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Internet Pricing, Price Satisfaction and Customer Satisfaction

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 Submitted to Psychology and Marketing
Special Issue on the Psychology of Internet Pricing

Internet Pricing, Price Satisfaction and Customer Satisfaction

Yong Cao
Department of Marketing,
Henry B. Tippie College of Business
University of Iowa
Iowa City, Iowa 52242-1000
Telephone: (319) 335-0979
Fax: (319) 335-3690
ycao@blue.weeg.uiowa.edu

Thomas S. Gruca
Department of Marketing,
Henry B. Tippie College of Business
University of Iowa
Iowa City, Iowa 52242-1000
Telephone: (319) 335-0946
Fax: (319) 335-1956
thomas- gruca@uiowa.edu
 Internet Pricing, Price Satisfaction and Customer Satisfaction

Abstract

Recent studies suggest that satisfaction with price affects overall customer satisfaction. In
the internet market, customer satisfaction is determined by two separate measures:
satisfaction with the pre-purchase experience (e.g. ease of use, selection) and satisfaction
with the post-purchase experience (e.g., delivery, order tracking, customer service).
Using data collected by a commercial web satisfaction firm and the weekly price of a
market basket of books, we model the impact of price and price satisfaction on these two
measures of e-tailer satisfaction. We find that price has a negative impact on price
satisfaction and satisfaction with the pre-purchase experience. Satisfaction with the pre-
purchase experience has a positive carry-over effect on the satisfaction with the post-
purchase experience. We also find that price satisfaction has a negative effect on
satisfaction with the post-purchase experience. These results raise interesting questions
about the nature of price satisfaction. They also have important implications for e-tailer
pricing strategy.

1
Introduction

On-line customer satisfaction is a very important issue for businesses and an

interesting new area of research for academics. Datamonitor reports that Internet retailers

lost $6.1 billion in sales in 1999 due to dissatisfaction with on-line service and this

amount is expected to grow every year (Mottl 2000). While there has been a great deal of

research on customer satisfaction in traditional (non- internet) markets, very little is

known about the determinants of customer satisfactio n for e-tailers (Szmanski and Hise,

2001). Internet customer satisfaction is also of great interest to web shoppers. Sites such

as BizRate.com which measure e-tailer customer satisfaction are among the most popular

destinations on the web (Haney, 2001).

Studies of the impact of customer satisfaction in traditional markets suggest that

increased customer satisfaction leads to better financial returns for the company

(Anderson, Fornell and Lehmann, 1995). These benefits accrue as satisfied customers

purchase more from the company, are less likely to switch and provide positive word-of-

mouth advertising (see Szymanski and Henard, 2001 for a review). In short, satisfied

customers are likely to be loyal customers.

While loyalty may seem incongruent with the point-and-click world of internet

shopping, Reichheld and Schefter (2000) suggest that building customer loyalty should

be the focus of e-tailers rather than attracting new customers. Since loyalty is a

consequence of customer satisfaction, e-tailers must understand how to satisfy customers

in order to keep them over time. Given the very large costs to acquire on-line customers,

the length and depth of their relationship with an e-tailer means the difference between

profitability and losses.

2
 An area of recent interest in the customer satisfaction literature is the role of

pricing and price perceptions on customer satisfaction (e.g., Voss, Parasuraman, and

Grewal 1998; Bolton and Lemon, 1999; Varki and Colgate, 2001). The relationship

between customer satisfaction and pricing for e-tailers is very important as e-tailers

struggle to identify profitable business models. The traditional view of on-line shoppers

is one of price-conscious bargain hunters who drive down prices and margins for every e-

tailer (Sinha, 2000). If this were true in general, we would expect to see that sites offering

lower prices would have higher levels of customer satisfaction, a negative relationship

between prices and customer satisfaction. However, Reichheld and Schefter (2000) claim

that the largest segment of on- line shoppers are more interested in convenience and are

willing to pay more for it (p. 110). If this latter situation were true, we would expect to

see a positive relationship between customer satisfaction and prices. Given the twin goals

of profitability and keeping customers, this relationship is one of great interest and

importance for e-tailers.

