UK SME eCommerce Adoption Survey

E-Commerce Performance Evaluation of SMEs in the UK

A Study for Aquilo Technology, Leeds.

LEEDS UNIVERSITYBUSINESS SCHOOL

Submitted byARUN TYAGI

Supervised byDr. Stephen King

andDr Bradley Barnes

This dissertation is submitted in part fulfilment of the requirements for the degree of MBA.

September, 2004Word count: 12596

1

Acknowledgements

It gives me immense pleasure to finish my MBA with this project. I would like to express

my sincere gratitude to Dr Stephen King and Dr Bradley Barnes, my mentors and

supervisors, for their overwhelming support in completing this project. They guided me

with their wise counsel, they stood by me every time I looked at them.

I would also like to thank Aquilo Technology for giving me an opportunity to work with them

for this project. John Swain, CEO and Mike McGrady, COO of Aquilo Technology, helped

me greatly by sharing their valuable time and knowledge related to the project.

Of equal importance, is the contribution made by the companies who took their time and

responded to the survey conducted for this project. They provided rich insights for the

research which made me draw some useful recommendations for Aquilo Technology

Limited.

I humbly acknowledge constant encouragement provided by my friends, John Monkhouse

and Ankit Maheshwari, throughout the progress of this report.

Finally, I wish to thank my family and the God almighty for providing me an opportunity to

pursue my dream of doing world class MBA.

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Abstract

This dissertation focuses on the development of a particular Small and Medium Enterprise

(SME), Aquilo Technology Limited (ATL), and attempts to help ATL improve its marketing

and sales process, particularly with respect to the evaluation of the Internet Channel

(website/e-commerce) of potential clients, primarily small and medium-sized enterprises

(SMEs), and the targeting of poor performers. A research based on the Internet Channel

Evaluation Framework developed by Dr Stephen King and Linda Liou of Leeds University

Business School was undertaken to understand e-commerce preferences of SMEs in the

UK. The framework has two levels – a business-level and a user-level, and has been split

into three sets of measures, which range from simple, objective, user-level measures to

more complex, subjective, strategic-level measures. A questionnaire based postal survey

of 1000 SMEs across UK was conducted. Analysis of research findings helped to identify

low and high performing variables at user level and business level for Internet channel.

Based on the analysis of findings and results, a set of recommendations has been offered.

Finally, a new process flow framework has been developed suggesting that incorporation

of website evaluation results into the sales process of ATL is the key to building long term

relationships with customers and profitability.

Keywords: Internet channel evaluation, electronic business, metrics, performance

measurement framework.

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CONTENTS

CHAPTER I………………………………………………………………………………………6 INTRODUCTION………………………………………………………………..…........…………6

1.1 About Aquilo Technology Limited (ATL)…………………….

………................................................…………6

1.1.1 SMEs in UK…………………………………………………...........

…………...………7

1.2 Aims and Objectives of

Study……………………………………….........................................…....7

1.3

Conclusion…………………………………………………………………….8

CHAPTER II…………………………………………………………..…………………………9

LITERATURE

REVIEW………………………………………………………………......................…………….9

Introduction ………………………………………………………......

……………………………9

2.1 PART I – SMEs in the

UK………………………………………..........................................………9

2.1.1 General Characteristics of

SMEs……………………………………….......................................…..…9

2.2 Marketing of SMEs………………………………………..............

………..………….….10

2.2.1 The Stages/growth

model…………………………………..........................………………..…11

2.2.2 The Management Style Approach………………………...

…………….................................…….11

2.2.3 The Management Function Approach………………………………..

…........................................…..12

4

2.2.4 The Contingency

Approach………………………………………........................……….….13

2.3 PART II – E-

Commerce ....................................................................................................13

2.3.1 E-Commerce

Theory...................................................................................................13

2.3.2 E-commerce adoption by SMEs in the

UK……………………...........................................................…..……….16

2.3.3 Evaluation of Internet Channel

Evaluation……………………................................................……..……17

2.3.4 An Initial Internet Channel Evaluation Framework…………….

………………………………………………….…18

2.4 Conclusion………………………...……………………………………..

….20

CHAPTER III………………………………………………………………………21

RESEARCH STRATEGIES AND METHODOLOGY

3.1 Research Framework………………………..

………………………………........……..21

3.2 Problem Definition………………………………...

………………………….......…….22

3.3 Research

Approach………………………………………………………........….....….22

3.4 Research Design

Development…………………………………………….................……..…23

3.4.1 Qualitative versus Quantitative

research………………………………............................................………23

3.4.2 Questionnaire Design

………………………………………………….............................………….24

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3.5 Fieldwork or Data

Collection………………………………………………….....................……26

3.6

Conclusion…………………………………………………………………….26

CHAPTER IV……………………………………………………………...……….27

ANALYSIS OF FINDINGS AND RESULTS

Introduction………………………………………………………………………...27

4.1 Performance of User Level

Variables…………………………………………........................................……27

4.1.1 Availability……………………………………………………………………..

……30

4.1.2

Navigation…………………………………………………………………………..30

4.1.3 Content………………………………………………..

……………………………31

4.1.4 Speed………………………………………………………………..

……………..32

4.1.5 Emotional

Involvement……………………………………………………………..........…....33

4.1.6 System Responsiveness……………………………………………………...

………..…..34

4.1.7 Transaction………………………………………………………………….….

….34

4.1.8 Interactivity………………………………………………………...

……………….35

4.2 Importance of User Lever Variables…………………................................

………………………..……..…37

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4.3 Correlation of Importance and Performance of User Level

Variables……......................................................................................….…...37

4.4 Performance of Business Level

Goals………………………………………..........................................……..….39

4.4.1 Communication………………………………………………………………...

…41

4.4.2 Complementarities………………………………………………………..….

…..42

4.4.3 Strategic Responsiveness

………………………………………………...................................……..….…..43

4.4.4 Increased Revenue…………………………………………..........

……………………...…..43

4.4.5 Strategic Position……………………………………………………..........

……………..….44

4.4.6 Customer

Loyalty…………………………………………………………........………...…...45

4.4.7 User

Satisfaction………………………………………………………………………46

4.4.8 Operational Efficiency

………………………………………………………...............................…........46

4.4.9

Integration………………………………………………………………………...47

4.5 Importance of Business Level

Goals………………………………………………......................................…..48

4.6 Correlation of Importance and Performance of Business Level

Goals……….............................................................................................…..48

4.7 Conclusion………………………………….

……………………………………..50

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CHAPTER V……………………………………………………………………….51

RECOMMENDATIONS AND CONCLUSIONS

Introduction………………………………………………………………………...51

5.1 Review of Research

Objectives…………………………………………………….......................……51

5.2

Recommendations………………………………………………………………..54

5.2.1 Content………………………………………………….

………………………….54

5.2.2 Availability……………………………………………………………………..

…..54

5.2.3 Speed and Navigation…………………………………………………...........

………………55

5.2.4 Transaction…………..

……………………………………………………………55

5.2.5 Strategic

Goals………………………………………………………………........…………55

5.2.6 Proposed Process

Flow………………………………………………….......................…….………56

5.3 Limitation of the

Research…………………………………………….................…………..…….57

5.4 Direction of the Future

Research……………………………………………............................……...…58

5.5

Conclusion………………………………………………………………………..58

Appendices ……………………………………………………………………….60

References……………………………………………………………...…………74

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CHAPTER I

INTRODUCTION

There is widespread acceptance of the notion that small firms typically possess certain

characteristics, which serve to differentiate them from larger organisations. These

characteristics include inherent weaknesses with respect to capitalisation and marketing

awareness and practice. Small firms are perceived as vulnerable yet valuable entities,

important both economically and socially. High failure rates of small firms are largely

attributed to weaknesses in financial management and marketing. This dissertation

focuses on the development of a particular SME, Aquilo Technology Limited (ATL), and

attempts to help ATL improve its marketing and sales process, particularly with respect to

the evaluation of the Internet Channel (website/e-commerce) of potential clients, primarily

small and medium-sized enterprises (SMEs), and the targeting of poor performers.

1.1About Aquilo Technology Limited (ATL)

Aquilo Technology Limited is a Leeds based small IT solutions and service firm with 15-20

employees. Its products and services portfolio (Table1.1) includes IT solutions such as e-

commerce solutions and products such as a content management tool, In Control, to

various clients in the UK and China. However, ATL primarily caters to small and medium-

sized enterprises (SMEs) in the UK. Major clients include Sulzer Pumps, Wakefield District

Council, and Ferrari (UK), among others.

Services Products

AQUILO

TECHNOLOGY

LIMITED (ATL)

- IT Consultancy

- SAP Implementation

- System Integration

- Website Design,

Development and

Hosting.

- In Control

A content management

tool.

- In Touch

Short messaging tool

(messenger)

- Microsoft CRM

Table 1.1 Products and Services Portfolio of ATL

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1.1.1 SMEs in the UK

In recent years small and medium-sized enterprises (SMEs) have come to play an

increasingly important role in global economies. SMEs contribute approximately 50 per

cent to the UK gross domestic product and nearly 90 per cent to employment (CBI, 2000).

The Department of Trade and Industry attributes the huge growth in SMEs - defined as

those companies employing fewer than 250 people - to a shift from manufacturing to

service and structural changes within many businesses, including downsizing and

outsourcing. The need for national and in some cases global, competitive advantage has

led customers of all sizes to develop corporate strategies, entailing integration and

development of their supplier bases. This holistic approach might founder, if both the

internal and external elements of e-commerce were not working alongside each other.

1.2 Aims and Objectives of the Research

This study addresses the following research objectives:

1. How do SMEs in the UK perceive the user level performance of the Internet channel and how much importance they attach to the various aspects of performance?

Performance variables related to usability of the website such as Availability,

Navigation, Speed, Content etc. will be evaluated. Evaluation of these variables,

classified as user level variables, will help to understand how SMEs feel they

fare on the performance scale for these variables. The level of importance

associated with variables relative to one another is also evaluated.

2. How do SMEs in the UK perceive the business level of the Internet channel and how much importance they attach to the various aspects of performance?

Strategic objectives for a website such as Strategic Position, Integration,

Communication etc. will be evaluated. Evaluation of these variables, classified

as business level goals, will help to understand how SMEs feel they fare on the

performance scale for these variables. The level of importance associated with

goals relative to one another is also evaluated.

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3. How SMEs in the UK actually measure the performance of websites performance

measurement variables and strategic goals?

This objective aims to identify what are the best practices in use by SMEs for Internet channel performance measurement.

4. What are the necessary modifications or processes to be adopted to improve ATL’s sales and marketing capabilities?

Implications based on results and findings are analysed and ways are

suggested to incorporate those into the business processes of ATL.

In sum, the research aims to understand the customers’ e-commerce preferences and

their implications for ATL’s e-commerce service offering. The Internet channel evaluation

framework (King and Liou, 2003) was used to identify how small and medium-sized

enterprises (SMEs) in the UK perceive website performance measurement variables,

strategic goals for websites and how much importance they give to those variable and

goals. A questionnaire based postal survey of 1000 SMEs across UK was conducted for

the purpose. The results of the research will benefit ATL by providing insights about its

customers’ perception of their Internet channel performance and importance.

1.3 Conclusion

This chapter briefly introduced the organisation, products and services offered, and

objectives of the study. The following pages will begin with a review of the relevant

literature and then progress to the methodology of the research conducted. The findings

from the research will be analysed to propose strategies and recommendations towards

improving marketing and sales process of ATL. Limitations of the research and directions

for future research are also discussed in the end

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Chapter II

Introduction

This chapter reviews the literature relevant to the issues related to the research objectives.

The chapter is divided in two parts. In part 1, concept of e-commerce is discussed and

there is an emphasis on e-commerce practices adopted by SMEs in the UK. Internet

Channel Evaluation Framework on which this research is based is also studied in this part.

