The Role Of E-Commerce In Improving Customer Satisfaction

Project and Seminar Material for Business Administration and Management BAM

Abstract

The purpose of this study is to investigate the role of e-commerce in improving customer satisfaction. The study was based on a random sampling technique. The data were collected from 720 customers and 150 staff of Jumia. The findings of the study revealed that the quality of service delivery has been improved by the use of online services. It is also seen that the avoidance of downtimes seems to be extremely important to Online vendors. In view of the findings of this research it is concluded that e – commerce in Nigeria is yet to create any significant impact on service delivery, which will consequently lead to improved customer service.

Chapter One

Introduction

1.1 Background of the Study

The use of e-commerce websites can lead to accepting and satisfying intentions and then influence customer satisfaction behavior towards an e-commerce website Customer satisfaction is how satisfied a customer is with the supplied product/service. It is closely related to interpersonal trust [Geyskens, Steenkamp, Scheer, and Kumar 1996].

[Zins 2001], stated , it is expected that a higher level of customer satisfaction will lead to greater loyalty. However, the impact of satisfaction on customer loyalty is rather complex. Fisher [2001] believes that customer satisfaction accounts for only part of why people change product or service providers. Other studies have shown that customer satisfaction is a leading factor in determining loyalty [Anderson and Lehmann 1994]. Anderson and Srinivasan [2003] found that both trust and perceived value, as developed by the company, significantly accentuate the impact of satisfaction on e-Journal of Electronic Commerce Research, VOL 12, NO 1, 2011 Page 81commerce loyalty. In a more recent study by Cyr [2008] it was found that website satisfaction is strongly related to loyalty in three countries: Canada, Germany, and China.

Generally, loyalty has been defined as the repeat purchasing frequency or the relative volume of same-brand purchasing. Oliver [1997] defines customer loyalty as a deeply held commitment to re-buy or re-patronize a preferred product/service consistently in the future, thereby causing repetitive same brand or same brand set purchasing, despite situational influences and marketing efforts having the potential to cause switching behavior. In e-commerce, loyal customers are considered extremely valuable. Today, e-retailers are seeking information on how to build customer loyalty. Loyal customers not only require more information themselves, but they serve as an information source for other customers. Building customer loyalty is one of the biggest challenges for business to customer e-commerce. Several antecedents of customer loyalty have been proposed. Customer satisfaction and trust have been brought forward as a precondition for patronage behavior [Pavlou 2003] and the development of long-term customer relationships [Papadopoulou, Andreou, Kanellis, and Martakos 2001].

The study by Kassim and Ismail [2009] found that services quality and vendor’s assurance to online customers, contribute to building trust and satisfaction thereby improving customer loyalty. These study shall therefore determine the role of e-commerce in improving customer service.

1.2 Statement of the Problem

E-commerce constitute a significant business process of transacting modern business services as vast population of people are hooked to online services through the internet and various websites.

However, creating customer satisfaction is pivotal to enhance customer loyalty and repeat patronage which is dependent on a number of factors.

The problem confronting this research is to investigate the role of e-commerce in improving customer satisfaction. With a case study of JUMAI

1.3 Research Question

What is the nature of e-commerce?
What is customer satisfaction and what factors determine customer satisfaction in e-commerce?
What is the role of e-commerce In improving customer satisfaction?
How does JUMAI e-commerce improve customer satisfaction?

1.4 Objective of the Study

To appraise the nature of e- commerce business services
To appraise customer satisfaction and factors determining customer satisfaction
To determine the role of e-commerce in improving customer satisfaction
To determine the JUMAI e-commerce services in improving customer satisfaction

1.5 Significance of the Study

The study shall provide a conceptual and theoretical appraisal of the nature of e- commerce
The study shall determine the role of e-commerce in improving customer satisfaction
The study shall provide information on e-commerce to organizations, IT professionals, and Business managers

1.6 Scope of the Study

The study focuses on the role of e-commerce in improving customer service. It provides a conceptual and theoretical appraisal of the nature of e-commerce and the factors which determine customer satisfaction in e-commerce

1.7 Definition of Terms

E-Commerce Is Defined

E-commerce is a short term for electronic commerce, It consist of trading in products or services using computer networks, such as the Internet. Electronic commerce draws on technologies such as mobile commerce, electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web for at least one part of the transaction’s life cycle, although it may also use other technologies such as e-mail.

Chapter Five

Summary, Conclusion and Recommendations

5.1 Summary

Commercial services offered through the Internet are more frequently described as e- commerce. This is simply because there is no physical contact between the customer and and the seller. In fact, some market watchers are beginning to argue that such transactions are real indeed and can no longer be described as “virtual”. Given the overwhelming success of e- commerce, sellers in Nigeria are gradually embracing Internet payment and radical changes are beginning to take place in Nigerian business landscape.

Chapter one of this study begun with the introduction of the study which set out to assess the impact of e-transaction as it affects customer satisfaction with jumia.

Chapter two focuses on existing literature (the work of others) in respect of this study area. perspective in Nigeria, Structure of the Nigerian online vendors . Similarly, the Financial Services in the Nigerian business cycle, origin and operations of e-transactions, the concept of e- commerce, the evolution of e- commerce in Jumia, e- commerce products/services in Jumia, benefits of e- commerce to Jumia and customer, merits and demerits of e- commerce in Nigeria, impediment to e- commerce in Nigeria, elements of customer satisfaction in Jumia and relationship of e- commerce to customer satisfaction.

In chapter three, the research methodology used for this research work was discussed. The research design was highlighted while the population of the study, the sample size and sample technique which was based on random sampling – where 350 customers and 150 Jumia staff were selected, was discussed. Sources of data, method of data collection and analysis techniques were areas of focus for this chapter.

