measuring customer perceived quality online service qualitymeasuring customer perceived online...

Measuring customer perceivedonline service quality

Scale development and managerialimplications

Zhilin YangDepartment of Marketing City University of Hong Kong Kowloon Hong Kong

Minjoon JunDepartment of Management College of Business Administration andEconomics New Mexico State University Las Cruces USA and

Robin T PetersonDepartment of Marketing College of Business Administration and Economics

New Mexico State University Las Cruces USA

Keywords Worldwide web Customer service quality

Abstract The purpose of this paper is to set forth a reliable and valid means of measuring onlineservice quality based on a broad conceptual framework which integrates theory andconceptualization in customer service quality information systems quality and productportfolio management into online service quality An ethnographic content analysis of 848customer reviews of online banking services was employed to identify salient online service qualitydimensions The most frequently cited online service quality attributes along with literature reviewand personal interview results were utilized to develop the survey questionnaire Subsequent to thepre-test a Web-based survey was undertaken to verify and test the online service quality model Aconfirmatory factor analysis produced six key online service quality dimensions reliabilityresponsiveness competence ease of use security and product portfolio This paper includes adiscussion of the managerial and theoretical implications of this online service quality model

IntroductionElectronic commerce (e-commerce) has witnessed extensive growth Dozens ofInternet-only companies have surfaced in many industries and numerousconventionally-operated companies have adopted the Internet Accordinglycompetition among online companies has become rigorous Most online companiespublish price information and feature price in their advertising campaigns Thereforecustomers can become informed of the optimal prices for sought productsservices Tooffset this price-transparency disadvantage competitors have utilized three primarystrategies

(1) geographic differentiation

(2) service quality differences and

(3) modest levels of switching costs (Chen and Hitt 2000)

The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at

wwwemeraldinsightcomresearchregister wwwemeraldinsightcom0144-3577htm

The authors thank the anonymous reviewers for their helpful comments The first authorgratefully acknowledges a research grant from the City University of Hong Kong (DAG ProjectNo 7100267)

Online servicequality

1149

International Journal of Operations ampProduction Management

Vol 24 No 11 2004pp 1149-1174

q Emerald Group Publishing Limited0144-3577

DOI 10110801443570410563278

Online growth has reduced the role of physical geography for many consumers Thisgeographical irrelevance can also shrink some implicit switching costs such as thosefor convenience and time utility In short the importance of service qualitydifferentiation in attracting and retaining customers has advanced

However e-commerce service quality has been evaluated as inferior by numerouscustomers (Rubino 2000) Since the Internet is a relatively new transactional channelonline companies may not clearly understand what specific services are desiredAdditionally many customers have not yet formed clear expectations for onlineretailers (Zeithaml et al 2001)

The importance of service quality and the challenges facing Internet-based servicesnecessitate insights on the part of managers about what attributes customers use intheir evaluation of online service quality However a rigorous measurementinstrument of online service quality has not been available (Cox and Dale 2001OrsquoNeill et al 2001 Yoo and Donthu 2001) In order to improve that condition thisstudy intends to

identify the more salient online service quality dimensions

confirm the identified major service quality dimensions and

determine the relative importance of each identified service quality dimension inproducing overall service quality

The authors employed a two-stage approach in developing a reliable and validmeasurement of online service quality After establishing a broad conceptualframework which integrates theory and related concepts in the customer servicequality information systems quality and product portfolio management into onlineservice quality the authors applied an ethnographic content analysis to 848 customerreviews of online banking services to identify online service quality dimensions Asurvey questionnaire was generated based on these identified salient attributes andresults from the literature review and personal interviews Following this a Web-basedquestionnaire survey effort produced data from 235 online customers Then aconfirmatory factor analysis was used to outline six key online service qualitydimensions reliability competence responsiveness ease of use security and productportfolio

Conceptual frameworkTwo areas of literature were selected and reviewed for this study One was thetraditional and online service quality literature and the other was the informationsystems and Web site design literature Based on the literature review the authorsidentified the following three broad conceptual categories related to online servicequality

(1) customer perceived service quality

(2) information systems quality and

(3) product portfolio

The major literature findings are discussed under these three categories

IJOPM2411

1150

Customer perceived service qualityCustomer perceived service quality can be defined as a global judgment or attituderelating to the superiority of a service relative to competing offerings (Parasuramanet al 1988) Over the past three decades numerous researchers have sought to uncoverthe global services attributes that contribute most significantly to relevant qualityassessments (Sasser et al 1978 Gronroos 1983 Parasuraman et al 1985 Pitt et al1999) Among them the Parasuraman et al (1985) work has been regarded as mostprominent which revealed ten dimensions

(1) tangibles

(2) reliability

(3) responsiveness

(4) communication

(5) credibility

(6) security

(7) competence

(8) courtesy

(9) understanding the customer and

(10) access

These ten dimensions were further purified and distilled to five

(1) tangibles

(2) reliability

(3) responsibility

(4) assurance and

(5) empathy (Parasuraman et al 1988)

In turn these five attributes constitute the base of a global measurement devise forservice quality namely SERVQUAL

SERVQUAL has been applied by various researchers to numerous serviceindustries as a means of gauging service quality The primary value of SERVQUALlies in its powerful benchmarking diagnostic and prescriptive tools (Kettinger andLee 1997) However it has also been subjected to critical conceptual and empiricalassessments (for a comprehensive review see Cronin and Taylor 1994 Dabholkar et al1996) One major concern raised with this instrument is that service quality dimensionstend to be context-bounded and service-type-dependent (Paulin and Perrien 1996) Forinstance two new dimensions unique to the traditional retailing environment such asldquowillingness and ability to serverdquo and ldquophysical and psychological accessrdquo weresubsequently identified by Hedvall and Paltschik (1989)

It is apparent that SERVQUAL may not be sufficient for measuring service qualityacross industries and situations not to mention online service quality The instrumentdoes not consider unique facets of online service quality since the five dimensionsprimarily address customer-to-employee but not customer-to-Web-site interactionsAccordingly some researchers have attempted to identify key attributes that best fitthe online business environment Zeithaml et al (2001) uncovered 11 dimensions of


1151

online service quality in a series of focus group interviews These were access ease ofnavigation efficiency flexibility reliability personalization security responsivenessassurancetrust site aesthetics and price knowledge Cox and Dale (2001) propose thattraditional service quality dimensions such as competence courtesy cleanlinesscomfort and friendliness are not relevant in the context of online retailing whereasother factors such as accessibility communication credibility and appearance arecritical to the success of online businesses Based on 54 student evaluations of threeUK-based Internet bookshops Barnes and Vidgen (2001) have extended theSERVQUAL scale and established a WebQual Index with 24 measurement itemsThe index addresses the following seven customer service quality aspects reliabilitycompetence responsiveness access credibility communication and understandingthe individual

Similarly Madu and Madu (2002) have proposed the following 15 dimensions ofonline service quality based on their literature review

(1) performance

(2) features

(3) structure

(4) aesthetics

(5) reliability

(6) storage capacity

(7) serviceability

(8) security and system integrity

(9) trust

(10) responsiveness

(11) product differentiation and customization

(12) Web store policies

(13) reputation

(14) assurance and

(15) empathy

Wolfinbarger and Gilly (2003) through focus group interviews a content analysis andan online survey have uncovered four factors of online retailing experience

(1) Web site design

(2) reliability

(3) security and

(4) customer service (this factor is primarily related to the customer-to-employeeinteractions)

Further Zeithaml et al (2002) have discovered the following seven service qualitydimensions

(1) efficiency

(2) reliability

IJOPM2411

1152

(3) fulfillment

(4) privacy

(5) responsiveness

(6) compensation and

(7) contact

The first four dimensions concern core online service and the remaining three arerelated to service recovery Recently Santos (2003) identified through focus groupinterviews two categories of online service quality dimensions that influence customerretention incubative and active groups The dimensions in the active group areprimarily associated with online customer service quality They are reliabilityefficiency support communication security and incentive

Further other studies have attempted to identify key dimensions of service qualityin the context of narrowly defined online businesses such as online banks portalservices and travel agencies (Kaynama and Black 2000 Jun and Cai 2001 Van Rielet al 2001) Joseph et al (1999) have uncovered six underlying dimensions of onlinebanking service quality