In second part, issues related to marketing of SMEs are studied.

2.1 PART I - E-Commerce Theory

Electronic commerce (e-commerce) is a growing aspect of modern consumer and

business interactions. It is already leading to the reshaping of buyer and seller

relationships, the streamlining of business processes and, in some cases, even the

restructuring of whole industries. E-commerce can be defined loosely as ‘doing business

electronically’. Straub (2004) has defined e-commerce as commercial activity utilizing open

network protocols, in which information is typically substituted for physical processes,

which lead firms towards virtual organisation structures. Jelassi and Enders (2005) have

defined e-commerce as the electronic trading of physical and digital goods, quite often

encompassing all the trading steps such as online marketing, online ordering, e-payments

and, for digital goods, online distribution (i.e. for after sales support activities). In general,

there are two major types of e-commerce: business-to-consumer (B2C) and business-to-

business (B2B). In B2C transactions, online transactions are made between businesses

and individual consumers. In B2B transactions, businesses make online transactions with

other businesses. Kalakota and Whinston (1997) refer to a range of different perspective

for e-commerce:

1. A communication perspective – the delivery of information, products/services or

payment by electronic means.

2. A business process perspective – the application of technology towards the

automation of business transactions and workflows.

3. A service perspective – enabling cost cutting at the same time as increasing the

speed and quality of service delivery

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4. An online perspective – the buying and selling of products and information online.

All these definitions imply that electronic commerce is not solely restricted to the actual

buying, but also includes pre sale and post sale activities across the supply chain

(Chaffey, 2004).

Electronic commerce (e-commerce), in particular via the Internet, is developing rapidly. It

is also a catalyst of fundamental changes in the structure, operations, and management of

organisations (Dertouzos 1997, McLaren 1996 and McLaren 1999). E-commerce has

become so pervasive that it is no longer wise to ignore competitors or customers simply

because they are not located in the one location or other physical locale (Westland &

Clark, 2000). It has gained strategic importance for organisations across the world and

transformed many organisations by giving them a source of competitive advantage in the

various forms such as scalability, reach, availability, operational efficiency and system

responsiveness. Because of its two way communication functionality, buyer side and seller

side (Chaffey, 2004), e-commerce/Internet has opened gates to immense opportunities for

organisations to market themselves along with their products and services. For example,

the supermarket Tesco has launched a market-leading e-commerce service for customers

and also uses the Internet extensively for purchasing. However, Porter (2001) argues that

great paradox of the Internet is that its very benefits-making information widely available;

reducing the difficulty of purchasing, marketing and distribution; allowing buyers and

sellers to find and transact business with one another more easily- also make it more

difficult for companies to capture those benefits as profits. Therefore, although there is a

great deal of speculation about potential opportunities, the Internet itself, moreover, will be

minimized as a source of advantage as all companies come to embrace Internet

technology/e-commerce.

2.2 E-Commerce Adoption by SMEs

2.2.1 SMEs Definition

There no universally accepted definition of an SME. In UK law, The Companies Act of

1985 states that a company is "small" if it satisfies at least two of the following criteria

(Small Business Service, 05/05/2005):

• A turnover of not more than £5.6 million net;

• A balance sheet total of not more than £2.8 million net;

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• Not more than 50 employees

A “medium” sized company must satisfy at least two of the following criteria:

• A turnover of not more than £22.8 million;

• A balance sheet total of not more than £11.4 million;

• Not more than 250 employees

The best description of the key characteristics of a small firm remains that used by the

Bolton Committee in its 1971 Bolton Report on Small Firms. This stated that a Small firm is

an independent business, managed by its owner or partly-owners and having a small

market share.

There were an estimated 4.0 million business enterprises in the UK at the start of 2003.

This compares with an estimated 3.8 million business enterprises in the UK at the start of

2002. Almost all of these enterprises (99.2 per cent) were small. Only 26,000 (0.6 per

cent) were medium-sized and 6,000 (0.2 per cent) were large (Small Business Service,

05/05/2005). The definition of SMEs (chapter III) used in this research will be based on

employee numbers and turn over of company.

2.2.2 SMEs in UK

At the start of 2003, UK business enterprises employed an estimated 21.7 million people,

and had an estimated combined annual turnover of £2,200 billion. SMEs are the backbone

of the UK economy. More than half of the employment in the UK are provided by Small

and medium-sized enterprises (58.2 per cent). SMEs are also accounted for more than

half of the turnover in the UK as well (52.4 per cent) (Small Business Services,

05/05/2005). Small enterprises alone provide about 46.2% employment and over 38.3%

turnover as seen in figure (2.1) below:

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Figure 2.1: Share of business, employment and turnover by size of business UK Private sector, start of 2003.

(Small business services, www.sbs.gov.uk , 05/05/2005).

2.2.3 E-commerce Adoption by SMEs in the UK

SMEs are resource constrained. Generally, they have a small or no IT departments, have

less capital and less assets and yet, they must compete in the same arena as larger

enterprises. SMEs are traditionally the most difficult sectors of business for IT suppliers to

address because they are so heterogeneous (Financial Times, 23/04/2005). IT is an

important and key factor in the way any business operates; despite this the majority of

SMEs have no formal IT strategy. The lack the technical knowledge within the company as

compared to larger organizations is primarily because people making technology decisions

at small companies tend not to have a great deal of technical knowledge (Financial Times,

23/04/2005). With modern technology revolutionizing the way in which businesses

operate, this lack of technical knowledge creates a gap between SMEs and large

enterprises.

SMEs have a different approach towards technology, they tend to buy products and

services based on testimonials - they do not have resources for research. In the SME

sector there are all sorts of small vertical markets and they look for a lot of technology out

of the box. They don't want to get involved in large projects and employ IT experts

(Financial Times, 09/04/2005).

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In recent years the cost of going online has fallen and the number of different e-commerce

options for SMEs has increased. Some companies choose to design their own websites,

and an increasing range of tools makes it possible to do so for as little as a few thousand

pounds (Financial Times, 09/04/2005).

The value of businesses’ Internet sales rose to £39.5 billion in 2003, more than double the

2002 figure of £19 billion, according to a report by the Office for National Statistics (ONS).

The value of ecommerce sales to households reached £11.4 billion in 2003, up from £6.4

billion the previous year. The rise in the value of ecommerce was apparent across all

sectors of the economy and by businesses of all sizes, according to the report. The ONS

surveyed 10,000 companies of all types and sizes (www.statistics.gov.uk, 05/05/2005).

According to the latest market research survey commissioned by Ofcom in February 2004,

68% of UK SMEs are connected to the internet (1Ofcom, April 2004). Another survey, E-

commerce survey of business, conducted by ONS in 2003 revealed some key facts

(2www.statistics.gov.uk, 05/05/2005):

The number of businesses using the Internet for sales increased by a quarter, to 5

per cent, between 2002 and 2003.

Businesses were a lot more likely to buy than sell over the Internet, with 29 per cent

reporting that they did so at some time during 2003.

Three in ten (31 per cent) of businesses reported having a website at the end of

2003.

The use of many Information and Communication Technologies (ICT) was growing

fastest among smaller businesses at the end of 2003, partly reflecting their catching

up following the early investment by larger businesses.

The largest increase in businesses with Internet access was among those with

fewer than 50 employees.

With 68% of UK SMEs connected to the Internet (Ofcom, 2004) the intention of these

companies to adopt new technologies is apparent. However for many of the companies

obtaining a connection to the Internet is as far as their IT plans reach. There is a need to

encourage e-commerce and maximize the use of technology within UK SMEs.

2.3 E-commerce Performance Evaluation

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E-commerce performance evaluation has become crucial for organisations in order to

justify costs involved in setting up and maintaining e-commerce solutions. Although there

is no significant literature written and the theory is still evolving for this subject, many

scholars have proposed frameworks, models, indexes and matrices recently to measure

the performance of e-commerce in organisations.

Gonzalez and Palacios (2004) have provided a Web Assessment Index, which focuses on

four user centric parameters: accessibility, speed, navigability and content. Another

research (Yang, Cai, Zhou & Zhou, 2005) has proposed five dimensional user centric

instrument to measure user perceived service quality of web sites. The parameters

included in this research included usability, usefulness of content, adequacy of

information, accessibility, and interaction. Similarly, E-Qal instrument proposed for website

assessment by Barnes and Vidgen (2004) involve parameters such as web site usability,

information quality, and service interaction quality.

Agarwal and Venkatesh (2002) utilizes a comprehensive set of usability guidelines

developed by Microsoft in their research for website usability evaluation presents a set of

weights associated with each of the constructs as follows: content (45/100), Ease of use

(30/100), Made-for-the-medium(15/100), Promotion (5/100), Emotion (5/100). This indicate

high importance to content and ease of use compared to emotion and promotion among

the users surveyed. Another study, (Web Site preference framework by Rosen, Purinton

& Lloyd, 2004) describes usability as crucial element in web design and ultimately in user

experience. Similarly, Palmer (2002) gives emphasis on Web site design and the features

of a Web site that need to be measured to determine its effectiveness. Lee, Keterakkankul

and Hong (2005) conclude that an effective web site should support web customers in

their a) information search, (b) pleasure and (c) business transactions.

More recently, ‘Benchmarking Approach’ suggested by Hassan and Li (2005) present a

new framework for evaluating the usability and content usefulness of web sites. Their

research identified a total of 46 criteria that can be used as the benchmarking metrics. The

framework was tested for its applicability by evaluating four political Web sites in Malaysia.

The framework is useful for those who intend to benchmark the overall usability and

content usefulness of their Web sites against those of their competitors. However,

research was not comprehensive and limited in few ways. One, the framework was tested

17

on very limited number (four) of websites and none of them was e-commerce enabled

website. Second, business perspective was not considered in evaluation parameters.

Third, because framework benchmark websites only against competitors end user

perspective was not considered.

In practice, there is also growing number of Information Technology (IT) vendors which

offer Internet Monitoring Solutions. Keynote, Gomez and Mercury Interactive are the

leading companies which provide tools to evaluate web sites (King & Liou, 2004). These

companies provide qualitative and quantitative user experience data (e.g. site availability,

traffic volume, paths taken by users, transactional success rates and wireless

performance). Management tools provided are automatic reports, fast alarms, diagnostics,

benchmarking and integration with internal management information systems.

Most of these studies have examined only a few aspects of web sites primarily related to

usability but aspects such as user value, long term business benefits and strategic fit

remain under explored in practice. However, Porter (2001) and Chaffey (2002) have

argued that internet should be used to compliment other business channels. Similarly,

Turban et al. (2002) highlighted the need to integrate business processes to internet both

internally and externally. Further, Phan (2003) has given emphasis on importance of

strategic positioning, strategic responsiveness and operational efficiency of organisation

associated with e-commerce initiative. This suggests that scholars have raised strategic or

business level related to e-commerce in organisations but no framework is suggested to

evaluate these aspects. Therefore, there is a need of comprehensive e-commerce

evaluation framework involving strategic, operational and user centric perspectives.

This gap in literature was filled by King and Liou (2004) in their recent research. A new

Internet Channel Evaluation framework involving strategic, operational and user centric

perspective is developed and validated. This framework (Fig 2.2) is the basis of this

research.

18

User Satisfaction

System ResponsivenessInteractivityEmotional involvementCustomer loyalty

Set B (User level)

Increased RevenuesCustomer

Loyalty

AvailabilitySpeedContent/Information quality

Navigation/Ease of use

Transaction

User satisfaction

Set A (User level)

Strategic positionStrategic responsivenessIntegrationComplementaritiesOperational efficiencyCommunicationIncreased revenues

Set C (business level)

InternetChannelROI

Impacts

Influences

Fig 2.2: Internet Channel Evaluation Framework (King and Liou, 2004)

The framework has two levels – 1) business level and 2) user level. These two levels are

further split into three ‘sets’. Set A consist of objective user -level matrices. Set B contains

a further set of sophisticated user-level matrices. Set C consist of business-level metrics,

which enable the long term contribution of the Internet Channel to be evaluated (King and

Liou, 2004). Further, King and Liou suggest that organisations can achieve better user

satisfaction and hence customer loyalty by continuously evaluating their Internet channel

though the proposed framework. For organisations, better customer loyalty may lead to

increased revenues and better return on investment (ROI).

