue and they have
advised to compnies that if they want the customers become satisfied
you should increase your return services. We have expexted from this
study that

H.4: return service is positively associated with the customer

satisfaction

2.5 Customer Satisfaction

According to Peteson, (et al, 1997) Online Consumer satisfaction and

better decision of buying can be increased by the high quality and more
extensive information available online. andwith the provider and supplier
of service customer feel satisfied and safe when he/she makes few
transaction with them. According to Ravald and Goonroos, (1996) When
the consumer trust to a company then he thinks that company is
providing him more value and fulfil his needs and wants, there fore he
committed more to that company.

Kotler (1997)stated that: After few purchases the customer earn the
experience that results the satisfaction or dissatisfsction.

Zehang (et al, 2006) examined that skills, experience and the perceived
security of the user have great impact on satisfaction of users with e-
services.

So many auhtors argued that the customer satisfaction is only achieved

by the services we are going to provoide them so it depend on every
company that how and which type of services it will going to provide to
theior customers in order to satisfiy them and make them loyal. If once
customer satisfied from the services offerd by a company then he will
commited to that company that in future he will make the purchase only
from that store or he will buy the products only from that company.

So we had expected from the past studies that the customer

satisfaction will directly impact on the future Purchase intention.
H.5: customer satisfaction is positively associated with the future online
shopping

2.6 Future shopping

According to Anderson and Lindestad: for future shopping retain the

existing customers and to attaract the new customers most of the
companies organize the external event in which they provide the
information to make awaire them. Garbarino and Johnson and Morgan
and Hunt (1994), Pritchard (et al, 1999): Commitment (maintain the
valued relationships) is an important tool in forming the loyality of
consumers and future behavioural intention.

From these stufies we had observed that the post purchase services has
also a great impact on the future purchase intention. As the customer
get good services he become satisfies than and loyal to that company
and try to make purchasse only and only from that store or that
company. So expected that the future purchase intention is also related
with the customer satisfaction that how much he has been satisfied wit
services provided to him.

H.6: future online shopping and the customer are positively associated.

Methodology
This research gather the data from those individuals who have
online shopping experience or having knowledge about online shopping
and post purchase customer service, return, shipping and tracking. so
through this study individuals share their opinions and based on those
opinions we interpret the results.
 The sampling of this study based on those individuals who are in
between 18 to 25 years, citizens of Pakistan at the time of survey and
are currently living there. The data is collected through Questionnaire
from 150 individuals and 5-point likard scale (1for strongly disagree, 2
for disagree, 3 for Neutral, 4 for Agree, and 5 for strongly agree) is used
and convenient sampling approach is used. The individuals are currently
student of BBA and MBA at Shah Abdul Latif University Khairpur (Mir’s).
In this study we examine the customer satisfaction with the post
purchase services offered by online retailers. We also included the
control variables that may affect the results such as: Age, Gender,
education, Income, these variables may affect the results at a great
extent. Because these variable are important to which the purchase
decision may be affected.

We analyse the shopping experience that how much experience

individuals have because only those individuals can provide better
results who have a online shopping experience. Income is also one of
the important factor to be considered because so many individuals
whose income is not sufficient to do an online shopping because they
prefer those ones which are easy available in the market. So, individuals
who have the source of high income they can do online shopping and
can share best opinions. Age is also a determinant that can be
considered while collecting the data. We have close cultural similarity
but different online shopping experience of individuals.

Table 1 RESPONDENT PROFILE (N=155)

Profile Frequency %

Age Under 20 41 28.1

20_25 105 71.9

 26-30 0 0

Gender Male 120 82.2

Female 26 17.8

Occupation Student 140 95.9

Teacher 0 0

Other 6 41

Income under 19,999 24 16.4

20,000-29,999 90
16.6

30,000-39,999 10
6.8

40,000+ 22 15.1

Qualification Intermediate 36 24.7

Undergraduate 37
25.3

Bachelor 60 41.1

Masters 13 8.9

The number of sample is 155. From these 9 responses are excluded

due to unengaged response, remaining respondents are 146. The ratio
of men and women is 82.2% and 17.8%, some of them are under 20 and
some are in between 20-25 are students and others. Students in
intermediate are 24.7%, the ratio of undergraduate is 25.3%, 41.1% are
those who have completed the bachelors and 8.9% are in Masters.