(1) convenienceaccuracy

(2) feedbackcomplaint management

(3) efficiency

(4) queue management

(5) accessibility and

(6) customization

Similarly Van Riel et al (2001) have derived three key portal service quality attributesndash core service supporting service and user interface

Information systems qualityThe Internet is an innovative form of information technology yet most commercialWeb sites function as well-defined information systems Information system qualitycan be divided into system and information quality System quality refers to softwaredevelopment caliber while information quality embraces accuracy timelinesscurrency and reliability of information (DeLone and McLean 1992)

Online companies employ a complicated database interface serving as an expertsystem From this perspective online consumers are the end-users of the computerprograms and networked system The term ldquoend userrdquo refers to one who ldquointeractsdirectly with the application software to enter information or prepare output reportsrdquo(Doll and Torkzadeh 1988 p 260) The principal goal of information systems service isto enable customers to function independently and to conduct numerous transactionson their own In addition as end users consumers often seek desired product andservice information through Web sites Doll and Torkzadeh (1988) have purified 13items proposed by Baroudi and Orlikowski (1988) to a 12 items scale that gauges fivequality dimensions influencing end-user satisfaction with information systems

(1) content

(2) accuracy


1153

(3) format

(4) ease of use and

(5) timeliness

Other studies have confirmed the reliability and validity of this scale (Doll et al 1994Hendrickson and Collins 1996)

Later several inquiries identified Web site attributes that are critical to businesssuccess DrsquoAngelo and Little (1998) argue that factors such as navigational and visualcharacteristics and practical considerations such as images background color soundvideo media and content are critical features of a Web site Lohse and Spiller (1998)have noted that characteristics such as a feedback section and product lists are crucialin generating sales Liu and Arnett (2000) propose four factors system use systemdesign quality information quality and playfulness as major ingredients for successYoo and Donthu (2001) have developed a measurement instrument for an Internetshopping site condition SITEQUAL which includes four dimensions

(1) ease of use

(2) aesthetic design

(3) processing speed and

(4) security

In the same vein Cox and Dale (2001) have discovered and statistically validated fourquality factors of a Web site These are

(1) ease of use (the design of the Web site)

(2) customer confidence (how the Web site generates customer trust)

(3) online resources (capability of the Web site to offer productsservices) and

(4) relationship services (how the Web site bonds with the customer and inspiresloyalty)

In addition Zeithaml et al (2002) have uncovered several quality dimensions related toonline systemsndash ease of navigation flexibility efficiency site aesthetics and security

Recently Gefen et al (2003) have empirically found that two technological aspects ofthe Web site interface namely perceived ease of use and perceived usefulnesssignificantly affect customer repurchase intentions Voss (2003) has proposed three keyquality factors relating to customer-centered service in a virtual environment ndash trustinformation and status and configuration and customization Of these twodimensions information and status and configuration and customization areassociated with the capability of Web sites Santos (2003) has uncovered fivedimensions of online systems quality ndash such as ease of use appearance linkagestructure and layout and content and labeled them as incubative dimensions

In the context of online bankWeb sites Waite and Harrison (2002) have found sevenkey factors that affect consumer satisfaction

(1) transaction technicalities

(2) decision making convenience

(3) interactive interrogation

(4) specialty information

IJOPM2411

1154

(5) search efficiency

(6) physical back-up and

(7) technology thrill

Product portfolioOnline customers are more inclined to patronize firms which offer a substantial varietyof services The primary reason for this choice is that it is more likely that their diverseneeds can be fulfilled This is especially the case for desired services which are notwidely distributed or unavailable at physical outlets (Barcia 2000) Thus a key togaining customer satisfaction and loyalty is to provide a mix of offerings preferred bytarget customers Cho and Park (2001) have identified ldquovariety of productsrdquo as one ofthe seven key dimensions that influence Internet shopper satisfaction Page andLepkowska-White (2002) have pointed out that a suitable selection of productsservicesis one of the important ingredients for developing consumer value in online companies

Another rationale for customer use of the Internet is convenience When possiblemany customers prefer to complete their transactions at one site For instancenumerous online banking customers wish to pay their bills electronically andautomatically view and print their monthly bank statements and purchase stocksinsurance and other financial offerings For this reason companies with wide productlines may be able to attract large number of customers to their sites Also introducingnew forms of products services to the marketplace appeals to customers whose needsare unfulfilled by existing offerings Therefore a key to gaining customer satisfactionis to provide a wide range of productsservices and diverse features in the formatrequired by customers

Research questionsThe online service quality attributes of the three categories set forth above weredetermined within a narrowly defined domain and in an independent manner Asystematical and extensive study is needed to uncover the underlying key dimensionsof service quality in the context of online services Therefore the primary researchquestions include

What is high quality online service

What are the key dimensions of online service quality

How can online service quality be conceptualized and measured in aparsimonious and valid way

Of course not all service quality attributes have the same impact on consumerperceptions of online services Some attributes may not be perceived as enhancingoverall service quality The key therefore is to uncover among various potentiallypredictive service quality attributes particular dimensions that are most crucial inenhancing the perceived level of service quality and to assess the degree to which theyare associated In this manner management can come to identify what service areasdeserve concentration while avoiding investing resources in providing service qualityattributes that may be of minor concern to consumers (Oliva et al 1992) Thus thesecondary research questions include


1155

What are the most influential online service quality dimensions in achieving ahigh level of overall service quality as perceived by online customers

What actions can be taken to deliver high quality online service

The authors have adopted a two-stage approach to develop valid online service qualitydimensions In phase one a content analysis was employed to explore possibledimensions of online service quality Based on these findings a literature review and aseries of personal interviews the authors have developed a preliminary model of onlineservice quality In phase two a survey questionnaire was generated to assess andrefine the model

Phase one an exploratory studyThe aim of this stage was to identify key dimensions and their respective servicefeatures through a content analysis of consumer reviews of their online serviceexperiences Content analysis of critical incidents has been shown to be effective inexploring customersrsquo perceptions of service quality with suppliers The fact thatcustomers contribute time and effort for voicing their Internet purchasing experiencessuggests that the attributes are salient in the post-use evaluation process (Cadotte andTurgeon 1988) Although the consumer comments ie complaints and complimentsare not likely to completely reflect their total experiences with suppliers they dohighlight those service quality dimensions and detailed attributes of greatest concern

SampleThe authors employed four steps to collect qualified customer reviews or anecdotesThe first step was to choose a sampled Industry Online banking was selected as asample industry because it is very service-intensive its services involve complicatedprocesses it is an emerging and fast growing service sector and customers are verysensitive to banking service quality

The next step was to find appropriate Web sites that provide customers with alocation to cite their evaluations of suppliers By using multiple search engines (ieGoogle Yahoo altavista MSN search LookSmart and Hotbot) the authors intensivelyreviewed the most prominent online consumer review Web sites Nine Web sites werefound to be relevant for this study They are

(1) consumerreviewcom

(2) dejacom

(3) consumeramaorg

(4) epinionscom

(5) complaintscom

(6) consumeraffairscom

(7) computingreviewcom

(8) ratingwonderscom and

(9) gomezcom

The third step was to select qualified customer evaluation sites Three selection criteriawere established to permit collection of the most representative samples

IJOPM2411

1156

(1) customers should be allowed to rate and review online companies based on theirown online service experience

(2) customers should not be financially motivated to express their opinionsfavoring the reviewed companies (eg some consumer review Web sites awardmoney to a consumer if hisher review leads a reader to make a purchase fromthe evaluated online company) and

(3) customers should be encouraged to post both dissatisfied and satisfied reviews

Two sites ratingwonderscom and gomezcom both leading online consumer reviewsites fully met the requirements

The last step was to choose sample banks ndash 20 of the most influential Internetbanks were selected for study They are

(1) First Internet Bank of Indiana

(2) CompuBank

(3) USABancSharescom

(4) NetBank

(5) CitiBank

(6) Security First Network Bank

(7) Wells Fargo

(8) WingspanBankcom

(9) BankDirect

(10) Bank of America

(11) ETrade Bank

(12) Fleet

(13) American Express

(14) everbankcom

(15) American Bank Online

(16) Bank One

(17) Washington Mutual

(18) First Union

(19) USAccess Bank and

(20) Chase Manhattan Bank

While some banks are Internet-only companies most are hybrid banks These banksmarket both banking products and non-banking offerings such as stock trading andinsurance