In this paper, we model e-tailer satisfaction using the consumer’s measures of

satisfaction with their pre-purchase and post-purchase experiences. These measures were

collected from BizRate.com for 9 most-visited book e-tailers. We model the prices of the

e-tailers using the same market basket approach used by Bailey (1998) in his study of

internet pricing. We examine the antecedents of price satisfaction and its impact on post-

purchase satisfaction. Using PLS to estimate our model, we find that an e-tailer’s price

has a negative effect on the customer’s satisfaction with the pre-purchase experience as

well as the customer’s satisfaction with price. We further find that a customer’s

satisfaction with price has a negative impact on satisfaction with the post-purchase

3
experience. This is an unexpected and important finding for e-tailers since post-purchase

satisfaction is strongly related to customer retention and, therefore, loyalty (Reichheld

and Schefter 2000: 112).

In the next section, we describe our model in detail. This is followed by a

description of the data collection and preliminary analyses. We then present and discuss

our estimated model. We conclude with some comments on the role of pricing on internet

customer satisfaction.

Measuring the Internet Shopping Experience

Since internet shopping is relatively new, we will describe the process and our

measures simultaneous ly. A time line of the process is provided in Figure 1.

Figure 1 about here

For ease of exposition, consider the purchase of a single item. The process begins

with the initial stages of product search and comparison. Once an item is selected for

purchase, the consumer continues to a checkout process. Before the transaction can be

completed, the consumer is informed of any shipping and handling charges associated

with the order. This is a key step in the buying process. Forrester Research found that 40-

60 percent of intended online purchases are abandoned when shoppers reach this step.

The major reason given was that shipping and handling charges were unreasonably high

(Bayan 2000).

The transaction continues with the customer providing shipping and payment

information. This is followed by the e-tailer performing a payment authorization (usually

via credit card) and identity verification, usually via an e-mail informing the customer of

the existence of the order.

4
 The process continues with the shipment of the product to the customer

followed by his or her choice to keep or return the product. If there are any problems with

the transaction, the customer can contact the e-tailer to deal with returns, refunds or other

questions.

Satisfaction with the entire shopping, buying and delivery process is measured at

two points. The measures and associated citations are presented in Table 1.

Table 1 about here

The first satisfaction measurement occurs after the customer confirms an order.

The customer provides four measures of satisfaction with respect to the pre-purchase

experience 1 . These include satisfaction ratings of ease of ordering, product selection,

product information and web site performance. All of these characteristics have been

suggested as key to providing good customer service on the web.

At the same time, the customer provides ratings of their satisfaction with the

shipping & handling charges. A rating of price satisfaction is also collected at this time.

The second satisfaction measurement occurs after the expected date of product

delivery. Satisfaction ratings for four aspects of the post-purchase experience are

collected. These characteristics are on-time delivery, order tracking, product

representation and customer support. In their studies of customer retention, Dell

computer has found that post-sale services including on-time delivery, product

representation and customer service are key drivers of customer loyalty (Reichheld and

Schefter 2000: 112).

1
Note that the pre and post purchase experiences are different. They are not before/after measures of the
same services as is typical in customer satisfaction studies.

5
 Price levels for each e-tailer are measured weekly using a market basket of

identical products. This is the same approach used by Bailey (1998) to measure price

dispersion in the internet markets for books, CD’s and software.

In the next section, we propose a model of the relationships among the measures

of price, price satisfaction, pre-purchase and post-purchase satisfaction.

Internet Pricing and Customer Satisfaction

In Figure 2, we provide a model of the impact of price and price satisfaction on

customers’ satisfaction with their pre-purchase and post-purchase experiences. The first

link we consider is between price and pre-purchase customer satisfaction.

Figure 2 about here

Customer satisfaction is often defined in terms of the comparison between the

customer’s expectations regarding a product, service or experience and the actual

performance that the customer encounters (e.g., Oliver, 1981). Customers are considered

to be satisfied if actual performance exceeds or matches expectations. If performance

fails to live up to the consumer’s expectations, the consumer will be dissatisfied.

Within this framework, price can have a major effect on customer satisfaction.

Johnson (1998) argues the influence of price on satisfaction is based on its effect on

customer’s perceptions of performance. Specifically, a customer should be more satisfied

with an offering that provides more of what customer’s want or desire relative to the

price the customer pays.

