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Understanding Determinants of Online Consumer Satisfaction: A Decision Process Perspective Author(s): Rajiv Kohli, Sarv Devaraj and M.

Adam Mahmood Source: Journal of Management Information Systems, Vol. 21, No. 1 (Summer, 2004), pp. 115135 Published by: M.E. Sharpe, Inc. Stable URL: http://www.jstor.org/stable/40398786 . Accessed: 10/09/2013 05:50
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Determinants ofOnline Understanding A Decision ConsumerSatisfaction: ProcessPerspective


AND M. ADAM MAHMOOD RAJIVKOHLI, SARV DEVARAJ,
of Management Rajiv Kohli is an Assistant Professor at theUniversity of Notre his Ph.D. from of Maryland, Dame. He received theUniversity Baltimore County IBM GlobalServices, He has consulted with SAS Corporation, UPS, MCI campus. several health-care Prior Telecommunications, others, among including organizations. for where he led thestrategic tojoining academiain2001,he worked Health, Trinity initiatives. Dr. Kohli 's research has beenpublished in Manfor e-business planning Journal Science, ofManagement Information Systems, Information Systems agement other Communications ACM,andDecisionSupport Research, ofthe Systems, among ofthebookIT Payoff: BusinessValueofInforHe is a coauthor Measuring journals. TimesPrentice Investment mation (Financial Hall). Technology of NotreDame. He reat theUniversity Sarv Devaraj is an AssociateProfessor of Minnesota. He has consulted withseveral theUniversity ceivedhis Ph.D. from His reand Infosys Health, Honeywell, Trinity Technologies. including companies, elecsearchareas includeinformation technology technology payoff, acceptance, His research has and productivity servicequality, tronic commerce, management. in Management beenpublished Science,Journal Information SysofManagement DecisionSciences, DecisionSupport Research, tems, Systems, Systems Information IEEE Journal the Communications Transactions, ACM, of Operations Manage-, of ofa bookrecently He is thecoauthor andother ment, published byPrentice journals. has won"BestPaper"awards work His research Timeson IT payoff. Hall/Financial conferences. international at several intheDepartofComputer Information M. Adam Mahmood is a Professor Systems ofTexasatEl Paso. He andDecisionSciencesattheUniversity ofInformation ment in theCollege of Business also holdstheEllis and Susan Mayfield Professorship and Helsinki School of Economics at the He was a visiting Administration. faculty Erskine attheUniversity of inFinland anda visiting Scholar Administration Business Information hisPh.D. inManagement inNewZealand.He received SysCanterbury on economresearch interest centers Dr.Mahmood's tems atTexasTechUniversity. information and electronic icsofinformation commerce, strategic competitive systems, andend-user and organizational decisionsupport computsystems, systems, group in over85 technical research he has published papers ing.On thistopicandothers, theJournal someof theleading of including proceedings, journalsand conference DecisionSciences, JourMIS Quarterly, European Systems, Information Management and Research INFOR- CanadianJournal nal ofInformation ofOperation Systems, and Management, Journal of Organizational Processing, Information Information in a He has also presented Data Base, andothers. and End UserComputing, papers Dr.Mahmood conferences. andinternational ofregional, number national, presently
/ Summer 5-135. Journal 2004,Vol.2 1, No. 1, pp. 11 ofManagement Information Systems Inc. 2004 ME. Sharpe, 0742-1222/2004 $9.50 + 0.00.

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As a and End UserComputing. serves as theeditor oftheJournal ofOrganizational ofInforhe also serves oftheTexasDepartment Governor's as a member appointee, oftheJournal as a guest editor He has served mation Resources BoardofDirectors. ComInternational Journal andthe ofElectronic Systems ofManagement Information He has also served of theInformation Resources merce. as president Management Association. channel e-commerce As business-to-consumer ABSTRACT: onlineshopping grows, an effito deliver will to to consumers' needs need explore providers ways anticipate anditsrelacient Yettheconsumers' decision-making process shopping experience. Simon's tothe channel arenot wellunderstood. selection ofthe online Utilizing tionship we for examined model, phasesusing134 decision-making support decision-making costsavings themodelto include consumers' onlineconsumers. We also extended Strucwith thee-commerce channel. and timesavings, as well as their satisfaction channel tural results indicate that theonlineshopping supported equation modeling forthe In particular, we found theoveralldecision-making support strong process. Our and of online consumers' choice process. results design decision-making phases was mediated forthedecision-making also indicate that bythecost process support and led to their greater savingsand timesavingsgainedby theonlineconsumers channel satisfaction. conKey words and phrases: B2C e-commerce, business-to-consumer commerce, channel. sumer onlineselling e-commerce, decision-making,

A study by Pew Internet Research found that onlineshopping has gonefrom to and that an number of customers are more time novelty utility increasing spending for and airline tickets music, [24].Nielsen/NetRatings shopping electronically books, in theholidayseasonof 2003, onlineshopping indicate that increased by over35 over2002,with consumers that 19.7percent oftheir budpercent responding holiday was from 16.3 in the online, get spent up percent previous year[6]. onlinesales represent less than 2 perDespitethegrowing appealofe-commerce, cent oftheoverall retail business. Forrester Research forecasts that retail online sales willcontinue tosee growth ofupto25 percent a significant [25].Thispresents opporfor intheonline stakeholders channel. Whilethe robust of tunity year-by-year growth thebusiness-to-consumer online trend is encouraging, there arelin(B2C) shopping consumer concerns aboutonline Recent research has attributed the gering shopping. erstwhile failures ofe-commerce toseveral the failure of the online factors, including tounderstand consumer needsatspecific intheir online shopping applications points observe that shopping decision-making process. ZengandReinartz theInternet has a verydifferentiated impact alongthevariousstagesof the consumer andthetrue value-added oftheInternet to decision-making process consumers materializes at veryspecific in the The points purchase process. evidence showsthat theecommerce initiatives so farhavebeenfoempirical on increasing theeffectiveness of onlinesearch, much cusingmostly paying

