Factors that influence customer

satisfaction of online shopping among

youth in Malaysia.

Members :
1. Daniel Chen Yii Legaria Sim ( 16030686 )
2. Dhakshnamurti Manirajan ( 16039067 )
3. Jinoth Pillai ( 16032609 )
4. Mahranul Hoque Chowdhury ( 16012106 )
Contents
1.0 Background..........................................................................................................................2

2.0 Problem definition...............................................................................................................3

3.0 Research Questions & Objectives........................................................................................4

3.1 Research questions...........................................................................................................4

3.2 Research objectives.....................................................................................................4

4.0 Literature Review.................................................................................................................5

5.0 Hypothesis Formulation.......................................................................................................6

6.0 Theoretical Framework........................................................................................................7

7.0 Methodology........................................................................................................................8

8.0 Quantitative Data Analysis...................................................................................................9

8.1 Table (1) Demographic information of the respondents.................................................9

8.2 Reliability........................................................................................................................11

8.20 Table (2) Product Quality..........................................................................................11

8.21 Table (3) Delivery Guarantee....................................................................................12

8.22 Table (4) The Offers..................................................................................................14

8.23 Customer Satisfaction...............................................................................................16

8.3 Multiple Regression Analysis..........................................................................................17

8.4 Normality........................................................................................................................19

9.0 Discussion...........................................................................................................................20

10.0 Conclusion........................................................................................................................21

11.0 Recommendations...........................................................................................................22

12.0 References........................................................................................................................23
1.0 Background

Shopping has been a part our daily livessince we can remember, whether it’s for groceries or
accessories. In this era where technology and businesses continuously evolve, so does shopping.
Today where the era of technology is at its peak, many people have resorted to shopping online as
compared to the traditional forms of shopping. [CITATION Gro16 \l 2057 ]Online shopping is a type
of e-commerce where consumers may purchase goods or services directly from the seller through
the internet.

Malaysia is a country that has a high purchasing power. Malaysia’s population also has a higher
proportion of youth as compared to the average ratio of other countries. And with the
implementation of online shopping, the consumer behaviour among youth in Malaysia has changed
drastically over the past few years. Today, nearly half the population in Malaysia purchase goods or
services online at least once a month.[ CITATION Eug16 \l 2057 ]

Online shopping has created a new competitiveness among companies. Companies now
compete with their offers online, how much information is provided concerning their products, as
well as secure payments methods. The age of online shopping brings many benefits such as
convenience and variety, but it also has downsides such as fraud and delays in delivery.[CITATION
Gro16 \l 2057 ]

There are many factors that influence customer satisfaction concerning online shopping, but the
main factors that this report will be looking into are product quality, delivery guarantee and the
offers offered by companies.
2.0 Problem definition

After conducting online research as well as reading through journals and articles on online
shopping and customer satisfaction, we’ve concluded that the main issue we’ve faced is most tests
and researches are conducted in Oman. [ CITATION Fir18 \l 2057 ] Consumer behaviour varies from
country to country as lifestyles are different as well as the pricing of household and luxury items, and
price is one of the biggest factors that affect consumer behaviour [ CITATION Sta16 \l 2057 ];
although online shopping can be said to be similar all over the world, target markets vary according
to the market and economy, and such the approach to customer satisfaction of online shopping
varies from country to country. And because of this, it is difficult to conclude whether the
information we have found is relevant in Malaysia. In summary, the research gap of information in
Malaysia is the primary issue.
3.0 Research Questions & Objectives

3.1 Research questions

1. Does product quality have a positive impact on customer satisfaction of online shopping
among youth in Malaysia?
2. How does delivery guarantee impact customer satisfaction of online shopping among youth
in Malaysia?
3. What kind of impact do the offers offered by companies affect customer satisfaction of
online shopping among youth in Malaysia?

3.2 Research objectives

1. To determine the impact product quality has customer satisfaction of online shopping
among youth in Malaysia.
2. To identify the impact that delivery guarantee has on customer satisfaction of online
shopping among youth in Malaysia.
3. To study theimpact that offers offered by companies have on customer satisfaction of online
shopping among youth in Malaysia.
4.0 Literature Review

It was found that the simplest means to influencing customers is through online retailing. In
the year 2000, the internet penetration rate in Malaysia was 15%. And by 2005, the percentage
increased drastically to 37.9 %. By 2007 it was nearly half the entire population. Today it is over 90%
of the entire population.[ CITATION Gro16 \l 2057 ]

Online shopping is a trending phenomenon that was derived from the continuous growth of
the internet. It began with the penetration of an immense market, online marketing. Companies
began advertising and promoting their products or services through websites and ads. The very first
transaction online was by NetMarket in 1994, and by 1995 Amazon and eBay was introduced.
Amazon and eBay took the net by storm and are now the biggest names in the market relating to
online shopping. [ CITATION wik18 \l 2057 ]

