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 websiteCustomer 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 KONGA

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 KONGA 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 KONGA e-commerce services in improving customer satisfaction

1.5   SIGNIFICANCE OF THE STUDY

1      The study shall  provide a conceptual and theoretical appraisal of  the nature of e-      commerce

2      The study shall determine the role of e-commerce in improving customer satisfaction

3      The study shall provide information on e-commerce to organizations, IT professionals, and Business managers

1.6          STATEMENT OF HYPOTHESIS

 H0 : E-commerce product/service of KONGA does not have significant impact on customer satisfaction

 H1 : E-commerce product/service of KONGA has significant impact on customer satisfaction

 H0 : E-commerce security feature of KONGA does not have significant impact on  customer satisfaction

H0 : E-commerce security feature of KONGA does not have significant impact on  customer satisfaction

H1 : E-commerce security feature of KONGA have significant impact on  customer satisfaction

H0  :E-commerce user interface of KONGA  does not have significant impact on                        customer satisfaction

HI  : E-commerce user interface of KONGA have significant impact on customer  satisfaction

1.7        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

1.8   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, E-commerce, 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.

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