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Factors Affecting Customer Satisfaction towards Online Shopping

Haslinda Musa1, Mohd Amin Mohamad1, Fararishah Abd Khalid1, Namirah Ab Rahim1, Nur
Najihah Ahmad Zamri1
1
Fakulti Pengurusan Teknologi dan Teknousahawanan
Universiti Teknikal Malaysia Melaka (UTeM), 76100 Durian Tunggal, Melaka,
Malaysia
haslindamusa@utem.edu.my

Abstract
Nowadays people are intended to do online shopping. Shop on the Internet becomes an alternative for
consumers since it is more comfortable than conventional shopping which usually attributed with
anxious, crowded, traffic jam, limited time, parking space and etc. Internet in Malaysia is still considered
as a new medium tool between the retailers and the consumers, and also retaining customers on e-retail is
the most issue that are faced by any e-retail store. Because of that, the research is to study the factors
affecting customer satisfaction towards online shopping among university students. There are three
factors contributed to this research, which are product quality, brand, and shopping experience. This
research was used a survey method of distributing questionnaires to 150 respondents. Questionnaires will
be distributed among university student to gauge their factors to shop online. The researcher used online
survey and manual method to collect data. The data that has been collected was analyzed by using
Statistical Package for Social Science (SPSS) and Microsoft Excel. Based on the research, the product
quality, brand and shopping experience have a significant relationship to customer satisfaction towards
online shopping among university students at UTeM.
Keywords: Brand, customer satisfaction, online shopping, product quality, shopping experience

INTRODUCTION
Internet usage has grown rapidly over the past several years and it has become a common means
for delivering and trading information, services and goods. The use of the Internet has increased
exponentially over the past years and it has become a mainstream tool in delivering and trading
information, services and goods (Albarq, 2006). Moreover, internet technologies create marketplaces for
consumers to purchase product or services from online Web sites instead of shopping in the traditional
market channels such as department stores (Zhuang & Babin, 2015). As such, the university student still
has various reservations about purchasing through the Internet, except those who use it as informative,
entertaining and communication tools.

In Malaysia, Internet shopping is still new and customers are less familiar and often more
skeptical towards online shopping. Furthermore, a high double digit percentage of Internet users in
Malaysia shopping online, motivated by price advantages, product range and availability of reviews.
Malaysian shoppers look for free shipping, convenience and exclusive online deals offered by online
stores. Moreover, online shopping is encouraged by new E-Commerce regulations adopted in 2013,
aimed at protecting consumer rights and preventing online fraud. Malaysia, internet shoppers are
relatively young, highly educated, having higher social status, and command a more favorable financial
position.

Considering that Internet shopping, is still at the early stage of development, little is known about
consumers’ attitudes towards adopting this new shopping channel and factors that influence their attitude
toward (Haque et al., 2006). According to Jariah, Husniyah, Laily and Britt (2004), with the expansion of
educational services in Malaysia, university students become one of the most important market segments
for two reasons; First, this group has money and shopping interests. Second, this is the segment of the
population that has the potential of earning a greater income than other segments of the population.

PROBLEM STATEMENT

In the new era of modern science and technology, peoples' life becoming easier and more
convenient than prior life. One of the benchmark of modern science and technology, the internet has been
deeply into every aspect of people’s life. According to Central Intelligence Agency (CIA, 2009), there
were 15.355 million number of users that access the internet in Malaysia. Up to June, 2012, the number of
internet users in Malaysia has reached 17.723 million, with an increase of 2.368 million compared to
2009, which is 60.7% of the population, according to International Telecommunication Union (ITU, cited
in Internet World Stats, 2012). Therefore, all of these statistics proved that the electronic commerce has
grown rapidly in recent years.