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onlinetransactions, and almost to facilitating less attention ignorcompletely better decisions. make of consumers the [58, 108] p. ing importance helping someparts oftheconsumers' that e-commerce Thisobservation supports suggests forbusinesses to it is better than others. Thus, important decision-making process how for these consumers' understand stepsimpacts support decision-making steps, time has on consumers' channel thee-commerce and theimpact their satisfaction, is toinvestigate the ofthis research The objective a purchase. andcostwhen making on the consumers' decision channel the e-commerce of capabilities support impact Theconsatisfaction. that lead toconsumer andthefactors decision-making process, suchas saving outcomes ofdecision tributions (DSS) tomanagerial systems support time tooptimize alternatives anddeveloping time [35,49] andcosts[14, 15]arewell arenais relatively inthee-commerce their contribution novel, however, established; ofconsumer inrelation to theprocess decision-making. particularly role consumers' theonline decision-making process playsa central Understanding needs. the consumers' that cater to and to ina retailer's systems ability design deploy a retailer can oftheconsumer's thesteps decision-making process, By understanding information costsby providing as well as cognitive reducethetangible supporting infortoomuch alternatives. chooseoneofseveral consumers andhelping Providing whereas in the cause mation propprocess, interruptions shopping unnecessary may in an environment timeand result can increase viewing erlyplaced interruptions can guidethe sale [57]. In thisway,theonlinechannel to a completed conducive at a transaction in a completed results one that to a successful consumer decision, and satisfaction consumer toimprove arelikely suchas these cost.Experiences lower satisfaction Consumer channel. to continue consumers usingtheonline encourage consumers becauserepeat business toward role an genprofitability, important plays customers becauseitcostsless toretain Thisis mainly revenues. more erate existing involves often ofane-commerce newones.Development tofind than signifisystem the successof such and as well as sellers, cantinvestment developers by channel theconsumers' investment supports uponhowwelltheonlinechannel maydepend decision-making process. varito support information as computer-based DSS aredefined designed systems environment inan unstructured ofthedecision-making [28,42]. An ous steps process ofa highly is notbasedon steps is one that decision unstructured procequantitative environdecision a structured In other heuristics rather but words, [42]. dure, upon reorder suchas an inventory has a distinct ment solution, processor step-by-step decision or ill-structured On theother of a payroll. calculation hand,unstructured thedecision-makers do nothavesuchclearsteps;instead environments support they Given their andsupport situation the decision tostructure decision-making capabilities. at variables decision several of can consist decisionscenarios onlineshopping that is notof thedecision can use computer-based a consumer eachphasewhere support, The as unstructured. can be hence and a "highly regarded procedure" quantitative comto the consumer's can exceed information ofavailable amount ability process, The consumer's amongitemsof interest. pare,and view thevariousrelationships An alternatives. of various evaluation rational limit the also abilities may cognitive

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online channel canprovide decision for comshopping searching, support capabilities andfinally a product to theconsumer. paring, recommending Previous hasgenerally deciliterature theimpact ofa DSS on managers' examined in various business Few have examined the situations. studies sion-making process decisionsituations in thee-commerce in which channel those the area,especially is a decision-maker. consumer et al. [50] haveobserved e-commerce Silverman that sites toooften failtosupport inlossof searches anddecision-making, buyer resulting sales andofcustomer Bar-Ilan recommended that business. and [33] repeat Lipshitz further research should be conducted to validate in thedecision-making process actuale-commerce situations. that theelectronic medium Specifically, may recognizing havegreater than its there have been calls of marketing any potential predecessors, for thestepsin thedecision-making andthesubsequent understanding postprocess consumer in satisfaction Internet [22,39]. purchase purchases thedecision-making onthetype orprice ofthe canvary Clearly, process depending factors. Consistent with in thearea,ourreresearch product, amongother previous search examines that most consumers suchas books, online, CDs, products purchase airline and flowers. will helpunderstand Within thiscontext, ourfindings tickets, howandatwhat the e-commerce channel toconsumers' decisionlendssupport stage in will to enhance online channel to This, turn, making process. capabilities help better consumers' online here makes decisions. the research support Briefly, presented - first, the contributions we present a theoretical basedonprefollowing perspective, vioussimilar studies which we modelonline consumers' deci(e.g., [51,52]), from we build decision studies Second, sion-making steps. upon previous byadding process newconstructs andhypothesizing howthese constructs relate tothechoicephaseof Simon'sdecision-making model.In doingso, we drawuponthetransaction-costs tocontextualize literature ourresearch we empirically showthat the Third, findings. research model is of decision of proposed capable explaining support capabilities the online channel. we contribute new ideas for Finally, practice byillustrating why organizations toolsfor (e.g.,onlinechannel operators) mayemploy providing comparativefeatures andprices to save consumers' their satisfaction time, cost,andincrease with theonline channel.

