CHAPTER!
INTRODUCTION
1.1. Research Background
In last few decades, the global economy is increasing significantly and there is no
sign to slowing down. This is made possible by the support
of Information
Technology, especially Internet since mid 1980s. And in 1993, the World Wide Web
(WWW)
penetrates
was commercialized with its user-friendly
browsers and increasingly
into home and organizations all over the world. According to research
conducted by the U.S. Department of Commerce, the use of Internet is increasing
drastically. In 1994, 3 million people, mostly in U.S. can access the Internet. In 1997,
40 million people worldwide were connected. And in 1998, I 00 million people are
using this technology. And the number will increase in the following years.
Following the rising of the World Wide Web technology, the new Information
Technology tenn was born. The term is Electronic commerce or every body known as
e-commerce. E-commerce describes the way in which transactions take place over
networks, mostly the Internet. In broad meaning is the process of electronically
buying and selling goods, service, and information. From the research taken by the
U.S. Department of Commerce, in early 1995, commercial transactions between the
company and the customers using the Internet had begun. E-commerce significantly
affects the world on businesses, professions, and people. And the t,>ro\ving of this way
2
of business
is very drastically. Article
written
by Martin
Stone
published
in
BizReport.com mentioned that business-to-consumer e-commerce reached $33.1
billion in 1999, according to online retailers' trade association shop.org. And the
market is expected to grow 85% in 2000.
1.2. The Problem and Its Setting
Nowadays, million people around the world access the Internet. Also at the main
cities in Indonesia, people with computer can access the Internet and browse the
WWW easily from their home or office. Moreover, today there are many "Internet
Cafe" that supporting people to access the Internet.
For most of the brick and mortar; the term for traditional companies, WWW is the
new magnificent market place to explore and raise their total sold to increase benefit.
And for the Internet-only companies, WWW is an interesting opportunity to doing
business. Unfortunately, till now this potential is not optimally reached, especially in
growing
countries
like
Indonesia.
From
the
research
conducted by Daniel
Adhinugraha Wimandjaya, found that the Indonesian Internet users' attractiveness
and actions towards online commercial activities \vith financial commitment is low or
only 11.62% from 465 total respondents. Why this can be happen? What are the
factors that affecting the Internet user to visit and participating in online commercial
activities like cybermall or virtual store?
3
Research that have been conducted by Novak (1999), at Owen Graduate School of
Management, found that there are many reasons why Internet users not yet made a
purchase online:
•
13.7% Internet users would buy online if they could speak directly to a customer
service representative.
•
35% online shoppers would buy more products online if there was real-time
interaction with a sales person.
The setting of this research is in the E-commerce and E-consumer topics. There are
many issues that come with online commercial activities from the user's preference
point of view.
The issues can be group to t\vo major categories:
1. The characteristics of the cybermall or virtual store point of view:
•
Payment security. Is the security of the payment will be positively related to
encourage the user to visit and buy the product from cybermall or virtual
store?
•
Web design. Is the design of the cybermall or virtual store will be positively
related to encourage the user to visit and buy the product?
•
Multimedia level. Is the level of multimedia appearance will be positively
related to encourage the user to visit and buy the product from cybermall or
virtual store?
4
• Download time. Is the time to download the page will encourage the user to
visit and buy the product from cybermall or virtual store?
• Contents. Are the contents that offered from the cybermall or virtual store
will encourage the user to visit and buy the product from cybermall or virtual
store?
2. External factors point of view:
• Demographic. Is demographic factors from the user will encourage him/her
to visit and buy the product from any cybermall or virtual store?
•
Internet experience. Is the user's Internet experience level will encourage
him/her to visit and buy the product from any cybermall or virtual store?
• Information sources. Are the information sources
the user obtain will
encourage him/her to visit and buy the product from any cybermall or virtual
store?
1.3. Research Goals
The ongoing research will focus on recognizing WWW user's preference on the
following areas:
• Precondition factors. To find out whether
the URLs, visibility, banner
advertising, and promotions have certain influence to WWW user to visit or
revisit the cybermall/ virtual store.
• Technical factors. To find out whether technology, the strategic e-mail use,
design, and contents have influence to WWW users to visit or revisit the
cybermall/ virtual store.
5
• The characteristics of the cybennall or virtual store. To find out whether the
characteristics of the cybennall or virtual store, like: design, transaction
service, contents, advice & market review, cost, customer service, features,
and delivery service have certain influence to the WWW user on making
transaction in the cybennall or virtual store.
