Theory Of Reasoned Action

Theory Of Reas wizardd ActionCHAPTER 2LITERATURE REVIEW2.0 IntroductionThis chapter go forth deals with take after of literature review in the argona of online buy goal and perceive put on the line and its determinants. This section will hold forth the supposeent, independent and mediating variables and the relationship among the variables that great power enamour consumer cognitions of sensed risk towards online purchase intention. Researcher was replicates the framework from the study Factors influencing consumer perceptions of brand entrust online by Hong-Youl Ha, 2004 and The influence of prior cause and age on rise consumers perceptions and intentions of internet app arl shopping by Wi-Suk Kwon and Mijeong Noh, 2009. The reason to choose this framework atomic number 18 beca habituate, this framework seem like fit with Malaysian culture and tradition. Although police detective was replicate the framework hardly virtually changes were made, which is researche r will combine both of the frameworks into one(a) newly framework and will test the framework into antithetical setting of place.2.1 Theory of Reasoned Action (TRA)To discharge some improvement for the past studies, researcher will apply the Theory of Reasoned Action (TRA) by (Fishbein, 1980) and Theory of Planned Behavior (TPB) by Ajzen in 1991.Theory of Reasoned Action (TRA) by Fishbein, 1980 was developed to explain how a consumer snuff its to a certain purchasing carriage, this theory asserts that attitude toward buying and natural norm are the antecedents of put to deathed behavior. Two antecedents which are (attitude and subjective norm) influence the purchase behavior additively (Ha, 1998). Two important propositions profound the theory of reasoned action offered by Lutz (1991) are the first one is to predict a purchase behavior, it is necessary to measure a persons attitude toward playacting that specific behavior, not only the general attitude toward the object a round which the purchasing behavior is. The second one is, in addition to the attitude toward the behavior, TRA includes a second determinant of overt behavior viz. the subjective norm (SN). SN is intended to measure the social influences on a persons behavior much(prenominal) as family members or friends and colleagues expectations. Some eons in some situations expectation of relevant from others may be a major factor in ultimate behavioural performances and simply not under the attitudinal control of individuals. Another study Lada et al., 2009, claim that according to the TRA, a persons intention is a function of two basic determinants, which are one individualised in nature and the other one is reflecting social influence. The personal factor is the individuals irrefutable or negative evaluation when acting the behavior and this factor is termed attitude toward the behavior. The second determinant of intention is the persons perception of the social pressure put on him o r her whether to perform or not to perform the behavior in question and this factor is termed subjective norm since it deals with perceived prescriptions, (Ajzen and Fishbein, 1980).harmonize to Ajzen and Fishbein, 1980), attitudes are a function of beliefs when someone believes that performing a abandoned behavior will put out to mostly positive vector sums they may hold a favorable attitude toward performing the behavior, contrary a person who believes that performing the behavior will lead to mostly negative outcomes then they will hold an unfavorable attitude. The beliefs that underlie a persons attitude toward the behavior are termed behavioral beliefs while subjective norm is a function of beliefs that specify individuals or groups to think whether they should or should not perform the behavior and these beliefs which is underlying a persons subjective norm termed as a normative belief. A person who believes that most referents with whom they are motivated much to comply t hink, that they should perform the behavior will mystify social pressure to do so (Lada et al., 2009).2.2 Theory of Planned Behavior (TPB)The second theory is Theory of Planned Behavior (TPB), which is proposed by Ajzen in 1991 as an extension of the first theory discussed above which is theory of Reasoned Action (TRA) (Fishbein, 1980). (Ajzen and Fishbein, 1980), the TPB has been used by m either researchers over the past 20 years and its shown to be able to predict a variety of intentions and behaviors perform by persons. According to Ajzen (1991), a persons action is determined by their behavioral intentions, which in turn are influenced by an attitude toward the behavior and subjective norms as discussed above.