1
- guest lecturers guest lecturers (one from Dennise Yeh's videos.)
key = essential to maintain the business model
Supply-side of the CANVAS Model: Key Resources, Key Activities, Key Partnerships, Cost Structure
Key Resources: Categories are physical, intellectual, human and financial. Company assets that
create value for the customer + are needed to sustain and support the business.
Key Activities: The most important things a company must do to make its business model work.
Categories are production, problem solving, platform/network. The most important activities in
executing a company’s value proposition.
Key Partnerships: Describes the network of suppliers and partners that make the business model
work. Three motivations for creating a partnership: optimization and economy of scale, reduction of
risk and uncertainty, acquisition of particular resources and activities. Companies maintain
relationships so that they can focus on their core activity
Cost Structure: All costs incurred to operate a business model. Either Cost-driven (focus on reducing
costs) versus Value-driven (focus on value creation). The monetary consequences of a company’s
business models.
Article 16 | Customer loyalty in e-commerce: an exploration of its antecedents and consequences
the way they define convenience: simple, intuitive, ease to use
time: 2002
convenience is unproven: unhighlighted :D
Key objective: identified 8 antecedents (8Cs: customization, contact interactivity, care, community,
convenience, cultivation, choice, + character) that potentially impact e-loyalty and developed scales
to measure them
Antecedents: 7 of 8 Cs (all except convenience) were found to have a significant impact on e-loyalty.
Consequences
- E-loyalty demonstrated the highest elasticity with respect to character and care.
- Equally important, e-loyalty was found to have a positive impact on positive WOM + the willingness to pay mo
What are the definitions of the 8 Cs?
What does elasticity mean?
Abstract
This paper investigates the antecedents and consequences of customer loyalty in an online
business-to-consumer (B2C) context. The authors identify eight factors (the 8Cs— customization,
contact interactivity, care, community, convenience, cultivation, choice, and character) that
potentially impact e-loyalty and develop scales to measure these factors. Data collected from 1,211
online customers demonstrate that all these factors, except convenience, impact e-loyalty.
The data also revealed that e-loyalty has an impact on two customer-related outcomes: word-of-
mouth promotion and willingness to pay more.
Definition
The authors define e-loyalty as a customer’s favorable attitude toward the e-retailer that results in
repeat buying behavior.
The antecedents of e-loyalty
After interviewing online consumers about their shopping behaviour, the authors identified eight
e-business factors that appeared to impact e-loyalty:
1. Customization
2. Contact interactivity
3. Cultivation
, 2
4. Care
5. Community
6. Choice
7. Convenience (not found significant in results)
8. Character
Customization: Customization is the ability of an e-retailer to tailor products, services, and the
transactional environment to individual customers. There are multiple reasons why customization is
expected to affect e-loyalty. By personalizing its site, an e-retailer can reduce this frustration.
Customization also creates the perception of increased choice by enabling a quick focus on what the
customer really wants. Finally, individuals are able to complete their transactions more efficiently
when the site is customized.
Contact Interactivity: Contact interactivity refers to the dynamic nature of the engagement that
occurs between an e-retailer and its customers through its website. Lack of interactivity is a problem
for a majority of websites. They are often hard to navigate, provide insufficient product information,
and answer inquiries via email only after a delay of a day or two. For this study, contact interactivity
is operationally defined as the availability and effectiveness of customer support tools on a website,
and the degree to which two-way communication with customers is facilitated. Contact interactivity
is expected to have a major impact on customer loyalty for multiple reasons. Interactivity enables a
search process that can quickly locate a desired product or service, thereby replacing dependence on
detailed customer memory. Interactivity helps build more refined knowledge on the part of the seller
regarding the customer’s tastes and preferences so that the customer has the incentive to return and
gain from, and add to, this knowledge repository. Finally, the navigational process facilitated by
interactivity dramatically increases the freedom of choice and the level of control experienced by the
customer.