The price paid by the consumer may affect satisfaction through its influence on

expectations as well. Varki and Colgate (2001) found a significant relationship between

price perceptions and satisfaction when price perception was measured on a relative basis

6
(NZ data) but not when measured on an absolute basis (US data). They interpret these

results as evidence of a reference price or price expectation which consumers use to

evaluate the prices they pay. This evaluation, positive or negative depending on the price

level, affects their overall satisfaction.

With respect to e-tailers, the effect of price on customer satisfaction is unknown.

In the absence of prior experience upon which to ground their expectations, consumers

will use market cues to evaluate performance. This may be the situation for internet

shopping since it is a relatively new activity for most people. In such instances, Rao and

Monroe (1989) suggest that price is often used to formulate performance expectations.

Consequently, high prices would lead to high expectations.

Consider the situation of two e-tailers with equal performance. Custome rs will be

more satisfied with the e-tailer that has lower prices. Since we expect there to be larger

differences in prices across e-tailers than variations in performance, we expect there to be

a negative effect of price on pre-purchase satisfaction (Path 1).

For the pre-purchase experience, we model satisfaction as a latent construct with

four indicators: satisfaction ratings on ease of ordering, product selection, product

information and web site performance.

The actual price level of an e-tailer as measured by a market basket of identical

items should have a negative effect on price satisfaction (Path 2). The internet allows

customers to easily compare prices across multiple outlets using a price search engine. If

an e-tailer is perceived by customers to have consistently higher prices, this may be

perceived as being unfair since the identical item is available elsewhere at a lower price

(Sinha, 2000). Following Bolton and Lemon (1999), such perceptions of unfairness

7
should lead customers to be less satisfied with the price they pay from higher priced e-

tailers.

Satisfaction with price should be a function the price paid by the consumers and

the shipping & handling (S&H) charges of the e-tailer. For many internet purchases,

these charges make up a substantial portion of the total transaction and dissatisfaction

with about S&H charges derails many internet purchases (Bayan, 2000). Consequently,

we include satisfaction with S&H charges as a determinant of price satisfaction.

How should customers’ satisfaction with their pre-purchase experience affect

their satisfaction with the price they pay? One clue comes from Reichheld and Schefter

(2000) who argue that many internet shoppers are actually less interested in low prices

than convenience. This suggests that consumers who are satisfied with their pre-purchase

experience will have higher levels of price satisfaction (Path 3).

We model satisfaction with the post-purchase experience as a latent variable of

the four measures of satisfaction with on-time delivery, order tracking, product

representation and customer support.

We expect there to be a positive relationship between the pre-purchase and post-

purchase satisfaction. Influence on this relationship could be a carry-over or halo effect

on the consumer’s perception of the e-tailer’s post-purchase performance. High levels of

satisfaction with the pre-purchase experience might lead to a higher level of perceived

performance during the post-purchase experience. At the same time, pre-purchase

satisfaction may also affect expectations about post-purchase service in the direction of a

positive relationship. Consider the consumer who is dissatisfied with pre-purchase

service. Such a customer would probably have higher expectations for the post-purchase

8
experience to compensate for the shortcomings in the pre-purchase experience. On the

other hand, customers who satisfied with the pre-purchase experience may have lowered

expectations in addition to higher perceptions of the performance for the post-purchase

experience. This would lead to a high level of post-purchase satisfaction for customers

who are satisfied with their pre-purchase experience and a low level of satisfaction for

customers dissatisfied with their pre-purchase experience. Therefore, we expect the effect

of pre-purchase satisfaction on post-purchase satisfaction to be positive (Path 4).

Following the same line of reasoning as presented above for Path 4, we expect

that the relationship between price satisfaction and the consumer’s post-purchase

satisfaction should be positive (Path 5).

In the next section, we discuss the data we used to test this model.

Empirical Study

Data and measures

The setting for our study is the on-line book market. The data for our study come

from two sources. The first is the BizRate.com web site. Here we obtained the weekly

average ratings of customer satisfaction for the measures of pre-purchase and post-

purchase experiences as well as the satisfaction measures for price and shipping &

handling.

These data were collected from a panel of more than 200,000 internet shoppers.

Whenever a panelist completes an internet purchase, he or she in invited to complete a

survey. In order to encourage panelist participation, BizRate offers the opportunity to win

$50 in a “Spin and Win” ga me as well as entry a future drawing for a $1000 prize.