(Azjen, 1991), behavioral intentions are factors that capture how people are voluntary to try to perform a behavior, behavioral intention likewise the most influential predictor of behavior and its shown that in TPB constructs, intention was a better predictor of behavi or. In the TPB, attitude toward the behavior is specify as ones positive or negative feelings about performing a specific behavior and determined through an assessment of ones beliefs regarding the consequences which is arising from ones behavior and an evaluation of the desirableness of these consequences.2.3 conceptual Definition of Dependent Variable (Online Purchase Intention)It is best to start this study by explaining what an online purchase intention is it in order to give some idea and to dispel some common misconceptions that might occur.Purchase intention do-nothing be defined as a plan to purchase a particular goods or services in the future. Purchase intentions is the likelihood that a consumer will buy a particular harvest-feast in which resulting from the interaction of his or her need for it, attitude towards it and perceptions of it and of course from the company itself which produces the products or services (J. Baker, 1998).This study using translation from (Az jen, 1991), behavioral intentions are factors that capture how people are willing to try to perform a behavior, behavioral intention withal the most influential predictor of behavior, intention also was a better predictor of behavior.2.4 Conceptual definition of Mediating Variable (Perceived Risk)Risks is a part of everyday life and always come as a routine in between us and hold out when there is a less than 100 percent probability that things will turn out as someone expected will happen (Baeur, 1967). Risks are different for different persons, according to Martin and Camarero (2008), some people view risk as a their inability to value the quality of the product directly, lack of personal contact with the salesperson, the cost involve of accomplishment on how to use the internet, cost switching different channels, security of payment and personal info. Whilst others, view risk as a (Stone and Gronhaug, 1993) degree of unbelief about the outcome of an action which might carrie s the possibility of physical harm or damages.Manzano et al., 2008 offered six dimensions of perceived risk which are security risk, privacy risk, performance risk, time harm risk and social risk. Whilst Beardon and Mason, 1978 proposed different dimensions of perceived risk namely, financial risk, social risk, performance risk, psychological risk and physical risk. Although there are different kind of names or term used but the meaning is quiet same in a context of online shopping. Financial risk or security risk share a same meaning, it can be incurred when guests financial circumstances are disgraced because of loss of money in cash or via credit card (March, 2006 Manzano et al., 2008). Social risks come through purchasing member that is perceived to be down-market (March, 2006). smaller and Melanthiou, 2006 found that social risk is concerned with the possibility of attracting unfavorable attention and solution from purchasing a particular product. Consumer attitudes to the different methods of purchasing highly depend on their characteristics. Performance risk according to (Littler and Melanthiou, 2006) is concerned with how well the product perform relative to expectations for example, the lack of personal contact with a salesperson forbid the consumer from correctly evaluating the characteristics of the product which in turn decreasing confidence (Ba, 2001) among consumer. It is good if consumer can try out the product they will buy before they make a payment, (Gerrard and Cunningham, 2003) in their study reveal that the opportunity to claim a trial before make payment provides the necessary confidence to consumers with high perceived performance risk. Whilst March 2006, implies that performance risk is occur when a product does not fulfill its function as expected especially services which may take risk time wasted in waiting. Time loss risk happen when consumer incur time costs from using online purchasing, the time of learning how to buy on a certain products, the time to wait for respond or the time for searching process( Littler and Melanthiou, 2006). Physical risk conduct with purchases that might include products which are unsafe or will cause physical harm to the user or in services, allow customers to take risks whilst undertaking baseless activity such as cycling (March, 2006). The last dimensions of perceived risk are psychological risk, which may be caused by consumers wearing unfashionable clothes, leading to the social risk of not fitting in and in turn will slump confidence level among consumer.We do not always accurately perceive the threats of risks, accurately understanding and effectively eliminating or limiting risks are part of the survival and safety especially in online industry. Risk management moldiness be an active part of facility marketing manager duties, risk should be well manage to control the financial and personal injury loss from sudden, unforeseen, unusual accident, and intentional tor ts (Ammon et al., 2004). In summary, for the purpose of this study, perceived risk can be summarize as a degree of uncertainty about the outcome from an action which carries the possibility of physical harm especially in financial and entropy fraud. Hence, this study assumes customer perceived risks are all the six dimensions discuss above which are, security risk, privacy risk, performance risk, time loss risk and social risk.2.5 Conceptual definition of Independent Variables2.5.1 SecurityTheres a various definition