Data collectionThe authors accessed two online review Web sites Gomez and Ratingwonders from1-16 November 2000 to secure a sufficient volume of anecdotes After deletingdisqualified reviews eg spamming messages duplications and other messages


1157

irrelevant to online banking services a total of 848 useful consumer anecdotes wereselected

Coding processAll anecdotes were numbered formatted and imported to Ethnograph 50 a leadingsoftware package designed for coding qualitative data (Wazienski 2000) The authorsthen classified each of the anecdotes into two categories satisfied attributes (positiveperformance) and dissatisfied attributes (negative performance) The leading authoralong with one research assistant developed an initial 68 coding words based on thefirst 100 messages These initial 68 coding words make up the primary themes orfacets of the overall quality of online services The two researchers then furtherindependently coded the remaining anecdotes Subsequent discussion identified andresolved all disagreements

ResultsThe content analysis identified a total of 17 dimensions of online service quality andassorted these into three groups

(1) Customer service quality constituting ten dimensions responsiveness reliability competence access personalization courtesy continuous improvement communication convenience and control

(2) Online system quality consisting of six dimensions namely ease of use accuracy security content timeliness and aesthetics

(3) One dimension of product portfolio referring to product or service variety anddiverse features (see Appendix 1)

In terms of frequencies of mentions the most often-cited quality attributes areresponsiveness reliability and competence in the customer service quality categoryease of use accuracy and security in the information systems quality category andproduct feature and product variety in the product portfolio category These qualityattributes were considered important in customer perception of service quality

IJOPM2411

1158

Phase two a confirmatory studySurvey instrument developmentDue to the constraints of a real-life evaluation in the current study the service qualitydimensions had to be simplified and adjusted for the survey Thus not all of thedimensions are included in the survey questionnaire Based on the most frequentcitations and theoretical considerations the authors selected the following sixdimensions reliability responsiveness competence ease of use security and productportfolio For instance the ldquoaccuracyrdquo dimension was emerged into the ldquoreliabilityrdquodimension Scale items for assessing these dimensions were incorporated into a surveyinstrument

Pre-testA pre-test of the questionnaire was conducted to assess the content validity of themeasurement scales Content validity can be evaluated by a group of judgessometimes experts who read or look at a measuring technique and decide whether intheir opinion it measures what its name suggests (Judd et al 1991 p 54) After thereview by five academics and four local professionals who specialize in servicemarketing and e-commerce some items were reworded added or deleted based on theirfeedback

Next the questionnaire was forwarded through e-mail attachment to 50 onlinecustomers selected from two news groups online financial investment ande-commerce The e-mail effort outlined the purpose of the study and requested theparticipants to answer review and critique the attached questionnaire A total of 14respondents replied with useful suggestions Based on their feedback thequestionnaire was further revised and finalized Appendix 2 illustrates all the scaleitems used in the survey questionnaire

MeasuresThe final questionnaire consisted of three sets of measures

(1) perceptions of overall online service quality and individual quality dimensions

(2) general information including demographic variables and

(3) computer and Internet usage information

The respondents were requested to indicate the extent to which they agreed ordisagreed by checking the appropriate response to each questionnaire item Except foroverall service quality and satisfaction which used seven-point Likert scales all itemsemployed five-point Likert scales anchored by 1 frac14 strongly disagree and 5 frac14 stronglyagree with 3 frac14 neutral neither agree nor disagree as the midpoint

Data collectionOnline customers tend to employ the Internet for conducting commercial transactionschecking updated information about their accounts tracking the current status of theirpurchase orders or simply obtaining other necessary information Since this studyintended to identify key online service quality dimensions covering all stages of theproductservice purchasing cycle from information search to service recovery theauthors collected necessary data from the customers who had conducted commercialtransactions online Further to enhance the generalization of the results an attempt


1159

was made to gather data from a variety of online customers The sampling frameconsisted of online customers with personal e-mail addresses provided by an onlinee-mail address broker

A solicitation letter was conveyed by e-mail to 4000 subjects randomly selectedfrom the e-mailing list The e-mail message described the research purpose and invitedeach receiver to participate in the survey Sample members who were willing toparticipate clicked through the URL address provided in the invitation e-mail

A total of 1101 e-mails were returned as undeliverable Thus the actualundeliverable rate is 275 per cent (1101 of 4000) which is similar to Sheehan and Hoyrsquos(2000) experience (26 per cent) The responses from 257 participants were forwarded tothe leading author via e-mail Of these 22 were eliminated because they were incompleteor duplicate (The ISP address of each respondent has been checked) responses Thusthe final sample was 235 and the effective response rate was 81 per cent (235 of 2899)

Unfortunately because some potential respondents sent complaining e-mails via athird party to the e-mail postmaster of the authorsrsquo affiliation there was no way tolocate and delete their e-mail addresses Since any further e-mailing without deletingthose e-mail addresses in question might involve potential legal issues and the numberof collected useable responses was sufficient for further data analysis follow-upe-mails were not sent No comparison was made between early and late responses forchecking non-response bias since approximately 90 per cent of the responses weregathered within five days after the initial e-mail

Profile of respondentsTable I sets forth the demographic variables and both computer and Internet usageprofiles of the 235 respondents Appropriately 808 per cent of the respondents weremale 769 per cent were between the ages of 25 and 54 680 per cent had earned abachelorrsquos degree or higher and 401 per cent earned an annual household income ofUS $ 70000 or above The characteristics of these respondents were similar to Internetuser profiles gathered in other studies (eg Kehoe et al 1999 Sheehan and Hoy 2000)While 740 per cent of the respondents were living in the USA the remainder 360 percent resided in 17 other countries

As to the computer and Internet usage profile 902 per cent of the sample had beenusing personal computers for more than five years 941 per cent reported that theylogged onto the Internet at least once a day on average and 646 per cent spent morethan five hours per week on browsing Web sites

Confirming online service quality dimensionsThe structural equation modeling (SEM) approach was used to assess if thehypothesized six-factor online service quality model fit the data set Subsequently itused an interactive procedure to generate the final measurement model Thedevelopment of the final measurement model follows the respecification guidelinessuggested by Anderson and Gerbing (1988)

The practical respecification process followed two steps First the study consideredan item removable if it demonstrated one of the following characteristics

loaded on the wrong factor or crossloaded or

exhibited large standardized residuals (Anderson and Gerbing 1988 Bollen1989)

IJOPM2411

1160

Classification Pcta

GenderMale 808Female 192

EducationHigh schoolTradeTechnical school 89Some college 231College graduate 359Graduate school 321

Age16-24 7325-34 20535-44 26145-54 30355 or over 158

Annual household incomeUnder $10000 48$10000-29999 157$30000-49999 209$50000-69999 214$70000-99999 162$100000 or over 239

Living countryregionUSA 740Others 360

How long have you been using personal computers1-5 years 986-10 years 22611 years or over 677

How long have you been using the Internet as one of your purchasing channelsLess than six months 3405-1 year 1331-2 years 3223-5 years 386More than five years 124

On average how often do you use the Internet1-5 times a week 591-4 times a day 4095-8 times a day 213Nine times a day 319

On average how many hours per week do you browse Web sitesLess than one hour 511-5 hours 3036-10 hours 26511-20 hours 20921-40 hours 107Over 40 hours 64

Note a The percentage is referred to the valid percentageTable I

Profile of respondents


1161

Then if the questionable item was considered to be represented by another indicator itwas removed from the analysis After one item was removed the CFA was run againThe same removing procedure continued until all items were considered necessaryeither theoretically or empirically

As a result of this procedure six dimensions with their associated 20 scale itemsreduced from the original 31 were derived The six dimensions generated include

(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and


As shown in Table II the reliability of each factor was estimated by computing itsCronbachrsquos Alpha which was 086 076 083 080 075 and 083 respectively Thesescale items had adequate reliability and were deemed appropriate for further analysisThe t-values of all indicator loadings well exceeded the critical value (278) at the 001significance level suggesting that each indicator was relevant and acceptable Thusno further model respecification was necessary

