Advanced Marketing Research

Project

Evaluation of the factor affecting the customer

satisfaction for Shopping app – Flipkart

Submitted to: Kuldeep Baishya

Submitted By: Group 2 | AMR 1

Dishant Patel - 024017

Gnaneswara Kumar Maripi - 024018
Pulkit Dhanava - 024036
Rishabh Pandey - 024039
Tushar Goel - 024056
Ritisha Pravin Panchal -133039
Shrishti Jain - 133104
Contents
EXECUTIVE SUMMARY ....................................................................................................................... 3
CHAPTER1: INTRODUCTION .............................................................................................................. 4
1.1. BACKGROUND .................................................................................................................... 4
1.1.1. Industry Overview ............................................................................................................... 4
1.1.2. Company Overview ............................................................................................................. 4
1.1.3. Flipkart App ......................................................................................................................... 5
1.2 LITERATURE REVIEW......................................................................................................... 5
Consumer behavior in online market: Indian context .................................................................... 6
1.3 PROBLEM DEFINITION ....................................................................................................... 6
2. RESEARCH OBJECTIVE AND HYPOTHESIS ................................................................................. 6
2.1. OBJECTIVE ................................................................................................................................ 6
2.2 HYPOTHESIS .............................................................................................................................. 7
3. Methodology..................................................................................................................................... 7
3.1 PROJECT DESIGN ...................................................................................................................... 7
3.2. QUESTIONNAIRE DEVELOPMENT & PRE-TESTING............................................................... 7
3.3 Sampling ..................................................................................................................................... 8
3.4 DATA COLLECTION METHOD ............................................................................................ 8
3.5 Data Analysis ...................................................................................................................... 9
3.5.1. Reliability Test ..................................................................................................................... 9
3.5.2. Factor Analysis ................................................................................................................... 9
3.5.3. Regression ........................................................................................................................ 11
3.5.4 Coefficients Table: ............................................................................................................ 14
CHAPTER 4: RESULTS ...................................................................................................................... 17
CHAPTER 5: CONCLUSION AND RECOMMENDATION................................................................... 17
CHAPTER 6: LIMITATIONS ................................................................................................................ 18
CHAPTER 7: ANNEXURES ................................................................................................................ 19
EXECUTIVE SUMMARY

The online shopping has evolved significantly over last decade and has now become
important channel of distribution of products and services. With the growing relevance of
the online shopping applications, it is very important for the companies in the business to
understand the factors which impact the customer behavior in choosing the application
for shopping and customer satisfaction becomes critical component for the players in the
business.
The objective of the study is to evaluate the various factors which affect the customer
satisfaction for shopping apps. The target respondents for the study are users of any
shopping app such as Amazon, Flipkart, Myntra, Jabong etc.
Result of the study indicates that three factors i.e. user interface of application, consumers
data risk such as privacy, data security and the customer service provided be the e-
commerce sites plays significant role to determine the customer satisfaction. Other
factors which appeared during the exploratory research i.e. convenience to use the
application and quality of research do not appear to significantly impact the customer
satisfaction in case of online shopping apps. So, these factors can still be considered
while devising the marketing strategy however their weightage would be less when
compared with other three factors i.e. user interface, consumer risk and customer
service
Hence, the marketing mix should of these players must consider these three factors as
i.e. user interface, consumer risk and customer service as customer satisfaction is
positively dependent on these factors.

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CHAPTER1: INTRODUCTION

1.1. BACKGROUND

1.1.1. Industry Overview

The e-commerce Industry has completed changed the way the way business is done in India.
The Indian e-commerce market is expected to grow to US$ 200 billion by 2026. Smartphone
Penetration and the increased internet penetration even in the remote areas have been crucial
factors in triggering the expansion. The ongoing digital transformation in the country is expected
to increase India’s total internet user base to 829 million by 2021. India’s E-commerce revenue is
expected to jump to US$ 120 billion in 2020, growing at an annual rate of 51 per cent, the highest
in the world.

