Research Design and Methodology
The ecommerce today plays a very significant role in ensuring customer satisfaction in developed markets like Australia. Australian Postal Corporation reports that Australian consumers spent a whopping $ 21.3 billion buying goods using ecommerce and on average a fifth of all ecommerce transactions take place in Australia (auspost.com.au 2018). This report by the Australian Post lays the perfect background for the aim of the paper. The primary aim of the paper would be to explore how the Australian ecommerce market integrates customer satisfaction and profitability. The study would be conducted by taking the global ecommerce leader commanding business of almost half of the ecommerce market, Amazon (CNBC.com 2018).
The main objective of the project is to study how customer satisfaction ensures profitability in the ecommerce market. As pointed out, the market considered for the study would be Australia with Amazon as the representative of the ecommerce market by virtue of its apical position. The secondary objective would be to study the challenges which the ecommerce companies face while ensuring customer satisfaction in Australia.
The scope of the project would consist of studying the roles customer satisfaction plays in ensuring profitability in the ecommerce market and how the ecommerce companies are taking steps to boots this customer satisfaction to enhance their profits./ The scope of the project would also include taking a tour to the capital generation since major ecommerce companies are listed companies. The scope of the project would however not include human resource aspects except the training and develop aspects. The scope of the study would once again taken Australia as the market and Amazon as the company to for study.
The literature review would explore works of different authors to understand the relationship between customer satisfaction and profitability which ecommerce companies integrate to sustain in the market.
Customer satisfaction model stands on three components namely, customer satisfaction, market share and ultimately profits. Yi and Nataraajan (2018) in their work defines customer satisfaction as the power of companies to surpass the expectations of customers to create a sense of satisfaction among them as the outcome of consumption of a product.
Figure 1. Customer satisfaction
(Source Yi and Nataraajan 2018)
As far as ecommerce companies are concerned, they have strong marketing mixes which is supported by their immense financial bases. Zablah et al.(2016) mention that the strong financial base of ecommerce companies enable to market a diverse range of products which in turn leads to customer satisfaction. Ramanathan, Subramanian and Parrott (2017) support this opinion by pointing out that customer satisfaction yields high profit for the ecommerce companies which enables them to reinvest immense amount of money into product offering. Thus, it can be inferred that customer satisfaction and profitability are interdependent in the ecommerce market.
Marketing mix is a model which ecommerce companies use to create customer satisfaction and earn profits especially in highly competitive markets like Australia. The marketing mix model consists of four composed of components namely product, pricing, place and promotion (Bahadir, Bharadwaj and Srivastava, 2015). The ecommerce companies as per Pomering, and Johnson (2018) provide a wide range of products right from products by multinational companies to locally grown products. As Bahadir, Bharadwaj and Srivastava (2015) point out that in developed markets like Australia ecommerce companies offer wide range of products with appropriate pricing. For example, the ecommerce portals charge more price for organic products compared to their inorganic counterparts. Lu et al. (2017) opine that this legitimate pricing strategy which ecommerce companies use in Australia creates a sense of value creation among the middle and upper class customers which in fact goes on to enhance their customer satisfaction levels. Hannak et al. (2014) add to the discussion that ecommerce companies like Australia in order to enhance this level of customer satisfaction and to create more values for their purchases collaborate with local suppliers. The leading ecommerce companies are purchasing local grocery chains which further strengthens their presence in the host markets besides their online presence (News.com.au. 2018). Porter and Heppelmann (2015) further points out this physical presence of ecommerce companies create a more sense of relatedness and satisfaction among customers, thus encouraging them to order more products online. This once again points out that customer satisfaction enhance profitability of the ecommerce companies. The fourth component of the marketing mix of the ecommerce companies is promotion. Sharma and Lijuan (2015) point out that ecommerce companies promote their products on offline as well as online platforms to attract customers. Mao (2016) though does not contradict with their opinion, point out that promotion has to be supported by appropriate product and pricing strategies to ultimately ensure customer satisfaction. Thus, it can be pointed out that customer satisfaction using marketing mix is capable of ensuring profitability of the ecommerce commerce companies. Bahadir, Bharadwaj and Srivastava (2015) can be reiterated in this respect that wide range of products are responsible for the high level of customer satisfaction which leading ecommerce companies create.