This research aims to find different weights associated with framework constructs. The

framework is further slightly modified (Chapter III) for simpler questionnaire (Appendix I

and II) survey.

2.4 Part II - Marketing of SMEs

SMEs in UK which account for more than 90% of total number of companies play vital role

in the economy. There are some strengths and weaknesses inherited with these firms.

SMEs tend to have certain characteristics in common: they have relatively small market

shares, their owners tend to be closely involved in all aspects of both strategic and

operational management, and they often fully independent (Brassington & Pettitt, 2003).

On the other hand, SMEs are believed to have an edge over larger firms in flexibility,

innovation, responsiveness, and overhead costs (McCartan-Quinn & Carson, 2003).

19

The four-stage model (Fig 2.3) for SMEs development proposed by Brassington & Pettitt

(2003) suggests that marketing plays an important part in the process of starting and

developing a business.

Fig 2.3: Business launch and development stages (Brassington & Pettitt, 2003)

The description of four stage of model is as follows (Brassington & Pettitt, 2003):

Stage1- the entrepreneur must asses the feasibility and viability of the business idea.

Stage 2, 3 and 4- during this period, it is fight for survival, ensuring the sufficient sales

volume is generated to sustain the business. This requires SMEs to adopt more

professional strategic marketing approach to maintain differentiation.

20

Prelaunch

Business launch

Survival

Consolidation and growth

Maturity and renewal

Stage 5 – the final stage, maturity and renewal, determines whether the business will grow

even further.

However, there is a constant risk of business failure at any of these stages. The business

might fail (Burns, 2001) if:

- It can not identify the target market or target customers.

- It can not delineate its trading area.

- It can not delegate

- It considers advertising as an expense not as investment.

- It has poor knowledge of pricing and strategy.

- It has immature understanding of distribution channels.

- It does not plan

Above mentioned factors also underline the importance of marketing to SMEs. Therefore,

SMEs require proper marketing approach for continuous business development.

2.5 Conclusion

This chapter discussed the concept of E-Commerce and related issues in the context of

SMEs in the UK. Internet channel evaluation framework, on which this research is based,

was also studied. Role of marketing was discussed in the last part of the chapter. The

following pages will progress to the methodology of the research conducted.

21

CHAPTER III

RESEARCH METHODOLOGY

Introduction

Following the introduction and literature review this chapter briefly outlines the research

objective. The chapter also discusses the search strategies for literature review, basis and

nature of the research and the methodology of quantitative research methods used. The

lay out, format and the design of questionnaire and methods of data collection will be dealt

with subsequent section. Methods used for data collection and analysis are also discussed

in the end of the chapter. Broadly, the research process (Malhotra, 1999, Churchill &

Gilbert, 1999, Hair, Bush & Ortinau, 2003) followed the framework (Fig 3.1) illustrated

below:

Fig 3.1: Simple Linear Description of the Marketing Research Process (Source: Malhotra et al., 2003)

22

Stage 1Problem Definition

Stage 6Report Preparation and

Presentation

Stage 5Data Preparation and Analysis

Stage 2Research Approach

Stage 3Research Design Developed

Stage 4Fieldwork or Data Collection

3.1 Stage 1- Problem Definition

The first step in any market research project is to define the problem (Malhotra, 1999).

Aquilo Technology Limited (ATL), a Leeds based IT services and solution provider,

needed to rework its marketing strategy in order to better understand customers’

preferences and ultimately increase profitability. Its services portfolio is dominated by

website development services. After few meeting and brainstorming sessions with ATL’s

CEO, COO and research supervisor, ultimate objective of the research was identified as:

To understand e-commerce preferences of SMEs in the UK and their implications for

ATL’s sales and marketing processes, particularly with respect to the evaluation of e-

commerce channel. Other research objectives, as discussed in detail in chapter I, were

agreed after discussions with research supervisor.

3.1 Stage 2- Research Approach

The development of an approach to the problem involves identifying factors that go on to

influence research design. A key element of this stage involves the selection, adaptation

and development of an appropriate theoretical model (Malhotra et al., 2003). The nature of

the research undertaken was largely descriptive, quantitative and exploratory (Churchill &

Gilbert, 1999).

As discussed in the last chapter, Internet Channel Evaluation Framework (Fig 3.2)

developed by King and Liou (2004) was taken as the basis of the research. Review of

recent literature (Chapter II) on Internet/e-commerce channel evaluation was also done

through different search strategies such as:

- Journals (Journal of e-commerce in organisations, Journal of small business, etc.)

- Academic Books

- Online Databases (ABI Global, Science Direct, etc.)

- Web sites (Company, government, etc.)

- Newspapers (Financial Times, etc.)

This approach enabled the researcher to obtain issues related to website performance

evaluation, and their importance.

23

Fig 3.2: Internet Channel Evaluation Framework (King and Liou, 2004)

After considering different survey research methods (Hair, Bush and Ortinau, 2003) and

considering resource factors, a direct mail survey method was selected to collect raw data.

An exhaustive questionnaire was derived based on the framework variables to explore

research objectives. The framework helped to design the questionnaire for this research,

however, there were some minor modifications made for the ease of the respondents. The

questionnaire (Appendix I) was divided into two sections, User Level and Business Level,

instead of three sets as mentioned in the Internet channel evaluation framework. In

addition, two variables (User Satisfaction and System Responsiveness) were moved to

business level from user level as they were considered to be among business goals for the

organisations surveyed.

24

User Satisfaction

System ResponsivenessInteractivityEmotional involvementCustomer loyalty

Set B (User level)

Increased RevenuesCustomer

Loyalty

AvailabilitySpeedContent/Information quality

Navigation/Ease of

use

Transaction

User satisfaction

Set A (User level)

Strategic positionStrategic responsivenessIntegrationComplementaritiesOperational efficiencyCommunicationIncreased revenues

Set C (business level)

InternetChannelROI

Impacts

Influences

3.3 Stage 3 - Research Design Developed

A research design is a framework or blueprint for conducting the marketing research

project (Malhotra, 1999). Given the variables used for analysis, research method applied

through direct mail survey to collect secondary data (Chisnall, 2003) required for analysis

was exploratory as well as descriptive

For survey, online database (FAME) was used to shortlist 1000 small and medium

enterprises (SMEs) based in the UK. SMEs, which were ideal target customers for ATL,

were selected on the basis of three parameters:

1. A company must have a website.

2. Turnover should be in the range of £5 -£20 million, and

3. A company should have number of employees between 100 and 500.

The ‘sampling size’ (Aakar, Kumar & Day, 2003) or the target population included the IT

Managers of respective companies. A mail survey was sent out all individuals with an

introduction to the purpose and objective of the survey, and the importance and

confidentiality of their feedback.

3.3.1 Questionnaire Design

A direct mail survey used for this research is a technique for obtaining quantitative data. A

standardised questionnaire or form ensures comparability of the data, increase speed and

accuracy of recording, and facilitate data processing.

A questionnaire, whether it is called a schedule, interview form or measuring instrument, is

a formalised set of questions for obtaining information from respondents (Malhotra et al.,

2003). Further, as suggested by Malhotra et al., a questionnaire is only one element of a

data collection package that might also include (1) fieldwork procedures, such as

instructions for selecting, approaching and questioning respondents; (2) some reward, gift

or payment offered to respondents; and (3) communication aids, such as maps, pictures,

advertisements and products (as in personal interviews) and return envelopes (in mails

surveys).

25

Three conditions are necessary for ensuring a true response to a question: (i) respondents

must be able to understand the question; (ii) they must be able to provide the information

requested; (iii) they must be willing to provide the information (Chisnall, 2001). These

guidelines help to avoid a great deal of the frustration experienced by researchers and

respondents.

The questionnaire (Appendix I) for research, keeping in mind above facts, was designed to

understand customer’s preferences. Another similar questionnaire (Appendix II) was also

designed for the use by ATL to evaluate existing Internet channel of potential clients. As

mentioned earlier, although the questionnaire was based on the Internet channel

evaluation framework (King and Liou, 2003), some variables were interchanged to make it

more user friendly. The questionnaire was divided into 2 sections for convenience. Majority

of items in the questionnaire were to be assessed according to the degree of compliance

they assigned relative to each question. Respondents (1000 SMEs) were sent a covering

letter outlining the purpose of the study and requesting their participation and questions to

reflect on what the responses might be. The sampling method used is explained later in

this section.

The first section (Section A: User Level) of the questionnaire comprised of questions

related to usability variables of the websites such as availability, speed, navigation etc. in

two formats. In first format respondents were asked to weigh the performance of different

parameters with respect to their company website on the scale of 1 to 5. Secondly, the

respondents were asked to weigh the relative importance of the variables.

The second section (Section B: Business Level) comprised of questions related to

strategic goals of the website such as strategic positioning, integration, strategic

responsiveness, operational efficiency etc. The same format of questions as in the first

section was used.

In addition, to get an idea about practice in use, respondents were asked how they

measure variables discussed. A copy of the research questionnaires is presented in the

Appendix I.

26

Since the questionnaire was designed to measure degree of agreement or disagreement,

the Likert Scaling technique (Aakar, Kumar, Day, 2003, Churchill & Gilbert, 1999) was

adopted in the questionnaire for quantitative research. The questionnaire was pre-coded

using numerical scales. Indirect approach to measure ‘Performance’ perception were

developed using a series of statements concerning the issue, and individuals were asked

to indicate his/her agreement or disagreement on a scale with 5 gradations ( Strongly

disagree=1, disagree=2, neither agree nor disagree=3, agree=4, strongly agree=5) with

numerical values associated with each possible answer. However, for ‘Importance’ part of

the questionnaire respondents were asked to weigh the variables on a scale of 1 to 100.

The questionnaire was pre-tested with the help of ATL CEO and COO. They were

interviewed to understand their views from supplier perspective about different variables

mentioned in the questionnaire. Finally, the feedback was incorporated into the final

version of the questionnaire.

3.4 Stage 4 and 5 – Data Collection and Analysis

The stage could be simplified to collecting right data, starting at secondary data collection

and analysis through quantitative research or qualitative research. The process starts with

a more through collection and analysis of secondary data sources.

A total of 90 survey questionnaires were eventually returned and 78 were used for the

analysis (12 were rejected as they were incomplete). Representation of industries among

respondents was as follows (Fig 3.3):

27

INDUSTRY NO OF COMPANIES

Manufacturing 32

Construction 9

Retail 6

Printing 2

Technology/IT 2

Real Estate 2

Hotel 1

Transport 1

Advertising 1

Computer Hardware 1

Financial Services 1

Food 1

Agriculture 1

Miscellaneous Services 18

Total 78

Fig 3.3: Industries’ representation among respondents

Further, questionnaires were numbered and data was entered in to XL spreadsheets.

Finally, data was analysed with the help of SPSS software. Most of the results of analysis

were projects through simple spreadsheets. However, multi dimensional scaling was used

conjoint analysis (Malhotra, 1999) was also carried out to project performance perception

and relative importance on scatter plot graph. Detailed analysis and findings (Stage 6) are

discussed in following chapters.

3.5 Conclusion

This chapter discussed the various stages of research (Problem Definition, Research

Approach, Research Design Developed) employed and the methods of data collection.

