Ethics and Customer Loyalty: Some Insights into Online Retailing Services
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Ethics and Customer Loyalty: Some Insights into Online Retailing
Services
Presented at 4th Biennial International Business
Banking & Finance Conference
June 23, 2011
Hilton Trinidad & Conference Centre
Trinidad & Tobago
Meena Rambocas & Professor Surendra Arjoon
Department of Management Studies, U.W.I. St. Augustine
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INTRODUCTION
• The Internet : A viable retail channel
• The Internet: An environment for unethical behaviour
• Ethical Retailing
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AN EXAMPLE OF AN ETHICAL DILEMMA
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ETHICAL ISSUES
• Privacy • Security• Deception• Reliability • Trust• Customer exploitation
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CUSTOMER LOYALTY
• What is Customer Loyalty
• Customer Loyalty – A strategic tool
• Customer Loyalty- association with quality, customer satisfaction, trust, brand affect and brand value
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RESEARCH QUESTIONS
(1) What factors contribute to Customers Perception
of Online Retailers Ethics?
(2) Does Customers Perception of Online Retailers
Ethics have any effect on Loyalty?
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RESEARCH METHODOLOGY
• Sampling Technique: Convenience sample• Sample Size: 200• Sample Selection Criterion: Purchase at least 1
item online over the last 3 months• Survey Instrument: Self-Administered
Questionnaire• Survey Scale:
– The Ethics scale : CPEOR scale– The Loyalty scale: SERVLOYAL scale
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DATA ANALYSIS: DESCRIPTION OF SAMPLE
Gender SampleMale 38 %
Female 62 %
Age SampleUnder 20 14
20-29 6630- 39 11
40 and Over 9
Education level %Undergradate 61
Post Graduate 34
Post Graduate PhD 5
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DATA ANALYSIS: EXPLORATORY FACTOR ANALYSIS
• Reason for EFA
• Items retained for further analysis met the following criteria:
– All inter-correlation coefficients were statistically significant at a 95% level of testing
– Items did not load on more than two factors.
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ROTATED FACTOR MATRIX
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Security & Reliability
Product Availability
Misleading Tactics
Advantage of customer
Trust
Ethics Customer Loyalty
.71
.17
.32
.71
.73
.59
Re-Specification of the CPEOR Model
.94
.74
.61 .67
.35
.53
.51
.87
.55
Customer perception of Online Retailers Ethics
Model
Chi Sq = 48.395DF = 40GFI = .958AGFI = .930NFI = .940
.82
Privacy Policy
Security Features
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DISCUSSION AND CONCLUSIONS
• Positive relationship between CPEOR ethics and Customer Loyalty
• T&T’s CPEOR ethics dependent on :
– Security and Reliability– Trust
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DISCUSSION AND CONCLUSIONS (Con’t)
Security and Reliability• Privacy Policy
•Security Features
• Product Availability
Trust•Misleading Claims
•Perceptions of being exploited
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SIGNIFICANCE OF STUDY
• Provide insights for online retailers targeting Caribbean Customers.
• Identify key indicators Caribbean Customers consider essential for online sites
• Provide an understanding of indicators that contribute to Customers Perception of Online Retailers Ethical Practices
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LIMITATIONS & OPPORTUNITIES FOR FUTURE RESEARCH
• Sampling technique
• CPEOR model and key performance
• Can ethical perceptions vary by demographical and geographical consumer characteristics?
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THANK YOU