The results of the confirmatory factor analysis (CFA) for online service qualitydimensions in Table II show that the chi-square was statistically significant(x2 frac14 15807 df frac14 126 p 003) Nevertheless the ratio of the chi-square statisticrelative to degree of freedom is 126 which was less than the suggested cut-off point oftwo The values of Goodness-of-Fit Index (GFI) Non-Normed Fit Index (NNFI)Competitive Fit Index (CFI) and Root Mean Square Residual (RMSR) were 090 099099 and 005 respectively

The convergent validity of the measurement model was examined by calculatingthe composite reliability and average variance extracted (AVE) (Fornell and Larcker1981) All the reliabilities were greater than the recommended 07 (Nunnally andBernstein 1994) The AVE represents the amount of variance captured by theconstruct measures relative to measurement error and the correlations among thelatent variables The AVE of each measure in this study extracted more than or equalto 50 per cent of variance the cut-off value (Bagozzi and Yi 1988)

The discriminant validity of the measures was examined in two ways First theAVE was compared with the square of the parameter estimate among the latentvariable (Fojt 1995) This revealed that the correlation among indicators of eachconstruct was greater than that of between a construct and any other constructSecond the discriminant validity of each construct was evidenced by each indicatorloading higher on the construct of interest than on any other variable (Chen et al 1998)Table III lists the means standard deviation of each construct and correlations amongthe constructs

Finally criterion-related validity analysis was undertaken to ascertain whether theonline service quality measure behaves as was expected in relation to other constructsincluding both customer perceived overall service quality and overall satisfactionOverall satisfaction was measured by three items with a Cronbachrsquos Alpha of 086 andoverall service quality by two items with a Cronbachrsquos Alpha of 092 (see Appendix 2)

IJOPM2411

1162

A regression analysis examined the associations of the six dimensions of perceivedonline service quality with overall service quality and satisfaction Pursuant to theinitial regression run the outliers were detected by examining the standardizedresidual Three outliers were found and eliminated In turn scale items were summedto form measures of the corresponding variables Missing values were handled bychoosing the option ldquoexclude cases pairwiserdquo which means that only cases withcomplete data for the pair of constructs being correlated were used to compute thecorrelation coefficient on which the regression analysis is based This procedureproduced 218 effective samples

Constructs sources and scale items Mean SD Loading t-value

Reliability (a frac14 086 AVE frac14 067 CR frac14 091)1 The company performs the service correctly the first time 433 080 086 17402 My online transactions are always accurate 433 092 093 18813 The company keeps my records accurately 431 082 083 1553

Responsiveness (a frac14 076 AVE frac14 052 CR frac14 082)1 I receive prompt responses to my requests by e-mail or othermeans 358 098 063 1026

2 The company quickly resolves problems I encounter 364 095 082 12803 The company employees give me prompt service 368 089 088 1181

Competence (a frac14 083 AVE frac14 062 CR frac14 088)1 The company employees have the knowledge to answer myquestions 347 090 085 1580

2 The company employees properly handle any problems thatarise 370 093 090 1734

3 The company employees comply with my requests 371 082 078 1457

Ease of use (a frac14 080 AVE frac14 057 CR frac14 090)1 Using the companyrsquos Web site requires a lot of effort (R) 352 103 071 11812 The organization and structure of online content is easy tofollow 375 095 095 1663

3 It is easy for me to complete a transaction through thecompanyrsquos Web site 406 086 092 1547

Product portfolio (a frac14 075 AVE frac14 051 CR frac14 077)1 All my service needs are included in the menu options 343 105 065 10802 The company provides wide ranges of product packages 376 079 051 8163 The company provides services with the features I want 376 083 062 9934 The company provides most of the service functions that I need 382 090 088 1661

Security (a frac14 083 AVE frac14 057 CR frac14 086)1 The company will not misuse my personal information 346 092 061 9932 I feel safe in my online transactions 405 074 088 16623 I felt secure in providing sensitive information (eg credit cardnumber) for online transactions 383 093 089 1704

4 I felt the risk associated with online transactions is low 386 090 071 1234

Model fit indicesx2 frac14 15807 (P frac14 003) df frac14 126 x2=df frac14 126RMSR frac14 005 GFI frac14 090 CFI frac14 099 NFI frac14 096 NNFI frac14 099

Note CR = composite reliability AVE = average variance extractedTable II

CFA results of measures


1163

The sum of all scale items within a particular factor was used to represent that factorThe enter method was used for the linear regressions When the regression analyseswere repeated with 70 per cent 80 per cent and 90 per cent randomly selected cases fromthe sample the parameter estimates were stable This finding along with the factorloadings of the explanatory variables suggested that multicollinearity would not be aconcern Table IV outlines the results of the regression analyses The adjustedcoefficients of determination (R 2) were 061 for both equations (p 0001) Thereforethe regression equations produced a satisfactory level of goodness of fit in predicting thevariance of online perceived overall service quality and overall satisfaction in relation torespective service quality dimensions The analysis revealed that all dimensions exceptsecurity have a statistically significant effect on the assessment of overall service qualityThe insignificant effect of ldquosecurityrdquo may be explained by the fact that customerstypically have difficulty in directly evaluating a Web sitersquos securityprivacy(Wolfinbarger and Gilly 2003) Instead they tend to use other clues such as customertestimonials Another reason may be that the surveyed customers feel comfortable withthe security of online transactions Based on the conceptual consideration the ldquosecurityrdquodimension was retained in the final measure (Anderson and Gerbing 1988)

In sum the analysis supported the convergent and discriminant validity of themeasure The CFA results demonstrated that the six-factor model was appropriate andpossessed adequate reliability and criterion-related validity

Mean SD 1 2 3 4 5 6 7 8

1 Reliability 433 075 12 Responsiveness 363 078 052a 13 Competence 362 076 044a 070a 14 Ease of use 378 080 052a 042a 049a 15 Product portfolio 369 068 043a 046a 053a 054a 16 Security 380 071 056a 046a 049a 049a 054a 17 Overall service qualityb 558 120 061a 066a 063a 058a 056a 054a 18 Overall satisfactionb 565 106 059a 064a 061a 059a 061a 057a 091a 1

Notes aCorrelation is significant at the 001 level (two-tailed) bA seven-point Likert scale was usedTable IIICorrelation matrix

Overall service quality Overall satisfaction

Independent variablesStandardizedcoefficients t-value p-value

Standardizedcoefficients t-value p-value

Constant 2179 008 2022 0081 Reliability 022 397 000 017 304 0002 Responsiveness 027 433 000 027 440 0003 Competence 016 552 001 010 159 0114 Ease of use 020 364 000 018 336 0005 Product portfolio 012 225 003 022 398 0006 Security 004 064 053 008 143 015F-value 5950 6013p 000 000Adjust R 2 061 061

Table IVRegression analysisresults between e-servicequality dimensions andoverall service qualityand customer satisfaction

IJOPM2411

1164

DiscussionCustomer perceived online service quality is one of the crucial determinants of thesuccess of online businesses Accordingly considerable research has been conductedon the construct of online service quality yet much of the literature is conceptual innature or based on a few case studies Moreover even the limited survey-basedempirical literature examines the construct within narrowly defined online businesses(eg online banks or portal services) or online business processes (eg Web site designor online exchange processes) and fails to systematically investigate this importantconcept in a broad sense

In order to fill this research gap this study empirically examined the construct ofonline service quality in the context of business-to-consumer e-commerce and from theperspective of integrated online service transformation processes which consist ofthree key elements customer service ldquofront storerdquo and product portfolio

The authors first identified key dimensions of customersrsquo perceived online servicequality through a content analysis of critical incidents and then purified these into sixdimensions by subjecting the data collected through Web-based surveys to CFA Theresults of the validation procedure indicate that this proposed six-factor online servicequality scale has appropriate reliability and validity in every aspect and has only 20scale items The six factors identified were

(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and


The ldquoreliabilityrdquo factor comprised four items related to accurate online transactionsaccurate records correct performance and fulfillment of promises ldquoResponsivenessrdquoreferred to prompt response to customer requests the speed in resolving customerproblems and prompt services ldquoCompetencerdquo was related to employee ability toanswer customer questions their ability to resolve problems that arise and compliancewith customer requests ldquoEase of userdquo referred to moderate effort required to navigate aWeb site well-organizedstructured and easy-to-follow catalogs and ease ofcompleting an online transaction ldquoSecurityrdquo encompassed low risk associated withonline transactions safeguarding personal information and safety in completingonline transactions Finally the ldquoproduct portfoliordquo factor covered online servicefunctions useful free services a wide range of product and service packages anddiverse features