This information was required to analyse customer’s e-commerce preferences and their

implications for ATL and thereafter arrive at suitable recommendations to improve sales

and marketing processes. However, Market research is not a panacea for all marketing

problems. There are examples such as Sony Walkman and Dyson where marketing

28

research has not adequately supported decision- makers. Many of the problems that arise

from poor marketing research derive from poor communications between decision-makers

and researchers (Malhotra et al., 2003). The following pages will discuss the analysis of

findings and recommendations based on the findings.

29

CHAPTER IV

ANALYSIS OF FINDINGS AND RESULTS

Introduction

Further to data collection, data analysis proceeded in an iterative fashion as suggested by

Miles and Huberan (1984) and Weick (1989). This chapter discusses the analysis of

findings from the research conducted. The first part of the chapter discusses User Level

Variables and second, Business Level Goals used in the questionnaire (Appendix I). Both

the parts discuss respective aspects broadly on the basis of ‘Performance’ and

‘Importance’ as perceived by companies surveyed.

Since the research was to measure perceptions, the scaling technique was adopted in the

questionnaire for quantitative research. The questionnaire was precoded using numerical

scales. Indirect approach to measure ‘Performance’ perception were developed using a

series of statements concerning the issue, and individuals were asked to indicate his/her

agreement or disagreement on a scale with 5 gradations ( Strongly disagree=1,

disagree=2, neither agree nor disagree=3, agree=4, strongly agree=5) with numerical

values associated with each possible answer. However, for ‘Importance’ part of the

questionnaire respondents were asked to weigh the variables on a scale of 1 to 100.

A total of 90 questionnaires were eventually returned and 78 were used for the analysis

(12 were rejected because they were incomplete). Data obtained from questionnaires were

prepared using statistical techniques through SPSS software for further analysis.

4.1 Performance of User Level Variables

A total of eight variables were derived based on the Internet channel evaluation framework

(King and Liou., 2003). These variables were classified as user level variables as they

dealt with usability of the website. The brief description and items used for the variables is

explained in the table 4. Detailed explanation is provided in Appendix I. Further, in table

4.1 results of respondents for user level variables are presented. In table 4.2 a bar graph

represents a comparison of means for user level variables.

30

Variable Description Items

AvailabilityEase of access to the Internet channel for

the user.

Five items used such as

search engine availability,

platform availability and

time of the day etc.

SpeedChannel response time as experienced

by user.

Two items used such as

time taken by page to

download and type of

connection.

Content/

information

quality

Quality of site content as perceived by the

user.

Six items used such as

content quality and range

of products/services

offered etc.

Navigation /

Ease of usEase of use as perceived by the user.

Four items used such as

3-click rule, menu

structure and broken link

test etc.

TransactionEfficiency and effectiveness of

transactions performed via the channel.

Six items used such as

Online shopping facility,

online payment and query

form etc.

System

responsiveness

Help provided by the system to the user

in order to complete the task.

Three items used such as

order tracking facility,

online chatting and

feedback form.

InteractivitySite responds in customised manner to

user behaviour.

Three items used such as

promotional campaigns,

communities and personal

homepage.

Emotional

involvement

The extent to which the user becomes

emotionally involved through interacting

with the site.

Two items used such as

colors, graphics and

animations etc.

Table 4: User Level Performance Variables

31

Level of Performance (%)

Variable Strongly Disagree Not Sure Strongly Agree Mean SD

1 2 3 4 5

Availability 1 3 4 32 60 4.47 0.80

Navigation 1 3 13 45 38 4.17 0.84

Content 0 9 21 55 15 3.76 0.82

Speed 3 8 24 42 23 3.76 0.98

Emotional

Involvement4 13 42 37 4 3.24 0.87

System

Responsiveness 38 26 27 8 1 2.07 1.04

Transaction 55 11 13 13 8 2.05 1.38

Interactivity 50 27 14 3 6 1.88 1.15

n=78

Table 4.1: Comparison of Performance of User Level Variables

Comparison of Performance of User Level Variables

4.47 4.17 3.76 3.763.24

2.07 2.05 1.88

012345

Variables

Le

ve

l o

f P

erf

orm

an

ce

Table 4.2: Comparison of Performance (means) of User Level Variables.

32

Below is the analysis and findings for individual user level variables:

4.1.1 Availability

1 2 3 4 5

Performance Level

0

10

20

30

40

50

60

70

Pe

rce

nt

Availability Performance

Fig: 4.3: Availability Performance

Availability is defined as ‘ease of access to the internet channel for the user’. It is observed

(Table 4.1) that availability variable of website was addressed most efficiently by most of

the companies. The mean of 4.47 on the scale of 1 to 5, compared to others, supports the

point. From the findings presented in table 4.1, it can be seen that altogether 92% of the

respondents believe that their website is easily available across different access points

such as through different platforms, search engines etc. However, nearly 30% (Appendix I)

respondents still thought their websites were not available through search engines. This

suggests, though availability variable addressed well, it still leaves reasonable scope

particularly for online promotion through search engines.

4.1.2 Navigation

As for navigation, defined as ‘ease of use as perceived by user’, it was observed (Table

4.1) that altogether 82% of the respondents believe that their website is relatively easy to

navigate. Only 4% of the respondents considered that their website is not easy to

navigate, whereas 13% displayed neutral views about navigation.

33

1 2 3 4 5

Performance Level

0

10

20

30

40

50

Per

cen

t

Navigation Performance

Fig: 4.4: Navigation Performance

However, a close look into the different items discussed under the navigation variable help

to find some areas where improvement is needed. Nearly 31% respondents were unaware

that their website would be available through 3 click navigation rule. Also, nearly 19%

respondents did not agree that their websites meet this rule at all. It was also observed

that a considerable number of companies (nearly 31%) did not pay much attention to ease

of intra page links i.e. moving from one position to another within the same page and 10%

(Appendix I) respondents thought that their websites did not perform well on this variable.

These areas should be considered while offering website solutions to customers as they

substantially improve ease in usability.

4.1.3 Content

Content is defined as ‘quality of website content as perceived by the user’. From the

findings presented in Table 4.1, it can be seen that 55% of the respondents agreed that

their websites offer quality content while only 15% felt strongly that they provide quality

content, whereas 21% displayed a neutral attitude towards this variable. There was varied

perception about different parameters defined for content variable. Most of the companies

surveyed consider that they performed relatively well on the parameters such as content

quantity (70%) and authenticity (87%).

34

2 3 4 5

Performance Level

0

10

20

30

40

50

Perc

en

t

Content Performance

Fig: 4.5: Content Performance

However, problem areas here were, lack of attention to update the content on the website,

nearly 27% displayed a neutral view towards this aspect, while 15% felt that they do not

offer up to date content, and lack of differentiated product/service offering through the

website, nearly 33% displayed a neutral view towards this aspect, while nearly 32%

believed they don’t offer this service through their website. This suggests that websites

generally provided appropriate and authentic content to their customers. However, they

fared relatively not so well on the parameters such as differentiated product/service

offering and updated content.

4.1.4 Speed

Speed defined as ‘channel response time as experienced by the user’. From the findings

presented in the Table 4.1, it can be seen that although 24% of the respondents displayed

neutral view towards this variable, altogether 65% consider that their website perform well

with respect to page download time and irrespective of time of the day and type of

connection. The reason for this is partially due to the fact that high penetration of

broadband in the UK. This also suggested that companies have paid attention to speed in

a major way to avoid any user dissatisfaction.

35

1 2 3 4 5

Performance Level

0

10

20

30

40

50

Pe

rce

nt

Speed Performance

Fig: 4.6: Speed Performance

4.1.5 Emotional Involvement

1 2 3 4 5

Performance Level

0

10

20

30

40

50

Pe

rce

nt

Emotional Involvement Performance

Fig: 4.7: Emotional Involvement Performance

Emotional involvement is defined as ‘the extent to which the user becomes emotionally

involved through interacting with the website’. It was observed (Table 4.1) that nearly 42%

of the respondents were not sure whether their websites was exciting and challenging to

use. However, altogether 41% believed that their websites were exciting and challenging.

36

Only 17% believed that they did not fare well on this aspect. Nearly 44% were not sure

about excitement item, and only 13% believed their website was exciting to use. On the

other hand 60% believed that their website was attractive in terms of colours, graphics,

animations and flash movies used. This suggests that a substantial number of companies

pay attention to attach themselves emotionally with their customers through colours,

graphics and animations on the website.

4.1.6 System Responsiveness

1.00 2.00 3.00 4.00 5.00

Performance Level

0

10

20

30

40

Pe

rce

nt

Responsiveness Performance

Fig: 4.8: System Responsiveness Performance

System Responsiveness defined as ‘help provided to the user in order to complete the

task’. It was observed that altogether 64% (Table 4.1) of the respondents disagreed that

their websites performed well on this variable. Only 9% agreed that they address this

variable through online help, feedback forms, order tracking etc. This suggested that not

many companies have dynamic websites. This is an area where improvement is needed

as it facilitates companies to get closer to their customers. It helps to improve customer

satisfaction and hence loyalty in long term.

4.1.7 Transaction

Transaction is defined as ‘efficiency and effectiveness of transactions performed via the

internet’. From the findings in the (Table 4.1), it can be seen that altogether 66% of the

respondents disagreed that their websites performed well on this variable.

37

1 2 3 4 5

Performance Level

0

10

20

30

40

50

60

Pe

rce

nt

Transaction Performance

Fig: 4.9: Transaction Performance

Only 21% of respondents agreed that they fare well on this variable. This was primarily

because of the little number of companies offering online shopping facilities. Only 9% of

the companies surveyed offer online shopping, online payment and use authentic security

measures for online payments. However, there were companies which did not offer online

shopping but offer services such as query form (nearly 21%), online tracking or orders

made (nearly 9%). This suggests that there were very few websites offering online

shopping and other relative facilities. Though it is difficult to conclude, but this implies a

general trend from the companies surveyed.

4.1.8 Interactivity

Interactivity is defined as ‘website responds in customised manner to user behaviour’. It

means a website is assumed to be interactive when it offers two way communication, it

engages the user with itself while user browses the website. This primarily aims to

enhance user experience. From the findings of the survey (Table 4.1) it was observed that

few companies (altogether 9%) engaged their customers with personalised services.

38

1 2 3 4 5

Performance Level

0

10

20

30

40

50

Perc

en

t

Interactivity Performance

Fig: 4.10: Interactivity Performance

Nearly 77% responded negatively to this variable. Only 17% said they offer promotional

campaigns through websites. This suggests that, from the companies surveyed, their

websites marginally interact with their customers. This leaves plenty of scope to offer

customers websites coupled with interactive elements.

39

4.2 Importance of User Level Variables

In the second part of Section A (User Level) of the questionnaire (Appendix I),

respondents were asked to weigh the importance of all the variables discussed relative to

one another on the scale of 1 to 100. It was aimed to understand how important variables

are perceived compared to other variables at the same level (user level). Results revealed

that the content variable was given the highest priority followed by availability and

navigation at second and third place respectively. These results are summarised in the Fig

4.11 below.

Comparison of Importance of User Level Variables

2919 16 13 9 5 5 4

0

20

40

60

80

100

Variables

Le

ve

l o

f Im

po

rta

nc

e

n=78

Fig 4.11: Comparison of Importance of User Level Variables

4.3 Correlation of Importance and Performance of User Level Variables

Based on performance scale (Fig 4.2) and importance scale (Fig 4.11), results from both

are correlated on one scale with the help of scatter graph illustrated below (Fig 4.12). This

has helped to differentiate low performing variables from high performing variables on one

scale. The variables having mean below 3 on the performance scale are considered to be

low performers. Whereas, variables having importance less than 10 on the importance

scale are to be considered low performers. Findings from this correlation analysis suggest

40

that availability, content, navigation and speed are the high performing variables, whereas

transaction, interactivity and system responsiveness are the low performing variables.