Transaction-Cost andDecision-Making Process Theory


Prior to undertakingthis empiricalstudy,itis important tounderstand, from a theoretical how onlineconsumers makepurchasing decisions. In sceperspective, narios where online consumers areabout topurchase a product orservice from a seller via an online onecan assume that will maximize their channel, to they utility, subject somebudget andtime constraints. Forexample, thetotal costfor a product orservice must be lessthan orequaltothe arewilling topayfor theproduct orservice price they andthetime arewilling tospend inexecuting theonline transaction. Werefer to they these as transaction costs. Under the classical economic of theory perfect competition, theconsumers should be abletomakea decision topurchase theproduct orservice at

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or should havelittle suchchannel, oranother andtheInternet, costandtime; a fixed is almost never seenin practice, no roleto playin it.However, competition perfect market factors as such market where information, prices, perfect mitigate imperfections and costs transaction ofcommodities. andfeatures Therefore, mayvary significantly, oftime and costsin terms further without be executed cannot transactions incurring transaction ideal from the above-mentioned decision-making promoney. Digressions costs[8,9]. transaction cess giverisetoadditional the in less than common that are Giventhefactors markets, competitive perfectly aretwoforces becausethere is complex, above-mentioned against working problem or of transaction costsfora product thedistribution theonlineconsumers. First, information about the available in tothem. is notknown service cases, Second, many can improve at best.Consumers is ambiguous or servicein question theproduct the costsbysearching their transaction andminimize their decision-making process This search their matches that thecommodity tofind Internet process requirements. will incur addisincetheonlineconsumers is, however, costly, usingtheInternet It can be assumed at a decision. costto arrive andinfrastructure tional effort, time, ofsearching benefit themarginal until thissearch willundertake theconsumers that in transactions to conduct are of cost the [55]. They likely searching equals marginal ecoTransaction-cost time and of in terms cost their minimizes a waythat money. maketo minimize consumers that rationale nomics(TCE) explainsthetheoretical costs[46]. transaction a number must ora service, a product Whenconsumers go through they purchase a deciSimon[52] proposed Herbert ofdecision-making steps.In his classicwork, andchoice.In distinct three sionprocess design, phases intelligence, comprising hand andgathat the decision-maker the theintelligence recognizes problem phase, is marked The situation. abouttheproblem ersinformation bystructurdesign phase alternatives thevarious andidentifying criteria, situation, developing problem ingthe decision-maker the choice In the be solved. can the which phase, problem through Foldecision. thefinal andmakes thecriteria, that meets choosesthebestalternative of the results from the feedback uses the thedecision-maker thethree phases, lowing on thepast Such reflection how well theprocesswas executed. decisionto review decisions. future for of the a basis form can Although phase intelligence process has been model Simon's in and appliedand decision-making generic simple nature, of situations in a widearray validated [22,33, 35]. theTCE theory In integrating byCoase [8] andSimon'sdecision-making putforth incurred costsas those suchex ante will include costs transaction infer that we model, varisituation the about information ingathering identifying (intelligence), problem the and canbe solved(design), choosing theproblem which ous alternatives through from the thecriteria meets that bestalternative (choice).We also surmise, primarily consumers' will and cost time ex that of economic impact savings post point view, withtheonline satisfaction that We also hypothesize choiceof theonlinechannel. with satisfaction customer overall willdirectly as anex postvariable impact purchase As stated channel. the toward consumer theonlinechannel and,therefore, loyalty anduse. channel roletoward consumer preference earlier, playsan important loyalty

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Development Hypotheses
the affect DSS significantly that in theliterature established It has beenempirically of the and [14]. choice, implementation decision-making process phases intelligence, information (TPS) (MIS) andtransaction systems processing systems Management activities their tosupport havealsobeenusedbymanagers [48].Fazlollahi intelligence DSS for theuse ofgenetic andVahidov designing [13] recommend algorithm-based the of in the alternatives process. decision-making design phase that characteristics has inherent channel thee-commerce It is likelythat support Due to and others. Simon of the certain by proposed decision-making process phases be for the e-commerce search channel, example, may well [58], capabilities superior selecfor criteria the with Combined theintelligence tosupport suited product phase. channel thee-commerce availablethrough of information sources themultiple tion, their costsandsupport search consumers' can reduce phase,and,subseintelligence availthealternatives ofa plantoevaluate can lead tothedevelopment they quently, for alternatives' and criteria a to establish This the decision. ability ablefor plan making in Simon'sdecision-maktheconsumer's evaluation design phaseoutlined supports of a theselection selection criteria information and the model. support Finally, ing interacthat Trifts Haubl and needs. the consumers' meets that [22] suggest product todrasenvironment aidsintheonline tivedecision mayhavethepotential shopping and information searchforproduct theway in whichconsumers transform tically twohypotheses: thefollowing Thuswe propose makepurchase decisions. HI: Thee-commerce channel phase willlead tosupfortheintelligence support the the process. for design phase of decision-making port H2: Thee-commerce channel forthedesign phase willlead to support support process. forthechoicephase ofthedecision-making

CostSavings
Costsavings ontheInternet havebeena major draw for online customers [45].Prices as is arefound tobe 9-16 percent on theconventional lower than channels, shopping theprice castdoubt overtheonline costsavings [5]. Yetsomeresearchers dispersion that thefundamentals willnotchange and oftheretailing business [37].Theysuggest that willcontinue tovaluecharacteristics customers willleadthem tothe conventhat tionalchannel. is evidencethat save there onlinechannel customers Nevertheless, costsbypurchasing with theprecise nothaving features need,thereby products they topayfor features do notneed[21]. Therefore, inaddition toaccesstocompetithey tivepricing information cost occur due to maximum valuedrawn from [30], savings the customers channel. Thesefindings that conprice payonthee-commerce suggest sumers channel maydiscriminate amongonlinepricesandconventional pricesand be drawn to the online channel due to lower and cost Thisleads may prices savings. us toournext hypothesis:

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12 1

channel will H3: A welldecision-making processin thee-commerce supported ' costsavings. lead toconsumers

TimeSavings
between actas intermediaries information that havefound studies Previous systems search reduce intheelectronic andsellers the and,as such, buyer marketplace buyers Todd and into time search coststranslates inbuyer costs[3,22]. A reduction savings. on value a decision-makers that established Benbasat[56] empirically place high the ina networked andKotier Achrol minimization. effort that, [1] suggest economy, in which itwillnowhaveto is undergoing roleof marketing changes revolutionary that oftheseller. ofan agent instead ofthebuyer actas an agent suggest Theyfurther This information. market real-time to have will in that provide capacity, marketing, This leads to the intotimesavingsforonlineconsumers. translate will inevitably hypothesis: following will channel H4: A well-supported decision-making processin thee-commerce time lead toconsumers' savings.

andDecision-Making Satisfaction Channel


that Index(ACSI) indicate Satisfaction Customer Recent changesin theAmerican due to dissathas been consumers American satisfaction primarily declining, among is satisfaction that customer also finds services with isfaction [16]. The ACSI study channel theonline Giventhat orvaluedriven. than driven more already price quality for an this to convenient a way acquireproducts, represents opportunity provides satisfaction. customer increase to tofind retailers online ways thestepsin theconarea have explored in theonlineshopping studies Previous Kalakota satisfaction. of consumer sumer decision-making processas antecedents to model mercantile the consumer used for (CMM) and Whinston [27], example, conof as antecedents intheconsumer thesteps process decision-making investigate underscore B2C successexplored for Antecedents satisfaction. sumer bypaststudies with the elecsatisfaction to establish consumers' decision-making process supporting continufor consumers' found in e-commerce research Prior channel. tronic support as beingdriven tohereas channel referred anceintention, bysatisfaction preference, atticonsumers' theonline service initial with process, [4]. Shapedduring purchase efhave concerns and convenience tudesand beliefs significant security regarding to has decided a consumer Once online to intention fectson their [32]. purchase the andsatisfactory be efficient should thetransaction [31]. Recently, propurchase, consumtomeasure model an integrated choicehasbeenthebasisfor cessofchannel channel theonline with ers' satisfaction [11]. canleadto for consumers that decision hasdemonstrated research While support past themediators tovalidate is needed more research with thechannel, satisfaction higher

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occurs with thechannel that satisfaction We suggest ofsuchdecision-making support. online from better choices benefit from thesuperior because consumers sup(resulting incostas wellas Thisleadstosavings for areabletomake. decision-making) they port time. twohypotheses: The previous discussion leadstothefollowing chanthee-commerce madethrough H5: Costsavings decisions resulting from with thechannel satisfaction nelwilllead tohigher consumer chanthee-commerce madethrough H6: Timesavings decisions from resulting thechannel. with nelwilllead tohigher consumer satisfaction

Research Design Study


chanwith theonlineandbricks-and-mortar To ASSESS CONSUMERS' EXPERIENCES well as underas in thecommunity, from nels,we solicited shoppers participation We ata private inbusiness administration andgraduate students university. graduate the conto contact useda membership listofa local socialandcultural organization in thecommunity. was carried outprimarily sumers The solicitation through phone inthestudy, we followed Iftheindividuals toparticipate ande-mail. upbyinagreed werecontacted The other set of subjects, students, by one of the personcontact. a to the a followed researchers brief in-class by request presentation, by making in theproject. We ofeachcoursetoallowhisorherstudents toparticipate instructor in the a totalof 200 individuals, contacted outof which171 agreedto participate Each asked out a brief of demowas to study. survey participant "register" byfilling information. graphic Wethen introduced theparticipants tothestudy anddirected them to requirements a Web sitecreated forthepurpose of supporting The Web site thepresent study. that theobjective of thesurvey was to capture their specified shopping experience withtheonlinechannel vis--vis theconventional store.In addition, theWeb site listed askedquestions Web (FAQ), linksto onlinecomparison-shopping frequently researchers' contact and thesurvey Each particisites, information, questionnaires. outthesurvey after via onlineandconventional channels. The pantfilled shopping the of how well the online channel survey captured participants' perceptions supthesteps intheir andtheir satisfaction with the online ported decision-making process, channel. theintroduction tothestudy, we emphasized that thesurvey During pertains totheir with the channel in as to In the vendor. addition, experience question opposed thesurvey thesame.All survey were beganwitha statement reiterating responses online andautomatically ina database. stored Pitkow andRecker captured [43] recommend online automated for ease ofuse,low overhead, andreliability. surveys Whilea majority of thepurchases werebooksor CDs, thesamplealso included such as airline andapparel. found that tickets, flowers, purchases Nielsen/Netratings in the2003 holiday accounted forthecategory with season,musicandvideo/DVDs

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an increase of 46 percent thehighest $1.6 billion, sales,withconsumers spending havealso captured online consumer bestudies from theprevious year[6]. Previous of such as and CDs their items books havior 23, 31, [5, 34]. regarding purchase eachparticipant whocompleted thetasks for thestudy, tocomplete As an incentive of $20. The gift certificates wererewith a gift certificate was provided thesurvey ina local shopping mallorthecollegebookestablishment atanybusiness deemable to controlled of thestudy did notlenditself thenature store. laboratory Although theitems list the seller of their thesubjects we required that purchases, pursettings, andthe of timespent on each purchase, theamount chased,thepriceof each item, theseredataneededforthestudy, In addition to providing dateof each purchase. in shopindeed that the as a confirmation served also subjects participated sponses with thestudy andcomplied inquestion theproducts Further, requirements. pingfor ofpurchases, we effects andorder and"carryover" biasesdueto"recall" tominimize store and the from a bricks-and-mortar first to the half respondents purchase required toelapse andalloweda week'stime an online store from halftopurchase other first, madethesecondpurchase. before they