1.1.2. Company Overview

Flipkart is an e-commerce company which was started in 2007 by its founders – Sachin
and Binny Bansal. The company is headquartered in Bengaluru. The company started
selling books at discounts in its initial years following the amazon journey in the same
segment. During 2015 -17, it acquired a number of services and companies in logistics,
and other startups. The company tried to acquire another e-commerce giant –
Snapdeal, but the deal did not get through, and company get a lot of bad press.

According to analysts, flipkart is expected to grow in coming years. It is spending billions

of dollars to win the Indian market. flipkart is ahead of amazon in market share at
present. Amazon has expanded its clout by moving into entertainment sector by launch
of Amazon Prime, which is difficult for flipkart to replicate.
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 1.1.3. Flipkart App

Around March 2015, Flipkart has blocked access to its website through mobile phones,
and began mandating that users must download the site's mobile app. By April, Myntra
went further ahead and withdrew its website on all platforms, in order to start operating
exclusively through its app. The "app-only" model, in hindsight, proved to be a disaster
for Myntra and reduced sales by 10%, and the company's main website was restored in
February 2016. The failed experiment with Myntra led to recommendations that Flipkart
itself must take the same step, but that did not occur. By November 2015, Flipkart has
launched a brand-new mobile website called "Flipkart Lite", that provides a unique
experience inspired by Flipkart's original app that runs within web browsers of
smartphones.

1.1.4 Efforts made by Flipkart in Covid-19

Flipkart has recently launched a digital platform for kiranas, local MSMEs with an aim to
connect local manufacturers with retailers and bring the entire wholesale marketplace at
their fingertips using technology. With the strong capability within the group in B2B, we
will focus on meeting the needs of kiranas and MSMEs by providing these small
businesses a wide selection at significant value, powered by technology to make their
lives easier. Wholesale customers will have access to an easy credit facility to manage
cash flow, a wide range of Flipkart assured quality products, simple and convenient
order returns and speedy product delivery directly to their shops with an easy order
tracking facility

1.2 LITERATURE REVIEW

Understanding consumer intention in online shopping: a re-specification and
validation of the DeLone and McLean model (Chen & Cheng, 2009)
Consumer intention needs to be understood to sustain in the highly competitive e-
commerce environment. The authors have proposed a comprehensive, empirical model
that separates the ‘use’ construct into ‘intention to use’ and ‘actual use’. The research
suggested that consumer behavior is accurately predicted by consumer’s intentions.
Consumer satisfaction has a significant impact on intention to use but no direct causal
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relation with actual use. In 1992, six constructs namely system quality, information quality,
use, user satisfaction, individual impact and organizational impact were proposed by
DeLone and McLean which described only the characteristics of information system (IS).
In 2003, service quality factor was added into the model. In this model, a user’s beliefs
(perceived quality of the information, system and service) and response (satisfaction) is
used to determine the user’s behavior

The research paper discusses that it’s not only qualities that make a customer feel
satisfied or unsatisfied consumers but also the perceived usage value. So, online
shopping providers should focus on increasing perceived quality and perceived usage
value for consumers.
Consumer behavior in online market: Indian context
(Kumari, Singh, & Mishra, 2016)
The authors get a questionnaire filled by 829 respondents to track the consumer behavior
related to online shopping. The questions were asked whether the online shopping gives
them time convenience, whether online shopping gives them place convenience, whether
online shopping provides an ease of price comparison, whether online shopping leads to
easy access to information, whether online shopping gives the customer infinite choices
in products and services and whether online shoppers have easy access to shopper’s
review.