0 5 10 15 20 25 30

Importance

1.50

2.00

2.50

3.00

3.50

4.00

4.50

Per

orm

ance

VariablesAvailability

Content

EInvolvement

Interactivity

Navigation

Speed

SResponsiveness

Transaction

Fig 4.12: Scatterplot of Importance against Performance of User Level Variables.

41

4.4 Performance of Business Level Goals

A total of nine goals were derived based on the Internet channel evaluation framework

(King and Liou., 2003). These are classified as business level goals as they dealt with the

strategic aspects related to the websites. The brief description and items used for the

goals is explained in the table 4.13 below. Further, in table 4.14a results of respondents for

business level goals are presented. In table 4.14b, a bar graph represents a comparison of

means for business level goals.

Goals Description Items

Strategic positionUsing the Internet to achieve strategic goals.

Four items used such as fit with

overall strategy and maintaining

strategic position etc.

Strategic responsiveness

Using the Internet to react rapidly to changes in the environment.

Two items, responsiveness to

customers’ need and latest news,

used.

Integration

Using the Internet to integrate business processes both internally and externally.

Three items used such as website

integration with business processes

and use of website to improve

processes etc

Complementarities

Using the Internet to compliment other business channels.

Three items used such as the

website compliments business

channels

Operational efficiency

Using the Internet to cut costs, improve productivity etc.

Eight items used such as whether

website helps to optimise human

resources, marketing process

efficiency and cut costs etc.

CommunicationUsing the Internet to improve communication internally and externally.

Single item was used.

42

Increased revenues

Using the Internet to increase revenues either directly, through online sales, or indirectly through referrals to offline sales channels e.g. call centres or branches.

Four items were used such as

whether website helps to attract

more customers, make strategic

alliances and increase profits etc.

User satisfactionOverall user satisfaction with using the channel.

Seven items used such as whether

website meets customer

expectations and helps to get

customer feedback etc.

Customer loyalty

The degree of loyalty exhibited by channel users e.g. repeat business.

Six items used such as whether

website can track customer’s use of

the webpages, revisits and page

views etc.

Table 4.13: Business Level Performance Goals

Level of Performance (%)

GoalsStrongly Disagree

Not SureStrongly Agree

Mean SD

1 2 3 4 5

Communication 11 17 27 31 14 3.19 1.21

Complementarities 6 23 35 33 3 3.03 0.967

Strategic

Responsiveness14 20 31 27 8 2.94 1.16

Increased

Revenues13 24 37 22 4 2.79 1.04

Strategic Position 8 33 39 19 1 2.73 0.90

Customer Loyalty 13 40 37 6 4 2.49 0.936

User Satisfaction 6 46 45 3 0 2.44 0.65

Operational

Efficiency27 40 20 10 3 2.22 1.04

Integration 27 35 23 14 1 1.05 2.28

n=78

Table 4.14a: Performance of Business Level Goals

43

Comparison of Performance of Business Level Goals

3.19 3.03 2.94 2.79 2.73 2.49 2.44 2.22

1.05

0

1

2

3

4

5

Goals

Level

of

Perf

orm

an

ce

n=78

Table 4.14b: Comparison Performance (means) of Business Level Goals

Below is the individual analysis and findings of business level goals:

4.4.1Communication

1 2 3 4 5

Performance Level

0

10

20

30

Perc

en

t

Communication Performance

Fig: 4.15: Communication Performance

44

Communication is defined as ‘using the internet to improve communication internally and

externally’. From the findings of the survey (Table 4.14a), it can be seen that altogether

45% of the respondents agreed that their websites help to improve the communication

between the customers and company. 27% displayed neutral view towards this variable

with nearly 28% responding negatively. This suggests that in context of corporate

websites, there is wide gap exist from communication point of view.

4.4.2 Complementarities

1 2 3 4 5

Performance Level

0

10

20

30

40

Pe

rce

nt

Complementarities Performance

Fig: 4.16: Complementarities Performance

Complementarities are defined as ‘using the internet to compliment other business

channels’. It was observed (Table 4.14a) that although 35% of the respondents displayed

neutral view towards this variable, altogether 36% agreed that they offer

complementarities through their websites. 29% responded negatively to this variable.

Further, only 21% agreed that most people come to know about their company through

their website. Also, nearly 43% agreed that they offer range of products and services

through websites. This suggests that there is scope to offer solutions such as product

catalogues.

45

4.4.3 Strategic Responsiveness

1 2 3 4 5

Performance Level

0

10

20

30

Perc

en

t

Strategic Responsiveness Performance

Fig: 4.17: Strategic Responsiveness Performance

Strategic responsiveness is defined as ‘using the internet to react rapidly to changes in the

environment’. From the findings presented in the table 4.14a, it can be seen that altogether

35% of the respondents agreed that their website perform well o this variable. 31% were

found to be neutral to this variable with 34% responding negatively. There is nearly equal

share of perceptions for this variable among companies surveyed. Further, 54% believed

that their websites don’t help to respond quickly to customers’ needs. This suggests an

improvement in the way websites designed and maintained to gain information from

customers or changing market dynamics.

4.4.4 Increased Revenues

Increased revenues is defines as ‘using the internet to increase revenues either directly,

through online sales, or indirectly through referrals to offline sales channels’. From the

findings (Table 4.14a), it was observed that only 26% of the respondents using their

website as a means to generate revenues. Further, 49% believed that website can attract

more customers. However, 72% believed that at present their websites do not increase

profits.

46

1 2 3 4 5

Performance Level

0

10

20

30

40

Perc

en

t

Increased Revenues Performance

Fig: 4.18: Increased Revenues Performance

4.4.5 Strategic Position

1 2 3 4 5

Performance Level

0

10

20

30

40

Perc

en

t

Strategic Position Performance

Fig: 4.19: Strategic Position Performance

Strategic position is defined as ‘using the internet to achieve strategic goals’. From the

findings (Table 4.14a) it was observed that although 39% of the respondents displayed

neutral view towards this variable, altogether 41% consider that their websites are not in

line with company’s overall strategy. Only 1% strongly agreed that their websites fit into

company’s overall strategy, with 19% agreed that their websites are in line with company’s

47

overall strategy. However, nearly 44% believed that a website may help organisation to

build strategic position in the market. Further, 67% disagreed that their website helps to

develop innovative products/services via the website (e.g.: by using online feedback). This

suggests that not many websites are in line with respective companies’ strategy.

4.4.6 Customer Loyalty

1 2 3 4 5

Performance Level

0

10

20

30

40

Perc

en

t

Customer Loyalty Performance

Fig: 4.20: Customer Loyalty Performance

Customer loyalty is defined as ‘the degree of loyalty exhibited by channel users’. From the

findings (Table 4.14a), it was observed that altogether mere 10% of the respondents

agreed that their websites help to build customer loyalty. 37% displayed neutral view

towards this variable with 53% responding negatively. This suggests that there is a

substantial lack of incorporation of customer loyalty measures in the websites among

companies surveyed. This further implies that customers should be made aware of tools to

build customer loyalty through websites.

48

4.4.7 User Satisfaction

1 2 3 4

Performance Level

0

10

20

30

40

50

Perc

en

t

User Satisfaction Performance

Fig: 4.21: User satisfaction Performance

User satisfaction is defined as ‘overall user satisfaction with using the channel’. From the

findings (Table 4.14a), it can be seen that altogether 50% of the respondents disagreed

that their website help to judge whether their customers are satisfied. 45% displayed

neutral view toward this variable with only 3% responding positively. This suggests that

huge number of websites lack basic features such as customer feedback form to judge

customer satisfaction, among others.

4.4.8 Operational Efficiency

Operational efficiency is defined as ‘using the internet to cut costs, improve productivity

etc’. It was observed (Table 4.14a) that altogether 67% of the respondents believed that

website does not help to cut cost, improve productivity etc. 20% displayed neutral view

towards this variable with only 13% responding positively. This implies, in general, that

website is not considered to achieve operational efficiency. Though website provides

enough opportunity to do so if processes such as recruitment and marketing could be

aligned with offline processes as it reduces time to finish these processes.

49

1 2 3 4 5

Performance Level

0

10

20

30

40

Pe

rce

nt

Operational Efficiency Performance

Fig: 4.22: Operational Efficiency Performance

4.4.9 Integration

1 2 3 4 5

Performance Level

0

10

20

30

40

Pe

rce

nt

Integration Performance

Fig: 4.23: Integration Performance

Integration is defined as ‘using the internet to integrate business processes both internally

and externally’. It was observed (Table 4.13) that altogether 62% of the respondents did

not believe that their website is integrated with different business processes such as

administration, supply chain etc. 23% displayed neutral view to this variable with nearly

50

15% responding positively. Further, 27% thought that business processes could be

improved using the website.

4.5 Importance of Business Level Goals

In the second part of Section B (Business Level) of the questionnaire (Appendix I),

respondents were asked to weigh the importance of all the business goals discussed

relative to one another on the scale of 1 to 100. It was aimed to understand how important

business goals are perceived compared to other goals at the same level (Business level).

Results revealed that the communication goal was given the highest priority followed by

strategic position and complementarities at second and third place respectively. These

results are summarised in the Fig 4.24 below.

Comparison of Importance of Business Level Goals

2713 11 10 9 9 8 7 6

0

20

4060

80

100

Goals

Level

of

Imp

ort

an

ce

n=78

Fig 4.24: Comparison of Importance of Business Level Goals

4.6 Correlation of Importance and Performance of Business Level Goals

Based on performance scale (Fig 4.14b) and importance scale (Fig 4.24) of business level

goals, results from both are correlated on one scale with the help of scatter graph

illustrated below (Fig 4.25). This has helped to differentiate low performing goals from high

performing goals on one scale. The goals having mean below 3 on the performance scale

are considered to be low performers. Whereas, goals having importance less than 10 on

51

the importance scale are to be considered low performers. Findings from this correlation

analysis suggest that communication and complementarities are the only high performing

goals with the communication goal at a very high end in comparison to the

complementarities goal. Further, findings suggest that goals such as integration,

operational efficiency, and customer loyalty and user satisfaction are appeared to be low

performers. Increase revenue and strategic position are performing reasonably on the

importance scale but performing poorly on the performance scale. This suggests that

respondent firms, in general, have not paid much attention to align their websites with their

overall strategy and implies they tend not to perceive websites as a tool to achieve

strategic objectives. The gap between importance and performance of these goals

provides an opportunity to make clients aware about the strategic importance of the

website.

5 10 15 20 25 30

Importance

1.00

1.50

2.00

2.50

3.00

3.50

Per

form

ance

Business GoalsCommunication

Complementarities

Customer Loyalty

Increased Revenues

Integration

Operational Efficiency

Strategic Position

Strategic Responsiveness

User Satisfaction

Fig 4.25: Scatterplot of Importance against Performance of User Level Variables.

52

4.7 Conclusion

This chapter analysed the date collected through quantitative research. SPSS software

was used for the analysis. The results helped to find high and low performers at user level

variables and at business level goals of Internet Channel. It was observed that user level

variables, in general, are being addressed well by the SMEs. However, large gap between

importance and performance of business goals was noticed. The following pages suggest

recommendations based on the findings and results in this chapter.

53

CHAPTER V

RECOMMENDATIONS AND CONCLUSION

Introduction

The aim of this chapter is to pull together all of the strands throughout the study to

consider the impact of the research as a whole. The chapter begins by referring back to

the objectives, in order to demonstrate how they have been met. A discussion of the way

the findings confirm, and add to the literature demonstrates the academic value of the

study. Practical worth is provided in terms of implications for Aquilo Technology Limited

(ATL), and the recommendations section makes these explicit. Limitations of the research

are included to ensure that the findings of the study remain in perspective, and

recommendations for future research are presented as a guide to those interested in

furthering this study.