Unique dimensionsWhile all of the derived dimensions contain many traditional service quality aspectsthey do have some unique characteristics related to the e-commerce setting As such itwould be interesting to compare the traditional service quality dimensions identifiedby Parasuraman et al (1988) with those of this study Among the Parasuraman et al(1988) five dimensions four of them reliability assurance responsiveness andempathy were also considered important by online customers On the other hand the


1165

traditional dimension of ldquotangiblesrdquo turned out to be inapplicable to the e-commercesetting This dimension may be linked to Web site design characteristics such asaesthetics structure of content or store layout menu naming and arrangement ofhyperlinks most of which were incorporated into one of the studyrsquos three ldquoease of userdquounique dimensions Two other dimensions uncovered by this study were security andproduct portfolio The detailed discussion of these three dimensions is as follows

Ease of use Many studies focused on the ldquoease of userdquo dimension in the informationsystem area In the context of Web-based markets the ldquoeasy to navigaterdquo feature isessential to attract both experienced and new online customers As Rice (1997) haspointed out for Internet-based shopping to achieve mass-market penetration it mustbe made substantially easier than it is at present for consumers to navigate and locateinformation or content

Customers grant priority to needed on-screen information concerningproductsservices Since the Web site functions as an information system theorganization and structure of online catalogues should be easy to follow and navigateThe sequencing placement and naming of hyperlinks and navigational menus shouldbe based on customer intuition A well-designed navigational structure can facilitateconsumersrsquo perceptions of online control and enjoyment Moreover a good Web siteshould always clarify the meaning of interactive messages in order to facilitate theldquoflowrdquo (comments from a respondent)

Most importantly the contents of the Web site should be concise and easy tounderstand All terms and conditions concerned with productsservices should havethese attributes Adequate explanations which are often missing in online banking andonline stock trading services should be provided

The simplicity and smoothness of the whole transaction process is also of criticalimportance to ensure customer satisfaction on the Internet Consumers will often feelfrustrated and even elect to terminate the transaction when they encountermisbehaving and superfluous Java applets and scripts on the site Graphics andadvertising can significantly slow download speed Thus a balance must be madebetween Web page multimedia richness and download speed

Security Many customers are concerned with the risk associated with onlinetransactions and privacy of sensitive personal information Security is closely linkedwith the trustfulness of online companies The perceived lack of security on publicnetworks is definitely a stumbling block (Balfour et al 1998) Personal informationsuch as credit card numbers transmitted to vendors from consumers can be coded anddecoded using encryption algorithms Additionally many consumers desire to retainsome level of privacy or anonymity A Web server however can track the identity ofthe userrsquos computer through ldquocookiesrdquo a text file placed on a userrsquos hard drive Mostonline customers are concerned about Web sites that do not provide clear andprominent statements about privacy and security matters

These disadvantages of e-commerce require companies to be very responsible forboth customer transaction activities and personal information Some respondents in thepresent survey provided useful suggestions For instance online companies can furnishvisible evidence of services independent security certification They should provide fordocumentation or passwords sent to prospective clients at the start of the service

Product portfolio This dimension refers to the range and depth of productsservicesand with free service offerings Many customers seek productsservices unavailable in

IJOPM2411

1166

their local outlets Limited selection of productsservices or outdated information ismost likely to prevent numerous customers from purchasing online In a survey of 220consumers from Austin Texas Jarvenpaa and Todd (1997) found that the mainimpediments to consumer acceptance of online shopping were difficult-to-find specialtyitems and limitation of the offerings of individual sites Finally a Web site can benefit ifit provides adequate service functions in the menu options Some value-added freeservices by linking to useful informational Web sites are also desirable

Optimizing service quality levelsThe correlations among the six dimensions set forth earlier are high (see Table II)Thus it is impossible to improve individual critical service quality dimensions withoutmaintaining the quality level of all six attributes at least within the relevant zone oftolerance Practically however it is difficult to offer all service quality attributes at asuperior level For example one respondent commented how the security measuresaffected ease of use

It is complicated to get logged in Each time I log in I have to type not only my username andpassword but also each time Irsquom asked four different digits from a 20-digit key word Iunderstand that is for safety reasons but it is not very user friendly

Thus the task of an online company is to optimize service quality by balancing thelevel of each primary service quality dimension Coordination across organizationalpartners and departments is essential in designing Web sites and service processes

Perceived overall service qualityThe regression analysis results portrayed in Table IV indicate that responsivenessreliability product portfolio and ease of use are considered important for both overallservice quality and satisfaction Responsive is the foremost critical factor indetermining satisfaction The second most important determinant of overall servicequality is reliability and of satisfaction is ease of use Online customers consideredreliability to be the foremost factor in achieving high levels of service quality this isconsistent with the findings of other traditional service quality studies (Parasuramanet al 1988 Bitner 1990) Online consumers also regarded ease of use as a significantfactor influencing overall service quality assessment

In contrast to the prevailing viewpoint security turned out to be insignificant indetermining overall service quality perceptions of online customers A large number ofcustomers are becoming accustomed to online transactions Many of the respondentswere not overly concerned with privacy and security just as one commented ldquoIexperienced no problems with privacy and would not hesitate to do business with themagainrdquo

Theoretical and practical implicationsTheoretically this study extends measurement scales of traditional service quality toonline service quality Parasuraman et al (1988) have developed SERVQUAL to assessservice quality in traditional markets As the online market has emerged bothresearchers and practitioners have called for a set of reliable and valid service qualitygauges in the setting of e-commerce The online service quality measure developed inthis study is designed to provide an effective tool to measure Internet-based servicequality


1167

Online companies can use the quality measurement tool developed in this study todetect service quality weaknesses and strengths Based on their quality assessmentand business strategies online companies can allocate corporate resources to theimportant service quality attributes uncovered by this study Particularly it should benoted that improvements in the level of responsiveness reliability and ease of useconstitutes a necessity for broadening a loyal customer base since these factors havestrong associations with overall service quality

Limitations and future research directionsThere are several limitations to the current study First the sample is US-focused with74 per cent of the respondents residing in the USA The participants in this study maypossess attributes and behaviors that differ from those in other parts of the world Inaddition the sample is skewed to a particular gender with 80 per cent of therespondents being males which may not exactly reflect the current composite of onlinecustomers Next as mentioned earlier in the data collection section it was impossible tosend follow-up surveys and thus no attempt was made to ascertain the existence ofnon-response bias by comparing responses from the first-wave surveys with those of asecond wave

Future research could make several extensions of the current study First to verifythe dimensions developed in this study and to enhance the generalizability of theresearch findings future inquiries could employ more diversified samples acrossgenders various forms of online businesses and diverse international customerenvironments Second the measurement instrument constructed in this study can beused to further investigate how customer perceived online service quality influencecustomer satisfaction and in turn purchasing behaviors such as customer repurchaseintentions and loyalty Similarly the antecedents of customer perceived online servicequality may also be examined using the measure For example product characteristicssuch as value and brand and consumer-specific characteristics such as timeorientation time pressure and technology readiness may significantly affect customerperceptions on each of the online service quality dimensions derived in this studyIdentifying these important antecedents is an essential element for better online servicequality management

Next the current research focuses on service quality dimensions perceived bycustomers who have conducted online transactions However a large portion ofindividuals primarily utilize the Internet as information sources and have notconducted commercial transactions These customers may have unique perceptions ofservice quality For instance compared to customers with online transactionexperience who may feel comfortable with online security purely online informationsearchers may have a serious concern with the security of online transactions Thusfurther research can develop a more generalized service quality scale by incorporatingthe perceptions from both groups

Finally as the e-commerce field becomes increasingly mature customers will shapeclear expectations for online service quality attributes More and more industry-wideservice standards will be set forth and be accepted Thus future studies may utilize theexpectation-disconfirmation paradigm to measure service quality and customersatisfaction

IJOPM2411

1168

References

Anderson JC and Gerbing DW (1988) ldquoStructural equation modeling in practice a review andrecommended two-step approachrdquo Psychological Bulletin Vol 103 No 3 pp 411-23

