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Empirical Study on Electronic Service Quality

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 Noor Habibah Arshad
habibah@tmsk.uitm.edu.my
Tel: 603-5521124

Fauziah Ahmad
fauziah@tmsk.uitm.edu.my
Tel: 603-55211204

Norjansalika Janom
norjan@tmsk.uitm.edu.my
Tel: 603-55211204

Faculty of Information Technology & Quantitative Sciences

University of Technology MARA (UiTM)
40450 Shah Alam, Selangor
Fax:6 03-55435501

JANUARY - JUNE 200 8 VOL. 2 NO. 1

EMPIRICAL STUDY ON ELECTRONIC SERVICE QUALITY

ABSTRACT

Creating business over the Internet seems relatively easy to some companies. However, to ensure flawless
integration of processing between consumers and the business is not merely an easy task to handle. If an
online company is to be successful, all aspects of its service must be closely integrated in terms of systems,
networks, procurement, shipping and consumer support. Since service quality is increasingly recognised as an
important aspect of electronic commerce, many practitioners and academicians focused on how to improve
online services to attract potential consumers and on how to retain current consumers. Most organisations
have encountered problems and challenges in furnishing Internet service quality. This paper presents empirical
29
findings on consumers’ and organisations’ perceptions of Internet service quality with respect to transportation
service companies in Malaysia. The result of the empirical study indicated that reliability was the most important
determinant to consumers and appearance is the most important determinant to the organisations. The
findings and the result of the empirical study would be used to provide guidelines and references for e-retailers
on online retail service quality.
Keywords: e-Service quality, e-Service quality perceptions, service quality guidelines