5.1 Review of Research Objectives

This research attempted to fulfil objectives outlined in chapter- I. Below is the review of

research objectives studied.

1. How do SMEs in the UK perceive the user level performance of the Internet channel and how much importance they attach to the various aspects of performance?

A total of eight variables were derived based on the Internet channel evaluation framework

(King and Liou, 2004). These variables were classified as user level variables as they dealt

with usability of the website. Research revealed that the Availability variable of the website

received the highest mean score of 4.47 on the scale of 1 to 5, compared to others. 92%

of the respondents thought their website is easily available across different internet access

points. Other areas which were addressed well (mean score >3) were Navigation, Content,

and Speed with 78%, 70% and 65% respondents considering themselves to perform well

on these variables respectively. These high performance levels for these variables may be

attributed to technological advancements associated with the UK market. However,

variables such as Emotional Involvement (41%), System Responsiveness (9%),

Transaction (21%) and Interactivity (9%) were not highly perceived among the

respondents. This might be attributed primarily to two factors, 1. Companies generally offer

54

corporate information through their websites, and 2. A low number of websites offer

dynamic facilities, such as online shopping.

As for the importance of the variables (Table 4.11), it was observed that the results were

little different from the performance perception of the variables. The top four variables here

were the as for the performance scale but in a different order. The Content variable was

rated as the most important with mean score of 29%. Other variables given high

importance (above 10%) were Availability (19%), Speed (16%) and Navigation (13%). And

as with the performance scales, other variables, System Responsiveness (9%),

Interactivity (5%), Emotional Involvement (5%) and Transaction (4%), did not fare well.

This might be contributed primarily to factors such as, all the areas above not fared well

are generally associated with dynamic websites (e.g.: online shopping, real time chatting,

order tracking system etc.) and only 7 companies out of 78 responded provided online

shopping facility. Therefore, it might be because of very low number of respondents that

influenced findings in one direction. However, this clearly indicates that nearly 10% of

SMEs responded offer online facility to their customers. This suggests that one out of

every ten SMEs may need dynamic websites.

2. How do SMEs in the UK perceive the business level of the Internet channel and how much importance they attach to the various aspects of performance?

Strategic goals were classified as business level goals. A total of nine goals were derived

based on the Internet channel evaluation framework (King and Liou, 2004). Research

revealed that the Communication goal received the highest mean score (of 3.19).

However, less than half (45%) of the respondents agreed that their website communicated

well (mean 3). The only other variable which had a mean of more than 3 was

Complementarities (3.03). All others goals, Strategic Responsiveness (2.94), Increased

Revenues (2.79), Strategic Position (2.73), Customer Loyalty (2.49), User satisfaction

(2.44), Operational Efficiency (2.22) and Integration (1.05), had averages less than 3, and

thus SMEs were perceived to not be performing well on such attributes. This suggests that

respondents, in general, have not paid much attention to align their websites with their

overall strategy, and implies they do not perceive websites as a tool to achieve strategic

objectives.

55

As for the importance of these goals, again the Communication goal was given the highest

importance of 27%. Other goals given high importance (equal to or above 10%) were

Strategic Position (13%), Complementarities (11%), and Increased Revenues (10%).

Interestingly, User Satisfaction (9%), Customer Loyalty (8%) and Operations Efficiency

(7%) were rated poorly. Based on the comparison of both the scales for business goals it

was observed that business goals such as, Increased Revenues and Strategic Position,

were not addressed well (mean<3) on the performance scale despite their reasonable high

importance (more than 10%) on the importance scale. This suggests that there is a

potential for ATL to target customers particularly in the areas of Increased Revenues and

Strategic Position. Clients need to be made aware how they can achieve these goals.

3. How SMEs in the UK actually measure the performance of websites performance

measurement variables and strategic goals?

Although the original intention was to obtain the information for this purpose but

unfortunately this research could not fulfil this objective. The questionnaire was designed

to get the information for this purpose but only 4 respondents filled relevant section. It may

be because respondents were asked to write comments about how they currently measure

the performance of various website performance variables rather than simply tick the box.

4. What are the necessary modifications or processes to be adopted to improve ATL’s sales and marketing capabilities?

Based on the findings and results, numbers of ways to improve marketing and sales

process are recommended in the areas of Content, Availability, Speed, Navigation, and

Transaction and Strategic importance of the website. But there are all areas perceived to

be performing well by individual respondents. Therefore, it demands further study that

needs to target firms where performance in these areas is poor. A questionnaire (Appendix

II) has also been designed for ATL to evaluate the website of potential clients by ATL staff.

A new process flow framework (Fig 5.1) has been developed suggesting that incorporation

of website evaluation results into the sales process is the key to building long term

relationships with customers and profitability.

56

5.2 Recommendations

Further to the analysis of findings, the recommendations to Aquilo are as follows:

5.2.1 Content

It was observed from the quantitative analysis that content is given highest importance

(29%) among other user level variables. On the other hand, on the performance scale the

content variable was not perceived to be addressed most efficiently. The content (3.76)

was ranked third after availability (4.47) and speed (4.17) on the performance scale.

Altogether 70% of the respondents considered themselves to be offering quality content.

This shows high attention is paid by SMEs for the Content variable. However, out of 70%

only 15% strongly agreed that they offer quality content, whereas, 9% disagreed that they

offer quality content. Because the content variable has the highest importance and still it

was perceived to be not performing well compared to the importance given. This suggests

that though content matters most but still it has scope for improvement. Secondly, it means

that 9% of the respondents may be target customers.

It might be argued that most (70%) companies would not require better content service as

they are already perceived to be performing well. But as ATL would not contact these

respondents, we have to think in terms of potential/prospective clients. In those terms 70%

of potential clients may wish to have quality content on their websites. This means ATL

should strengthen its capabilities in this context and give maximum consideration to quality

of the content on the websites it develops. The issue could be addressed by hiring

professional copywriters. These copywriters must interact with clients in order to

understand their business and offer rich content.

5.2.2 Availability

The availability variable was observed to be the second most important (19%) variable. It

was considered by most (92%) of the respondents that they were perceived to be

performing well. This variable described the access availability through different channels

such as search engines and different platforms. Nearly 73% of the respondents said that

their website was available through search engines. This implies most of the companies

give emphasis on their presence through search engines. However, it was noted that ATL

do not provide search engine promotion services to its clients. Therefore, given the high

trend of adoption of search engine availability among SMEs, ATL should start providing

57

such services because most (nearly 73%) of the potential clients may wish to have this

service. This would work in favour of Aquilo in two ways, 1. ATL will have a new channel of

revenue by adding new service to its portfolio and, 2. This would give competitive

advantage to clients of ATL over their rivals. This is more important given the fact that the

people generally search through keywords. This ensures only relevant (prospective

customers) traffic come to the websites.

5.2.3 Speed and Navigation

Speed and Navigation were other variable which were given relatively high importance

(16% and 13% respectively). They were ranked third and fourth on the importance scale.

However, on performance, navigation was ranked second. 83% of the respondents

considered that they perform well. Speed ranked fourth with 65% considered that they

perform well. This indicates the prominence of these variables. For speed, this suggests

that websites should avoid using heavy graphics and animations which might slow the

webpage/website to download. For navigation, websites should be strictly made according

to 3 click rule, suggesting that information on the website should be available to the user

with a maximum of three clicks.

5.2.4 Transaction

It was observed that the variables such as System Responsiveness (9%), Interactivity

(5%), Emotional Involvement (5%) and Transaction (4%), did not fare well (i.e.

mean<10%). This might be contributed primarily to factors such as, 1. All the variables

above not fared well are generally associated with dynamic websites (e.g.: online

shopping, real time chatting, order tracking system etc.) and only 7 companies out of 78

responded provided online shopping facility. Therefore, it might be because of very low

number of respondents that influenced findings in one direction. However, this clearly

indicates that nearly 10% of SMEs responded offer online facility to their customers. This

suggests that one out of every ten SMEs may need dynamic (particularly transaction

based) websites.

5.2.5 Strategic Goals

From the findings of the analysis at the business level, it was observed that

Communication (45%) and Complementarities (36%) were the only strategic goals where

SMEs appeared to be performing reasonably well relative to other goals. All the other

58

business goals, ranked below 3 on the performance scale, were not being achieved by the

respondents. This suggests that respondent firms, in general, have not paid much

attention to align their websites with their overall strategy and implies they tend not to

perceive websites as a tool to achieve strategic objectives. However, Communication

(27%), Complementarities (13%), Strategic responsiveness (11%) and Increased

Revenues (10%) were ranked first, second, third and fourth respectively on the importance

scale. The gap between importance and performance of these goals provides ATL with an

opportunity to make clients aware about the strategic importance of the website.

Companies such as IBM, Dell and Cisco have hugely benefited themselves by aligning

their websites with their corporate strategy. For example, these companies do more than

50% of their businesses through their websites by aligning websites with their business

processes. However, these are large organisations and all organisations might not need

such high end websites as different organisations (Consultancy, FMCG, School etc) have

different requirements. But fundamental importance of strategic fit of the website is same

for all the businesses. Moreover, organisations need to see technology (here website) as a

tool to achieve competitive advantage. Therefore, ATL should emphasise strategic

importance of the website to its clients so that they can see the website as a tool to

achieve strategic goals. For ATL, it means clients may ask for dynamic (high technology

oriented) websites and hence bigger the size of the order would be.

5.2.6 Proposed Process Flow

Finally, a process flow framework has been developed and should be integrated into ATL’s

sales process. This process flow framework aims to help ATL incorporate

recommendations made into the sales process starting from telemarketing cold calls. The

process starts with a survey of potential clients through questionnaire developed for ATL

and used in this research project. Consequently, different stages are there in the process

involving identifying and evaluating client’s existing Internet system, offering bespoke

(customised) or packaged solution, followed by evaluation of new system over old system.

The diagram 5.1 below (next page) explains the complete process:

Fig 5.1: Proposed Process Flow Chart for ATL

59

60

Identify potential client

Understand Current Use of Internet

Evaluate Client’s Internet System

Evaluate new system

Opportunity?

Bespoke Solution

Required?

Happy Client

+ Referrals

NO

YES

Compare client’s current system to

Aquilo’s ‘Packaged Solution’

Contact Client

Sell packaged solution

Implement Package

NO

Evaluate ATL’s existing packaged system

Survey potential client

Client Agrees

Client Agrees

NO

NO

YES

5.3 Discussion

Usability (user level) findings of this research are more or less in line with the literature

review like ‘content’ has been given highest importance in this research as Agarwal and

Venkatesh (2002) in their research. However, high importance given to another construct

‘availability’ in this research was in contrast to low importance given in their research.

Compared to the research findings of Lee, Keterakkankul and Hong (2005) this research

does not indicate that transaction and pleasure are the main features of an effective

website.

Due to lack of any substantial literature on evaluation of business objectives matrices its is

difficult to make any agreement or disagreement.

The main advantage of the framework used for this research is its comprehensive nature

in the sense it provides measures to evaluate strategic objective associated with web

sites. As discussed in the literature, most of other frameworks or evaluation models have

provided only usability matrices and failed to provide matrices to evaluate business. Also,

not many scholars have tried to link web site performance to return on investment (ROI).

Secondly, despite small sample size this research covers wide number of industries

compared to other studies.

5.4 Limitations of the Research

The first constrain of this research is that only SMEs in the UK were included in the survey.

Also, this research is based on a small sample of 78 SMEs. Therefore, findings can neither

be generalised for all sizes of firms nor for other countries.

Second, there is a lack of information on how website performance is actually measured

and what are the best practices that SMEs use are. Although the questionnaire was

designed to obtain information for this purpose, only 4 respondents filled relevant section.

It was primarily because respondents were asked to write comments about how they

currently measure the performance of various website performance variables.