of security, Yoo and Donthu, 2001 Wolfinbarger and Gilly define security as to protecting the user from the risk of fraud and financial loss. According to (Milne et al., 2004), security often breaches of internet transmissions and databases enable the unauthorized use of consumers confidential information from third parties such as, name, address, password, social security and credit card numbers and, often result in identity theft. In reality, the face of privacy los ses and information misuse in e-commerce settings may offset any convenience, time, and financial savings afforded to consumers olibanum by providing security for consumers will lead to customer satisfaction and in turn will decrease risk perception among consumers.Unfortunately, security breaches are occurring at a growing rate from time to time. Indeed, Miyazaki and Fernandez (2001) found that internet users highly concerns with regard to online shopping were privacy, system security breaches from third parties in which due to faulty technological security and security breaches in the form of fraudulent online retailer behavior. Security plays a vital utilization on customer trust and customer satisfaction, thus by providing security to consumers will lead to brand trust and would expect (Mayer et al., 1995) security decrease risk perceptions among consumers. On the other hand, Krisnahmurthy (2001) also found that consumers who recognize positive security leads to improvements in the levels of familiarity on the sack up, accordingly security should affect brand trust as well as decrease risk perceptions.2.3.2 PrivacyConsumers patronizing an online service which requires the first-string transmission and remote storage of confidential information may perceive elevated concerns regarding threats to the privacy of their personal and confidential information is very important during online proceeding (Mauricio et al., 2007). Privacy refers to protection of personal details implicit or explicit agreement and not to sell or exchange the personal information collected from consumers during transactions (Yoo and Donthu, 2001 Wolfinbarger and Gilly, 2003). Another definition of privacy from (Parasuraman et al., 2005) is the claim of individualsto determine on when, how, and to what extent information about them is communicated to others. (Caudill and Murphy, 2000 Sheehan and Hoy, 2000) proposed in their studies that consumer concern for information privacy is c onsidered one of the most important issues nowadays.Fried (1998) was one of the earliest modern scholars to evaluate the notion of privacy he argued that privacy is especially valuable since it allows people to conduct online transactions that result in trust, which would not be possible in the absence of privacy. Caudill and Murphy (2000) argued that both public and head-to-head information should be include in the debate regarding privacy since technologies today are reservation it increasingly easier to move private information into the public do main(prenominal), which will cause consumers serious concerns regarding their private information. If the private information going into public meaning that, there is no privacy at all and this will cause distrust among customers and will lead to unsatisfied customers.2.3.3 Brand NameTheres are various definition of brand, one of the definition is proposed by Bennett, 1988 claim that a brand is a name, term, sign, symbol, design, or an y combination of these concepts, used to identify the goods and services of a seller. Keller (1998) states that brand name are one of the main factors facilitating the development of brand awareness or familiarity. The much(prenominal) specialized and reputable a brand name is in selling or recognizing the product or service, the more highly will its brand trust be perceived by consumers. Choosing a brand name for a consumer product or service is so critical that some writers argue it is one of the most important marketing management ends that marketing manager should take highly considerations about choosing a brand name (Landler et al., 1991). A well elect brand name can provide a customer with a symbolic meaning which assists in both the recognition of the product and the decision-making process (Herbig and Milewicz, 1993), it is also can produce a number of specific advantages including suggesting product benefits (McCarthy and Perault, 1990), contributing to brand identity, simplifying shopping, implying quality (McNeal and Zerren, 1981), evoking feelings of trust, confidence, security, strength, durability, speed, status and exclusivity and at the end of the day can decrease risk perceptions (Shimp, 1993).The more positively the persons perceived the brand, the higher the consumers brand awareness and loyalty, allowing the firm to command larger margins, higher market share, more inelastic consumer response to price increases, less vulnerability to competitive activity, increased marketing communications effectiveness, additional brand extension opportunities and other competitive advantages such as dispersion leverage, customer satisfaction and as well as decrease risk perceptions (Keller, 1998).2.3.4 Word of MouthWord of mouth (WOM) plays a vital role in consumer behavior because Word of mouth (WOM) would affect purchase and intention to purchase and also experience of other consumers by conveying their consumption experience of others, namely the satisfaction or dissatisfaction after the purchasing process occur. WOM is commonly defined as informal communication about the characteristics of a business, services or a product which occurs between consumers (Westbrook, 1987). Most importantly, WOM also allows consumers to exert both informational and normative influences on the product or service evaluations and purchase intentions to fellow consumers (Bone, 1995 Ward and Reingen, 1990). According to Ha, 2004, WOM has been shown to influence awareness, expectations, perceptions, attitudes, behavioral intentions and behavior towards a product or services.Online shopping consumers will perceive higher purchase risk than that of the traditional shopping since the purchase occurs in virtual space rather than face to face transactions. They will accordingly rely more on WOM information to reduce uncertainty and purchase risk to make decisions (Kim and Song, 2010). According to Assael (1995), since online shopping has higher purchase risk than face to face interactions, (Richins and Shaffer, 1987) consumers carry out WOM action to obtain market information while making buying decision especially consumers who rely more on WOM as they perceive higher risks.Nowadays, there a growing luggage compartment of evidence that the internet based opinion mechanism influence consumers when making a purchase such as blogs, social network (facebook, myspace, twitter) (Hong, 2006) and this is a new form of word of mouth communication and is known as electronic Word of Mouth (e-WOM). e-WOM is any positive or negative communication among the potential, watercourse or former customers about a product, services or company that is available to public on the internet. Indeed, (Sen, 2008 Sen and Lerman, 2007) claimed that the impact of e-WOM is not as effective as the traditional face to- face word of mouth (WOM). In contrast, Steffes and Burgee (2009) found that the information gained from the e-WOM forum is more influential and beneficial in decision making process rather than speaking with friends in person (WOM).2.3.5 Good Online ExperienceOften consumers tend to remember best the last experience they encounter (the recentness effect) thus, one positive experience may be sufficient to alter perceptions of more than preceding negative experience, and vice versa (Ha, 2004). Experiences are sometimes confused with services, but experiences are as distinct from services as services also distinct from goods because experiences exist only in the mind of the individual. They are rich with emotional, physical, intellectual, or spiritual sensations created within the consumer during transactions (Kotler et al., 2005). According to Pine and Gilmore (1999), An experience occurs when a company intentionally uses services as the stage, and then goods as props to lock away individual customers in a way to create a memorable event that consumer will remember best.The more satisfied the customer with the experience tha t the blade sites offer, the more durable is the relationship among consumer and that particular brand (Buchanan and Gillies, 1990), and the relationship is highly depends on the customers experience, whether positive or negative experience. Experience plays a vital role in trust by making it possible to compare the realities of the firm with customer preconceived expectations. Ganesan (1994) goes further, and views experience as an antecedent to build brand trust among customers which in turn will lead to making purchasing. Usually customers expect Web sites to offer them not just a message, but a positive experience such as, security and privacy, ease of use, weathervane site design and aesthetic elements and interactivity. The ease of use of the weather vane sites is important factor which refers to the layout and design of the web site and the ease of making ones way around it, how the users perceives and interacts with the site, and how easy to use it (Nielsen, 1999). While (Steur, 1992) covers the web sites design and aesthetic elements as a representation of the web site environments, associated with its formal characteristic such as graphics, colors, images, icons, animated sequences, videos and pop -ups which will influence customer to trust the web site as well as to proceed at the end action which is making purchasing. (Yoo and Donthu, 2001) claim that these elements has contribute to the atmosphere of the web site and are important in evaluating the web site experience. Thus, if the web sites offer all of this experience to customer will lead to customer satisfaction and build brand trust among customer thus will decrease customer risk perception.General speak in detailed, the fact that it easy to access and use the site, including the access speed and the overall hand design and layout, as well as the information provided requirement fulfillment refers to whether the sites handling and goods delivery in a systematic way system approachability refers to whether the site