Profile Respondent
The age of and validresponses. of 134 complete usablesampleconsisted Ourfinal with Of these, a meanage of24 years. to49 years, from 19 years varied respondents from no work male.Work and59 percent werefemale 41 percent ranged experience 4 A vast the mean was 22 and to (86.6 (students) majority years. years, experience online. in purchasing hadprior oftherespondents products experience percent)

Data andVariables
Likert were assessed inthe constructs Mostofthe through seven-point study employed As stated the literature. from the derived scale survey earlier, published questions and in ourmodel intelligence, three design, decision-making stagesof consumer - formed have utilized the studies Several variables. thedecision-making choice past aids in supof theroleof support evaluation decision-makers' scales forcapturing ofdecision-making various [2,7, 13,14,20,29,35,44,47]. Scales and stages porting metrics ofe-commerce wereutilized for satisfaction items [11]. In study bya recent ourresearch thescalesfor eachcase,we adapted design. therecognition of theintelligence usedto construct The questions phaseaddress willaid in making information that in gathering involved andtheeffort theproblem theintelscale (see Appendix a three-item We employed thedecision. A) to capture scale the the items whether first examined We represented constituting ligence phase. All itemsloaded ontoa a singlefactor analyses. (unidimensionality) usingfactor ofthereliability or 0.68. A measure than all factor scale with loadings greater single 0.72. for this scale was The a-value a. is Cronbach's scale of the internal consistency new for ocacceptability ofCronbach's these arenewscales,thethreshold Giventhat studies further refine occuras future reliabilities scales is 0.60 [41]. Higher usually

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themeasurement extracted scales.The variance (Table bythescale is 60.97 percent in thepresent of all scales employed detailson divergent 1). We present validity in thissection. later study strucAs discussed thedesign earlier, bythedecision-maker phaseis characterized alternathevarious theproblem andidentifying criteria, situation, turing developing scale that tivesforfulfilling theshopping need.We employed a three-item tapsinto for criteria the to various establish decision-maker's alternatives, making ability identify Factor thepurchase downthechoicebaseduponthese. andnarrow decision, analysis of items with factor included in thescale loadedon a singlefactor loadings greater we examined than 0.86. Thusthescaledemonstrated Next, unidimensionality. strong variance the ofreliability, which was0.84. Finally, Cronbach's a as a measure percent unididemonstrated extracted was 75.82 percent. Thusthescalefor design adequate andvariance extracted (Table 1). mensionality, reliability, inthe The items tocapture thechoicephaseconstruct (shown Appendix) employed thepurthedecision-maker alternatives and reflect the various making evaluating all items revealed that of items this scale chase.A factor the constituting analysis than0.76. The factor loaded ontoa singlefactor withindividual loadingsgreater extracted the variance for measure Cronbach's a, was0.79.Further, reliability, percent scale we that the the scale was 71.10 Based on the conclude above, repreby percent. and varithechoicephasedisplays reliability, senting adequateunidimensionality, anceextracted (Table 1).

Performance Variables
The twoperformance we employed variables werecost savingsand time savings from online a conventional vis--vis Allparticipants inthe store. resulting purchasing had purchased thesame product from bothchannels and werethusable to study forthesevariables. The question forcost saving(shownin the provide responses asked the to state the for theproduct Appendix) participants purchase price including taxesandshipping Thedifference between theresponses obtained for (ifapplicable). theconventional andonline is the variable in the Simipurchase employed analyses. we asked respondents to provide us withthetimeit tookto complete their larly, online as well as through a conventional store. As before, thedifference purchase between these twovaluesis anestimate ofthetime is usedintheanalyses. that saving Whereas time we savingsand costsavingsare objective measures, performance also included a subjective assessment ofsatisfaction. Consistent with recent literature in thearea [11],ourmeasure of satisfaction is an overallassessment of satisfaction with thepurchase. Sinceone wayto tellifconsumers aresatisfied is ifthey recommend their to we also an included item that into this The others, purchase taps aspect. three-item scale for satisfaction is shown inthe A factor to Appendix. analysis assess theunidimensionality of thisscale revealed a single-factor solution withall factor than orequal to0.8 1. The percent ofvariance extracted loadings greater bythescale was 73.24 percent. a test ofthereliability ofthisscale usingCronbach's a Further,

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125

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thecontohavesatisfied thescale was deemed indicated a valueof0.81. Therefore, andreliability ditions ofunidimensionality (Table 1).

Discriminant Analyses
eninvolved test Thefirst ofdivergent twotests Ghiselli etal. [19] presented validity. lower notinthescalebe generally oftheitems correlations theitem-to-total that suring of the a comparison in thescale.The secondtestinvolved than thosefortheitems Fora scaletodemcorrelations. theinterscale with ofthescalesemployed reliabilities be significantly of thescale must thereliability onstrate validity, divergent adequate sufficient indicated withother scales.Bothof thesetests thanitscorrelation higher andsatisfaction the scalesfor for choice, phases. design, intelligence, validity divergent