1. INTRODUCTION area. Not all Malaysians are exposed to the online

e-Business or e-Enterprise is the term used to define a
business that has a virtual presence or Web site on the
Internet either to promote brand awareness or enable
e-Commerce [2]. Meanwhile, electronic commerce refers
generally to all forms of transactions relating to
commercial activities, including both organisations and
individuals that are based on the processing and
transmission of digitized data.
Since service quality is increasingly recognised as an
important aspect of electronic commerce, many
practitioners and academicians have focused on how
to improve online services to attract potential
consumers and on how to retain current consumers.
Most organisations have encountered problems and
challenges in furnishing Internet service quality
In Malaysia, Internet retailing is still a new business
transaction over the Internet and most often they are
still hesitant to make on-line purchasing due to
problems associated with security, reliability, threat of
fraud, and etc. Information search and purchasing on
the Internet also require a certain level of computer
literacy which is not required in a traditional retail
space. Without this level of technical literacy, consumers
can become frustrated and purchases maybe aborted
[9].
The purpose of the study is to determine consumers’
and organisations’ perceptions on the Internet service
quality of online ticketing in Malaysia’s bus and train
transpor tations. This study used the eleven
dimensions of perception proposed by Santos [13]
which are: reliability, security, efficiency, ease of use,
information, appearance, linkage, structure and layout,
 support, communication and incentive to explore the
reliability of each dimension with the respondents
perception. This research will find out which area of
Internet Service Quality dimensions match with both
of these groups perception. The findings and the result
of the empirical study could be used to provide
guidelines and references for e-retailers on online retail
service quality.
PUBLIC SE CTOR ICT M ANAGE M E N T RE V I E W
2. ON-LINE TICKETING IN MALAYSIA’S
TRAIN AND BUS WEBSITES
Train and bus ser vices have been operating and
became the main public transportation in Malaysia
decades ago. The mode of payment for ticket purchase
has always been cash and direct at the counter. Only
lately, when the Internet has penetrated into most
businesses activities, this ticket transaction process has
also been modified. Currently, most of the bus and train
operators have websites, establishing themselves over
the Internet and, at the same time, offering information
to the customers. They are aware that their existence
in the Internet is crucial since most consumers are on-
line now.
Keretapi Tanah Melayu Berhad (KTMB) is the only railway
30
operator in Malaysia, which offers passengers freight,
courier, property rental, lease, and container haulage
services. For passengers, KTMB offer long and short
distance travel using trains and commuter services.
KTMB, even though wholly owned by the government
of Malaysia, is run as a private sector organisation which
is responsible for its own revenue and operations.
Operation for more than 120 years, KTMB (previously
known as Malayan Railway Administration) trains has
undergone various changes from first steam locomotive
in 1885 to diesel engines in 1958 and now electrified
rail system in 1995. Not only changes to the train and
locomotives, but the services provided have also
matured through time, from manual ticketing to
e-Ticketing system [7].
In order to serve customers better, KTMB has launched
e-Ticket system in October 2001 for the first phase,
which was developed by TATA Consultant from India.
Then, in November 2004, the second phase of e-Ticket
was fully developed by it’s internal sources [7]. This
second phase of e-Ticket is a better implementation
than the first because the focus was towards fulfilling
customers’ needs and wants. e-Ticket aims at using
the Internet as another medium for sales and
marketing purposes. The customers choose and pay
their ticket electronically by interacting with the ticket
server of KTMB. Then the tickets are transmitted
electronically where customers have the options of
printing out the tickets by themselves or have the
tickets printed at the counters before departure. A
formal identification on ID is necessary when
passengers board the train.
Meanwhile, bus operators in Malaysia are regulated by
the Ministr y of Transportation and controlled by
Lembaga Perlesenan Kenderaan Perdagangan (LPKP), an
agency in charge of commerce vehicles’ permit. Some
of the bus operators (108 companies) are represented
by Pan Malaysia Bus Operator Association (PMBOA) [11]
and some are represented by Persatuan Pengusaha Bas
Ekspres Melayu. Currently, it is estimated that around
150 companies are operating bus transportation
services in Malaysia [10]. Some of the bus operators
have already adopted IT into their organisations by
having websites and systems to handle their processes
and transactions. Some of them are more advanced by
upgrading their transaction systems and enabling on-
line ticketing through their websites. Nonetheless, some
of them are contented with their present conditions,
profiting from conventional ways of selling bus tickets;
eliminating the need to venture into new channels of
sales and marketing.
The most experienced and successful companies using
the Web are beginning to realise that the key
determinants of success or failure are not merely Web
presence or low price, but instead centre on delivering
electronic service quality (e-SQ) [14]. The key element
to business achievement is quality (Cox and Dale, 2001).
Without the quality management approach that
guarantees quality from its systems, staff and suppliers,
a business will not be able to deliver the appropriate
level of service quality to satisfy its consumers [2]. Thus,
the reason as to why this research was conducted in