Cultivation: Cultivation is the extent to which an e-retailer provides relevant information and
incentives to its customers in order to extend the breadth and depth of their purchases over time. In
this study, cultivation is operationally defined as the frequency of desired information and
cross-selling offers that an e-retailer provides to customers. By actively cross-selling its products, a
firm can provide customers with useful information that would be cumbersome to obtain otherwise.
For example, Amazon.com reaches out to its customers with offers on books related to their past
purchases. An additional benefit of such cycles of stimuli and responses is that the retailer’s
knowledge base regarding the customer is continuously enhanced, lessening the customer’s
incentive to defect to another seller who has to build such knowledge from scratch.
Care: Care refers to the attention that an e-retailer pays to all the pre- and post- purchase customer
interface activities designed to facilitate both immediate transactions and long-term customer
relationships. Customer care is reflected in both the attention that the e-retailer pays to detail in
order to ensure that there is no breakdown in service, and the concern that it shows in promptly
resolving any breakdowns that do occur. In this study, care is operationally defined as the extent to
which a customer is kept informed about the availability of preferred products and the status of
orders, and the level of efforts expended to minimize disruptions in providing desired services.
Several researchers have established the negative impact of breakdowns in service on customers’
repeat purchase behaviour. Therefore, it is expected that the level of care that a company exercises
to minimize disruptions in customer service will lead to higher e-loyalty.
Community: A virtual community can be described as an online social entity comprised of existing
and potential customers that is organized and maintained by an e-retailer to facilitate the exchange
, 3
of opinions and information regarding offered products and services. In operational terms, we
measure community-related initiatives in terms of the extent to which customers are provided with
the opportunity and ability to share opinions among themselves through comment links, buying
circles, and chat rooms sponsored by the e-retailer. There are several reasons why a community
could potentially affect customer loyalty. Many consumers regularly turn to other consumers for
advice and information regarding products and services that they wish to purchase (Punj & Staelin,
1983). By facilitating this informational exchange among customers through the community, an
e-retailer can further increase e-loyalty among its customers. Communities also enable individual
customers to identify with a larger group. Communities also affect e-loyalty through their effect on
social relationships that customers build among themselves, usually based on a shared interest.
Members of this community can be loyal because they value the social interaction and because the
retailer’s way of doing business is aligned with their own values.
Choice: Compared with a conventional retailer, an e-retailer is typically able to offer a wider range of
product categories and a greater variety of products within any given category. An increase in the
number of available alternatives at a single e-retailer can greatly reduce the opportunity costs of
time and the real costs of inconve- nience and search expended in virtual store hopping. The
e-retailer that offers greater choice can emerge as the dominant, top-of-mind destination for
one-stop shopping, thereby engendering e-loyalty.
Convenience: Convenience refers to the extent to which a customer feels that the web site is simple,
intuitive, and user friendly. Accessibility of information and simplicity of the transaction processes
are important antecedents to the successful completion of transactions. The quality of the website is
particularly important because, for e-retailers, it represents the central, or even the only interface
with the marketplace. A website that is logical and convenient to use will also minimize the likelihood
that customers make mistakes and will make their shopping experience more satisfying. These
outcomes will likely enhance customer e-loyalty.
Character: Character can be defined as an overall image or personality that the e-retailer projects to
consumers through the use of inputs such as text, style, graphics, colors, logos, and slogans or
themes on the website. Creative website design can help an e-retailer build a positive reputation and
characterization for itself in the minds of consumers. Beyond general presentation and image, web-
sites can use unique characters or personalities to enhance site recognition and recall.
H1: The greater the (1) level of customization, (2) contact interactivity, (3) cus- tomer cultivation, (4)
care, (5) community, (6) choice, (7) convenience, and (8) (positively perceived) character of the
e-retailer, the greater the e-loyalty of its customers
The behavioural consequences of e-loyalty
Loyal customers forge bonds with the company and behave differently from non-loyal
customers. Customer loyalty impacts behavioral outcomes and, ultimately, the profitability of a
company. While loyal customers focus both on the economic aspects of the transaction and the
relationship with the firm, less loyal customers focus mainly on the economic aspects. Loyalty to a
business reduces the consideration set size and the amount of effort expended in searching for
alternatives while increasing the individual’s willingness to purchase from that e-business in the
future.
