Term Paper on "Investigation on Developing Loyalty Customer in E-Commerce in China"

Term Paper 34 pages (9393 words) Sources: 1+

[EXCERPT] . . . .

Customer Loyalty in E-Commerce Outlets in China Today

E-commerce is examined in the context of the relationship between firms and their customers and the implications for customer loyalty within E-commerce website. While a large number of consumers in China begin to shop on the internet nowadays, the benefits and value of E-commerce determines what can be offered to customers, but only customers determine which of those will be accepted. Therefore, it is significant to develop a research to argue that providing the highest customer delivered value and satisfaction by E-commerce can be viewed as marketing real contribution to customer. Customer loyalty is one of critical importance when measuring perceived customer delivered value that is offered by E-commerce. Targeting on the main scales of how to create and maintain the customer loyalty within E-commerce business.

Chapter 1

Introduction

Introduction of study

Introduction of E-commerce in China

Statement of the problem

Background of the problem

Purpose of the study

Conceptual framework

Significance of the study

Chapter 2 - Review of the Literature

Introduction

Definition of customer e-loyalty

E-commerce's effect and advantage today

The link between web benefits and customer loyalty

Influencing e-satisfaction: customer need, customer value and customer cost

Barriers to E-commerce development

Chapter 3 - Methodology

Research Focus

Assumptions and rationales for the research design

Theoretical framework

Research approaches and strategies

Data collection methods

Data analysis procedures

Potential outcomes/problems of research

Timescale

Chapter 4: Data Analysis

Chapter 5: Summary, Conclusions and Recommendations

Bibliography and References

Chapter 1

Introduction

Introduction of study

In this study, the paper will carry out an investigation on developing loyalty customer within the specific E-business industry in China. In addition, it develops a research proposal fully recommending how the results of the investigation could be taken further and possibly be a question which needs to be solved. Furthermore, the paper will also state an aspect of the focus of the customer loyalty and then address the literature relevant to this issue. It is also conducted to summarise and justify this research topic.

In the last stage, the paper will discuss how and what data will be collected, and give an explanation of how the data will be interpreted. The report will depend on the primary research and various secondary researches including several case studies to address this specific question in order to summarise any potential difficulties anticipated within the research process.

Introduction of E-commerce in China

In this chapter, the history of Chinese E-business will be examined, starting from its inception 1999 to the present, which will give an insight how Chinese E-business was formed, re-structured, and its most recent developments. Song, the top Group Board Chairman and Chinese.com CEO (2001), points out that after 20 years of reform in China, the country's information industry has witnessed unprecedented rates of development unmatched elsewhere in the world. Indeed, China's telephone and network users and scale (as well as their gross national product) are now second in the world only to that of the United States. According to the 15th survey report publicised on 27 January 2005 by CNNIC, there are 94 million internet users in China (see further discussed in Chapter 3 below), which is above 6% of the total national population. In addition, the development speed and scale of e-commerce is not in direct proportion to the increase of internet users, and is affected and restricted by many factors including policy, goods flow, credit, and consumption habit. Further, e-shopping, online promotion and online sales cover 6.7%, 1.3% and 1.6%, respectively, of most commonly used internet services.

Chinese E-commerce has developed from initiation stage to implementation and developing stages. The most famous domestic E-commerce firms begin to extend their business. Some of them will come into the market abroad, more and more foreign E-commerce companies would like to invest or collaborate with domestic successful E-commerce websites. Facing by the drastic global E-commerce competition, Chinese E-commerce industry has to transform and make innovation to meet the challenges and opportunities.

Statement of the problem

In terms of the research topic area the problem to be addressed in this study is going to find out how customer loyalty will be developed in Chinese E-business industry and how it is important for development of E-business. In daily life, people have formed rooted consuming habits, and they tend to carefully select and try before they buy. But Song (2001) said that the virtual nature of internet causes low trust and loyalty to ecommerce. Many people use internet for information and communication but not purchase. Thus there is a clear need to address this question by evaluating the current situations and problems coming out with customer loyalty within Chinese E-commerce. Identify what and how the E-consumers think of the Chinese E-business industry now. Finally, the paper will demonstrate the impact on the further prospect of Chinese E-business.

Aims and Objective.

Aims:

The study aims to find out the ways in which Chinese E-business has been able to develop the customer loyalty.

To find out what the E-consumers think about E-business and E-shopping in China

Objective:

Focus on the existing e-consumer retention in China.

Identify what elements define on creating and maintaining the E-customer loyalty.

Determine the new methods to transform the Chinese E-commerce company's operation modes within the fast changing global E-business trend in order to gain loyalty customer.

Background of the problem

The choice for this topic comes after the current rapid and drastic development of Chinese E-business situation. Recently there are lots of controversy and speculation coming up about the most popular prospect of E-business in China. More and more people begin to argue and pay attention on the Chinese E-business evolution. There have been many exposures about the problems existing in Chinese E-commerce, they are industry structure, credit system and systematic distribution. The other reason why E-business was chosen was in terms of the 8th survey report by CNNIC, within 22.5% internet users, only 0.86% use internet mostly for purchase of goods. There is a huge potential opportunities of E-business development in the next five years in China.

On the other hand, E-business development is getting more and more flexible and popular in China. According to the fast change of customer's buying behaviours and attitudes to online shopping, people would like to pay more attention on the online shop because of its convenience and low price; however, in terms of some traditional factors such as security problems, credit level and reputation degree, companies are quite hard to keep people as long-term or return customers. That is the reason to hypotheses this topic (Analysis Report on the 13th Survey, CNNIC, 2004).

Purpose of the study

In this purpose, the study will demonstrate the relationship between customer retention and E-business. Try to find out how E-business could gain customer loyalty and satisfy them in China. In other words, the study is helping E-companies to develop their own competitive advantage to improve the understanding and prospect of customer's need and increase their online sale profit.

Conceptual framework

Base on the topic of study, the paper will provide comprehensive theories and opinions to support the question. Basically, the E-business can also be seen as E-retailing, therefore, it should be the same or quite similar to develop the relevant marketing strategies to keep customer loyalty and satisfy customer's need. In that case, the study may be supported by the Phillips's theory (2003) and Hansen and Hennig-Thurau (2000) theories, and also be accepted by other authors' opinions through electronic journals. Most of the theories and opinions are focused on the consumer buying behaviours and attitudes, customer loyalty, customer relationship management and customer retention.

On the other hand, the research project should be conducted by the research methods and theories. Some relevant ideas come from Saunders, et al. (2000) providing comprehensive knowledge to support the research process.

Significance of the study

The study will indicate how E-business can develop and gain customer loyalty in order to improve the online sale and reputation. According to the well developing prospect of E-business in China, organisations especially small online companies have to think about how to accommodate the fast changing competitive environment of online shopping and how to compete with each rival depending on its own competitive advantages. The result of this study may benefit to those organisations which want to start or extend their E-business in the future.

Chapter 2

Literature Review

Introduction

In this chapter, the research carrying out is focused on how to develop customer loyalty, with the main focus being on Chinese E-commerce industry. Today, customer loyalty is considered an increasingly important component of a business's international marketing efforts because of its positive effect on long-term profitability. Studies have shown time and again that it is much more profitable to retain an existing customer than it is to actively recruit new ones. According to Reichheld, et al. (2000), the high costs of acquiring new e-customers can lead to unprofitable customer relationships for up to three years. Lin (2003) also indicated that E-commerce have emphasised on… READ MORE

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