In this paper, we address the following questions that are becoming increasingly important to managers in service industries: How are the levels of customer satisfaction and loyalty for the same service different when chosen online versus offline? What are the unique drivers of online customer satisfaction? How is the relationship between customer satisfaction and loyalty in the online environment different from that in the offline environment? We propose a conceptual framework and develop hypotheses about the drivers of customer satisfaction and loyalty, the relationship between satisfaction and loyalty, and the role of the online medium. We test the hypotheses through a simultaneous equation model using two data sets of online and offline customers in the lodging industry.

The results show that whereas the levels of customer satisfaction for a service chosen online is the same as when it is chosen offline, loyalty to the service provider is higher when the service is chosen online than offline. Service encounter satisfaction for a service chosen online is higher when information content at the web site is deeper. In addition, the online medium also strengthens the relationship between overall satisfaction and loyalty, and appears to foster a reciprocal relationship between loyalty and satisfaction, such that satisfaction increases loyalty, which in turn, reinforces satisfaction.  These results suggest that, contrary to popular fears, the online medium provides an attractive opportunity for service providers to acquire loyal customers. The results imply that online service providers should not only invest in service quality improvement initiatives, but also maintain web sites that offer a good online experience for their customers. They should also focus directly on loyalty-building initiatives, such as frequent online user reward programs.

Author(s): Fareena Sultan, Glen Urban, Venky Shankar and Yakov Bart

This research investigates the determinants and role of consumer trust in e-business. It examines consumer perceptions of trust in a Web site and addresses the following key research questions: What factors influence consumer trust in a Web site and what specific Web site trust cues are associated with these factors? How does trust affect consumer behavioral intent on a Web site? To address these questions, we develop a conceptual model that links consumer perceptions of Web site characteristics, consumer characteristics and demographics to perceptions of trust in a Web site, and trust to behavioral intent related to a Web site. We also examine whether trust mediates the relationship between Web site and consumer characteristics and behavioral intent related to the Web site. We test our hypotheses in a large-scale empirical study that estimates this model from 6831 consumers across 25 Web sites and eight industry categories. We validate the model using a holdout sample. The results show that Web site, consumer, category and demographic variables can explain 76% of the variance in trust. Web site characteristics such as privacy and security, navigation, presentation, brand, and advice account for as much as 98% of this explained variance in Web site trust. Surprisingly, over 80% of the explained variance in Web trust is due to factors other than privacy and security—mainly navigation, brand, advice, absence of errors, and presentation. We also find that trust mediates the relationships between Web site and consumer characteristics and behavioral intent related to Web sites. The results offer important implications for Web site strategies that include the manipulation of factors influencing Web site trust to favorably impact consumer behavior at the Web site.

Determinants of Trust in e-Business

Book Review: Cutting Edge: Gillette’s Journey to Global Leadership
Author: Gordon McKibben

This book documents the story of Gillette, one of the most successful global consumer packaged good companies that is well known for product innovation. It offers insights on the innovation, acquisition, and global strategies of Gillette.  It is chronologically well organized and is filled with interesting examples and facts, as can be expected from its journalist author, Gordon McKibben. A few limitations apart, the book offers important lessons for managers.   First, it is possible to succeed through greater focus on quality and innovation over price leadership.  Second, having a global vision for a new product may be the key to long-term leadership.  Finally, successful growth strategy involves pursuing a combination of acquisition and home-grown innovation.

http://www.amazon.com/exec/obidos/ASIN/0875847250/

The detailed review was published in Journal of Product and Innovation Management – Reviews Innovation and Entrepreneurship International Business Marketing NO 4 .

Cutting Edge: Gillette’s Journey to Global Leadership

This course is designed to give you a good understanding of strategic digital business thinking for start-ups and bricks and mortar corporations (bricks and clicks businesses). It will cover digital business strategy formulation and implementation of programs to meet with the needs of the customers, while achieving the business objectives. The focus will be on understanding of the basic digital business concepts and frameworks and application of the concepts in the form of case analysis, discussion of real-world examples, and development and presentation of digital business ideas and plans. The course will emphasize the following key elements: 1. Strategic analysis of digital business opportunities: Issues of focal concern include analysis of the e-business space including markets, business models, company, competitors and customers, segmentation analysis, target segment selection, and product positioning. 2. Digital business steps: The important elements include digital business vision, digital strategy, digital business model, marketing, and organization in the digital environment. 3. Digital business plan: This includes the process of writing and presenting a business plan for a digital business venture. It involves your team coming up with a digital business idea or concept, writing and presenting a detailed business plan based on that concept. The course will also highlight special topics in marketing such as B2B, B2C and wireless in the form of cases and several industry examples. An innovative feature of this intensive course is a presentation of your business plan summary to venture capitalist(s) and to other digital business experts and an ability to receive feedback from them.

Digital Business Strategy SYLLABUS Winter 2003

This work was a finalist for the 2006 Marketing Science Practice Prize.

http://www.informs.org/Edu/MarketingScience/

We develop a model for estimating, tracking, and managing brand equity for multicategory brands based on a combination of customer survey and financial measures for each product category. We apply this model to measure the equity of the flagship brand of a leading insurance company and its leading competitor with the same brand name in multiple product categories, allowing for spillover effects of the brand from one category to another. Furthermore, we examine the relationships between advertising and brand equity and between shareholder value and brand equity, using longitudinal data on advertising, brand equity, and shareholder value, and build a decision support simulator. Our model provides reliable estimates of brand equity and our results show that advertising has a strong long-term positive influence on brand equity. This brand equity model and simulator has enabled the company reallocate its advertising resources to improve brand equity and shareholder value, and offer better guidance to managers, analysts, and investors.