order to gather perceptions of e-Service quality and to
improve the features in the transportation’s websites.
3. INTERNET SERVICE QUALITY
Developed from the Internet marketing and the
traditional service-quality literature, the concept of
internet service quality in e-Commerce can be defined
as the consumers’ overall evaluation and judgment of
the excellence and quality of e-Service offerings in the
virtual marketplace [14]. Zeithaml et al. [14] uncovered
11 dimensions of e-Service quality which were similar
to those found in their previous research on service
quality in the pre-Internet age including reliability,
responsiveness, access, assurance/trust, security/privacy,
and customisation /personalisation. However, some new
dimensions related specifically to technology were
revealed – ease of navigation, flexibility, efficiency, site
aesthetics, and price knowledge. In addition, personal
service was not considered critical in e-service quality
except when problems occurred or consumers were
making complex decisions [9].
Consumers often divide service-quality dimensions
into various sub-dimensions [1]. Santos [13] proposed
that e-Service quality consists of an incubative
dimension and an active dimension. The active
dimension and the incubative dimension, each consists
of five or six related overlapping determinants. The
active dimension can be defined as the good support,
fast speed, and attentive maintenance that a Web site
can provide to its consumers. It consists of reliability,
efficiency, support, communications, security, and
incentives. The active dimension must be achieved
consistently throughout the period that a Web site
remains active. It can increase consumer retention and
encourage positive word-of-mouth referral. While the
incubative dimension is defined as the proper design
of a Web site, how technology is used to provide
consumers with easy access, understanding and
attractions of a Web site. The majority of elements in
the incubative dimension can be developed before a
Web site is launched. It consists of ease of use,
appearance, linkage, structure and layout, and content.
The Web’s interactive features, multimedia content, and
capacity for inexpensive customisation have
increasingly attracted the attention of commercial
enterprises [8, 3]. Non-price competitive advantages
have become ever more critical because instant price
and technical comparisons on the Web are essentially
cost-free and feasible for consumers [6]. A sense of
loyalty that comes from an online company offering
better service than its competitors is the determining
factor in consumer loyalty [12]. Therefore, focusing on
quality of service is the primary concern of Internet-
based e-Commerce [4].
The Internet, if properly utilised, can be a powerful tool
to increase overall service offerings and create a higher
standard in various industries [5]. e-Service quality can
not only offer online commercial companies
competitive advantages in the market place, but also
involve consumers in the product-development process,
through quick feedback and enhanced consumer
relationships.
This research works to evaluate the perceptions of
consumers and transportation organisation based on
the eleven dimensions that was proposed by Jessica
Santos to represent the overall quality of Internet retail
service which are reliability, security, efficiency, ease of
use, information, appearance, linkage, support, structure
and layout, communication and incentives.
4. RESEARCH MODEL
Based on Jessica Santos’ model of e-service quality,
research model in Figure 1 was proposed. In this study,
all the eleven dimensions were proposed as the factors
in determining Internet Service Quality in online
transportations ticketing.
In line with this research finding, the following
hypotheses were proposed:
JANUARY - JUNE 200 8 VOL. 2 NO. 1
H1: The consumers’ perceptions on reliability of
e-Service quality is positive
H2: The consumers’ perceptions on security of
e-Service quality is positive
H3: The consumers’ perceptions on efficiency of
e-Service quality is positive
H4: The consumers’ perceptions on ease of use
of e-Service quality is positive
H5: The consumers’ perceptions on information
of e-Service quality is positive
H6: The consumers’ perceptions on appearance 31
of e-Service quality is positive
H7: The consumers’ perceptions on linkage of
e-Service quality is positive
H8: The consumers’ perceptions on structure and
layout of e-Service quality is positive
H9: The consumers’ perceptions on support of
e-Service quality is positive
H10: The consumers’ perceptions on communication
of e-Service quality is positive
H11: The consumers’ perceptions on incentive of
e-Service quality is positive
H12: The organisations’ perceptions on reliability
of e-Service quality is positive
H13: The organisations’ perceptions on security
of e-Service quality is positive
H14: The organisations’ perceptions on efficiency
of e-Service quality is positive
H15: The organisations’ perceptions on ease of use
of e-Service quality is positive
H16: The organisations’ perceptions on information
of e-Service quality is positive
H17: The organisations’ perceptions on appearance
of e-Service quality is positive
 H18: The organisations’ perceptions on linkage of using a survey design, which was a relatively inexpensive
e-Service quality is positive and effective way of obtaining information on a large
number of cases. Due to resource constraints, a convenient
H19: The organisations’ perceptions on structure
sampling approach was adopted, whereby the sample
and layout of e-Service quality is positive
comprised of consumers who used bus and train
H20: The organisations’ perceptions on support
transportation services. These respondents were later
of e-Service quality is positive
divided into two groups: consumer and organisation. 240
H21: The organisations’ perceptions on communication questionnaires were distributed among transportation’s
of e-Service quality is positive
PUBLIC SE CTOR ICT M ANAGE M E N T RE V I E W