Finally, the research findings do no include end user perceptions. It would have been more

fruitful if end users of websites were included through qualitative interviews to know how

61

much importance they attach to different website performance variables. This would have

helped to disclose if there is any gap between Aquilo, businesses and the end users.

5.4 Directions for Future Research

This research, based on an Internet channel evaluation framework (King & Liou, 2004),

attempted to identify how SMEs in the UK perceive website performance measurement

variables, strategic goals for websites and how much importance they give to those

variable and goals. The results of the research would benefit Aquilo with rich insights

about its customers’ perception of services it offers.

The next logical step should be to understand if there is any gap between the perceptions

of Aquilo and its customers. However, the research could be broadened by including end

users of websites to gain neutral and comprehensive feedback. This would help to identify

if there is any gap that exist between perceptions of Aquilo, businesses and end users.

5.5 Conclusion

This chapter discussed the results from the analysis of perceptions while recommending

implications to improve sales potential for Aquilo Technology Limited. Recommendations

point out that incorporation of the website evaluation framework into a process flow is the

key to build long term relationships with customers and profitability. Further, this chapter

also reviewed the research objectives and listed the limitations of this research, along with

directions for future research suggesting there is ample room for future studies to better

understand internet channel performance.

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APPENDICES

Appendix I: Clients Questionnaire

COMPANY WEBSITE EVALUATION SURVEY(Leeds University Business School)

We are currently undertaking research to examine ‘best practices’ in terms of using the website as a means for facilitating business. We would therefore appreciate your time to complete this short survey based on your perception of your own website. In response, we will be pleased to provide you with a copy of findings aimed at maximizing the full potential benefits using the website as a vehicle for improving your company’s business performance.

SECTION A: USER LEVEL

The following list presents eight areas used to measure the performance of a website. To what extent do you agree/disagree that each of these have been addressed by your company’s website? Please refer to appendix enclosed for description of various user level and business level terms being discussed.(Please circle where appropriate)

AreasStrongly Disagree

Strongly Agree

1. Availability Our website can be found in most search engines (e.g.: Google, Yahoo, MSN) 1 2 3 4 5Our website can be found using its current domain name (e.g.: www.bbc.com) 1 2 3 4 5Our website is available whenever our customers need it 1 2 3 4 5Our website can be accessed from various networks and platforms (e.g.: different browsers, screen resolutions, operating systems)

1 2 3 4 5

Our website recovers quickly after an error 1 2 3 4 5

2. SpeedOur website downloads quickly ( e.g.: page size, time taken by page to download) 1 2 3 4 5

Response time is fast in all circumstances (e.g.: time of day, type of connection) 1 2 3 4 5

3. Content/Information QualityIt is easy to get information that our customer need (e.g.: products details, contact information, company profile)

1 2 3 4 5

Amount of content on the website is appropriate (e.g.: product/service focused, markets served)

1 2 3 4 5

Content available on the website is authentic (e.g.: trade associations, certifications) 1 2 3 4 5Content available on the website is up to date/latest (e.g.: date of content last published, recent news)

1 2 3 4 5

It is easy to understand the content (e.g.: product/service details, nomenclature used) 1 2 3 4 5

Differentiated products/services are offered (e.g.: internet only content/offer) 1 2 3 4 5

4. Navigation/Ease of useIt is possible to find information that our customer need in minimum number of clicks (e.g.: 3-Clicks rule, search facility)

1 2 3 4 5

All primary and secondary links are available (e.g.: menu structure, run broken link test)

1 2 3 4 5

It is easy to use intra-page links i.e. moving from one position to another within the same page (e.g.: in general maximum 3-5 links on a page)

1 2 3 4 5

63

It is easy to use intra-site links i.e. moving from one page to another within the same

website1 2 3 4 5

It is possible to use the web site without training 1 2 3 4 5It is possible to use the web site without previous experience 1 2 3 4 5

The navigation facilities of the web pages make tasks easier (e.g.: top left menu, clarity

about steps involved in transaction)1 2 3 4 5

It is easy to go back to previous steps without hassle (e.g.: a link on logo should take

the user to the homepage, transaction details/history available)1 2 3 4 5

5. Transaction

Our website offers online shopping YES/NO

Our website supports online payment (e.g.: credit cards)YES/NO

Our website uses authentic security measures for online payment (e.g.: verisign certification, etrust certification, secure server option) YES/NO

It is easy to fill-in purchase/query forms 1 2 3 4 5It is easy to cancel a purchase order 1 2 3 4 5It is easy to track progress of order made 1 2 3 4 5

6. System Responsiveness

Our website provides online customer service (e.g.: order tracking, account

information)1 2 3 4 5

Our website has real time online help (e.g.: online chatting mechanism) 1 2 3 4 5Our website provides offline customer help (e.g.: feedback forms, e-mail confirmation) 1 2 3 4 5

7. Interactivity

Our website provides personalised services (e.g.: personal homepage, mail account) 1 2 3 4 5

Our website supports communities that I am interested in 1 2 3 4 5

Our website offers promotional campaigns 1 2 3 4 5

8. Emotional Involvement

It is exciting/ challenging to use the website 1 2 3 4 5

Our website is attractive in design and layout ( e.g.: colours, pictures, animations, flash

movies)1 2 3 4 5

9. Given above the areas to measure the performance of website, we kindly ask you to weigh the importance of each one relative to others. You are given 100% to share between the nine areas. e.g. if you think they are all of equal importance you would allocate approximately 11% to each goal. (Please allocate the highest percentage to the most important factor and the lowest percentage to the least important factor for this relationship)

S.No. Area Importance Please state how the ‘Area’ is measured currently?

1 Availability _______%

2 Speed _______%

3 Content/Information quality _______%

4 Navigation/Ease of use _______%

64

5 Transaction _______%

6 System responsiveness _______%

7 Interactivity _______%

8 Emotional Involvement _______%

9Any other Area_______________ _______%

TOTAL 100%

SECTION B: BUSINESS LEVEL

The following list presents nine business goals for the website. To what extent do you agree/disagree that each of these goals have been addressed by your company’s website? (Please circle where appropriate)

GoalsStrongly Disagree

Strongly Agree

1. Strategic PositionOur website is integrated into the our company’s overall strategy 1 2 3 4 5Our website helps us to create a strategic position in the market 1 2 3 4 5Our website helps the us to maintain a strategic position in the market 1 2 3 4 5The company develops innovative products/services via the website. (e.g.: by using online feedback)

1 2 3 4 5

2. Strategic ResponsivenessOur website provides latest news about company to its stakeholders and customers

1 2 3 4 5

Our website helps our company to respond quickly to customer’s needs 1 2 3 4 5

3. IntegrationOur website is integrated with our company’s processes (e.g.:

administration, recruitment, communication, the supply chain)1 2 3 4 5

Our website helps the us to share our resources and capabilities with our customers (e.g. project management, database management)

1 2 3 4 5

Our company can improve its processes by using the website 1 2 3 4 5

4. ComplementaritiesMost people get to know about the company by using the website 1 2 3 4 5Our website complements our other channels 1 2 3 4 5Our company provides a wide range of information/services through the

website1 2 3 4 5

5. Operational EfficiencyOur website helps to reduce costs, such as overheads, management and

communication costs1 2 3 4 5

Our website helps to optimize human resource 1 2 3 4 5

Our website helps to increase productivity (e.g. effectiveness and efficiency

in administration, processes, knowledge sharing)1 2 3 4 5

Our website speeds up our processes (e.g.: marketing) 1 2 3 4 5

65

Our website helps to reduce human errors 1 2 3 4 5Our website makes recruitment application process more effective and efficient

1 2 3 4 5

Our website is useful for controlling our operations/processes 1 2 3 4 5

Our company expects a strong return on investment from the website 1 2 3 4 5

6. CommunicationOur website helps to enhance communication process between the

customers and the company1 2 3 4 5

7. Increased RevenuesOur company can attract more customers, in terms of volume and quality, by using the website

1 2 3 4 5

Our company can attract more customers from different countries by using the website

1 2 3 4 5

Our company can make strategic alliances by using the website 1 2 3 4 5Our website increases our profits 1 2 3 4 5

8. User SatisfactionOur website helps us to know whether our customers are satisfied with our products/services

1 2 3 4 5

Our customers are satisfied in using the website 1 2 3 4 5Our customers experience difficulties using the website 1 2 3 4 5Our website fails to meet our customer’s expectations 1 2 3 4 5

Many customers abandon our website before completing their task(e.g.:

information search, transaction)1 2 3 4 5

We know at which page customers abandon the website 1 2 3 4 5

Our website has a customer feedback mechanism(e.g.: comments,

complaints)1 2 3 4 5

9. Customer LoyaltyOur customers can register as members at our website 1 2 3 4 5We can track our customer’s use of the website (e.g.: repeat visits, repeat purchases)

1 2 3 4 5

Many of our customers recommend our website to colleagues/friends 1 2 3 4 5

Many of Customers revisit the website 1 2 3 4 5

A high percentage of our web-based business comes from existing

customers1 2 3 4 5

Our website primarily aims to attract new business 1 2 3 4 5

10. Given the business goals discussed within the questionnaire, we kindly ask you to weigh the importance of each one relative to others. You are given 100% to share between the ten goals. e.g. if you think they are all of equal importance you would allocate 10% to each goal. (Please allocate the highest percentage to the most important factor and the lowest percentage to the least important factor for this relationship)

S.No. Goal Importance Please state how the ‘Goal’ is measured currently?

1 Strategic Positioning _______%

2 Strategic Responsiveness _______%

3 Integration _______%

66

4 Complementarities _______%

5 Operational Efficiency _______%

6 Communication _______%

7 Increased Revenues _______%

8 User Satisfaction _______%

9 Customer Loyalty _______%

10Any other Goal _______________

_______%

TOTAL 100%

Respondent’s Name ……………………………………………………..

Job Title ……………………………………………………..

Company’s Website Address (URL) ………………………………………………………

THANK YOU VERY MUCH FOR YOUR TIME!

Appendix (enclosed with questionnaire)

Table 1: User Level Terms

Areas Description

Availability Ease of access to the Internet channel for the user.

Speed Channel response time as experienced by user.

Content/ information quality Quality of site content as perceived by the user.

Navigation /Ease of us

Ease of use as perceived by the user.

Transaction Efficiency and effectiveness of transactions performed via the channel.

System responsiveness Help provided by the system to the user in order to complete the task.

Interactivity Site responds in customised manner to user behaviour.

Emotional involvementThe extent to which the user becomes emotionally involved through interacting with the site.

67

Table 2: Business Level Terms

Areas Description

Strategic position Using the Internet to achieve strategic goals.

Strategic responsiveness Using the Internet to react rapidly to changes in the environment.

Integration Using the Internet to integrate business processes both internally and externally.

Complementarities Using the Internet to compliment other business channels.

Operational efficiency Using the Internet to cut costs, improve productivity etc.

Communication Using the Internet to improve communication internally and externally.

Increased revenuesUsing the Internet to increase revenues either directly, through online sales, or indirectly through referrals to offline sales channels e.g. call centres or branches.

User satisfaction Overall user satisfaction with using the channel.

Customer loyalty The degree of loyalty exhibited by channel users e.g. repeat business.