9
 Respondents rate their satisfaction with the pre-purchase experience, price and

shipping & handling charges using a 10 point scale with 10 indicating a high degree of

satisfaction. At the time of the survey, the respondent is asked to indicate the expected

time of delivery of the ordered merchandise.

A few days after the expected order delivery date, a follow- up survey is sent to

the same respondent. This survey asks respondents to indicate their level of satisfaction

with their post-purchase experiences on the same 10-point scale. While the survey does

ask the respondent’s likelihood to buy from this same e-tailer in the future, these data are

available only to the e-tailer’s themselves. These measures are not available to other e-

tailers or researchers.

These aggregated measures of customer satisfaction are similar to the market-

level indices used in cross- industry research by Johnson, Anderson, Cha and Bryant

(1996) among others. Each weekly measure was based on a large sample of 500-10,000

respondents.

The second source of data is a longitudinal database of book prices collected daily

over the weeks from September 3rd, 2000 to December 22nd, 2000. We constructed a

market basket of nine titles, which includes best sellers, children’s books, and reference

books. The list of titles is included in Table 2. Every book in the market basket was

available from every e-tailer over the entire period of study.

Table 2 about here

We compared the coefficient of variation, which is a measure of price variation,

of our data with that of the market baskets in Bailey (1998). His market baskets consisted

of some 125 titles. The coefficient of variation in our market baskets ranged from 9% to

10
11%. This is slightly higher than Bailey’s (1998) range of 7.5% to 9.75%. There are two

possible reasons for this minor discrepancy. First, we study more e-tailers (9 v. 6)

including some with much lower prices than the most popular book e-tailers. Second,

Bailey’s (1998) market basket contained many more items. Overall, we conclude that our

market basket fairly represents the variations in prices across the e-tailers in our study.

Sample statistics and construct validation

In Table 3, we present that sample means and standard deviations of the

satisfaction measures across all nine e-tailers for the entire 11-week period.

Table 3 about here

The means are all above 8 on a 10-point scale. Some of this ceiling effect may be due to

the selection of respondents from the pool of shoppers who have completed a transaction.

BizRate does not survey Internet shoppers who fail to complete their buying process2 .

Notice that the variances of the measures of the post-purchase experience are larger than

the satisfaction measures for the pre-entry experience. This implies that there is a much

wider variation in customer satisfaction after the sale than before. Since these measures

are strongly related to customer retention, this should be of concern to e-tailers seeking to

build long-term relationships with their customers.

To validate our decision to model the pre-purchase experience, post-purchase

experience and shipping & handling satisfaction as separate constructs, we performed a

principal components analysis of these nine measures. The results are also presented in

Table 3.

2
There have been special studies using the panel to determine why some shoppers do not complete their
purchases. These data are not part of the weekly satisfaction scores we use here.

11
 There were three eigenvalues larger than one. The three- factor solution accounted

for 98% of the variation in the data. From the varimax rotated loadings, we see that the

four satisfaction measures associated with the pre-purchase experience have high

loadings (> 0.80) on the same factor. The same is true for the four satisfaction measures

associated with the post-purchase experience. As expected, the satisfaction measure for

shipping & handling loaded on it own factor.

Model estimation

To estimate the model proposed in Figure 2, we used partial least squares (PLS).

There are four latent variables: pre-purchase satisfaction, post-purchase satisfaction,

price, and price satisfaction. There are four manifest variables associated with the pre-

purchase latent variable: satisfaction ratings of ease of ordering, product selection,

product information and web site performance. There are also four manifest variables

associated with the post-purchase latent variable: satisfaction ratings of on-time delivery,

order tracking, product representation and customer support. The price satisfaction latent

variable is associated with its own manifest variable as well as the shipping and handling

satisfaction manifest variable. The price latent variable is associated with the manifest

variable of the price of the market basket of identical books.

We used the EzPLS T M software written by Bruce Klemz to estimate the PLS

model (Klemz, 1998). This software uses Wold’s (1981) formulation to estimate the path

coefficients. In addition, this software offers full jack-knifing capabilities in order to

estimate the standard errors of the path estimates.

PLS Model Results

The results are presented in Figure 3.