consumers in the Klang Valley. 30 questionnaires were

H22: The organisations’ perceptions on incentive
of e-Service quality is positive
5. RESEARCH APPROACH
The main objective of the questionnaire survey was to
elicit responses from consumers and organisations on
the online ticketing services. The research was addressed
distributed to on-line ticketing retailers, 10 questionnaires
to employees of Keretapi Tanah Melayu Berhad (KTMB)
and another 20 to on-line ticketing bus organisations. In
addition, relevant secondary data was gathered to further
facilitate and validate responses generated from the
questionnaires.

Figure 1: Research Model

H1 H12
RELIABILITY
32
H2 H13
SECURITY

H3 H14
EFFICIENCY

H4 H15
EASE OF USE

H5 H16
INFORMATION

H6 H17
APPEARANCE

H7 H18
CONSUMERS LINKAGE ORGANISATION

H8 STRUCTURE H19
AND LAYOUT

H9 H20
SUPPORT

H10 H21
COMMUNICATION

H11 H22
INCENTIVE
6. SURVEY’S RESULTS AND FINDINGS
The survey questionnaire captured background data of respondents profile as well as their on-line buying experience.
This section also reports the results of consumers’ and organisations’ perceptions.

6.1 Respondents’ Profile

From the total of 250 respondents, 40% were online consumers and the remaining 60% represented non-online
consumers. Since this research focused on online consumers perception of web-based service quality, only responses
from the 100 respondents were utilised for the analysis of this study. Basically, both genders were equally represented in
this research with Male 51% and Female 49%. The majority of the respondents were in the age group of 18 to 25 (51%). Most
of the respondents were bachelor’s degree holders (49%) and either working in private sector (34%) or students (34%). Of
all the online consumers, the majority (84%) of them have occasional buying experience of less than four times.

JANUARY - JUNE 200 8 VOL. 2 NO. 1

6.2 Cronbach’s alpha Test of Reliability
Cronbach’s Alpha Test was conducted to evaluate both consumers and organisations’ perception of Internet service quality
in order to determine the reliability of each of the eleven determinants for both groups. The statements tested will be
considered as reliable and consistent if the value of Cronbach’s Alpha is more than 0.7.
Table 1 illustrates that all determinants for consumer perceptions were reliable and consistent except communication,
0.584, and linkage, 0.687. The reliability test on support was considered the most reliable and consistent followed by
information, appearance, reliability, security, incentives, ease of use, efficiency and lastly, structure and layout. It was found
that e-Ticketing web sites provide a lot of different supports, for example user-friendly guidelines pages and frequently ask
questions (FAQs) services. Malaysian consumers felt that it was important for the retailers to provide them with a lot of
support, since transaction will not involve any face-to-face interaction. The dimension linkage was rated lowest as not
reliable and consistent. Linkage refers to how the link between websites affect the overall service quality via the Internet.
Consumers felt that too much linkage may mess up the content and thus lead to complicated services. Most of them
33
preferred simple and fast services.

Table 1: Cronbach’s Alpha Test of Reliability for Consumers

Item Cronbach’s Alpha Result
Appearance 0.854 Reliable and consistent
Communication 0.584 Not Reliable and consistent
Ease of Use 0.818 Reliable and consistent
Efficiency 0.762 Reliable and consistent
Incentives 0.819 Reliable and consistent
Information 0.866 Reliable and consistent
Linkage 0.687 Not Reliable and consistent
Reliability 0.848 Reliable and consistent
Security 0.835 Reliable and consistent
Structure and Layout 0.715 Reliable and consistent
Support 0.872 Reliable and consistent
*alpha > 0.7 shows that the variable measurement is consistent and reliable

Table 2 summarises reliability tests of the eleven determinants for organisations. It showed that all determinants
were found to be reliable and consistent except for incentive. One of the reasons to give incentive is to raise loyalty
among consumers. Bus and train transportations e-Ticketing can be considered as micropayment transactions,
which involve small amount of money. Thus, to an organisation, this feature might not need be emphasised to gain
consumer loyalty.
 Table 2: Cronbach’s Alpha Test of Reliability for Organisations

Item Cronbach’s Alpha Result

Appearance 0.888 Reliable and Consistent
Communication 0.836 Reliable and Consistent
Ease of Use 0.907 Reliable and Consistent
Efficiency 0.774 Reliable and Consistent
Incentives 0.559 Not reliable and Consistent
PUBLIC SE CTOR ICT M ANAGE M E N T RE V I E W