Bagozzi RP and Yi Y (1988) ldquoOn the evaluation of structural equation modelsrdquo Journal of theAcademy of Marketing Science Vol 16 No 1 pp 74-94

Balfour A Farquhar B and Langmann G (1998) ldquoThe consumer needs in global electroniccommercerdquo Electronic Markets Vol 8 No 2 pp 9-12

Barcia SM (2000) ldquoInternet pharmacies all hype with no helprdquo Health ManagementTechnology Vol 21 No 4 pp 24-5

Barnes SJ and Vidgen R (2001) ldquoAn evaluation of cyber-bookshops the WebQual methodrdquoInternational Journal of Electronic Commerce Vol 6 No 1 pp 11-30

Baroudi JJ and Orlikowski WJ (1988) ldquoA short-form measure of user information satisfactiona psychometric evaluation and notes on userdquo Journal of Management Information SystemVol 4 No 4 pp 44-59

Bitner MJ (1990) ldquoEvaluating service encounter the effects of physical surroundings andemployee responsesrdquo Journal of Marketing Vol 54 No 2 pp 69-82

Bollen KA (1989) Structural Equations with Latent Variables Wiley New York NY

Cadotte ER and Turgeon N (1988) ldquoDissatisfiers and satisfiers suggestions for consumercomplaints and complimentsrdquo Journal of Consumer Satisfaction Dissatisfaction andComplaining Behavior Vol 1 pp 74-9

Chen H Houston AL Sewell RR and Schatz BR (1998) ldquoInternet browsing and searchinguser evaluations of category map and concept space techniquesrdquo Journal of the AmericanSociety for Information Science Vol 49 No 7 pp 582-603

Chen PY and Hitt LM (2000) ldquoSwitching cost and brand loyalty in electronic marketsevidence from on-line retail brokersrdquo in Proceedings of 21st Annual InternationalConference on Information Systems Brisbane Australia

Cho N and Park S (2001) ldquoDevelopment of electronic commerce user-consumer satisfactionindex ecusi) for Internet shoppingrdquo Industrial Management ampData Systems Vol 101 No 8pp 400-5

Cox J and Dale BG (2001) ldquoService quality and e-commerce an exploratory analysisrdquoManaging Service Quality Vol 11 No 2 pp 121-31

Cronin JJ and Taylor SA (1994) ldquoSERVPERF versus SERVQUAL reconcilingperformance-based and perceptions-minus-expectations measurement of servicequalityrdquo Journal of Marketing Vol 58 No 1 pp 125-31

Dabholkar PA Thorpe DI and Rentz JO (1996) ldquoA measure of service quality for retailingstores scale development and validationrdquo Journal of the Academy of Marketing ScienceVol 24 No 1 pp 3-16

DrsquoAngelo J and Little S (1998) ldquoSuccessful Web pages what are they and do they existrdquoInformation Technology and Libraries Vol 17 No 2 pp 71-81

DeLone WH and McLean ER (1992) ldquoInformation system success the quest for the dependentvariablerdquo Information Systems Research Vol 3 No 1 pp 60-95

Doll WJ and Torkzadeh G (1988) ldquoThe measurement of end-user computing satisfactionrdquoMISQuarterly Vol 12 No 2 pp 259-74

Doll WJ Xia W and Torkzadeh G (1994) ldquoA confirmatory factor analysis of the end-usercomputing satisfaction instrumentrdquo MIS Quarterly Vol 18 No 4 pp 43-461


1169

Fojt M (1995) ldquoBarclays invests in technology to boost customer service and market sharerdquo TheJournal of Services Marketing Vol 9 No 3 pp 66-7

Fornell C and Larcker D (1981) ldquoEvaluating structural equation models with unobservablevariables and measurement errorrdquo Journal of Marketing Research Vol 18 No 1 pp 39-50

Gefen D Karahanna E and Straub DW (2003) ldquoTrust and TAM in online shopping anintegrated modelrdquo MIS Quarterly Vol 27 No 1 pp 51-90

Gronroos C (1983) Strategic Management and Marketing in the Service Sector MarketingScience Institution Cambridge MA

Hedvall MB and Paltschik M (1989) ldquoAn investigation in and the generation of service qualityconceptsrdquo in Avlonitis GJ et al (Eds) Marketing Thought and Practices in the 1990sEuropean Marketing Academy Athens pp 473-83

Hendrickson AR and Collins MR (1996) ldquoAn assessment of structure and causation of itsusagerdquo The Database for Advances in Information Systems Vol 27 No 2 pp 61-7

Jarvenpaa SL and Todd PA (1997) ldquoIs there a future for retailing on the internetrdquo inPeterson RA (Ed) Electronic Marketing and the Consumer Sage Thousand Oaks CApp 139-54

Joseph M McClure C and Joseph B (1999) ldquoService quality in the banking sector the impact oftechnology in service deliveryrdquo International Journal of Bank Marketing Vol 17 No 4pp 182-91

Judd CM Smith ER and Kidder LH (1991) Research Methods in Social Relations HarcourtBrace Jovanovich College Publishers Fort Worth TX

Jun M and Cai S (2001) ldquoThe key determinants of internet banking service quality a contentanalysisrdquo The International Journal of Bank Marketing Vol 19 No 7 pp 276-91

Kaynama SA and Black CI (2000) ldquoA proposal to assess the service quality of online travelagencies an exploratory studyrdquo Journal of Professional Services Marketing Vol 21 No 1pp 63-88

Kehoe C Pitkow J Sutton K Aggarwal G and Rogers JD (1999) Results of GVUrsquos TenthWorld Wide Web User Survey Graphics Visualization and Usability Center College ofComputing Georgia Institute of Technology Atlanta GA

Kettinger WK and Lee CC (1997) ldquoPragmatic perspectives on the measurement of informationsystems service qualityrdquo MIS Quarterly Vol 21 No 2 pp 223-40

Liu C and Arnett KP (2000) ldquoExploring the factors associated with Web site success in thecontext of electronic commercerdquo Information amp Management Vol 38 No 1 pp 23-34

Lohse GL and Spiller P (1998) ldquoElectronic shoppingrdquo Communications of the ACM Vol 41No 7 pp 81-7

Madu CN and Madu AA (2002) ldquoDimensions of e-qualityrdquo International Journal of Quality ampReliability Management Vol 19 No 3 pp 246-58

Nunnally JC and Bernstein IH (1994) Psychometric Theory McGraw-Hall New York NY

Oliva TA Oliver RL and MacMillan IC (1992) ldquoA catastrophe model for developing servicesatisfaction strategiesrdquo Journal of Marketing Vol 56 No 3 pp 83-95

OrsquoNeill M Wright C and Fitz F (2001) ldquoQuality evaluation in on-line service environments anapplication of the importance performance measurement techniquerdquo Managing ServiceQuality Vol 11 No 6 pp 402-17

Page C and Lepkowska-White E (2002) ldquoWeb equity a framework for building consumervalue in online companiesrdquo Journal of Consumer Marketing Vol 19 No 3 pp 231-48

IJOPM2411

1170

Parasuraman A Zeithaml VA and Berry LL (1985) ldquoA conceptual model of service qualityand its implications for future researchrdquo Journal of Marketing Vol 49 No 4 pp 41-50

Parasuraman A Zeithaml VA and Berry LL (1988) ldquoSERVQUAL a multiple-item scale formeasuring consumer perceptions of service qualityrdquo Journal of Retailing Vol 64 No 1pp 12-40

Paulin M and Perrien J (1996) ldquoMeasurement of service quality the effect of contextualityrdquo inKunst P and Lemmink J (Eds) Managing Service Quality Vol III Chapman Londonpp 257-73

Pitt L Berthon P and Watson R (1999) ldquoCyberservice taming service marketing problemswith the World Wide Webrdquo Business Horizons Vol 42 No 1 pp 11-18

Rice M (1997) ldquoWhat makes users revisit a Web siterdquoMarketing News Vol 31 No 6 pp 12-13

Rubino G (2000) ldquoGetting and keeping online customers if you build it will they comerdquo BankMarketing Vol 32 No 3 pp 36-40

Santos J (2003) ldquoE-service quality a model of virtual service quality dimensionsrdquo ManagingService Quality Vol 13 No 3 pp 233-46