Furthermore, one of the behavioral outcomes expected to result from e-loyalty is positive
word-of- mouth—the extent to which an individual says positive things about the e-retailer to others.
, 4
Hypotheses: The e-loyalty of customers will be negatively related to their search for alternatives
(H2a)and positively related to their (1) word-of-mouth behavior, and (2) willingness to pay more
(H2b).
Results
Hypothesis H1 refers to the impact of the 8Cs on e-loyalty. A summary consideration of the
results indicates that all the parameters estimated (except for convenience) are significant at p .05
and in the predicted direction (positive).
Hypotheses H2a and H2b focus on the consequences of e-loyalty. H2a posits that e-loyalty
will be negatively related to customer search for alternatives. This hypothesis is at best only weakly
supported. H2b posits that e-loyalty will be positively related to word-of-mouth and willingness to
pay more, respectively. The estimates for 3 and 5 are positive and significant at p .05, supporting
H2b.
This shows that e-loyalty has a positive impact on positive word-of-mouth and willingness to
pay more.
article 17 |“Consumer feelings and behaviours towards well designed websites”
you can take any block and look at it to make recommendations for the company you’re analysing +
21 item evaluation be useful in evaluating other websites
well website = well designed website
Key Objective: The researchers tested website design in terms of purchase intention, positive
attitudes, trust, satisfaction and perceived risk by testing a well-designed website with websites with
4 different deficits.
Results:
- 21 questions to evaluate websites on purchase intention, attitude toward the website,
satisfaction, low perceived risk and online trust
- Evaluated 5 websites using the questionnaire, then graphed the results that show the 5
website clusters.
Methodology:
● They performed a test to determine how simultaneous manipulation of several ‘‘key’’
variables affected purchase intention.
● Used various determining factors for well website success and formed the hypotheses based
on those, including purchase intention, attitude towards the website, satisfaction, low
perceived risk and online trust. They evaluated 5 websites using 21 question questionnaire,
and graphed the results that show the 5 website clusters.
- guest lecturers guest lecturers (one from Dennise Yeh's videos.)
key = essential to maintain the business model
Supply-side of the CANVAS Model: Key Resources, Key Activities, Key Partnerships, Cost Structure
Key Resources: Categories are physical, intellectual, human and financial. Company assets that
create value for the customer + are needed to sustain and support the business.
Key Activities: The most important things a company must do to make its business model work.
Categories are production, problem solving, platform/network. The most important activities in
executing a company’s value proposition.
Key Partnerships: Describes the network of suppliers and partners that make the business model
work. Three motivations for creating a partnership: optimization and economy of scale, reduction of
risk and uncertainty, acquisition of particular resources and activities. Companies maintain
relationships so that they can focus on their core activity
Cost Structure: All costs incurred to operate a business model. Either Cost-driven (focus on reducing
costs) versus Value-driven (focus on value creation). The monetary consequences of a company’s
business models.
Article 16 | Customer loyalty in e-commerce: an exploration of its antecedents and consequences
the way they define convenience: simple, intuitive, ease to use
time: 2002
convenience is unproven: unhighlighted :D
Key objective: identified 8 antecedents (8Cs: customization, contact interactivity, care, community,
convenience, cultivation, choice, + character) that potentially impact e-loyalty and developed scales
to measure them
Antecedents: 7 of 8 Cs (all except convenience) were found to have a significant impact on e-loyalty.
Consequences
- E-loyalty demonstrated the highest elasticity with respect to character and care.
- Equally important, e-loyalty was found to have a positive impact on positive WOM + the willingness to pay mo
What are the definitions of the 8 Cs?
What does elasticity mean?
Abstract
This paper investigates the antecedents and consequences of customer loyalty in an online
business-to-consumer (B2C) context. The authors identify eight factors (the 8Cs— customization,
contact interactivity, care, community, convenience, cultivation, choice, and character) that
potentially impact e-loyalty and develop scales to measure these factors. Data collected from 1,211
online customers demonstrate that all these factors, except convenience, impact e-loyalty.