12
 Figure 3 about here

As we see, the manifest variables have strong relationships with their associated

latent variables. With the exception of the measure of S&H satisfaction, all of the

estimated loadings are greater than 0.9 and are significant at the p < 0.01 level. With a

loading of nearly 0.60, satisfaction with shipping and handling charges has a strong

impact on overall satisfaction with price. This suggests that e-tailers wishing to recover

revenue given up through promotions on posted prices may end up alienating many

customers.

As expected, the coefficient for Path 1 is negative (-0.33). This result is consistent

with a positive relationship between price and the expectations for the pre-purchase

experience. It appears that either all of these e-tailers are providing comparable leve ls of

performance or that the higher priced e-tailers’ performances are not sufficiently higher

to compensate for their higher prices. We expect that the former explanation is very

possible since many e-tailers are using the same types of interfaces and even the same

software to serve their customers.

The coefficient for Path 2 is negative as expected. The magnitude of this path

coefficient (-0.51) suggests that price has a larger impact on price perception than it does

on pre-purchase satisfaction. This is indirect evidence supporting Reichheld and

Schefter’s (2000) contention that internet shoppers are more concerned with convenience

than price. If internet shoppers were purely price-driven as Sinha (2000) claims, then the

impact of a low price on pre-purchase satisfaction should have been at least as great as its

impact on price satisfaction.

13
 Further support for this view of the internet consumer is the positive path

coefficient between pre-purchase satisfaction and price satisfaction (Path 3: 0.33). In

other words, high levels of pre-purchase satisfaction can somewhat compensate for

dissatisfaction with price.

The coefficient for the path between satisfaction with the pre-purchase experience

and the post-purchase experience (Path 4) is positive (0.65). This result suggests that one

“path” to post-purchase satisfaction and building long-term relationships begins with

providing customers with a satisfying pre-purchase experience.

The most surprising finding is that the relationship between price satisfaction and

post-purchase satisfaction is negative (Path 5: -0.43) which is the opposite of our

expectations. This result seems to conflict with prior studies in this area by Voss,

Parasuraman and Grewal (1998) and Varki and Colgate (2001). However, in their studies,

the subjects were evaluating a single service encounter. Our respondents are providing

post-experience satisfaction measures for two different service encounters separated by

several days. This separation in time provides one possible explanatio n for our results.

What we may be capturing in this model is the transient nature of price

satisfaction. In prior studies, price satisfaction or perceptions are measured

simultaneously or in near proximate time to the service encounter. In the internet

environment, there is necessarily a time lapse between the measurement of price

satisfaction and the post-purchase experience. It is likely that the consumer’s evaluation

of the transaction as a “good deal” or “rip-off” may regress to the mean over time.

In the interim period between the completion of the on- line ordering process and

the delivery of the product, typical consumers would have made many purchasing

14
decisions with their attendant evaluations of the price they paid. This may inhibit the

effect of price satisfaction on their expectations for the post-purchase experience.

In addition, the measurement of price satisfaction might be influenced by

temporary conditions. For example, the presence of a special promotional price or

coupon, which is not measured in our data, might increase price satisfaction. On the other

hand, a customer pressed for time may pay more than he or she expects by purchasing at

a more familiar site. Both of these scenarios would result in a temporal attenuation of

price satisfaction.

If price satisfaction is not enduring (regresses to the mean), it may have little

effect on post-purchase satisfaction. However, we find a significant negative relationship.

If we accept that price satisfaction regresses to the mean, then we may also be capturing a

lack of follow-up service on the part of low price e-tailers.

Some e-tailers try to reduce prices by carrying little inventory, using out-sourced

shipping services or non-FedEx/UPS package delivery companies. Each of these cost-

cutting decisions could lead to a negative post-purchase experience, regardless of the

consumer’s expectations.

Discussion

One of the interesting features of a PLS model is the capability to examine the

total effects of a variable through the path relationships in the estimated model. For our

results, we wanted to know the effect of price on post-purchase satisfaction. This is, of

course, a key question since post-purchase satisfaction is thought to be an important

driver of customer loyalty. Proceeding along the path through pre-purchase satisfaction,

15
we have a total effect of –0.21 (= -0.33*0.65). The total effect via the price satisfaction

construct is 0.22 (= -0.51*-0.43). These effects almost cancel each other out.