Sasser WE Jr Olsen RP and Wyckoff DD (1978) Management of Service Operations Textand Cases Allyn amp Bacon Boston MA

Sheehan KB and Hoy MG (2000) ldquoDimensions of privacy concerns among online consumersrdquoJournal of Public Policy and Marketing Vol 19 No 1 pp 62-73

Van Riel ACR Liljander V and Jurriens P (2001) ldquoExploring consumer evaluations ofe-services a portal siterdquo International Journal of Service Industry Management Vol 12No 4 pp 359-77

Voss CA (2003) ldquoRethinking paradigms of service ndash service in a virtual environmentrdquoInternational Journal of Operations amp Production Management Vol 23 No 1 pp 88-104

Waite K and Harrison T (2002) ldquoConsumer expectations of online information provided bybank Web sitesrdquo Journal of Financial Services Marketing Vol 6 No 4 pp 309-22

Wazienski RJ (2000) ldquoThe ethnographrdquo Social Science Computer Review Vol 18 No 3pp 351-6

Wolfinbarger MF and Gilly MC (2003) ldquoeTailQ dimensionalizing measuring and predictingetail qualityrdquo Journal of Retailing Vol 79 No 3 pp 183-98

Yoo B and Donthu N (2001) ldquoDeveloping a scale to measure the perceived quality of Internetshopping sites (SITEQUAL)rdquoQuarterly Journal of Electronic Commerce Vol 2 No 1 pp 31-47

Zeithaml VA Parasuraman A and Malhotra A (2001) ldquoA conceptual framework forunderstanding e-service quality implications for future research and managerial practicerdquoMSI Working Paper Series Report No 00-115 Cambridge MA

Zeithaml VA Parasuraman A and Malhotra A (2002) ldquoService quality delivery through Websites a critical review of extant knowledgerdquo Journal of the Academy of Marketing ScienceVol 30 No 4 pp 362-75

Further reading

Zeithaml VA (2000) ldquoService quality profitability and the economic worth of customers whatwe know and what we need to learnrdquo Journal of the Academy of Marketing Science Vol 28No 1 pp 67-85

Zhang P and von Dran G (2001) ldquoExpectations and rankings of Web site quality featuresresults of two studiesrdquo On User Perceptions Proceedings of the 34th Hawaii InternationalConference on System Sciences Hawaii USA


1171

Appendix 1 Service quality dimensions of online banking and their frequencies bysatisfiers and dissatisfiers

Satisfied Dissatisfied TotalNo Dimension No Pct No Pct No Pct

A Product portfolio 17 35 47 30 64 31Product features 11 23 42 26 53 26Product varietyrange 6 12 5 03 11 05Sub-total 17 35 47 30 64 31

B Customer service quality 329 677 1178 741 1507 7261 Responsiveness

Prompt service (Acct open customer request etc) 23 47 131 82 154 74Timely response from rep 34 70 87 55 121 58Quickly solve problems 31 64 72 45 103 50Sub-total 88 181 290 182 378 182

2 ReliabilityCorrect service (corresponding and other unspecifiedissues) 3 06 141 89 144 69Keep service promise 4 08 54 34 58 28Keep promotion promise 0 00 29 18 29 14Accurate records (ie billing amount mailingaddress) 0 00 14 09 14 07Sub-total 7 14 238 150 245 118

3 CompetenceReps knowledge to answer questions 33 68 103 65 136 66Ability to solve problems 5 10 68 43 73 35Sub-total 38 78 171 108 209 101

4 AccessE-mail access 14 29 59 37 73 35Representative access via phone 25 51 40 25 65 31ATM access 6 12 8 05 14 07Phone access 7 14 7 04 14 07Account access when abroad 4 08 7 04 11 05Sub-total 56 115 121 76 177 85

5 PersonalizationAssurance and care 5 10 82 52 87 42Individual attention 17 35 27 17 44 21Top management involvement 7 14 5 03 12 06Sub-total 29 60 114 72 143 69

6 CourtesyAddress complaints friendly 43 88 49 31 92 44Consistently courteous 0 00 1 01 1 00Sub-total 43 88 50 31 93 45

7 Continuous improvementContinuous improvement on customer service 9 19 42 26 51 25Continuous improvement on online systems 10 21 13 08 23 11Continuous improvement on product offerings 0 00 9 06 9 04Sub-total 19 39 64 40 83 40

(continued )Table AI

IJOPM2411

1172


8 CommunicationInforming customer of important information 7 14 31 19 38 18Availability of status of transactions 6 12 13 08 19 09Payee information 0 00 5 03 5 02Clear answer 0 00 1 01 1 00Sub-total 13 27 50 31 63 30

9 ConvenienceSave time 5 10 21 13 26 13When I want 14 29 1 01 15 07247 customer service 12 25 2 01 14 07Where I want 3 06 0 00 3 01Avoid service personnel 2 04 0 00 2 01Sub-total 36 74 24 15 60 29

10 ControlProcess control 0 00 26 16 26 13Mistake prevention 0 00 21 13 21 10Account lock-up 0 00 9 06 9 04Sub-total 0 00 56 35 56 27

C Online information systems quality 140 288 365 230 505 2431 Ease of use

Functions that customers need 39 80 62 39 101 49User friendly 23 47 55 35 78 38Response speed 8 16 29 18 37 18Outdated technology 0 00 34 21 34 16Easy log-in 5 10 24 15 29 14Compatibility (eg Quicken Microsoft money) 14 29 11 07 25 12Accessibility of Web site (ie shut down) 5 10 12 08 17 08Effective navigation 6 12 6 04 12 06Sub-total 100 206 233 147 333 160

2 AccuracyAccurate online transactions 6 12 62 39 68 33Errors in interface 6 12 13 08 19 09Errors in contents 1 02 3 02 4 02Sub-total 13 27 78 49 91 44

3 SecurityprivacyInformation transaction safety 6 12 11 07 17 08Privacy 2 04 11 07 13 06Sub-total 8 16 22 14 30 14

4 Others (contents timeliness aesthetics)Information on products and service 10 21 15 09 25 12Up-to-date information 7 14 16 10 23 11Attractive of the Web site 2 04 1 01 3 01Sub-total 19 39 32 20 51 25Total 486 1000 1590 1000 2076 1000 Table AI


1173

Appendix 2 Measurement instrument perceived service quality dimensions

Reliability1 The company performs the service correctly the first time2 When the company promises to do something by a certain time it does so3 The company keeps my records accurately4 My online transactions are always accuratea

Responsiveness1 Employees give me prompt service2 I receive prompt responses to my requests by e-mail or other means3 The company quickly resolves problems I encounter4 I can rapidly retrieve the information I requesta

5 The company informs me of important information promptlya

6 The company provides me real-time informationa

Competence1 Employees properly handle any problems that arise2 Employees have the knowledge to answer my questions3 Employees comply with my requests

Ease of use1 The organization and structure of online content was easy to follow2 It is easy for me to complete a transaction through my bankrsquos Web site3 Using the bankrsquos Web site requires a lot of effort4 I can easily log on to my accounta

5 I didnrsquot encounter online jam in searching for informationa

Product portfolio1 The company provides wide ranges of service packages2 The company provides services with the features I want3 The company provided me many useful free services (eg message board)a

6 The company provides most of the service functions that I need9 All my service needs are included in the menu options

Security1 The company will not misuse my personal information2 I feel safe in my online transactions3 I felt secure in providing sensitive information (eg credit card number) for

online transactions4 I felt the risk associated with online transactions is low

Overall service quality (Cronbachrsquos Alpha frac14 092)1 Overall the service quality of my online company is excellent2 Overall my online company comes up to my expectations of what makes a good

online supplier

Overall satisfaction (Cronbachrsquos Alpha frac14 086)45 Overall I am very satisfied with the company46 Overall I am very satisfied with Internet-based transactions47 Overall I am very satisfied with the productsservices offered by the company

Note aItems were deleted from later analysesTable AII

IJOPM2411

1174

Online growth has reduced the role of physical geography for many consumers Thisgeographical irrelevance can also shrink some implicit switching costs such as thosefor convenience and time utility In short the importance of service qualitydifferentiation in attracting and retaining customers has advanced

However e-commerce service quality has been evaluated as inferior by numerouscustomers (Rubino 2000) Since the Internet is a relatively new transactional channelonline companies may not clearly understand what specific services are desiredAdditionally many customers have not yet formed clear expectations for onlineretailers (Zeithaml et al 2001)