In chapter four, the data collected from the field were presented and analyzed with appropriate interpretation given. The questionnaires were further analyzed and the research questions are answered. Chapter five summarizes all the succeeding chapters. Here the study was summarize and conclusion is drawn and made while recommendations were proffered.

5.2 Conclusions

Expectations have a central role in influencing satisfaction with services, and these in turn are determined by a very wide range of factors – lower expectations will result in higher satisfaction ratings for any given level of service quality. This would seem sensible; for example, poor previous experience with the service or other similar services is likely to result in it being easier to pleasantly surprise customers. However, there are clear circumstances where negative preconceptions of a service provider will lead to lower expectations, but will also make it harder to achieve high satisfaction ratings – and where positive preconceptions and high expectations make positive ratings more likely.

Technology is undoubtedly a very important tool of every company‟s competitive strategy. It could draw the line between success and failure. E- commerce, which has resulted from the blossoming Internet technology, obviously has many benefits for the financial system. Unfortunately, Nigerian companies cannot immediately reap the digital dividend because of poor telecommunications infrastructure.

Since e -commerce is targeted, in most cases, at the public by way of mass marketing, users must have access to cheap, fast and easy telecommunication tools. The poor in Nigeria are financially forbidden from participating. The roll-out of GSM cannot solve telecommunications problem given the high cost of tariff.

Other finding is that Jumia’s has enough good retail products for the needs of customers. The study also reveals that online vendors nowadays, because of competitive nature of their service they come up with fantastic and effective marketing strategies that will position them at an advantage over other businesses. In a bid to operationalize all these marketing strategies, the marketing department in Jumia have been highly consolidated and solidified by making use of the core marketer in the department and employing other field marketer through outsourcing arrangement.

Today, e- commerce means developing new relationships with customers, regulatory authorities, suppliers, and business partners with digital age tools. For example, it requires an understanding that customer/company relationships will be more personalized, resulting in novel modes of transaction processing and service delivery. This in turn calls for substantial investment in IT platforms by Jumia.

This study has revealed that e-transaction has an overwhelming impact on customer satisfaction. In fact, it is quite important that Jumia should transcend from the most popular quick teller and focus more on strengthening other e- commerce services like transfer of funds, payment of bills and other e- commerce platforms, which shall in the near future be a critical success factor for their continued existence and success. Apart from committing more resources in upgrading those services there is also an attendant need for Jumia to invest in creating customer awareness on the existence of other value added e- commerce services for their utilization.

Particular importance in this drive should be the existence of round the clock complaint handling desk that should be staffed with qualified and courteous staff to provide efficient and responsive way-forwards to customers. And, given the high level of concern with internet security, Jumia need to emphasize the measures they have taken to ensure confidentiality of transactions and to also protect their customers from fraud and other attendant internet vices that their subscription may subject them to.

The quality of Web sites too has a direct and an indirect impact on both satisfaction and trust. Jumia should redesign their Web sites with a view to enhancing usability and usefulness. Amongst the many factors that account for the perceived quality of a Website, the avoidance of downtimes seems to be extremely important to Online vendors. Furthermore, based on findings I recommend making the sites easy to navigate and giving them an uncluttered look. Sufficient information should be given on how to conduct transactions and, most importantly, on how to get help should unforeseen events happen.

Trust and overall satisfaction can be seen as major antecedents of e-loyalty. I would therefore recommend that trust-building actions are paid more attention in to, focusing for example on pay-back guarantees or quality certificates, which are seen as helpful steps in increasing electronic customer retention. It seems obvious that the results of many surveys suggest incorporating trust-building measures into online customer relationships. As far as this research is concerned, the pre-eminent importance of trust can be explained by both the core products of the financial industry, which can be seen as the transmission and processing of highly confidential information, and trust in the medium as such, which again stands for Jumia’s capability to securely transfer and store confidential personal information. Unless customers establish personal contacts with Jumia, users of e -commerce in many cases do not have well-known contact persons and must rely completely upon the capability and trustworthiness of Jumia. Therefore, Jumia must build a strong brand in order to signal competence to its customers.

Another important issue is that of continuous survey which might be an adequate instrument for e -commerce to learn about their customers’ attitudes. The comparatively high response rate for an online survey can be taken as an indicator that customers of jumia are actually willing to give feedback and get in touch with their supplier.

5.3 Recommendations

e -commerce has become a necessary survival weapon and is fundamentally changing the business worldwide. Today, the click of a mouse offers Jumia’s customers services at a much lower cost and also empowers them with unprecedented freedom in choosing vendors for their financial service needs. No country today has a choice-whether to implement e- commerce or not given the global and competitive nature of the economy. Jumia have to upgrade and constantly think of new innovative customized packages and services to remain competitive. The invasion of business by technology has created an information age and rendered e -commerce more appealing.
In view of the findings of this study it is concluded that e- commerce in Nigeria is yet to create any significant impact on service delivery, which will consequently lead to improved customer satisfaction.

Based on the findings of this research, it is recommended that:

Much need to be done in the area of creating awareness about the availability of e -commerce products and services, how they operate and their benefits. Jumia should organise public exhibitions and talk shows and make products accessible to all customers. In addition, they should improve their service delivery to justify the benefits of e- commerce products and services. This way, customers‟ interest would be aroused.
Jumia should try to win customers‟ confidence by providing adequate security of transaction back up of critical data files and alternative means of processing information. They should also ensure good connectivity and power base that will enable them serve customers faster and more conveniently. Jumia should ensure that at no time should service cease as a result of network problem
Government should provide adequate regulatory framework that will ensure customer protection, and security of transaction. That way, Jumia customers‟ confidence in e -commerce would be secured.

Project Material Download