The data also revealed that e-loyalty has an impact on two customer-related outcomes: word-of-
mouth promotion and willingness to pay more.
Definition
The authors define e-loyalty as a customer’s favorable attitude toward the e-retailer that results in
repeat buying behavior.
The antecedents of e-loyalty
After interviewing online consumers about their shopping behaviour, the authors identified eight
e-business factors that appeared to impact e-loyalty:
1. Customization
2. Contact interactivity
3. Cultivation
, 2
4. Care
5. Community
6. Choice
7. Convenience (not found significant in results)
8. Character
Customization: Customization is the ability of an e-retailer to tailor products, services, and the
transactional environment to individual customers. There are multiple reasons why customization is
expected to affect e-loyalty. By personalizing its site, an e-retailer can reduce this frustration.
Customization also creates the perception of increased choice by enabling a quick focus on what the
customer really wants. Finally, individuals are able to complete their transactions more efficiently
when the site is customized.
Contact Interactivity: Contact interactivity refers to the dynamic nature of the engagement that
occurs between an e-retailer and its customers through its website. Lack of interactivity is a problem
for a majority of websites. They are often hard to navigate, provide insufficient product information,
and answer inquiries via email only after a delay of a day or two. For this study, contact interactivity
is operationally defined as the availability and effectiveness of customer support tools on a website,
and the degree to which two-way communication with customers is facilitated. Contact interactivity
is expected to have a major impact on customer loyalty for multiple reasons. Interactivity enables a
search process that can quickly locate a desired product or service, thereby replacing dependence on
detailed customer memory. Interactivity helps build more refined knowledge on the part of the seller
regarding the customer’s tastes and preferences so that the customer has the incentive to return and
gain from, and add to, this knowledge repository. Finally, the navigational process facilitated by
interactivity dramatically increases the freedom of choice and the level of control experienced by the
customer.
Cultivation: Cultivation is the extent to which an e-retailer provides relevant information and
incentives to its customers in order to extend the breadth and depth of their purchases over time. In
this study, cultivation is operationally defined as the frequency of desired information and
cross-selling offers that an e-retailer provides to customers. By actively cross-selling its products, a
firm can provide customers with useful information that would be cumbersome to obtain otherwise.
For example, Amazon.com reaches out to its customers with offers on books related to their past
purchases. An additional benefit of such cycles of stimuli and responses is that the retailer’s
knowledge base regarding the customer is continuously enhanced, lessening the customer’s
incentive to defect to another seller who has to build such knowledge from scratch.
Care: Care refers to the attention that an e-retailer pays to all the pre- and post- purchase customer
interface activities designed to facilitate both immediate transactions and long-term customer
relationships. Customer care is reflected in both the attention that the e-retailer pays to detail in
order to ensure that there is no breakdown in service, and the concern that it shows in promptly
resolving any breakdowns that do occur. In this study, care is operationally defined as the extent to
which a customer is kept informed about the availability of preferred products and the status of
orders, and the level of efforts expended to minimize disruptions in providing desired services.
Several researchers have established the negative impact of breakdowns in service on customers’
repeat purchase behaviour. Therefore, it is expected that the level of care that a company exercises
to minimize disruptions in customer service will lead to higher e-loyalty.
Community: A virtual community can be described as an online social entity comprised of existing
and potential customers that is organized and maintained by an e-retailer to facilitate the exchange
, 3
of opinions and information regarding offered products and services. In operational terms, we
measure community-related initiatives in terms of the extent to which customers are provided with
the opportunity and ability to share opinions among themselves through comment links, buying
circles, and chat rooms sponsored by the e-retailer. There are several reasons why a community
could potentially affect customer loyalty. Many consumers regularly turn to other consumers for
advice and information regarding products and services that they wish to purchase (Punj & Staelin,
1983). By facilitating this informational exchange among customers through the community, an
e-retailer can further increase e-loyalty among its customers. Communities also enable individual
customers to identify with a larger group. Communities also affect e-loyalty through their effect on
social relationships that customers build among themselves, usually based on a shared interest.