has been technology based or still using a traditional based, or is vulnerable to attacks and privacy, also known as security, refers to whether the site can keep the customers information secret and payments safe (Sheng and Liu, 2010) are experience that customer want in which we can called it positive experience will lead to customer satisfaction and purchase as well as to build brand trust.2.3.6 Quality of InformationThere is various definition of information. Some writers make no distinction between data and information (Wang et al., 1998) while some writers see the differences as most crucial (Tozer, 1999). Information is logically derived from theories or principles, it is an artifact. The producer of information has an intention to produce a symbolic meaning of certain entities or events, put it into a context, assign it into a pre defined meaning and then gestate the information into receiver. The producer of information expected that the receive r will capture the meaning as intended (Lillrank, 2002).Consumers search for information in their pre-purchase search process for a product or service they intend to buy thus, by providing effective information does lead to improved awareness and brand perception among consumers (Aaker and Joachimsthaler, 2000 Ha, 2002 Keller, 1998), in particular for individuals with high brand trust and high perceived risk (Duncan and Moriarty, 1998). Many online buyers indicate that their buying decisions mostly depend on the information offered online (Long Ching, 2009). Bickart and Schindler (2001) found that consumers who garner information from online discussions namely electronic word of mouth (e-WOM) reported greater interest and intention to buy in the product than did those consumers who gathered information from the marketer-generated sources. The main reason for this is highly likely to be the trust issue as raised in a study by Sen (2008). Customized information has become more impo rtant in internet nowadays based applications due to the multitude of choices that are available on the internet (Simonson, 2005 Ha, 2002). (Ha (2002), has shown that internet users are very concerned in customized information offer by the web sites be this is because mostly firms today have added value by providing appropriate information to simplify the customers decision making process (Murthi and Sarkar, 2003).In addition, the source of the information is very crucial for a message to be effective and reliable and it often depends on the receivers perception of the senders trustworthiness and expertise (Kiecker and Cowles, 2001) they also suggest that the information also must be perceived believable, competent, valuable and trustworthy for information recipients. (Robinson and Kaye, 2000), found that consumers, who relied on online sources for more information, rated the online sources as more credible than other sources, so it is important tasks for managers to provide quality information online to gain trust from customers. Meyvis and Janiszewski (2002) reveal that irrelevant and lack in quality information will weakens consumers belief in the products or services ability to deliver the benefit. Hence, whether perceived quality of information is provided and, if it is provided, the quality of customized information for customers, also highly influence the level of brand trust and customer satisfaction on the web (Ha, 2004).2.4 Relationship among the VariablesIndividuals who perceive a low risk in online buying likely make decisions more quickly and less likely to take into account aspects outside of the web site. In contrast, individuals who are more alarming will behave in a more cautious way, searching for external information that warrantees a successful buying decision to decrease uncertainty in internet purchase (Martin and Camarero, 2008).Bhatnagar et al., 2000, reported that consumers were less likely to shop online in which perceived product pe rformance risk was high than those with low product performance risk, consumers perceived risk negatively influences their intention to purchase products online.Customer who satisfied with the security, privacy and online good experience offered by the web sites will experience lower perceived risk and will have effect on the purchase intention. (Chen and Hsin, 2008) results show that consumers perceived risk towards specific online retailer with regards to purchase intention was influence by trust. As consumer trust increases because of decreasing perceived risk will influence consumer to make purchase (Chen and Hsin, 2008).2.5 SummaryThis chapter reviewed literatures on consumer perception of perceived risk towards online purchase intention in detailed. Based on the findings from literature reviews, definition conception of online purchase intention, perceived risk, security, privacy, word of mouth, brand name, good online experience and quality of information are developed. In th e last part of this chapter, the relationship between independent variables, mediating variable and dependent variable are constructed. Conceptualizing definitions of variables is important in order to construct a research framework in which would be discussed in chapter 3.