Control Variables

The online customer service that provides satisfaction may vary through
different demographic factors such as age, gender and income. In our
survey, we have analysed that in which stage of age, respondent have
online purchase experience, and individual income also impact on online
shopping, not only men but women are also interested in online
purchase. So such variables have a great impact on customer
satisfaction.

Construct and Research Instrument

We have used the source of questionnaire for survey and used the 5-
point Likert scale (1 “Strongly disagree” and 5 for ”Strongly agree”). In
this survey we have taken 155 respondents and 20 samples are used
pilot test. We evaluated our questionnaire through pilot test in order to
check the reliability and validity. So, from pilot test we have gotten
accurate result as we had expected.

Table:2 Survey items, respective constructs.

Customer Service
Code Item S.D. D.A N A S.A
A

CS-1 I have received prompt services from the online

stores.
CS-2 It is easy to find customer service number that I can
call to ask questions.

CS-3 The online stores show a sincere interest in solving

customer problems.

CS-4 I feel the online stores are always willing to help

customers.

Shipping

Code Item S.D.A D.A N A S.A

SP-1 The Online Stores I use deliver the product based

on an agreed time.
SP-2 I often receive my products within expect time
period.

SP-3 I often find shipping options that best fit me.

SP-4 I often receive free/discounted shipping .

SP-5 The online stores provide tracking ability during

shipping.
SP-6 The online stores give me the flexibility to choose
delivery date.

SP-7 The online stores provide flexibility to transfer

packages.

Tracking

Code Items S.D.A D.A N A S.A

TR-1 Email or text notifications with a tracking number.

TR-2 The ability to track my shipment directly on the

retailer’s website.

TR-3 The ability to track my shipment with my mobile

device.

TR-4 Sent instant email/text delivery alerts.

Return
Code Items S.D.A D.A N A S.A

RT-1 It is easy to make returns/exchanges.

Rt-2 The online stores have clear returns policy.

RT-3 I often do not have trouble getting the returned

items to the shipping company.

RT-4 I often do not have to pay a return

shipping/restocking fee.

Customer satisfaction

Code Items S.D.A D.A N A S.A

SAT- The services provided by the online stores

1 and sellers are very good.

SAT- The online shopping store provides good

2 customers service quality.

SAT- My online shopping experience is satisfying.

3

SAT- I am satisfied with my online shopping

4 experience.

Future purchase intention

Code Items S.D.A D.A N A S.A

FPI-1 I will continue to do online shopping in the near

future.

FPI-2 I will recommend my friends/ relatives to do

online shopping.

Results

Measurement Model
We measured the validity by analysing the internal consistency,
convergent validity and discriminant validity. In table 3, we have
presented the descriptive statistics and correlation among the reflective
constructs. In calculation, Cronbach’s alpha ranges from (.5 to .8).
Customer satisfaction and Return have good internal consistency
because they are exceeding the limit of .7. In addition, Average variance
extracted AVE ranges from (.2 to .5).

Table:2 Survey items, respective constructs.

Customer Service
Code Item S.D. D.A N A S.A
A

CS-1 I have received prompt services from the

online stores.

CS-2 It is easy to find customer service number that

I can call to ask questions.

CS-3 The online stores show a sincere interest in

solving customer problems.

CS-4 I feel the online stores are always willing to

help customers.

Shipping

Code Item S.D.A D.A N A S.A

SP-1 The Online Stores I use deliver the product

based on an agreed time.
SP-2 I often receive my products within expect time
period.

SP-3 I often find shipping options that best fit me.

SP-4 I often receive free/discounted shipping .

SP-5 The online stores provide tracking ability

during shipping.
SP-6 The online stores give me the flexibility to
choose delivery date.
SP-7 The online stores provide flexibility to transfer
packages.

Tracking

Code Items S.D.A D.A N A S.A

TR-1 Email or text notifications with a tracking

number.

TR-2 The ability to track my shipment directly on

the retailer’s website.

TR-3 The ability to track my shipment with my

mobile device.

TR-4 Sent instant email/text delivery alerts.

Return

Code Items S.D.A D.A N A S.A

RT-1 It is easy to make returns/exchanges.

Rt-2 The online stores have clear returns policy.

RT-3 I often do not have trouble getting the

returned items to the shipping company.

RT-4 I often do not have to pay a return

shipping/restocking fee.

Customer satisfaction

Code Items S.D.A D.A N A S.A

SAT- The services provided by the online

 1 stores and sellers are very good.

