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Ethics and Customer Loyalty: Some Insights into Online Retailing
Services
Presented at 4th Biennial International Business
Banking & Finance Conference
June 23, 2011
Hilton Trinidad & Conference Centre
Trinidad & Tobago
Meena Rambocas & Professor Surendra Arjoon
Department of Management Studies, U.W.I. St. Augustine
INTRODUCTION
• The Internet : A viable retail channel
• The Internet: An environment for unethical behaviour
• Ethical Retailing
AN EXAMPLE OF AN ETHICAL DILEMMA
ETHICAL ISSUES
• Privacy • Security• Deception• Reliability • Trust• Customer exploitation
CUSTOMER LOYALTY
• What is Customer Loyalty
• Customer Loyalty – A strategic tool
• Customer Loyalty- association with quality, customer satisfaction, trust, brand affect and brand value
RESEARCH QUESTIONS
(1) What factors contribute to Customers Perception
of Online Retailers Ethics?
(2) Does Customers Perception of Online Retailers
Ethics have any effect on Loyalty?
RESEARCH METHODOLOGY
• Sampling Technique: Convenience sample• Sample Size: 200• Sample Selection Criterion: Purchase at least 1
item online over the last 3 months• Survey Instrument: Self-Administered
Questionnaire• Survey Scale:
– The Ethics scale : CPEOR scale– The Loyalty scale: SERVLOYAL scale
DATA ANALYSIS: DESCRIPTION OF SAMPLE
Gender SampleMale 38 %
Female 62 %
Age SampleUnder 20 14
20-29 6630- 39 11
40 and Over 9
Education level %Undergradate 61
Post Graduate 34
Post Graduate PhD 5
DATA ANALYSIS: EXPLORATORY FACTOR ANALYSIS
• Reason for EFA
• Items retained for further analysis met the following criteria:
– All inter-correlation coefficients were statistically significant at a 95% level of testing
– Items did not load on more than two factors.
ROTATED FACTOR MATRIX
11
Security & Reliability
Product Availability
Misleading Tactics
Advantage of customer
Trust
Ethics Customer Loyalty
.71
.17
.32
.71
.73
.59
Re-Specification of the CPEOR Model
.94
.74
.61 .67
.35
.53
.51
.87
.55
Customer perception of Online Retailers Ethics
Model
Chi Sq = 48.395DF = 40GFI = .958AGFI = .930NFI = .940
.82
Privacy Policy
Security Features
DISCUSSION AND CONCLUSIONS
• Positive relationship between CPEOR ethics and Customer Loyalty
• T&T’s CPEOR ethics dependent on :
– Security and Reliability– Trust
13
DISCUSSION AND CONCLUSIONS (Con’t)
Security and Reliability• Privacy Policy
•Security Features
• Product Availability
Trust•Misleading Claims
•Perceptions of being exploited
SIGNIFICANCE OF STUDY
• Provide insights for online retailers targeting Caribbean Customers.
• Identify key indicators Caribbean Customers consider essential for online sites
• Provide an understanding of indicators that contribute to Customers Perception of Online Retailers Ethical Practices
LIMITATIONS & OPPORTUNITIES FOR FUTURE RESEARCH
• Sampling technique
• CPEOR model and key performance
• Can ethical perceptions vary by demographical and geographical consumer characteristics?
THANK YOU