What does this mean for the pricing strategy of internet e-tailers? It may seem that

these results suggest that either a high price or low price strategy would result in equal

levels of post-purchase satisfaction. While this is true algebraically, it is not true

strategically. Low price e-tailers make their customers happy initially with low prices

and, given their low expectations for pre-purchase service, the customers are also

satisfied with this aspect of their interaction with the e-tailer. We assume that the

performance on the dimensions of pre-purchase satisfaction are similar for low price and

high price e-tailers are similar given the reliance on non-human interaction (i.e. e-

commerce software). It appears that low-price sites pay the price of admission to the e-

tailer game and then drop the ball. They do not seem to follow up with their post-

purchase service. This is to be expected since post-purchase activities such as order

fulfillment (pick, pack and ship), delivery and customer interaction (via e- mail or phone)

have a larger human eleme nt. This increases the variability of the service the customers

receive. However, only the high priced e-tailer has the margins to make sufficiently large

investments in the people and systems to keep customers coming back.

One of the limitations of this study is that we are modeling the relationships

between satisfaction indexes rather than using individual- level measures on satisfaction

and the underlying expectations and performance ratings. Examining how internet pricing

affects these constructs under various conditions including the experience of the customer

with on- line buying, the size of the transaction, etc. should be fruitful areas for future

research.

16
 Compared to traditional retailing and many services, internet e-tailing is a very

complex bus iness. Every transaction involves a number of contact points with the

consumer and third-parties such as credit card clearance firms and delivery companies.

Consequently, there are many opportunities for an e-tailer to delight or disappoint

customers. An interesting area for future research raised by our study is the degree of

permanence and the direction of influence of price satisfaction on post-purchase

satisfaction. Our results suggest that customers delighted by a low price do not stay so for

long. Whether this is a natural decay over time or the fault of the e-tailer itself, this

finding raises serious issues for e-tailers hoping to compete on price as a long-term

strategy.

There should be great academic interest in satisfaction measures such as those

posted on BizRate. Consumers and businesses are making important decisions based

upon these data. Consumers are choosing which sites to visit and e-tailers are monitoring

the buying public’s opinion of their business practices. Our exploratory study of a single

product category provides some interesting preliminary insight into how price

perceptions are formed on the internet and how these perceptions affect customer

satisfaction. Since “satisfying the customer” is the mantra of most businesses today,

understanding the role of price is this process is quite important.

17
 Table 1

E-tailing Satisfaction Constructs, Measures and Citations

Construct Measure Definition Citations

Pre- • Ease of Use Convenience and Kaufman (1999), Seiders, Berry
purchase speed of ordering and Gresham (2000), Szymanski
experience and Hise (2001)
satisfaction
• Product Breadth/depth of Seiders, Berry and Gresham
selection products offered (2000), Szymanski and Hise
(2001)
• Product Information Lohse and Spiller (1998),
information quantity, quality Seiders, Berry and Gresham
& relevance (2000), Szymanski and Hise
(2001)
• Web site Layout, links, Kaufman, (1999), Bayan (2000),
performance pictures, images Seiders, Berry and Gresham
& speed (2000), Teeter and Schointuch
(2000), Szyma nski and Hise
(2001),
Post- • On-time Expected vs. Bayan (2000), Hall (2000),
purchase delivery actual delivery Reichheld and Schefter (2000),
experience date Seiders, Berry and Gresham
satisfaction (2000),
• Product Product Reichheld and Schefter (2000)
representation description/
depiction vs. what
you received
• Customer Status updates Sawy and Bowles (1997), Lohse
support and complaint/ and Spiller (1998), Reichheld
question handling and Schefter (2000)
• Order Ability to track Hall (2000)
tracking orders on- line

Price • Price Prices relative to Gale (1994)

Satisfaction Satisfaction similar stores
• Shipping and Shipping and Bayan (2000)
handling handling charges
satisfaction
Price Market basket of Listed in Table 3 Bailey (1998)
identical items

18
 Table 2

Market Basket Summary Statistics and Contents

Market basket Average ($US) 114.69-119.02

statistics:
Standard Deviation 11.08-14.00

Coefficient of variation 9.41%-11.77%

Contents of market basket:

Book name ISBN Author Binding List

Price
Bible Stories for 0025540602. By Geoffrey Horn, Arthur Hardcover USD
Children. Cavanaugh, Arvis Stewart, 317 pages 15.95