Analyses
in in thestudy We present correlations between the constructs employed between The correlations can be observed. correlations Table 2. Severalsignificant werestatistically and timesavingsand satisfaction, cost savingsand satisfaction, between correlations We observe also intelligence statistically significant significant. existsbealso correlation and design, and designand choice.A surprisingly high Sincecorrelations tween choiceandsatisfaction. insights, onlypreliminary provide model(Figure1) estimated our results are based on theresearch usingstructural model(SEM) analysis. equation inLISREL inFigure 2 as anSEM implemented research model shown Weestimated the strucas wellas the the measurement [26].TheSEM methodology aspects incorporates is no Sincethere Italso provides indices. tural model estimated. being goodness-of-fit it is offit standard on a single measure consensus orevena setofmeasures [38], pracinthesocialsciences and ticetoreport several measures. SEM hasbeenwidely applied areahasalso Recent inthe information literature. research systems marketing empirical techharnessed thepowerof thistechnique. SEM is a second-generation estimation in a and enables researchers to address a set of interrelated research nique questions andcomprehensive between [17]bymodeling single, systematic, analysis relationships anddependent variables [18]. multiple independent simultaneously In testing and reporting results on SEMs, Marsh[36] suggests therecomparing search modelto alternative we modelsalongvarious indices. Therefore, first, commodelto an unmediated modelin whichtimesavingsand cost pare theresearch werenotconsidered oftherelationship mediators between choiceandsatissavings The rationale for this is to test whether the faction. decision-making stageofchoice satisfaction or in fact the whether mediators of timeand cost sufficiently explains a better model fit. thehypothesized model toan Second,we compare savings provide are considered to be unre(null model)in whichall variables independent-model lated.Itis standard inSEM analysis tocompare theresearch modeltosucha practice benchmark orbaselinemodel.

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Constructs Table2. Correlations Among Study Variables


1. Intelligence 2. Design 3. Choice 4. Timesaving 5. Cost saving 6. Satisfaction

1
1.0 0.747** 0.646** 0.214* 0.127 0.628**

2
1.0 0.788** 0.22* 0.166 0.659**

1.0 0.261** 0.233* 0.734**

1.0 0.147 0.316*

1.0 0.318*

* at 5 percent. at I percent; Notes: ** significant significant

i .

Simon's Decision-MakingModel

^ /^

Time Saving )v^

(^intelligence^)

>(^

Design

J)

X^Choice

~""S

(^Satisfact^^)

^v

^'s CostSaving

Model Research FigureI. Hypothesized

Simon's Decision-MakingModel

/* JT Time Saving'

-"~'

(^mtelligence^)-

>Q

Design

J.

H>(^Choice

^^)

(^SatisfactiorT^)

^'

^'^ CostSaving

0.79***

Model. oftheHypothesized 2. Results Figure ** significant at I percent. at 5 percent; Notes:*** significant

inTable is presented evaluated models thevarious for ofthestatistics A comparison of theSEM withFigure 3. This,in conjunction 2, can be usedto assess theresults to is model research the from Table be seen As can 3, superior hypothesized analyses. the variThisis evident model. modelas wellas theindependent theunmediated by in SEM analysis. criteria ous evaluation employed commonly anddesignbetween thepaths that From 2, we observe intelligence-design Figure forHI and thus the 0.01 at choicearestatistically level, support lending significant

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KOHLI, DEVAR AJ,AND MAHMOOD

Table3. ModelFitStatistics Model M1: Hypothesized model M2: Independent model M3: Unmediated model Chisq/df 1.98 30.79 3.508 GFI 0.96 0.47 0.92 AGFI 0.90 0.25 0.84 RMSEA 0.085 0.47 0.13 NFI 0.95 0 0.91 CFI 0.97 0 0.93

Notes: GFI- goodness-of-fit of index;AGFI- adjustedGFI; RMSEA - rootmean squareerror NFI- normed fitindex;CFI - comparative fitindex. approximation;

H2. Further, choicewas significantly at the0.01 level,to both costsavings related, andtime Thuswe also find for H3 and H4 of the the savings. study. Finally, support between cost and time were paths savings-satisfaction savings-satisfaction significantat the0.05 level as well,thusproviding forH5 and H6. In summary, support these results indicate for theproposed model. research strong support An interesting was that while the on was meof choice satisfaction finding impact diated at 0.01 and of time cost there was also evidence level)by (significant savings, a direct effect o choiceon satisfaction. Thisis revealed indices that bymodification are a keypart of theoutput from SEM analyses. we allowedfora direct Therefore, link between choiceandsatisfaction inthestructural model. Thedirect between path choiceandsatisfaction was also statistically at the 0.01 We level. discuss significant these results andtheir ingreater detailin thefollowing section. implications

inDecision-Making Differences Onlineand StagesBetween Bricks-and-Mortar Purchases


Weconducted anadditional ofthe differences the dimensions ofSimon's analysis along model.In other we wanted to examine what inparticular aresupported words, stages ofe-commerce. To understand we conducted bythedecision this, support capabilities - intelligence, a paired-sample /-test of thedifferences between thestages design, - forthesamerespondent and choice between onlineand bricks-and-mortar stores Table Such ormatched-sample tests havebeenfound tobe ofconsid(see 4). pairederableutility minimize variance all other factors [10, 12] becausethey (in our along of theindividual case, theidiosyncrasies We observed a statistietc.). respondents, difference theonlineand bricks-andcally significant (at the0.10 level) between mortar environments forthedesignphase.We also found a statistically significant difference thechoicephase.Wefound no significant (at the0.05 level)for difference between thetwochannels attheintelligence In these results phase. summary, suggest that theonline channel seemsto facilitate thedesignandchoicephasesof thedecimore than theintelligence these sion-making process substantially phase.Wediscuss ingreater detailinthenext section. findings

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Table4. Comparison ofDecision-Making Conventional Stores. Stages:OnlineVersus Mest(Online-Conventional) Paired-Sample Decisionstage Online meanvalue Conventional meanvalue Difference i-statistic Probability
-0.218 1.451 2.55 0.828 0.073* 0.012**

5.66 5.68 -0.02 Intelligence 5.49 5.32 0.17 Design Choice 5.36 5.04 0.32 Notes:* significant at0.10 level;** significant atthe 0.05 level.