SAT- The online shopping store provides good

2 customers service quality.

SAT- My online shopping experience is

3 satisfying.

SAT- I am satisfied with my online shopping

4 experience.

Future purchase intention

Code Items S.D.A D.A N A S.A

FPI- I will continue to do online shopping in the

1 near future.

FPI- I will recommend my friends/ relatives to

2 do online shopping.

Table 3. Factor Analysis Results

CS SP TR RT SAT FPI Age Gender Income

CS
-
SP
-.001 -
TR
.039 -.007 -
RT
-.026 .014 -.017 -
SAT
-.010 .004 -.009 .000 -
FPI
-.001 -.009 .009 .008 .005 -
Age
.034 -.023 .043 .016 .003 -.043 -

Gender
.132 .000 -.024 -.034 -.005 -.039 .108 -
Income
.065 -.013 .012 -.039 .033 -.045 -.013 -.063 -

Mean
3.2312 3.2446 3.3322 2.8408 3.1216 3.1918 -- -- --

.73701 .71889 .87104 .92049 .88510 1.04264 -- -- --

SD

Cronbach's 0.58 0.63 0.56 0.77 0.72 0.65 -- -- --

Alpha

Composite 0.6 0.7 0.52 0.66 0.75 0.5 -- -- --

reliability

0.3 0.32 0.21 0.32 0.44 0.34 -- -- --

AVE

Structural Model

In figure 2, we have presented the results of path analysis for structural

model. All paths coefficients are statistically significant and are expected
as we had guessed except customer service.

We have found the variance of given variables in questionnaire. As the

variance of customer services is .543, variance of customer satisfaction
is .783, variance of tracking is .759, variance of return is .847, variance
of FPI is 1.087, and variance of shipping is .517. All variables are
statistically significant and are in expected direction.
 Model Summary
Std. Change Statistics
Adjusted Error of
R the R Square F
Model R R Square Square Estimate Change Change df1
1 .756a .571 .555 .59013 .571 37.236 5
a. Predictors: (Constant), FPI, TR, CS, RT, SP

ANOVAa

Sum of Mean
Model Squares df Square F Sig.
1 Regression
64.837 5 12.967 37.236 .000b

Residual 48.755 140 .348

Total 113.592 145
a. Dependent Variable: SAT
b. Predictors: (Constant), FPI, TR, CS, RT, SP

Coefficientsa

Unstandardized Standardized
Coefficients Coefficients
Std.
Model B Error Beta t Sig.
1 (Constant)
.359 .260 1.381 .169

CS .170 .084 .142 2.030 .044

SP .123 .097 .100 1.265 .208
TR -.002 .073 -.002 -.028 .978
RT .172 .072 .179 2.380 .019
FPI .418 .060 .492 7.001 .000
a. Dependent Variable: SAT

The value of R-square is .571 means 57.1%. and the beta is diiferent in
every dimension as in customer service it’s beta is .170, shipping .123,
tracking .002, return .172, and future purchase intention beta is .418.
The significance values are also change for every dimenion such as
customer service has .,044 sig. level, shipping has .208, tracking has
.978, return has.019 , and future purchase intention has .000 sig. level.

Discussions and Findings

Nowadays, e-commerce is emerging day by day because the

generations of this decade prefer online shopping than purchase directly
from the shop. The online shoppingis become trend for everyone, it
gives customer satisfaction, customers don’t have to walk outside the
city, they can receive their products by sitting at home. The companies
also update the technology and renew their policies and strategies to
compete in the market and to provide the high quality products and
services to their customers. In our research, while checking the
questionnaire, we have found some positive response from the
respondents who have good experience in online purchase and we have
also got the new ideas that how much the people are interested in online
shopping. We have mentioned some variables like customer
satisfaction, shipping, return, customer and future purchase, through
these variables we knew about the perception of all respondent, some of
them were little bit confuse and other were fully excited while reading the
questionnaire.

Conclusion

In this study we have found that the services provided by online stores
has great impact on customer satisfaction. In this modern world every
customers wants the quick and fast service.

Loyality of customer also depend on the services provided by those

online stores. Customers are so much loyal to those store who ful fill the
needs by providing so many services after or before purchase such as
product information, quick delivery, return and tracking facility.

customers are more satissfied with these store and to be loyal for the
long time as they continually receive these services. And online store
are also trying to increase their sale by identifying the needs and wants
of the customer and try to fulfil those needs in efficient and effective way.