However, surveys of online consumers continue to indicate that many remain unsatisfied with
their online purchasing experiences. One of the important reason when customers do not have good and
perfect information about product quality, once they make an online purchase. Differed from the
traditional business, consumers may evaluate the quality of products by looking or also may allow to
touch or feel the products. However, these traditional ways of searching product information are not suit
for online purchasing. Besides, the increasingly crowded online space also raises the issue of retailer
visibility, defined as the extent of the presence of an online retailer in the consumer’s environment (Drèze
and Zufryden, 2004). Just because of online retailer easily locate the stores on internet by only a mouse
click away, not at all are equally visible to the consumers. In short, the research intended to investigate
the exact factors play in the relationship between product quality, brand, shopping experience and
customer satisfaction.

RESEARCH OBJECTIVES

The purpose of the present paper is to the factors affecting customer satisfaction toward online
shopping. The specific objectives of this study are 1) to examine the relationship between product quality
and customer satisfaction among university students, 2) to determine the relationship between brand and
customer satisfaction among university students and 3) to analyze the relationship between shopping
experience and customer satisfaction among university students.

HYPOTHESIS DEVELOPMENT

Hypothesis 1

H0: There is no significant relationship between product quality and customer satisfaction towards online
shopping among university students

H1: There is a significant relationship between product quality and customer satisfaction towards online
shopping among university students

Hypothesis 2

H0: There is no significant relationship between brand and customer satisfaction towards online shopping
among university students

H2: There is a significant relationship between brand and customer satisfaction towards online shopping
among university students

Hypothesis 3

H0: There is no significant relationship between shopping experience and customer satisfaction towards
online shopping among university students
H3: There is a significant relationship between shopping experience and customer satisfaction towards
online shopping among university students

LITERATURE REVIEW

Customer refer to the person who does the buying of the product and satisfaction can refer to the
person’s feelings of pleasure or disappointment that results from comparing a product’s perceived
performance or outcome with their expectations. Customer satisfaction refers to the degree a customer is
happy about the quality of products and services. In order to increase online shopping in Malaysia,
understanding customer online shopping satisfaction and factors affecting this satisfaction when shopping
online should be given priority.

Product quality

Product quality refers to the group of features and characteristics of a saleable good which
determine its desirability and which can be controlled by a manufacturer to meet certain basic
requirements. Most businesses that produce goods for sale have a product quality or assurance department
that monitors outgoing products for consumer acceptability. Product quality means to incorporate features
that have a capacity to meet consumer needs (wants) and gives customer satisfaction by improving
products (goods) and making them free of any deficiencies or defects. Customers are satisfied when the
perceived service meets or exceeds their expectations. They are dissatisfied when they feel the service
falls below their expectations. Quality and customer satisfaction has provided some insights into
determining the levels of satisfaction for product experience. The more quality information provided by
the online retailers, the better the decisions could be done satisfactorily (Ludin & Cheng, 2014). Customer
service and a positive customer experience are critical to sales in the e-commerce marketplace. Product
quality is customers’ overall evaluation of the excellence in the performance of the good or service (John,
Mowen & Michael, 1997).

Brand

Brand management in the twenty-first century has become almost synonymous with building and
managing customer relationships (Story & Hess, 2010). A brand is similar to a living being: it has an
identity and personality, name, culture, vision, emotion and intelligence. All these are conferred by the
owner of the brand and needs to be continually looked at to keep the brand relevant to the target it intends
to sell to. According to He, Li and Harris (2012), satisfaction occurs when the performance of a brand
meets the expectations of the purchaser. Brand satisfaction refers to the evaluation summary of direct
consumption experience, based on the different between prior expectation and the actual performance
after receiving the product.

However, brand satisfaction defined as the cumulative satisfaction as overall consumer’s


evaluation based on the consumer’s total purchase and experience with a brand of product or service.
According to Chiu, Huang & Yen (2010), highly satisfied consumers tend to reflect the brand personality
traits by using some symbols related to the brand as an expression of their attachment to that brand.
Similarly, consumers who trust a brand are willing to improve and sustain an affective bond with the
brand that makes them feel warm and enjoyable.