• External factors. To find out whether demographic factors, including gender,
age, and education have certain influence to the WWW user on making
transaction in the cybennall or virtual store.
1.4. The Important from This Research
The findings of this research will contribute to a better theoretical understanding of
the characteristics of the cybennall or virtual store and also factors that are meet and
suitable with Indonesian WWW user preferences.
The finding will also benefits for the management of marketing that want to expand
their marketing to WWW, and for the people or organization who want to build the
online web-based marketing to understand and increasing the knowledge about the
commercial web site's characteristics and other factors.
This research also will find out the user and/or customer behavior and preferences in
using the Internet for purchase something.
6
1.5. Research Scope
There are many type of business perspectives in electronic marketing. Until today,
eight types of perspectives are known. These perspectives are:
Direct
marketing
versus
indirect
marketing.
Direct
marketing means that
manufacturers advertise and distribute their own products to customers via the
Internet-based electronic store or other telemarketing media without intervention of
any intermediaries. Indirect marketing means that the products are distributed through
third-party intermediaries.
Full cybermarketing versus partial cybermarketing. Full cybermarketing means
that companies sell their products and I or service only through the Internet. Partial
cybermarketing means the companies sell not only through the Internet but also
through traditional physical stores.
Electronic distributor versus electronic broker. Electronic distributor means that
the companies responsible for order fulfillment and guarantee. Where electronic
broker only introduce suppliers who deal \vith the items that the customers are
looking for.
Cyber store versus cyber shopping mall. Cyber store is an electronic distributor
whose dealing items are handled by a single store. A cyber shopping mall is an
electronic distributor whose dealing items are handled by more than a single
electronic store.
Generalized cybermalls I stores
versus
specialized cybermalls I stores.
Generalized cybennalls I stores deal with various categories of items. In other hand,
specialized cybennalls I stores focus on only special types of items.
7
Proactive versus reactive strategic posture toward cybermarketing. Proactive
strategic posture toward cybermarketing means that a company's main distribution
channel is the Internet, and internal activities are focused to capitalize on the benefit
of cybermarketing. A reactive strategic posture toward cybennarketing means that the
traditional physical distribution channels continues to be the main ones even though
the company has opened an online distribution channel.
Global versus regional marketing. In global marketing, products and I or services
are provided globally. In regional marketing, products and I or services cannot be
provided globally.
Sales versus customer service.
In sales, the company's website is provided for
selling products and I or services. In customer service, the company's website is
provided only for customer service.
From the perspectives
above, this research
is focus specifically to analyze the
cybermall or virtual store web site's characteristics and external factors that influence
to the WWW user's preferences. Where the cybermall or virtual store that will be
examined are for business to consumer (B2C) type only and are both from local
(Indonesia) and foreign. Examples of the local cybennall or virtual store are
gadogado.com,
radioclick.com,
and
gramedia.com.
Examples
of
the
foreign
cybermall or virtual store are amazon.com. The cybermalll virtual store can be direct
or indirect marketing, full cybermarketing or partial cybermarketing, generalized or
specialized mall or stores, and global or regional marketing.
8
This research is using primary and secondary data. The primary data is needed to
analyze the Internet user preference in cybermall or virtual store effectiveness and
will be gathered by sending a questionnaire via e-mail and letter. The respondents are
the WWW users, either for commercial, academic, or individual purposes. Existing
data from other research, journal, article, magazines, and article in the Internet are
used for the secondary data.
WWW user's
preferences
levels that
will
be
examined are
limited to
the
characteristics of the cybermall or virtual store, its precondition, and the external
factors, which are age, gender, and education. And the effectiveness that will be
measured is the cybermall or virtual store visit or revisit and the level of transaction.
The research does not try to analyze the business-to-business e-commerce or e-biz
that the exchange of products, services, or information is between businesses rather
than between businesses and consumers and electronic broker. Also the research does
not try to analyze the business-to-consumer e-commerce that run in service type of
business.
1.6 Thesis Structure
The thesis will be divided into five chapters, with the following contents:
I.
Chapter one will give global introduction to the research. This chapter including
research background, the problem and its setting, research goals, the important of
this research, research scope, and the thesis structure.
9
2.
Chapter two will cover the entire theoretical framework and references used in the
research.
3.
Chapter three will explain the research methodology, the place and time of the
research, data collection methodologies and the analysis methodologies.
4.
Chapter four will contain the result of the data processing and its description,
including validity and reliability test, general analysis, and
user preference
priority tests.
5. Chapter five will conclude the research and offer some suggestions for the parties,
who receive the advantages of the research, and some follow up or suggestion for
further research on this topics.