1.3 PROBLEM DEFINITION

To find all the attributes which contribute towards customer satisfaction for an online
shopping apps and to measure the impact of these factors on the customer satisfaction
which may lead to loyalty

2. RESEARCH OBJECTIVE AND HYPOTHESIS

2.1. OBJECTIVE

To evaluate the various factors which affect the customer satisfaction for shopping apps.
The target respondents would be users of any shopping app such as Amazon, Flipkart,
Myntra, Jabong etc

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2.2 HYPOTHESIS

Hypothesis 1

Null Hypothesis, H0: User Interface does not affect the satisfaction

Alternate Hypothesis, H1: User Interface affect the satisfaction

Hypothesis 2

Null Hypothesis, H0: Consumer Risk does not affect satisfaction

Alternate Hypothesis, H2: Consumer Risk determines satisfaction

Hypothesis 3

Null Hypothesis, H0: Customer Service does not affect satisfaction

Alternate Hypothesis, H3: Customer Service affects satisfaction

3. Methodology
3.1 PROJECT DESIGN

Initially we opted for the Exploratory Research because the factor was not defined. After
doing a Literature review and the insights gained from the Exploratory Research, we went
for the Conclusive Research. Quantitative Research encapsulates the preferences of
users of different demographics for various factors responsible for customer satisfaction
for shopping apps. The questions were both close ended and open ended.

3.2. QUESTIONNAIRE DEVELOPMENT & PRE-TESTING

The development of the questionnaire is based on the exploration to collect the views of
users and to discover the ideas and insights regarding the factors which would help to
evaluate the customer satisfaction. A set of online shopping app users were interviewed

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which helped to find the set the items which might affect the user satisfaction. Also,
secondary research was conducted to find relevant literature which helped to understand
the applicable items impacting the customer satisfaction for shopping apps.
Based on the collected information which included primary research(interviews) and
secondary research (literature review), the questionnaire was created. The questionnaire
also included the direct questions on satisfaction and loyalty of users which would be
used as a dependent variable in reference to the independent variables (the items
collected).
First thirty-six respondents were used for pilot testing and the Cronbach’s alpha came to
be 0.945. This value indicates that a very good internal consistency of the questionnaire,
based on the average inter-item correlation. As the questions of the questionnaire were
internally consistent, we floated that questionnaire to the larger audience.

3.3 Sampling
Sampling Size: 154

For this research, Non-Probability Sampling Method was adopted. Under this the
technique used was Convenience Sampling. The reason Convenience Sampling was
used is the respondents were from a particular sampling unit convenient to the group
conducting the survey. The respondents were based upon their availability and
willingness to share the information.
3.4 DATA COLLECTION METHOD

Data Source : Primary Data

Contact Method : Online Questionnaire

To capture the satisfaction of users using online shopping applications, a structured

questionnaire was used and floated through google forms for data collection. The
questionnaire was mainly shared with relatives and friends. A total of 154 responses have
been captured. The questionnaire was largely based upon the variables that influences
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 the user to engagement which might lead to user satisfaction with the application. It
captured the demographics information as well as the usability of online shopping apps
so as to get a clear understanding of the factors that enhance the user intention to use
the application.
3.5 Data Analysis

3.5.1. Reliability Test

We have conducted the reliability test of the whole questionnaire with a total of 22
structured questions.

The reliability test shows the Cronbach alpha 0.945 which is greater than .07 (as shown
in table above). This shows that the questions were reliable. The above result have been
calculated on the basis of Pilot testing that has been executed on 36 respondents.

3.5.2. Factor Analysis

The Kaiser-Meyer-Olkin Measure of Sampling Adequacy is a statistic that indicates the
proportion of variance in the variables that might be caused by underlying factors.

The KMO Value is 0.913. Any value greater than 0.60 is considered favourable. Values
greater than 0.9 are considered as Excellent
This proves that the Data Sample is adequate. There is no overlapping of the variables
between the defined Factors
The Bartlett’s Test of Sphericity is also significant as P < 0.005.