Shopping experience

Nowadays, the shopping experience has become the most important differentiating factor for
retail companies. Previous research has shown that when customers are satisfied with a company or
service, there is high possibility that they will share their experience with other people (Nelson, 2012).
For example, in Motorola company, the retailers need to offer their customers the best possible customer
service as well as ensure a smooth transition between shopping on the Internet and in the store if they
want to provide a unique shopping experience and resulting customer retention to ultimately increase
sales. Online shopping experience moderates the effect of the perceived usefulness of behavioral
intentions (Hsieh and Liao, 2011). Frequency of purchases is positively related to the online shopping,
tendency and negatively related to the likelihood to abort an online transaction.

A shopping experience is the cognitions and feelings the consumer experiences during the use of
a product or services. The customer experience may provide a new means of competition (Robert &
Xiangyu, 2011). According to Alam and Yasin, 2010, satisfied customers are most likely to have the
intention to repurchase if the service provider reached or exceeded their expectation. Thus, the more
experienced consumers are with online shopping and the more satisfied they are with past online
transaction experiences, the higher their purchase amounts and the more likely they are to be repeated
purchasers and the lower likelihood of them aborting an intended online transaction.

Based on the literature, the proposed research model is illustrated in Figure 1.


Figure 1: Research Model

Source: Developed for the research

RESEARCH METHODOLOGY

One set of questions was designed and distributed to customers who have online shopping
experience as respondents. Respondents are from student Universiti Teknikal Malaysia Melaka (UTeM)
in Malacca to get statistical information. The questionnaires distributed to 150 respondents to the targeted
respondent to get data more accurately. The questionnaires are based on this research topic.

In this study, two page questionnaire which consisted of 21 close ended questions was employed.
There are three main sections in the questionnaire which is Section A, Section B and Section C. Section
A indicating demographic information: respondent’s gender, age, education level, frequencies of
purchasing over the Internet and product purchased on online. Section B is about the level of
understanding of online shopping and Section B indicating factors affecting customer satisfaction which
is product quality, brands and shopping experience. The questionnaire was designed based on a five-point
Likert-type scale. The scales represents, 1: “strongly disagree”, 2: “disagree”, 3: “neutral”, 4: “agree”, 5:
“strongly agree”. The study concentrates on customer satisfaction that immediately or indirectly involve
in Malaysia online shopping.

DATA ANALYSIS

In this study, the researcher will be used descriptive analysis and correlation analysis methods to
analyze the data. All data will be processed and analyzed using Statistical Package for Social Science
(SPSS) version 19; it can be used to analyze data collected from surveys, tests, observation or even
secondary data. This program helps to facilitate data clearing, and checking for logical inconsistencies in
the dataset. The researcher will carry out data mining procedures before the actual data analysis is
performed. The responses from the respondents will be coded accordingly before being transferred into a
data file.

RESULT AND ANALYSIS

Table 1 shows the summary of the demographic profile of respondents. In this study demographic
variables consisted of gender, age, education level, often purchased and product purchased. In the table,
shows that there are 150 respondents participated in this research. The results of the gender analysis show
that the percentages of respondents are 72% females and the rest of 28% are male. It consists of 108
females and 42 males. For results by age, respondents between age 22 and 25 years give the highest
participation in this research that is 96 respondents or 64%. Then, for the education level of respondents
in this research concludes that there is 96 % in 144 of the respondents are Bachelor Degree level. Only
one (0.70%) of respondent have diploma and the other one has a PhD. For level of education in Master,
there are 2.7% in 4 of the respondents.

The summary results for frequencies of purchasing over the Internet have 48% or 72 respondents,
less than 5 times in a life. For 6 until 10 times buying, representing 26.7 % with 40 respondents
participated. Meanwhile, 11 to 15 times have the lowest number of respondents that is 11.30% with 17
respondents. Based on this research, the demographic data in product purchase online, it shows that the
highest percentage is 48.70% with 73 respondents come from male and females that purchased fashion
and apparel on online. The lowest of frequency product purchased is 13 respondents or 8.70% are
categorized in buying others product such as food and beverages, sport and equipment, books, service
coupon, and electrical product.