Discussion
The results fromSEM analyses indicate that theproposed research model is able toexplain the decision of the e-commerce channel and adequately support capabilities leadtoconsumers' the factors that satisfaction with the channel. Morespecifically, our that online research indicates for information leads to better develsupport gathering ofcriteria for decision alternatives. online the for evaluating opment Similarly, support leads to for the selection ofan optimal in alternative design phase improved support choicephase.Simon duetobounded the automated that, suggested rationality, support in choosing theoptimal alternative et [53,54]. Silverman mayhelpdecision-makers that e-commerce sitestoooften al. [50] haveobserved failto support searches buyer inloss ofsalesandofcustomer anddecision-making, business. Failresulting repeat ure tosupport the canresult inthe customers' switchcomplete decision-making process ing to a channel thatprovides bettersupportfor a particularstage in their Nunesand Cspedes[40] refer to thisas "channel decision-making process. poachof support thetype at various that byunderstanding required stages ing"andsuggest thechannel canprovide suchsupport andclosethe oftheconsumer's buying process, customer tocheck a personal channel sale.Forinstance, mayusetheonline computer thepurchase. andthen switch totheconventional channel for theprices Recognizing owner can protheneedforinformation (intelligence gathering phase),thechannel and rating Web site,thussupporting the vide linksto an independent comparison consumer's decision-making process. that online thechoicephaseleads also indicate Ourresults improved support during with Thisis consistent Achrol andKotier time toconsumers' [1],whostated savings. in will real-time the networked market information that economy, provide marketing, will translate intotimesavings foronlineconsumers. Our results also showed that the choicephaseleadstoconsumers' costsavings. online Lee [30] that during support save costsbecause they have access to competitive stated that consumers pricing Ourresults are also consistent with and information via theonlinechannel. Grover that when consumers use the online channel who stated achieve Ramanlal [21], they features need. those costsavings they onlyfor bypaying - that is mediated of ourresearch satisfaction One of thefindings higher byconof time and costs reinforces the of sumers' savings savings importance recognition

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a puronlinesupport fortheintelligence, and choicephasesforoptimizing design, forthechoicephaseis decision. Our results also showthat onlinesupport chasing deciof thepurchase withoverallsatisfaction and significantly correlated directly for the This that online decision-making process. emphasizes support sion-making itself itmaymanifest can havea direct on satisfaction, eventhough process impact Thisfinding andcostsavings. themediated effects oftime savings indirectly through is consistent in e-commerce forchannel withprevious research that found support service as driven satisfaction with the initial [4]. preference being by theonline and We found between a statistically albeit weak,difference significant, channels for thedesignphase(at the0.10 level)and offline (e.g.,brick-and-mortar) differwe found no significant thechoicephase(at the0.05 level).Interestingly, for the online These that encebetween thetwochannels attheintelligence phase. suggest in our for of channel facilitatesatleast the represented sample generally type products decision(e.g., books and CDs) - thedesignand choicephasesof thepurchasing One would than the more expect intelligence substantially phase. making process would with online channel the abundance of information the that, available, support theexplanation theintelligence also contradict provided phasequitewell.Ourresults tosupport channel thee-commerce [58] that maybe wellsuited byZengandReinartz for this theintelligence due to its search One phase superior capabilities. conjecture deal is that the used to the construct items mainly contradictory finding tap intelligence with Fortheproducts information on prices, of products. taxes,andquality getting is that form themajority of ourresearch sample(e.g.,CDs andbooks),thisprocess both for online and stores. This be bricks-and-mortar relatively straightforward may thereason we do notsee significant differences the twochannels. Therebetween why thisareaofresearch needstobe explored further. fore, The implications of ourfindings forbusinesses thee-commerce channel utilizing arethat, must if want to attract first, they support buyer decision-making phases they newcustomers andkeepexisting ones.Specifically, should they provide capabilities to support theintelligence ourresearch indicates that onlinebusiphase,giventhat nessesare notperforming as well as thebricks-and-mortar in thisarea.In channel this e-commerce site must that realize providing support, professionals appropriate search anddecision must be implemented toaccomplish this technology support goal. Forinstance, online channel canprovide toolssuchas the operators price comparative orPricegrabber.com, others. the Second, engines provided byCNet.com among given roleoftheonline channel as an intermediary toreduce search channel costs, operators can provide features andrecommend items so that onlineshoppers can comparative savetime andeffort inexercising their choiceofthefinal alternatives. Providing supfordecision-making can also helpe-commerce channel port operators gaininsights intoconsumer the critical decision as wellas thosefeatures that preferences, points to them in tousethe channel. Suchlearning ofthe decision-makers' appeal continuing is highlighted in addition to theautoprocess benefit, bySimon[52] as a significant mation ofdecision For from the decision instance, support technologies. learning process can lead toenhancements of shopping and portals (e.g.,activebuyersguide.com