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Appendix II: Questionnaire used by ATL (internally)

COMPANY WEBSITE EVALUATION SURVEY

SECTION A: USER LEVEL

The following list presents eight areas used to measure the performance of a website. To what extent do you agree/disagree that each of these have been addressed by your company’s website? Please refer to appendix enclosed for description of various user level and business level terms being discussed.(Please circle where appropriate)

Areas Strongly Disagree

Strongly Agree

Don’t Know

1. AvailabilityThe website can be found in most search engines (e.g.: Google, Yahoo, MSN) 1 2 3 4 5The website can be found using its current domain name (e.g.: www.bbc.com) 1 2 3 4 5The website is available whenever I customers need it 1 2 3 4 5The website can be accessed from various networks and platforms (e.g.: different browsers, screen resolutions, operating systems)

1 2 3 4 5

The website recovers quickly after an error 1 2 3 4 5

2. SpeedThe website downloads quickly ( e.g.: page size, time taken by page to download) 1 2 3 4 5

Response time is fast in all circumstances (e.g.: time of day, type of connection) 1 2 3 4 5

3. Content/Information QualityIt is easy to get information that I need (e.g.: contact information, company profile) 1 2 3 4 5Amount of content is appropriate (e.g.: product/service focused, markets served) 1 2 3 4 5Content available is authentic (e.g.: trade associations, certifications) 1 2 3 4 5Content available is up to date/latest (e.g.: date of content last published, recent news)

1 2 3 4 5

It is easy to understand the content (e.g.: product/service details, nomenclature used)

1 2 3 4 5

Differentiated products/services are offered (e.g.: internet only content/offer) 1 2 3 4 5

4. Navigation/Ease of use 1 2 3 4 5It is possible to find information that I need in minimum number of clicks (e.g.: 3-Clicks rule, search facility)

1 2 3 4 5

All primary and secondary links are available (e.g.: menu structure, run broken link test)

1 2 3 4 5

It is easy to use intra-page links i.e. moving from one position to another within the same page (e.g.: in general maximum 3-5 links on a page)

1 2 3 4 5

It is easy to use intra-site links i.e. moving from one page to another within the

same website

1 2 3 4 5

It is possible to use the web site without training 1 2 3 4 5

It is possible to use the web site without previous experience 1 2 3 4 5

The navigation facilities of the web pages make tasks easier (e.g.: top left menu,

clarity about steps involved in transaction)

1 2 3 4 5

It is easy to go back to previous steps without hassle (e.g.: a link on logo should

take the user to the homepage, transaction details/history available)1 2 3 4 5

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5. Transaction

The website offers online shoppingYES/NO

The website supports online payment (e.g.: credit cards))YES/NO

The website uses authentic security measures for online payment (e.g.: verisign certification, etrust certification, secure server option) YES/NOIt is easy to fill-in purchase/query forms 1 2 3 4 5It is easy to cancel a purchase order 1 2 3 4 5

It is easy to track progress of order made 1 2 3 4 5

6. System ResponsivenessThe website provides online customer service (e.g.: order tracking, account

information)

1 2 3 4 5

The website has real time online help (e.g.: online chatting mechanism) 1 2 3 4 5

The website provides offline customer help (e.g.: feedback forms, e-mail

confirmation)

1 2 3 4 5

7. InteractivityThe website provides personalised services (e.g.: personal homepage, mail

account)

1 2 3 4 5

The website supports communities that I am interested in 1 2 3 4 5

The website offers promotional campaigns 1 2 3 4 5

8. Emotional InvolvementIt is exciting/ challenging to use the website 1 2 3 4 5

The website is attractive in design and layout ( e.g.: colours, pictures, animations,

flash movies)

1 2 3 4 5

9. Given above the areas to measure the performance of website, we kindly ask you to weigh the importance of each one relative to others. You are given 100% to share between the nine areas. e.g. if you think they are all of equal importance you would allocate approximately 11% to each goal. (Please allocate the highest percentage to the most important factor and the lowest percentage to the least important factor for this relationship)

S.No. Area Importance

1 Availability _______%

2 Speed _______%

3 Content/Information quality _______%

4 Navigation/Ease of use _______%

5 Transaction _______%

6 System responsiveness _______%

7 Interactivity _______%

8 Emotional Involvement _______%

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9Any other Area_______________

_______%

TOTAL 100%

SECTION B: BUSINESS LEVEL

The following list presents nine business goals for the website. To what extent do you agree/disagree that each of these goals have been addressed by company’s website? (Please circle where appropriate)

Areas Strongly Disagree

Strongly Agree

Don’t Know

1. Strategic PositionThe website is integrated into the company’s overall strategy 1 2 3 4 5The website helps the company to create a strategic position in the market 1 2 3 4 5The website helps the company maintain a strategic position in the market 1 2 3 4 5The company develops innovative products/services via the website. (e.g.: by using online feedback)

1 2 3 4 5

2. Strategic ResponsivenessThe company provides latest news to its stakeholders and customers with the help of website

1 2 3 4 5

The website helps the company to respond quickly to customer’s needs 1 2 3 4 5

3. IntegrationThe website is integrated with the company’s processes (e.g.: administration, recruitment, communication, the supply chain)

1 2 3 4 5

The website helps the us to share our resources and capabilities with our customers (e.g. project management, database management)

1 2 3 4 5

The company can improve its processes by using the website 1 2 3 4 5

4. ComplementaritiesMost people get to know about the company by using the website 1 2 3 4 5The website complements our other channels 1 2 3 4 5The company provides a wide range of information/services through the website 1 2 3 4 5

5. Operational EfficiencyThe website helps to reduce costs, such as overheads, management and communication costs)

1 2 3 4 5

The website helps to optimize human resource 1 2 3 4 5The website helps to increase productivity (e.g. effectiveness and efficiency in administration, processes, knowledge sharing)

1 2 3 4 5

The website speeds up our processes (e.g.: marketing) 1 2 3 4 5The website makes recruitment application process more effective and efficient 1 2 3 4 5The website is useful for controlling company’s operations/processes 1 2 3 4 5The company expects a strong return on investment from the website 1 2 3 4 5

6. CommunicationThe website helps to enhance communication process between the customers and the company

1 2 3 4 5

7. Increased Revenues

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The company can attract more customers, in terms of volume and quality, by using the website

1 2 3 4 5

The company can attract more customers from different countries by using the website

1 2 3 4 5

The company can make strategic alliances by using the website 1 2 3 4 5The website increases company’s profits 1 2 3 4 5

8. User SatisfactionThe website helps company to know whether its customers are satisfied with its products/services

1 2 3 4 5

Company’s customers are satisfied in using the website 1 2 3 4 5Company’s customers experience difficulties using the website 1 2 3 4 5The website fails to meet our customer’s expectations 1 2 3 4 5Many customers abandon the website before completing their task(e.g.: information search, transaction)

1 2 3 4 5

The website has mechanism to know at which page customers abandon the website

1 2 3 4 5

The website has a customer feedback mechanism(e.g.: comments, complaints) 1 2 3 4 5

9. Customer LoyaltyThe customers can register as members at the website 1 2 3 4 5The website can track customer’s use of the website (e.g.: repeat visits, repeat purchases)

1 2 3 4 5

Many of customers recommend the website to colleagues/friends 1 2 3 4 5Many of Customers revisit the website 1 2 3 4 5A high percentage of web-based business comes from existing customers 1 2 3 4 5The website primarily aims to attract new business 1 2 3 4 5

10. Given the business goals discussed within the questionnaire, we kindly ask you to weigh the importance of each one relative to others. You are given 100% to share between the ten goals. e.g. if you think they are all of equal importance you would allocate 10% to each goal. (Please allocate the highest percentage to the most important factor and the lowest percentage to the least important factor for this relationship)

S.No. Goal Importance

1 Strategic Positioning _______%

2 Strategic Responsiveness _______%

3 Integration _______%

4 Complementarities _______%

5 Operational Efficiency _______%

6 Communication _______%

7 Increased Revenues _______%

8 User Satisfaction _______%

9 Customer Loyalty _______%

10 Any other Goal _______________ _______%

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TOTAL 100%

Employee Name ……………………………………………………..

Job Title ……………………………………………………..

Client’s Website Address (URL) ………………………………………………………

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Appendix III: Different variables and their description used in the Internet Channel

Evaluation Framework (Source: King and Liou, 2003)

ConstructDescription Measures

(the extent to which Internet is used to)

How measured / Metrics (commercially supported metrics in italics)

Strategic positionUsing the Internet to achieve strategic goals.

Create a strategic position. Benchmarking.Maintain a strategic position. Competitor analysis.Support an innovative business model.

Strategic responsiveness

Using the Internet to react rapidly to changes in the environment.

Time to market; speed of change. Benchmarking

IntegrationUsing the Internet to integrate business processes both internally and externally.

Support business strategy; combine business functions; reconfigure and realign resources and capabilities.

Complementarities

Using the Internet to compliment other business channels.

Provide online and offline complementarities.

Referral mix.

Support vertical complementarities (after-sale service).

Benchmarking.

Support horizontal complementarities (cross selling).

Benchmarking; range of products/services cross-sold.

Bundle products / services.Operational efficiency

Using the Internet to cut costs, improve productivity etc.

Improve daily operations; integrate supply chain activities; disintermediate supply chain.

RoI; cost reduction; productivity improvement; time saving; frequency of errors.

Optimize human resources. Staff headcount.Improve management control. Integrate Internet channel with

Enterprise Management Systems (EMS).

Communication Using the Internet to improve communication internally and externally.

Facilitate communications among employees, partners and customers.

Costs of paper and phone calls; time saved.

Increased revenues

Using the Internet to increase revenues either directly, through online sales, or indirectly through referrals to offline sales channels e.g. call centres or branches.

Access new business opportunities / markets.

User / customer profile analysis; increase in market share.

Create profitable business models. Online revenue contribution; sales conversion rate; sales per customer.

Create sponsorship opportunities.Support customer decision-making in the transaction process.

Table 1. Initial business-level framework

74

ConstructDescription Measures How measured / Metrics

(commercially supported metrics in italics)

AvailabilityEase of access to the Internet channel for the user.

Ease of access; access reliability

Load test; Stress test; Initial page load time; Validation of different platforms and software; availability via search engines; availability via domain name.

Website availability. Percentage site downtime; site recovery time.

SpeedChannel response time as experienced by user.

Waiting time. Response time; Page load time; Traffic volume; Data variation; Download time at network-level (DNS lookup time, route time or redirect time); Download time at web-level (GIFs, Javascript, flash content), ISP performance comparison.

Content/ information quality

Quality of site content as perceived by the user.

Understandability; reliability; relevance; adequacy; up-to-date; usefulness.

Depth and breadth. Benchmarking.Product/service differentiation.

Benchmarking.

Assurance. Content check.Navigation /Ease of use

Ease of use as perceived by the user.

Web page layout; sequence; structure.

Path trace; Clickstream analysis; Link completeness; Third-party software validation; Streaming (multimedia) measurement.

Design consistency & style.Users feel confident / in control; simplicity.

Search facilities; comparison facilities; reversibility of actions; feedback on status.

Transaction Efficiency and effectiveness of transactions performed via the channel.

Shopping effort; ease of ordering.

Transaction process time.

Delivery. Accuracy of delivery process; choice of delivery methods.

Payment. Multiple payment mechanisms.Vendor trust.

Table 3a: Initial user-level framework

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ConstructDescription Measures How Measured / Metrics

(commercially supported metrics in italics)

User satisfaction

Overall user satisfaction with using the channel.

User satisfaction. Conversion / attrition rate; frequency of complaints; online satisfaction survey.

Perceived value gap. Conversion / attrition rate.

System responsiveness

Help provided by the system to the user in order to complete the task.

Customer service & support.

FAQ facility; online help mechanism.

Interactive consultancy. E-mail response rate; alternative call centre channel available.

InteractivitySite responds in customised manner to user behaviour.

Customization / personalisation.

Personalised web page facility.

Users learn from using the site.

Feedback mechanism provided.

Emotional involvement

The extent to which the user becomes emotionally involved through interacting with the site.

Attractiveness; playfulness; enjoyment; excitement; challenge.Feeling of participation. Online community available.

Customer loyalty

The degree of loyalty exhibited by channel users e.g. repeat business.

Lock-in; likelihood of return; customer retention.

Number of members / subscribers; performance of loyalty programmes; proportion of repeat visitors; frequency of site use.

Table 3b Initial user-level framework

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