Table 1: Summary of demographic profile

Demographic Variables Categories Frequency Percentage (%)


Gender Male 42 28
Female 108 72
Age 18-21 years 41 27.3
22-25 years 96 64.0
26-29 years 11 7.3
30 and above 2 1.3
Education Level Diploma 1 0.7
Bachelor degree 144 96.0
Master 4 2.7
PhD 1 0.7
Often purchased Less than 5 times 72 48.0
6-10 times 40 26.7
11-15 times 17 11.3
16 times or more 21 14.0
Product purchased Fashion and apparel 73 48.7
Digital product 16 10.7
Ticket (travel and cinema) 26 17.3
Cosmetic product 22 14.7
Others 13 8.7
Source: Developed for the research

Reliability analysis

As referred in Table 2, it shows that the value of Cronbach’s Alpha results for this research for all
variables is 0.827. The value is acceptable because it more than 0.5 which is at a very good result. The
Cronbach’s Alpha value that more than 0.7 is considering as reliable result. Hence, the reliability analysis
of the all variables is acceptable.

Table 2: Reliability Statistics of Data Gathered

Cronbach's Alpha N of Items


.827 16
Source: Developed for the research

Pearson Correlation Coefficient Test


Pearson Correlation Coefficient is a method that measures the validity of the data relationship. It
is also indicates the direction, the strength and significant of the relationship among all variables. The
value for a Pearson’s correlation can fall between 0.00 and 1.00.

Table 3: Correlations of Independent and Dependent Variable

Customer Product Brand Shopping


Satisfaction Quality Experience
Customer Pearson 1 .624** .390** .461**
satisfaction Correlation
Sig. (2-tailed) .000 .000 .000
N 150 150 150 150
Product Pearson .624** 1 .394** .341**
Quality Correlation
Sig. (2-tailed) .000 150 .000 .000
N 150 150 150
Brand Pearson .390** .394** 1 .480**
Correlation
Sig. (2-tailed) .000 .000 .000
N 150 150 150 150
Shopping Pearson .461** .341** .480** 1
Experience Correlation
Sig. (2-tailed) .000 .000 .000
N 150 150 150 150

From the table 4.3 above, it shows that the result analysis of the correlation between all the
dependents variables and independent variables. The dependent variable in this research is customer
satisfaction towards online shopping while there are three independent variables which are product
quality, brand and shopping experience. Based on table, all the independent variables have a significant
relationship to dependent variable. This is based on the Pearson Correlation value for each variable which
are all positive value. First, there is moderate relationship between product quality and the customer
satisfaction towards online shopping among university students at Universiti Teknikal Malaysia Melaka.
The value of the coefficient correlation is 0.624, falls under the coefficient range of “± 0.41 to ± 0.70”.

Next, there is weak relationship between brand and the customer satisfaction towards online
shopping among university students at Universiti Teknikal Malaysia Melaka. The value of the coefficient
correlation is 0.390, falls under the coefficient range of “± 0.21 to ± 0.40”. Last but not least, there is
moderate relationship between shopping experience and the customer satisfaction towards online
shopping among university students at Universiti Teknikal Malaysia Melaka. The value of the coefficient
correlation is 0.461, falls under the coefficient range of “± 0.41 to ± 0.70”.
Regression Analysis

The regression analysis is used to test the hypothesis relationship of factors affecting customer
satisfaction towards online shopping which is product quality, brands, and shopping experience.

Hypothesis of Product Quality and Customer Satisfaction

H0: There is no significant relationship between product quality and customer satisfaction towards online
shopping among university students at Universiti Teknikal Malaysia Melaka

H1: There is a significant relationship between product quality and customer satisfaction towards online
shopping among university students at Universiti Teknikal Malaysia Melaka

Table 4: Regression for product quality

Model R R Square Adjusted R Std. Error of the


Square Estimate
1 .624a .389 .385 .46114
a. Predictors: (Constant), Product Quality