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UNDERSTANDING DETERMINANTS OF ONLINE CONSUMER SATISFACTION

13 1

satisfaction consumer toincreased Gomez.com), byoffering appropriate guidleading intheprocess. anceat specific steps as is the has somelimitations. this theabovefindings, First, study Notwithstanding thecomfort level and thedecisionit is quitepossiblethat case withsuchstudies, is different than in thewider consumers ofe-commerce population making process our 86 of As mentioned in our the earlier, responpercent sample. among participants muldidnotinclude online areprevious dents Second,ourresearch design shoppers. of the cross-sectional nature Given the of same-product purchases. tipleinstances to andis notintended modelrepresents ourresearch data, relationships hypothesized CDs andbookseventhough most be causalinnature. Third, they bought respondents online with Thesearecategories choicestobuyother weregiven high purproducts. of other in the context be validated needto ourfindings and therefore chase share, ofpurchases. types that it is important research. forfuture has severalimplications Our study First, the online difference between no studies research future why significant investigate fortheintelligence is found channels and offline phase.One wouldexpectonline deto makea soundpurchasing information tobe able togather necessary shoppers the online and available information of amount the enormous superior cision, given can studies research channel. of thee-commerce Second,future search capabilities casual relationships to examine amongthevarious designs longitudinal incorporate How theconsumer's research. in thepresent studied constructs phaseis intelligence online for purchase through previous acquired by knowledge supported, example, future studies research wellina longitudinal canbe captured Third, decisions design. hereto examine in theresearch theframework can also utilize presented provided of products online between differences satisfaction and purchases decision-making andluxury and consumer and andservices, products products, products physical digital of antecedents the to examine can also be expanded thisresearch Fourth, products. intersuchas electronic business-to-business satisfaction channel (B2B) users among in the that constructs Other andexchanges. mediaries decision-making steps support infuture research. satisfaction andchannel mayalso be examined process

andContribution Summary
tothechoiceofthe process anditsrelationship The consumers'decision-making a setofconstructs we present Inthis research arenotwellunderstood. channel online consumers' and forunderstanding supporting and a method prodecision-making consumers' for theonline constructs (i.e. cess.Taken steps decision-making together, time variables and (cost savings), savings, choice), performance design, intelligence, we basis forourmodelthat theconceptual satisfaction channel andoverall provide consumers. online from data validate using subsequently a theoretical we present contributions: makesthefollowing First, The study perconmodel online we which from work on based 52]), [51, (e.g., previous spective, is thefirst this bestofourknowledge, To the sumers' empirical decision-making steps.

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in thee-commerce arenathat study stepsbased upon investigates decision-making we have addednew conSimon'smodel.Second,also based on previous studies, from structs timesavings, andoverallsatisfaction derived using (e.g.,costsavings, to the theonlinechannel) are related and hypothesized as to how theseconstructs choicephaseof Simon'sdecision-making model.Again,to thebestof ourknowlthat does so. edge,thisis thefirst study We we have grounded ouroverallresearch in transaction-costs literature. Third, haveshown howtheaforementioned these conconstructs andrelationships among that the structs areconsistent with this literature. we haveempirically shown Fourth, ofthe research modelis capableofexplaining decision proposed capabilities support with thechannel. online channel andthefactors that consumers' satisfaction impact leads Wehavealso demonstrated the that online for process decision-making support to consumers' timesavingsand cost savings. This support can also have a direct themeon satisfaction, eventhough itmaymanifest itself impact indirectly through oftime diated effects and cost savings savings. we contribute newideasfor Fifth, whyandhoworganizapractice byillustrating tions(e.g., onlinechannel toolsforproviding comparative operators) mayemploy consumer features andprices to saveconsumers' time andcost,andtoolstoincrease when the satisfaction with willbe better served theonline channel. Online consumers online channel and then understand how consumers make decisions, proproviders videappropriate Forinstance, a to support thedecision-making capabilities process. consumers abandon thetransaction after that provider mayrealizethat recognizing anitem is priced than that ofa competitor, orthecostofshipping andhandling higher is toohigh. In theformer the can provide suchas case, channel provider capabilities, andfeatures, thus in theintelligence comparative prices supporting phase.Similarly, thelatter can the case, thechannel managers support designphasebyincorporating theshipping andhandling costsfrom different shippers (e.g.,FedEx,UPS). we contribute newdirections for future research. Finally, byproposing undertaking Werecommend that future research studies no significant differ(1) investigate why ence between theonlineand offline channels is found fortheintelligence phase, inthe studies areatoexamine causalrelationships, and(3) ex(2) conduct longitudinal aminetheantecedents of channel satisfaction amongB2B userssuchas electronic intermediaries andexchanges.

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Variables Appendix. Decision-Making Stages:Intelligence


wereclearto me. ofthepurchase decision 1. The objectiveis) 2. It was easy forme to getrelevant (price,taxes,etc.) information quantitative neededto makethepurchase. metogetrelevant 3. It was easyfor usefulness, etc.)informaqualitative (quality, tionneededto makethepurchase.

Decision-Making Stages:Design
alternatives. various to identify 4. I believeitwas possible or price)to make criteria 5. It was easyforme to establish when, (suchas where, decision. thepurchase downmychoices. I had,I was able tonarrow theinformation 6. With

Stages:Choice Decision-Making
alternatives. metoevaluate thevarious for itwas possible 7. I believethat didnottakeme very alternatives ofthevarious 8. Evaluation long. topickthebestalternative. 9. Itwas an easydecision

CostSavings
oftheproduct intotal 10. Thedifference etc.,if (including shipping, price purchase channel? andonline conventional between applicable)

TimeSavings
in making of minutes) number in time 11. The difference spent (approximate spent channel? andonline conventional between this purchase

Satisfaction
online with this I was satisfied 12. Overall, experience. to others. online recommend 13. I strongly shopping ofmychoiceeasily. me tobuytheproduct for 14. Itwas possible

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