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This means that the Factor Analysis will be meaningful and we can now proceed for
Factor Analysis

The table of total variance shows that only 3 factors were defined as they have Eigenvalue
> 1 and cumulative %age the total variance of the chosen factors is 59.414%.

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 Rotated component suggests the variables that have been assigned to different
components (factors) by SPSS. The data has been suppressed by 0.4 value so as to
make the output easier to read by removing the clutter of low correlations that are
probably not meaningful anyway.

On the basis of the table, there are three factors that has been defined with different
variables. After analyzing the pattern and variables of the components following are the
names given to the factors:

Factor 1: User Interface with V1,V2,V3,V5,V6,V7,V8,V11 as variables

Factor 2: Consumer Risks with V16,V17,V18,V19 as variables

Factor 3: Customer Service with V4,V9,V10,V12,V13,V14,V15 as variables

3.5.3. Regression
The hypothesis that has been defined for the study needs to validate whether the identified factors
i.e. User Interface, Consumer Risk and Customer Service for shopping apps do have any impact
on the Satisfaction of the consumer or not. Hence hierarchical regression analysis have been
conducted for this purpose.

Hypothesis 1

Null Hypothesis, H0: User Interface does not affect the satisfaction

Alternate Hypothesis, H1: User Interface affect the satisfaction

Hypothesis 2

Null Hypothesis, H0: Consumer Risk does not affect satisfaction Alternate

Hypothesis, H2: Consumer Risk determines satisfaction

Hypothesis 3

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Null Hypothesis, H0: Customer Service does not affect satisfaction

Alternate Hypothesis, H3: Customer Service affects satisfaction

Regression analysis

Following variables are being used for quantitative analysis to test the hypothesis
generated and to narrow down the factors which would affect the customer satisfaction
of online shopping apps.

Variabl Variable Definition

e Name
V1 [The app design gives a pleasant experience for shopping]

V2 [It is easy to navigate within the application]

V3 [I find the app design to be interactive]

V4 [The app rarely crashes or causes problems on my phone]

V5 [It is easy to browse through product catalogue]

V6 [It is easy to search for the required product]

V7 [I find updated information on application]

V8 [I find original products on the application]

V9 [The product information is clearly explained]

V10 [There is no hidden cost involved on the final payment page]

V11 [The product recommendations are relevant to your requirement]

V12 [I trust the app not to share your personal information outside the
organization]
V13 [I feel safe to do transitions of the app]

V14 [I feel safe to store credit/debit card information on the app]

V15 [I believe that privacy policy of app is to protect the customers]

V16 [Return policy is clearly mentioned in app]

V17 [I like the return policy of the app]

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V18 [I get delivery on time when I order from the app]

V19 [App provides relevant offers]

V20 [I am satisfied with the app experience]

V21 [I will continue to use the application]

V22 [I would recommend the app to your family/friends]

The above-mentioned items are categorized into 3 factors which are being used as
independent variables in the regression analysis

Independent Variables in Factor Factors

Variable
User Interface V1, V2, V3, V5, V6, V7, V8, Factor 1
V11
Consumer Risk V16, V17, V18, V19 Factor 2
Customer Service V4, V9, V10, V12, V13, V14, Factor 3
V1 5

Dependent Variables
Variables
Customer Customer Satisfaction, Loyalty and
Satisfaction Recommendation

Model Summary:

Interpretation of the table:

For Model 1: The value of adjusted R2 is 0.611. It explains 61.1% of the variation in the
Model.
For Model 2: The value of adjusted R2 is 0.688. It explains 68.8% of the variation in the
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Model.
The Durbin Watson value is 1.905 which is less than 2. This suggests that the Regression
Model is independent of error.
Since Model 2 has higher value of adjusted R2, therefore we consider Model 2 for
analysis.
ANOVA Table:

For Model 2, the P-Value is close to 0.000 (less than 0.05), so we reject the Null
Hypothesis (H0) and accept the Alternative Hypothesis (Ha).
3.5.4 Coefficients Table:

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Interpretation of table

● For Model 2, The Tolerance Value is greater than .2

● VIF value for all the considered independent factors is also less than 5.This means
that there is no MultiCollinearity among the Factors.
● Significance Value (p-value) is less than 0.05 for User Interface, Consumer Risk &
Consumer Service. This means all the factors are affecting the dependent variable
significantly.
● Therefore the Regression Equation on considered Model 2 will be as follows:
Y= -.256 + (.579)*F1 + (.279)*F2 + (.246)*F3
Here,
Y = Customer Satisfaction
F1 = User Interface
F2 = Consumer Risk
F3 = Customer Service
Residual Statistics:

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Interpretation of table
The above table is used for the checking of the regression model thus formed. Following
are the parameters that needs to be checked:
● The maximum value of Mahalanobis distance is 11.695 (which is less than 15, for
95
● observations), so there is no problem as such with our regression model

● Maximum value of Cook’s distance is 0.637 (which is less than 1), so there are no
residuals which negatively affect the outcome of our model

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CHAPTER 4: RESULTS

1. Three factors derived from the research are user interface of application,
consumer risk aspects like privacy, user data security and customer service
from the online shopping companies plays significant role on the satisfaction of the
customers using online shopping application. These factors would further help to
determine the customer loyalty and positive word of mouth for the application.

2. Any change in the user interface, consumer risk and customer service would
directly affect the customer satisfaction on online shopping applications.

3. The User interface variable has high impact on the customer satisfactory
compared to other variables which is evident from the regression model

CHAPTER 5: CONCLUSION AND RECOMMENDATION

1. The marketing mix should consider the three factors i.e. user interface, consumer
privacy related concerns and customer service from the company which may
include ease of contact, return policy as customer satisfaction is positively
dependent on these factors.

2. Other factors which appeared during the exploratory research i.e. convenience to
use the application and quality of research do not appear to significantly impact
the customer satisfaction in case of online shopping apps. So these factors can
still be considered while devising the marketing strategy however their weightage
would be less when compared with other three factors i.e. user interface, consumer
risk and customer service

17
CHAPTER 6: LIMITATIONS

1. The main limitation of the projects is that majority of the data for research is
collected being collected from respondents based in Delhi NCR.

2. Majority of respondents are students. This would give a certain bias based on
young age and income level of respondents.

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CHAPTER 7: ANNEXURES

ANNEXURE 1
1. Age
2. Gender

Male Female Others

3. Qualification

Never been to Less than 5-10th grade Passed Graduate

School 5th grade 12th grade

If Others, please specify

Post-graduate Other

4. Monthly Income

Less than 10K 10-25K 25-40K 40-55K Above 55K

5. Profession

Student Business Service Housewife

6. Marital Status

Married Unmarried Divorced Separated Widowed Cohabiting

7. Family Type?

Nuclear Joint

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 Strongly Disagree Neutral Agree Strongly
Disagree Agree

8. The app design gives a pleasant

experience for shopping

9. It is easy to navigate within the

application

10. You find the app design to be

interactive

11. The app rarely crashes or causes

problems on my phone

12. It is easy to navigate within the

application

13. It is easy to browse through

product catalogue

14. It is easy to search the required

product

15. You find undated information

on application

16. You find original products on

the application

17. The product information is

clearly explained

18. There is no hidden cost involved

on the final payment page

19. The product recommendations

are relevant to your
requirement

20. You trust the app not to share

your personal information
outside the organization

21. You feel safe to do transitions of

the app

20
22. You feel safe to store
credit/debit card information
on the app

23. You believe that privacy policy

of app is to protect the
customers

24. Return policy is clearly

mentioned in app

25. You like the return policy of the

app

26. You get delivery on time when

you order from the app

27. App provides relevant offers

28. You are satisfied with the app

experience

29. You would recommend the app

to your family/friends

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ANNEXURE 2

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