Day after Roswell 067101756x Birnes, William J. / Corso, Mass Market 6.99
Philip J Paperback
371 pages
Easy Prey 039914613x John Sandford Hardcover 25.95
407 pages
E-Bay the Smart 0814470645 Joseph T. Sinclair Paperback 17.95
Way: Selling, 352 pages
Buying, and
Profiting on the
Web's #1 Auction
Site
How to Become a 0312972563 Hank Schlesinger Mass Market 5.99
Poke'mon Master Paperbound
Oxford American 0195027957 Eugene H. Ehrlich, Oxford, Hardcover 19.95
Dictionary Gorton Carruth, Joyce M. 816 pages
Hawkins, Stuart Berg Flexner
Concise Oxford 019280037X Kennedy, Michael / Bourne, Trade 16.95
Dictionary of Music, Joyce (Editor). Paperback
4th Ed.
Keeping the Moon 0670885495 Sarah Dessen Hardcover 15.99
224 pages
The Nanjing 0520220072 Joshua A. Fogel (Editor) Paperback 15.95
Massacre in History 238 pages
and Historiography

19
 Table 3

Satisfaction measure summary statistics and principal components analysis.

Satisfaction Measure Mean Standard Minimum Maximum

Deviation
Ease of Use 8.80 0.44 8.0 10.0
Product selection 8.65 0.46 7.5 9.2
Product information 8.24 0.56 7.3 9.5
Web site performance 8.62 0.52 7.6 10.0
On-time delivery 8.18 0.82 6.0 9.1
Product representation 8.69 0.48 7.5 9.5
Order tracking 8.01 0.92 5.9 9.0
Customer support 8.12 0.74 6.3 8.9
Shipping and handling charges 8.15 0.73 7.3 9.7

Varimax Loadings

Satisfaction Measure Factor 1 Factor 2 Factor 3

Ease of Use 0.050 0.982 0.072
Product selection 0.091 0.876 -0.132
Product information 0.457 0.847 -0.108
Web site performance 0.225 0.908 0.277
On-time delivery 0.990 0.095 0.012
Product representation 0.829 0.379 0.317
Order tracking 0.971 0.208 -0.035
Customer support 0.960 0.255 0.040
Shipping and handling charges -0.302 -0.001 0.914
Eigenvalue 5.49 2.27 1.11
(cumulative % of variance) (61.1%) (86.4%) (98.7%)

20
 Figure 1

Internet buying and measurement processes

BizRate satisfaction survey

• Ease of use
• Product information
• Product selection
• Web site performance
• S&H charges
Shopping • Price satisfaction
process Check -out process

• Search site for

• Customer sees order
products
total including S&H • E-tailer approves
• Compare payment
charges
features and
• Customer enters • E-mail
prices verification of
• Make selections payment and shipment
information buyer identity

• Customer checks • Customer contacts BizRate satisfaction survey

status of order e-tailer if there are
• Order shipped to problems • Order tracking
consumer
• On-time
• Consumer
delivery
receives order
• Product
representation
• Customer
service

Customer begins
internet shopping
process again

21
 Figure 2

Conceptual Model of Internet Price, Price Satisfaction

and Pre/Post-purchase Satisfaction

Satisfaction with
pre-purchase
Path 5: +
Path 1:- experience

Path 3: +
Satisfaction with
E-tailer Price Satisfaction
post-purchase
with Price
experience
Path 2: -
Path 4: +

22
 Figure 3

PLS Results

Product Ease of Product Website

information ordering selection performance
0.929 0.9665 0.907 0.952
(0.0017) (0.0007) (0.002) (0.0009)

Satisfaction with pre-

purchase experience
Path 5:
Path 1: 0.655
-0.332 Path 3:
0.33 (0.006)
(0.011)
(0.0076)

Path 2: Path 4: Satisfaction with

E-tailer Price Satisfaction with
-0.512 -0.43 post-purchase
(0.005) Price experience
(0.0085)

1.0 0.982 0.598 0.932 0.98 0.987 0.994

(0.0014) (0.0114) (0.0017) (0.0003) (0.0002) (0.0001)

Basket Price Shipping & Product On time Customer

tracking
price satisfaction handling representation delivery support

23
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