Information 0.868 Reliable and Consistent

Linkage 0.851 Reliable and Consistent
Reliability 0.869 Reliable and Consistent
Security 0.765 Reliable and Consistent
Structure and Layout 0.788 Reliable and Consistent
Support 0.755 Reliable and Consistent
*alpha > 0.7 shows that the variable measurement is consistent and reliable

6.3 Results of Hypotheses Testing

Correlations Coefficient Test was conducted to identify consumers’ and organisations’ perception with the eleven
determinants on the quality of Internet service quality. Results of the correlation coefficient test conducted for
consumers, as in Table 3, shows that there was a statistically significant positive relationship between consumers’
perception with all determinants of e-Service quality perceptions being studied in this research.
Therefore, hypotheses 1 to 11 are accepted. Briefly, in term of consumers’ perception, the survey results indicated
that reliability (0.794) was the most important determinants compared to the other ten. Consumers felt that the
34 promise of accurate and consistent services, including frequency of updating the web sites, prompt reply to
consumer enquiries, and accuracy of online purchasing and billing were the most important. Hence, it is important
for the companies to maintain their e-Commerce sites and make it easy for consumers to enquire about merchandise,
check the status of their orders, and file complaints or send compliments.

Table 3: Consumers Perception with e-Service Quality

Variables Value P-Value

H1: There is a positive relationship between consumers perception and reliability 0.794(**) 0.000
H2: There is a positive relationship between consumers perception and security 0.687(**) 0.000
H3: There is a positive relationship between consumers perception and efficiency 0.638(**) 0.000
H4: There is a positive relationship between consumers perception and ease of use 0.791(**) 0.000
H5: There is a positive relationship between consumers perception and information 0.774(**) 0.000
H6: There is a positive relationship between consumers perception and appearance 0.776(**) 0.000
H7: There is a positive relationship between consumers perception and linkage 0.582(**) 0.000
H8: There is a positive relationship between consumers perception and structure 0.662(**) 0.000
and layout
H9: There is a positive relationship between consumers perception and support 0.753(**) 0.000
H10: There is a positive relationship between consumers perception and 0.726(**) 0.000
communication
H11: There is a positive relationship between consumers perception and incentives 0.441(**) 0.000

Note ** Correlation is significant at the 0.01 level

Ease of use (0.791) was the second most important determinant of e-service quality rated by consumers. There was
a very high demand for a Web site that was easy to find, use and navigate within. Some Web sites offer the option
of internal search, which allows consumers to search within the site by product, feature or keyword. This attribute
was highly rated – a finding that has also been noted by other researchers.
Appearance (0.776) was also considered to be an important element of online service quality. Web users commented
positively on pleasant eye-catching colours, complementary colours, simple appealing colours, and colours that were
coordinated with the logo or brand image of the product. In contrast, they were annoyed by too many or too few colours,
poorly matched colours, dark and boring colours. Another important factor is the size of a web page. Web users preferred
the size of web page that can fit into one screen. Oversized pages and graphics, or having to scroll to view the whole
page, were not appealing to Web users.
Linkage (0.582) was not considered as an important determinant because consumers felt that too much linkage may

JANUARY - JUNE 200 8 VOL. 2 NO. 1

mess up the content and thus led to confusing and complicated services. It was also not necessary to offer incentive
to consumers in order to encourage them to use online ticketing because it will not increase consumer retention.
Consumers will buy ticket transportation based on their needs to reach certain destinations. To them, online ticket
transportation is not a regular buying activity. Online ticket is sought for its convenience otherwise they would go
to the traditional ticket counter. This may be the reason why incentive was rated the lowest of all the determinants.