Table 5: Coefficientsa for product quality

Model 1
(Constant Produc
) t
Quality
Unstandardize B 1.338 .660
d Coefficients
Std. .258 .068
Erro
r
Standardized Beta .624
Coefficients
t 5.178 9.708
Sig. 0.000 0.000
a. Dependent Variable: Customer satisfaction
Table 4 shows that the results of the independent variable that are needed into regression model
and R (0.624) are the correlation of the independent variable with the dependent variable. The results
mean that 39% of the variance (R square) has been significantly explained by the independent variable.
The adjusted R square also was taken into account, 39% showed that there was a correlation. There has a
relationship between independent (product quality) and dependent variable (customer satisfaction towards
online shopping). Based on coefficient Table 4, product quality is significant independent variables that
influences customer satisfaction toward online shopping as the significant value are less than 0.05. Based
on significant level, p = 0.000 which is less than 0.05, then the H1 is accepted hypothesis. It means that
product quality has contributed to customer satisfaction towards online shopping among university
students.

Hypothesis of Brand and Customer Relationship

H0: There is no significant relationship between brand and customer satisfaction towards online shopping
among university students at Universiti Teknikal Malaysia Melaka

H1: There is a significant relationship between brand and customer satisfaction towards online shopping
among university students at Universiti Teknikal Malaysia Melaka

Table 6: Regression for brand

Model R R Square Adjusted R Std. Error of the


Square Estimate
1 .390a .152 .146 .54337
a. Predictors: (Constant), Brand

Table 7: Coefficientsa for brand

Model 1
(Constant) Brand
Unstandardized B 2.562 .333
Coefficients
Std. .249 .065
Error
Standardized Beta .390
Coefficients
t 10.307 5.146
Sig. 0.000 0.000
a. Dependent Variable: Customer satisfaction

Table 5 shows that the results of the independent variable that are needed into regression model
and R (0.390) are the correlation of the independent variable with the dependent variable. The results
mean that 15% of the variance (R square) has been significantly explained by the independent variable.
The adjusted R square also was taken into account, 15% showed that there was a correlation. There has a
relationship between independent (brand) and dependent variable (customer satisfaction towards online
shopping). Based on coefficient Table 5, brand is significant independent variables that influences
customer satisfactions toward online shopping as the significant value are less than 0.05. Based on
significant level, p = 0.000 which is less than 0.05, then the H1 is accepted hypothesis. It means that
brand has contributed to customer satisfaction towards online shopping among university students.

Hypothesis of Shopping Experience and Customer Satisfaction

H0: There is no significant relationship between shopping experience and customer satisfaction towards
online shopping among university students at Universiti Teknikal Malaysia Melaka

H0: There is significant relationship between shopping experience and customer satisfaction towards
online shopping among university students at Universiti Teknikal Malaysia Melaka

Table 8: Regression for Shopping Experience

Model R R Square Adjusted R Std. Error of the


Square Estimate
1 .461a .213 .208 .52341
a. Predictors: (Constant), Shopping Experience
Table 9: Coefficientsa for Shopping Experience

Model
1
(Constant Shopping
) Experienc
e
Unstandardize B 2.160 .660
d Coefficients
Std. .266 .071
Erro
r
Standardized Beta .461
Coefficients
T 8.127 6.328
Sig. 0.000 0.000
a. Dependent Variable: Customer satisfaction

Table 6 shows that the results of the independent variable that are needed into regression model
and R (0.461) are the correlation of the independent variable with the dependent variable. The results
mean that 21% of the variance (R square) has been significantly explained by the independent variable.
The adjusted R square also was taken into account, 21% showed that there was a correlation. There has a
relationship between independent (shopping experience) and dependent variable (customer satisfaction
towards online shopping).

Based on coefficient Table 7, shopping experience is significant independent variables that


influences customer satisfaction toward online shopping as the significant value are less than 0.05. Based
on significant level, p = 0.000 which is less than 0.05, then the H1 is accepted hypothesis. It means that
shopping experience has contributed to customer satisfaction towards online shopping among university
students.

DISCUSSION

Research Objective 1

The first objective of this research is to examine the relationship between product quality and
customer satisfaction among university students at Universiti Teknikal Malaysia Melaka.