Customer satisfaction can be said to be a form of evaluation on the post-purchase

experience of shopping, in comparison to the customer’s original expectations. A satisfied customer
simply signifies that the expectations on the performance of the goods or services were met, and
hence the customer will be encouraged to re-purchase the product or service in the near future.
[ CITATION Ism16 \l 2057 ]

It was also found that the product quality that is perceived has a major impact on the
purchase-decision-making process, and so has a direct impact on overall customer satisfaction.
Through research it can be seen that customer satisfaction increases or decreases based on the
overall quality of the final product and the quality of the packaging. [ CITATION Fir18 \l 2057 ] It is
essential to understand that the overall quality of a product is perceived from the point of view of
the customer and not the company selling the product. In simple terms, if the customer’s perception
of the products quality is in line with their expectations, then to them the product is of good quality
and customer satisfaction is reached. [ CITATION Ism16 \l 2057 ]

After conducting thorough research and surveys on the factors that influence customer
satisfaction of online shopping, it can be seen that the products overall quality, the offers being
offered by the company, and the delivery performances are all key factors that influence customer
satisfaction. [ CITATION Fir18 \l 2057 ]
5.0 Hypothesis Formulation

H1: The better the overall quality of the product is after purchased online, the more satisfied the
customer will be.

H2: The safer and more reliable the delivery of a good or service purchased online is, the more
satisfied the customer will be.

H3: The more or higher the offers and promotions are offered when purchasing goods or services
online, the higher customer satisfaction will be.
6.0 Theoretical Framework

 Product
quality

CUSTOMER SATISFACTION
 Delivery
guarantee

 The offers
7.0 Methodology

After conducting the necessary research that covers our literature review, we shall
now continue with the quantitative analysis between customer satisfaction and product
quality, delivery guarantee, and the offers.

Our data will be obtained through the method of an online survey, where our
targeted respondents will be youth in Malaysia. We chose to perform this survey on the
youth as we ourselves are aged between 20-22, and so the respondents can be obtained
more effectively through friends and family, and we will be able to relate directly with our
findings. We chose the method of online surveys as it is the most efficient way to obtain a
high number of respondents in the least amount of time possible. The survey will be in the
form of a questionnaire with 27 questions, separated into 5 sections. Each section will
contain questions regarding the three independent variables including one section for
demographic questions such as age, sex, etc.

We will have one week to distribute our surveys and obtain back our responses, we
aim to obtain at least 200 complete responses. Once we have our necessary amount of
responses to obtain reliable findings, we will convert our responses into the SPSS system
where we can conduct an analysis and obtain our data. With the data on hand, we can
finally begin testing our hypotheses.
8.0 Quantitative Data Analysis

8.1 Table (1) Demographic information of the respondents

From the frequency tables above, we can see that nearly 96 % of our respondents are
between the age of 18-30. We can also see that 65% of our respondents are male. Other than that,
we can see that majority of our respondents are at the educational level or diploma or bachelor’s
degree. And finally, 96.4% of our respondents are Malaysian.
 From the tables above, we can see that 96% have shopped online before, and nearly half the
sampling population frequently shop online. Finally, we can also see that 60% of our respondents are
un-employed.
8.2 Reliability

8.20 Table (2) Product Quality

 Reliability Statistics

Cronbach's Alpha N of Items

.658 5

As we can see from the tables above, we can see that product quality is important to the
respondents during the purchasing-decision making process when shopping online. The assurance of
product quality being the most important, followed by being able to obtain reliable information on
the product or brand.
Through the reliability statistics table, we can see that the Cronbach’s alpha is close to 0.7,
hence it is acceptable.[ CITATION Hai06 \l 1033 ]

8.21 Table (3) Delivery Guarantee

 Reliability Statistics

Cronbach's Alpha N of Items

.666 5

From the tables above we can conclude that delivery guarantee is important to the
respondents when shopping online. The flexibility of the delivery as well as the deliverance of the
package being on time as assured, are the most important factors to the respondents when
shopping online when regarding delivery guarantee.

Through the reliability statistics table, we can see that the Cronbach’s alpha is close to 0.7,
hence it is acceptable.[ CITATION Hai06 \l 1033 ]
8.22 Table (4) The Offers
 Reliability Statistics

Cronbach's Alpha N of Items

.646 5

From the tables above, we can see that offers play a big part in the purchase-decision
making process of our respondents when shopping online. The offers offered when online shopping
outweighing the offers offered when traditional shopping, is the most significant to the respondents.
We can also see that our respondents are encouraged to purchase more goods or services when
there are discount coupons being offered.