The importance of service quality and the challenges facing Internet-based servicesnecessitate insights on the part of managers about what attributes customers use intheir evaluation of online service quality However a rigorous measurementinstrument of online service quality has not been available (Cox and Dale 2001OrsquoNeill et al 2001 Yoo and Donthu 2001) In order to improve that condition thisstudy intends to

identify the more salient online service quality dimensions

confirm the identified major service quality dimensions and

determine the relative importance of each identified service quality dimension inproducing overall service quality

The authors employed a two-stage approach in developing a reliable and validmeasurement of online service quality After establishing a broad conceptualframework which integrates theory and related concepts in the customer servicequality information systems quality and product portfolio management into onlineservice quality the authors applied an ethnographic content analysis to 848 customerreviews of online banking services to identify online service quality dimensions Asurvey questionnaire was generated based on these identified salient attributes andresults from the literature review and personal interviews Following this a Web-basedquestionnaire survey effort produced data from 235 online customers Then aconfirmatory factor analysis was used to outline six key online service qualitydimensions reliability competence responsiveness ease of use security and productportfolio

Conceptual frameworkTwo areas of literature were selected and reviewed for this study One was thetraditional and online service quality literature and the other was the informationsystems and Web site design literature Based on the literature review the authorsidentified the following three broad conceptual categories related to online servicequality

(1) customer perceived service quality

(2) information systems quality and


The major literature findings are discussed under these three categories

IJOPM2411

1150


(1) tangibles

(2) reliability

(3) responsiveness

(4) communication

(5) credibility

(6) security

(7) competence

(8) courtesy


(10) access


(1) tangibles

(2) reliability

(3) responsibility

(4) assurance and






1151



(1) performance

(2) features

(3) structure

(4) aesthetics

(5) reliability


(7) serviceability


(9) trust

(10) responsiveness



(13) reputation

(14) assurance and

(15) empathy


(1) Web site design

(2) reliability

(3) security and



(1) efficiency

(2) reliability

IJOPM2411

1152

(3) fulfillment

(4) privacy

(5) responsiveness


(7) contact





(3) efficiency



(6) customization




(1) content

(2) accuracy


1153

(3) format

(4) ease of use and

(5) timeliness



(1) ease of use



(4) security













IJOPM2411

1154












1155








(2) dejacom

(3) consumeramaorg

(4) epinionscom

(5) complaintscom




(9) gomezcom


IJOPM2411

1156







(2) CompuBank


(4) NetBank

(5) CitiBank


(7) Wells Fargo

(8) WingspanBankcom

(9) BankDirect


(11) ETrade Bank

(12) Fleet


(14) everbankcom


(16) Bank One


(18) First Union






1157








IJOPM2411

1158











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174


(1) tangibles

(2) reliability

(3) responsiveness

(4) communication

(5) credibility

(6) security

(7) competence

(8) courtesy


(10) access


(1) tangibles

(2) reliability

(3) responsibility

(4) assurance and






1151



(1) performance

(2) features

(3) structure

(4) aesthetics

(5) reliability


(7) serviceability


(9) trust

(10) responsiveness



(13) reputation

(14) assurance and

(15) empathy


(1) Web site design

(2) reliability

(3) security and



(1) efficiency

(2) reliability

IJOPM2411

1152

(3) fulfillment

(4) privacy

(5) responsiveness


(7) contact





(3) efficiency



(6) customization




(1) content

(2) accuracy


1153

(3) format

(4) ease of use and

(5) timeliness



(1) ease of use



(4) security













IJOPM2411

1154












1155








(2) dejacom

(3) consumeramaorg

(4) epinionscom

(5) complaintscom




(9) gomezcom


IJOPM2411

1156







(2) CompuBank


(4) NetBank

(5) CitiBank


(7) Wells Fargo

(8) WingspanBankcom

(9) BankDirect


(11) ETrade Bank

(12) Fleet


(14) everbankcom


(16) Bank One


(18) First Union






1157








IJOPM2411

1158











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174



(1) performance

(2) features

(3) structure

(4) aesthetics

(5) reliability


(7) serviceability


(9) trust

(10) responsiveness



(13) reputation

(14) assurance and

(15) empathy


(1) Web site design

(2) reliability

(3) security and



(1) efficiency

(2) reliability

IJOPM2411

1152

(3) fulfillment

(4) privacy

(5) responsiveness


(7) contact





(3) efficiency



(6) customization




(1) content

(2) accuracy


1153

(3) format

(4) ease of use and

(5) timeliness



(1) ease of use



(4) security













IJOPM2411

1154












1155








(2) dejacom

(3) consumeramaorg

(4) epinionscom

(5) complaintscom




(9) gomezcom


IJOPM2411

1156







(2) CompuBank


(4) NetBank

(5) CitiBank


(7) Wells Fargo

(8) WingspanBankcom

(9) BankDirect


(11) ETrade Bank

(12) Fleet


(14) everbankcom


(16) Bank One


(18) First Union






1157








IJOPM2411

1158











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174

(3) fulfillment

(4) privacy

(5) responsiveness


(7) contact





(3) efficiency



(6) customization




(1) content

(2) accuracy


1153

(3) format

(4) ease of use and

(5) timeliness



(1) ease of use



(4) security













IJOPM2411

1154












1155








(2) dejacom

(3) consumeramaorg

(4) epinionscom

(5) complaintscom




(9) gomezcom


IJOPM2411

1156







(2) CompuBank


(4) NetBank

(5) CitiBank


(7) Wells Fargo

(8) WingspanBankcom

(9) BankDirect


(11) ETrade Bank

(12) Fleet


(14) everbankcom


(16) Bank One


(18) First Union






1157








IJOPM2411

1158











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174

(3) format

(4) ease of use and

(5) timeliness



(1) ease of use



(4) security













IJOPM2411

1154












1155








(2) dejacom

(3) consumeramaorg

(4) epinionscom

(5) complaintscom




(9) gomezcom


IJOPM2411

1156







(2) CompuBank


(4) NetBank

(5) CitiBank


(7) Wells Fargo

(8) WingspanBankcom

(9) BankDirect


(11) ETrade Bank

(12) Fleet


(14) everbankcom


(16) Bank One


(18) First Union






1157








IJOPM2411

1158











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174












1155








(2) dejacom

(3) consumeramaorg

(4) epinionscom

(5) complaintscom




(9) gomezcom


IJOPM2411

1156







(2) CompuBank


(4) NetBank

(5) CitiBank


(7) Wells Fargo

(8) WingspanBankcom

(9) BankDirect


(11) ETrade Bank

(12) Fleet


(14) everbankcom


(16) Bank One


(18) First Union






1157








IJOPM2411

1158











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174








(2) dejacom

(3) consumeramaorg

(4) epinionscom

(5) complaintscom




(9) gomezcom


IJOPM2411

1156







(2) CompuBank


(4) NetBank

(5) CitiBank


(7) Wells Fargo

(8) WingspanBankcom

(9) BankDirect


(11) ETrade Bank

(12) Fleet


(14) everbankcom


(16) Bank One


(18) First Union






1157








IJOPM2411

1158











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174







(2) CompuBank


(4) NetBank

(5) CitiBank


(7) Wells Fargo

(8) WingspanBankcom

(9) BankDirect


(11) ETrade Bank

(12) Fleet


(14) everbankcom


(16) Bank One


(18) First Union






1157








IJOPM2411

1158











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174








IJOPM2411

1158











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174











1159











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174











IJOPM2411

1160

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174

Classification Pcta



Age16-24 7325-34 20535-44 26145-54 30355 or over 158










1161



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174



(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and







IJOPM2411

1162


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174


















1163



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174



Mean SD 1 2 3 4 5 6 7 8








IJOPM2411

1164




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174




(1) reliability

(2) responsiveness

(3) competence

(4) ease of use

(5) security and





1165









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174









IJOPM2411

1166









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174









1167






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174






IJOPM2411

1168

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174

References





















1169





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174





















IJOPM2411

1170


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174


















Further reading




1171













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174













IJOPM2411

1172











1173














online supplier



IJOPM2411

1174











1173














online supplier



IJOPM2411

1174














online supplier



IJOPM2411

1174

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