Based on data analysis in section 4, the researchers had determined the independent variables that
influences on customer satisfaction, which are product quality, brand and shopping experience. The
researchers had analysed three factors by using correlation analysis. The correlation analysis is used to
find whether all of these three factors have relationship with customer satisfaction (dependent variable),
thus influences this dependent variable.

Based on the findings, it shows that the relationship between product quality and customer
satisfaction is significant. Thus, the result interpreted that consumers have received what they were
expected on about the product they purchase. Therefore, it is directly meant that they were satisfied with
the product or service offered. So, when the perceived product quality seems meet or exceed consumer
expectation, the probability for them to repeat online purchasing will increase due confident level on the
product quality offered, which already experienced by the consumer.

Research Objective 2

The second objective is to determine the relationship between brand and customer satisfaction
among university students at Universiti Teknikal Malaysia Melaka.

Besides product quality, brand also shown as significant relationship with customer satisfaction
towards online shopping. Based on coefficient table in Table 5, brand is resulted as significant
independent variable that influences customer satisfactions toward online shopping, which the significant
value are 0.000 which is less than 0.05. Thus, the result gained gives a meaning that, customers were
satisfied with the brand of product, which is originally not a fake brand product. It is about overall
consumer’s evaluation based on the total purchase and experience with a brand of product or service they
purchase. However, brand trust, in this vein, expresses the belief of consumers that the experienced brand
satisfaction will continue to be fulfilled by the brand (Zhou, Zhang, Su & Zhou, 2012). Therefore, the
higher the degree of brand satisfaction the customer realizes, the higher the level of brand trust.

Research Objective 3

The third objective is to analyse the relationship between shopping experience and customer
satisfaction among university students at Universiti Teknikal Malaysia Melaka.

Based on the result findings in section 4, shopping experience is shown as significant relationship
between shopping experience and customer satisfaction. As been mentioned in literature review part,
shopping experience is the feelings of customer experiences during the use of product and the process of
purchasing the product which is the delivery of product on time or not, the features of the product, the
features of website of the product and the service offer. Thus, this positive result is interpreted as
customer were satisfied with the process of online purchasing products and services.

Therefore, brand is contributed as one of the vital variable affected on customer satisfaction. The
more experiences the consumers towards the online shopping, the more satisfy they are with past online
transaction experiences. Besides, the higher the purchase amounts, the more likely they are to repeat
purchase then and the lower likelihood of them aborting an intended online transaction.

RESEARCH RECOMMENDATION

In this research, the researcher is only test three independent variables which are product quality,
brand, and shopping experience on customer satisfaction towards online shopping among university
students. This study provides many opportunities for future research, for example a wide range of
possible salient beliefs about shopping online. So, the researcher hopes that for the future research may
include other factors of customer satisfaction towards online shopping like advertisement that affected
customer satisfaction. Furthermore, future research should address other relevant construct that affects
customer satisfaction on online shopping. The measures created for this study should support future
research. It is clear that more and different variables are needed to understand shopping on Internet fully.
It is relatively new phenomenon, and as such may require additional rethinking of used models.

Lastly, if the researcher is interested in doing survey method in the future, the questions in
questionnaires should be simple and can be understand by the respondent, so that the respondent will
answer based on their understandings. The targeted respondents should be to the career person so that the
result will be more acceptable.

CONCLUSION

Based on the findings, all components in factors that impact the customer satisfaction towards
online shopping have significant effect. In this research the researcher just only focus on three factors that
give impact on customer satisfaction which are product quality, brand and shopping experience. Various
approaches have been used in finding answers of objectives that stated in this research which are
distributed questionnaires, as well as some of methods used to analyze the data obtained such as, validity
and reliability analysis, correlation coefficient and regression analysis. All data were obtained from a
variety of background of respondent which are the Master student, PhD student, and Degree student that
are from different year in Faculty Technology Management and Technopreneurship (FPTT). Finally, the
finding sees that there is a significant relationship between the customer satisfactions towards online
shopping (dependent variable) and the product quality, brand and shopping experience (independent
variables).

ACKNOWLEDGEMENT

This work is supported by Faculty of Technology Management and Technopreneurship,


Universiti Teknikal Malaysia Melaka.

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