Members of this community can be loyal because they value the social interaction and because the
retailer’s way of doing business is aligned with their own values.
Choice: Compared with a conventional retailer, an e-retailer is typically able to offer a wider range of
product categories and a greater variety of products within any given category. An increase in the
number of available alternatives at a single e-retailer can greatly reduce the opportunity costs of
time and the real costs of inconve- nience and search expended in virtual store hopping. The
e-retailer that offers greater choice can emerge as the dominant, top-of-mind destination for
one-stop shopping, thereby engendering e-loyalty.
Convenience: Convenience refers to the extent to which a customer feels that the web site is simple,
intuitive, and user friendly. Accessibility of information and simplicity of the transaction processes
are important antecedents to the successful completion of transactions. The quality of the website is
particularly important because, for e-retailers, it represents the central, or even the only interface
with the marketplace. A website that is logical and convenient to use will also minimize the likelihood
that customers make mistakes and will make their shopping experience more satisfying. These
outcomes will likely enhance customer e-loyalty.
Character: Character can be defined as an overall image or personality that the e-retailer projects to
consumers through the use of inputs such as text, style, graphics, colors, logos, and slogans or
themes on the website. Creative website design can help an e-retailer build a positive reputation and
characterization for itself in the minds of consumers. Beyond general presentation and image, web-
sites can use unique characters or personalities to enhance site recognition and recall.
H1: The greater the (1) level of customization, (2) contact interactivity, (3) cus- tomer cultivation, (4)
care, (5) community, (6) choice, (7) convenience, and (8) (positively perceived) character of the
e-retailer, the greater the e-loyalty of its customers
The behavioural consequences of e-loyalty
Loyal customers forge bonds with the company and behave differently from non-loyal
customers. Customer loyalty impacts behavioral outcomes and, ultimately, the profitability of a
company. While loyal customers focus both on the economic aspects of the transaction and the
relationship with the firm, less loyal customers focus mainly on the economic aspects. Loyalty to a
business reduces the consideration set size and the amount of effort expended in searching for
alternatives while increasing the individual’s willingness to purchase from that e-business in the
future.
Furthermore, one of the behavioral outcomes expected to result from e-loyalty is positive
word-of- mouth—the extent to which an individual says positive things about the e-retailer to others.
, 4
Hypotheses: The e-loyalty of customers will be negatively related to their search for alternatives
(H2a)and positively related to their (1) word-of-mouth behavior, and (2) willingness to pay more
(H2b).
Results
Hypothesis H1 refers to the impact of the 8Cs on e-loyalty. A summary consideration of the
results indicates that all the parameters estimated (except for convenience) are significant at p .05
and in the predicted direction (positive).
Hypotheses H2a and H2b focus on the consequences of e-loyalty. H2a posits that e-loyalty
will be negatively related to customer search for alternatives. This hypothesis is at best only weakly
supported. H2b posits that e-loyalty will be positively related to word-of-mouth and willingness to
pay more, respectively. The estimates for 3 and 5 are positive and significant at p .05, supporting
H2b.
This shows that e-loyalty has a positive impact on positive word-of-mouth and willingness to
pay more.
article 17 |“Consumer feelings and behaviours towards well designed websites”
you can take any block and look at it to make recommendations for the company you’re analysing +
21 item evaluation be useful in evaluating other websites
well website = well designed website
Key Objective: The researchers tested website design in terms of purchase intention, positive
attitudes, trust, satisfaction and perceived risk by testing a well-designed website with websites with
4 different deficits.
Results:
- 21 questions to evaluate websites on purchase intention, attitude toward the website,
satisfaction, low perceived risk and online trust
- Evaluated 5 websites using the questionnaire, then graphed the results that show the 5
website clusters.
Methodology:
● They performed a test to determine how simultaneous manipulation of several ‘‘key’’
variables affected purchase intention.
● Used various determining factors for well website success and formed the hypotheses based
on those, including purchase intention, attitude towards the website, satisfaction, low
perceived risk and online trust. They evaluated 5 websites using 21 question questionnaire,
and graphed the results that show the 5 website clusters.