Through the reliability statistics table, we can see that the Cronbach’s alpha is close to 0.7,
hence it is acceptable. [ CITATION Hai06 \l 1033 ]
8.23 Customer Satisfaction

Reliability Statistics

Cronbach's Alpha N of Items

.680 5
 From the table above we can see that overall our respondents are satisfied with the
assurance of delivery and product quality when they shop online. And also that they are happy with
the service and would shop online again in the future.

Through the reliability statistics table, we can see that the Cronbach’s alpha is close to 0.7,
hence it is acceptable.[ CITATION Hai06 \l 1033 ]

8.3Multiple Regression Analysis

 From the multiple regression analysis, the ANOVA table shows a significance of 0.000
which proves there is a positive linear relationship between the independent variable and the
dependent variable. Through the coefficients table we can also see that the tolerance value is above
0.1 and the VIF value is below 10.0, and hence there is no issue of multi-collinearity in this analysis.
And finally, the coefficients table also shows that the significance value for the independent
variables are below 0.05, hence accepted.

From the tables above, we can conclude that there is a relationship between customer
satisfaction and product quality, delivery guarantee & the offers. Hence, H1, H2, and H3 are all
accepted.

8.4 Normality

Through the histogram diagram above, we can see that the bell-shaped curve is
normal and is within +/-3 standard deviation from its mean.
9.0 Discussion

The results show that the increase in overall product quality increases customer
satisfaction among youth in Malaysia when shopping online, this is because a standardized quality
among the products offered by the company emphasize reliability hence increasing satisfaction.
[ CITATION Ism16 \l 1033 ]

The results also show that the better the offers offered by the company, the higher
customer satisfaction will be; Also, delivery guarantee also increases customer satisfaction among
youth in Malaysia. This is because the overall price of a product and delivery assurance creates
customer value, in which means that the product quality is relative to the low price as well as
delivery assurance, and so the functional value is ensured. [ CITATION Ism16 \l 1033 ]
10.0 Conclusion

Through our findings, we can firstly conclude that product quality and delivery guarantee
has a direct influence on customer satisfaction when shopping online among the youth in Malaysia.
The better the overall product quality is perceived by the customer, the more satisfied they are; If
the delivery can be assured and follows through, the customer will end up satisfied.

We can also conclude that reliable information regarding the brands or products are
obtainable. Other than that, the offers offered while online shopping do outweigh the offers offered
when traditional shopping; It is agreed that shopping online is more convenient as well as faster as
compared to traditional shopping.

And most importantly, we have come to the essential conclusion that our respondents are
satisfied when they shop online and will shop online again in the future.
11.0 Recommendations

Our first recommendation for companies that want to implement online shopping is to make
their variety of products available online without compromising the overall quality of their products.
Our second recommendation is to ensure that the delivery quality is ensured and consistent as this
will improve customer satisfaction and hence build customer loyalty with your brand, which is
essential to any business. Our final recommendation is to ensure that the offers being offered online
are equivalent or better than the offers offered in traditional retail shops, as this will ultimately
encourage customers to shop online more.
12.0 References
1) [ CITATION Fir18 \l 1033 ] Factors influencing customer satisfaction of online shopping
among youth in Oman.
https://www.researchgate.net/profile/Firdouse_Khan/publication/328582888_Factors_influ
encing_customer_satisfaction_of_online_shopping_in_Oman_-
_Youth_perspective/links/5bd74ed94585150b2b8f00d0/Factors-influencing-customer-
satisfaction-of-online-shopping-in-Oman-Youth-perspective.pdf?origin=publication_detail\

2) [ CITATION Eug16 \l 1033 ] TheStaronline. https://www.thestar.com.my/business/business-

news/2016/06/27/online-shopping-uptrend/

3) [ CITATION Gro16 \l 1033 ]https://www.ukessays.com/essays/marketing/growth-of-online-

shopping-in-malaysia-marketing-essay.php

4) [ CITATION wik18 \l 1033 ]https://en.m.wikipedia.org/wiki/Online_shopping

5) [ CITATION Ism16 \l 1033 ]The impact of product quality and price on customer satisfaction
with the mediator of customer
valuehttps://mail.google.com/mail/u/0/#inbox/QgrcJHsHkwkcVZFLXTsTnVrgHvlWqPvtvwl

6) [ CITATION Sta16 \l 1033 ]

https://mail.google.com/mail/u/0/#inbox/QgrcJHsHkwkcVZFLXTsTnVrgHvlWqPvtvwl

7) [ CITATION Hai06 \l 1033 ]Multivariate data Analysis (6th ed.)