Table 4 : Organisations’ Perception With e-Service Quality

Variables Value P-Value

H12: There is a positive relationship between organisations’ perception and reliability 0.692(**) 0.000
H13: There is a positive relationship between organisations’ perception and security 0.757(**) 0.000
H14: There is a positive relationship between organisations’ perception and efficiency 0.809(**) 0.000
H15: There is a positive relationship between organisations’ perception and ease of use 0.852(**) 0.000
H16: There is a positive relationship between organisations’ perception and information 0.853(**) 0.000
35
H17: There is a positive relationship between organisations’ perception and appearance 0.879(**) 0.000
H18: There is a positive relationship between organisations’ perception and linkage 0.771(**) 0.000
H19: There is a positive relationship between organisations’ perception and structure 0.775(**) 0.000
and layout
H20: There is a positive relationship between organisations’ perception and support 0.649(**) 0.000
H21: There is a positive relationship between organisations’ perception and 0.839(**) 0.000
communication
H22: There is a positive relationship between organisations’ perception and incentives 0.596(**) 0.001
Note ** Correlation is significant at the 0.01 level

Table 4 tabulates the results of correlation coefficient test for the organisations. It shows that all eleven determinants
of e-Service quality measuring from organisations perspectives were significant. Therefore, H12 to H22 were all
accepted. Briefly, in terms of organisations’ perception, the survey results indicate that appearance (0.879) was the
most important dimension among the other eleven. When designing a web page, organisations paid much
attention on appearance that can attract Web surfers for initial and repeat visits. It is important for Web site
designers to design a page by using sound and video files, coloured backgrounds and Java applets. Many
organisations also focus on the functional presentation of content in preference to novelty and visual appeal.
From the organisations’ perspectives, Information (0.853) quantity and credibility were also considered to be an
important element of online ticket service quality. The ability to access relevant information in a purchase situation,
and the degree on which consumers trust the information provided in the Web site are important when designing
a web page. Providing relevant information can help retailers avoid concerns or fears that consumers may have
about a particular product, or about the e-Retailer. Retailers are aware that consumers will want full access to
information that will allow them to make competent and informed decisions about ticket booking and ticket
purchasing.
Organisations rated ease of use (0.852) web site as the third important determinant. A retailer having a Web site
that is easy to use and facilitates the locating of merchandise is a dimension that is different and more specific
 than service quality dimensions previously identified
for traditional retail outlets. In addition, considering
the level of ICT literacy among Malaysians, retailers
think that it is important to offer web sites which is
easy to use. This is because, in comparing the advanced
uses of information and communication technologies
in the other developed countries, e-Commerce is still
considered new technology in Malaysia. However,
PUBLIC SE CTOR ICT M ANAGE M E N T RE V I E W
have rated Appearance be an important element of
online service quality where appearance means the
proper use of colour, graphics, images, and animations,
together with the appropriate size of the Web pages.
Taking this into consideration, organisations should
take a few initiatives to increase reliability rating of
their websites, for example, providing organisation’s
e-mail address for correspondence, allowing consumers

organisations ranked support (0.649) among the last

to view or track orders’ status, enabling customisation,
determinant in evaluating the online service quality.
and assuring of system up time and updates.
Support is constituted by the technical help, user
Nevertheless, even though Reliability is the most
guideline, and personal advice to consumers from a
important determinant, organisations cannot ignore
Web site. Online retailers might feel that, since they
the other dimensions. All the dimensions need to be
already emphasised on web sites which is easy to use
considered and maintained throughout the entire
and navigate within, it is not important to offer support
period of active e-Commerce on the website.
features.
The determination of e-CRM factors will allow
It should be noted that both consumers and organisations
companies to focus on developing their web site of
agreed that appearance and ease of use are among the most
those aspects that are related to consumer satisfaction.
important determinants that should be used when
This could mean reduced costs, since elements that
measuring the quality of internet services. Besides that,
are not relevant need not be included anymore. Thus,
they also concurred that incentive was the least important
in developing the benchmark of e-CRM features for
determinant to offer in online ticketing. However, there
Malaysia online ticketing web site, is not only based
were some deviations between the result of consumer’s
on the popularity of the features, but also the suitability
perception and organisation’s perception on reliability and
and acceptance of the technology by retailers and
36 support determinants. Based on the consumer’s perspective,
consumers.
they ranked reliability as the highest important
determinant, in contrast organisation ranked it as the 9th
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