Implicatios, limitations and direction for future

research

Research implications:

Our research purpose mainly focuses on after purchase behaviour of the

customers, either they want to have some intentions to buy the products
online in the future or not. The reason is their satisfaction to have some
intentions to buy. If the customers are getting good satisfaction from
their online purchase then it will motivate them to have an experience of
going online again for purchasing the products. And our study also
enlighten the concept of customer satisfaction. Our study broadens the
concept of after purchase service actions like shipping, tracking, and
return and their usefulness in estimating the customer satisfactios and
their effect on online shoppers.

Managerial implications:

Further our study suggests that services provided after purchase have a
positive power of motivation on the customers which in effect turn their
minds to repeat purchases online. Not only they repeat their purchase
behaviour but also inform their colleagues, friends and family members
or relatives about it and encourage them to try that experience once.
The continuous behaviour to shop online is the consequence or result of
having good feelings about activities like shipping, tracking and return.
But these kind of activities have a different effect on different customers
from different type of geographical ares or countries. For example, return
service has a greater impact in one country, on the other hand customer
service has the bigger one in another.

Limitations and direction for future research:

We have come up now to show some limitations of our research. The

very first limitation of our research is concerned with the sample of the
paper. We used cross sectional survey of reachable or accessible
customers, keeping aside the fact that authors tried to get sample from
different territories. After that we came to second limitation which is that
we surveyed the respondents form only Shah Abdul Latif University’s
students and not from the different areas of whole Pakistan. Our final
limitation is related with the scope of study anlaysis. Just like controllable
variables most other authors neglect the factors like demographic and
social but we have included most important ones from them including
age, gender, occupation, education leaving behind the marrital status
and ethnicity.

Future research may overcome the limitations of our research by

surveying different type of customers from different areas with a big
number of sample and working group design and the way they will
conduct their studies. Maybe they will be able to show the impact of
online shoping post purchase activities on customer satisfaction in a
better way.

Reference

Reichheld & Schefter, 2000; Santos 2003).”The experience of

successful e-business shows that satisfaction with the quality of service
determines the success or failure of an e-commerce enterprise”.

Reichheld & Schefter, 2000; Santos (2003). “Online customer

experience also depend upon how well people interact with the
computers”

Bakos 1998, Alba (et al 1997): “During the information search stage, the
internet offers extensive benefits to web customers by reducing g their
search cost and increasing shopping convenience, vendor choices and
product option”.

Wolfinbarger and Gilly (2000). “Design element of website such as ease

and fun of navigation are important when any customer interact” .

Fornell(1992), Martensen, Gronholdt & Kristensen (2000): “online

shopping the level of customers satisfaction can be determined by the
service quality”.

Bakos (1997): “The key role of online store is to provide information

about the price as well as about product in order to reduce the search
cost of consumers”

Alba (et al,1997). “The consumers reduce their decision making efforts
in online shopping environment that provide vast selection information,
screening, reliability and product comparison”.
Lohse and spiller,(1998): “consumer want communication in a careful,
continuous and in a useful way without restriction of any geographic
barriers”.

Hoque and Lohse (1999): “search cost of consumers and time required
for the processing of information may be reduced by a well-designed
user interface”.

Wolfinbarger and Gilly (2001): “When the consumers make online

shopping they get unique benefits such as; time saved, more convenient
dis-satisfaction risk reduced”.

Moth (2012): “The key factor of customer satisfaction are the free
shipping and the delivery”

Peteson, (et al, 1997): “Online Consumer satisfaction and better

decision of buying can be increased by the high quality and more
extensive information available online. andwith the provider and supplier
of service customer feel satisfied and safe when he/she makes few
transaction with them”.

Ravald and Goonroos, (1996): “When the consumer trust to a company

then he thinks that company is providing him more value and fulfil his
needs and wants, there fore he committed more to that company”.

Kotler (1997): “After few purchases the customer earn the experience
that results the satisfaction or dissatisfsction”.

Zehang (et al, 2006): “skills, experience and the perceived security of
the user have great impact on satisfaction of users with e-services”.

Anderson and Lindestad: “for future shopping retain the existing

customers and to attaract the new customers most of the companies
organize the external event in which they provide the information to
make awaire them”

Garbarino and Johnson and Morgan and Hunt (1994), Pritchard (et al,
1999): “Commitment (maintain the valued relationships) is an important
tool in forming the loyality of consumers and future behavioural
intention”.