Qualitative Research
Figure 2. Marketing mix
(Source: Liu et al. 2017)
Capital generation in ecommerce companies is the base of marketing mixes, customer satisfaction and profitability. This is evident from the fact that top ecommerce companies are public limited companies listed on stock exchanges like ASX. Chaudhuri and Kumar (2015) point out that the listed ecommerce companies are able to raise capital by issuing shares in the secondary market which provides them a massive base required to support their immense marketing mixes. This strong financial bases of leading ecommerce companies as Patra, Mahapatra and Patnaik (2016) allows acquisition of subsidiary companies and market a wide range of products. Qu et al.(2015) mention that the formidable capital base support the marketing mixes of ecommerce companies which in turn go on to create customer satisfaction. Guercini and Runfola (2015) merely point out that the literature gap in the study which authors tend to avoid which is the marketing mix of leading ecommerce companies are composed mostly of branded products owned by other MNCs. These international brands find acceptance in the market and generate customer satisfaction. Thus customer satisfaction in turn generates high profits a part of which goes into giving back high returns to investors, thus in turn attracting more capital. Thus, it can be inferred that customer satisfaction is directly associated with capital generation.
H0: Customer satisfaction is directly proportionate to profitability in ecommerce companies.
H1: Customer satisfaction and profitability are not related directly related in ecommerce companies.
The researcher should conduct qualitative research by studying secondary sources of information like articles and books. The process of qualitative research would start with reading a large number of books and articles. The researcher should strength the base of the knowledge acquired by reading several journals and official journals regarding ecommerce companies. He should check the reliability and validity of the materials. The data collection method here would be secondary and hence, sampling is not applicable. The two variables to be linked would be customer satisfaction and profitability.
The quantitative research should contain gaining of information directly from the chosen group of respondents. The proposed process of the quantitative research design would contain setting of interview questions followed by giving interviews. The researcher should collect a large number of responses so that he is able to capture valid data. The sample size should be 200 and the quantitative data analysis process should consist of statistical analysis of the data using tools like SPSS. The questionnaire design should consist of questions regarding the preferences of Australian customers on ecommerce portals. The questions should try to capture their lifestyle, tastes and purchase preferences. The interview should ask valid questions and avoid asking personal questions.
Justification of the method:
It can be justified that the research would require both qualitative and quantitative methods. There are several researches have been done on customer satisfaction but the concept of ecommerce is comparatively new. It is true that large amount of data about ecommerce is available online but very few sources are reliable. The researcher would require to collect sizeable amount of primary data to substantiate this lack of reliable data online. Hence, it is justified that the research would embrace both qualitative and quantitative (Lewis 2015).
Quantitative Research
The first limitation which the researcher have to face is lack of money to buy online articles beyond a certain numbers and time to study the large of resources he would gather. The second limitation would be that several respondents would refuse to take the interview.
The time schedule for the research would be 4 months approximately. The first month should be dedicated towards choosing a topic of research and getting approval from the professor. The next step would planning the questionnaire for a week followed by interviews for 1 month. The next one month would be spent analyzing the data collected and qualitative analysis. This would should followed by preparation of the final dissertation and submission with the professor.
Conclusion:
The research fails to explore several important areas like stakeholders’ theory and risk management, two topics so pertinent in case of ecommerce market. The researcher should try to visit these new topics in future. The research would show light to future researches regarding ecommerce.
Reference lists:
Auspost.com.au. 2018. Auspost.com.au. [online] Available at: https://auspost.com.au/content/dam/auspost_corp/media/documents/2018-ecommerce-industry-paper-inside-australian-online-shopping.pdf [Accessed 19 Oct. 2018].
Bahadir, S.C., Bharadwaj, S.G. and Srivastava, R.K., 2015. Marketing mix and brand sales in global markets: Examining the contingent role of country-market characteristics. Journal of International Business Studies, 46(5), pp.596-619.
Chaudhuri, M.P. and Kumar, A., 2015, December. Role of Digitization and E-commerce in Indian Economic Growth: An Employment Generation Perspective. In 98th Annual of Conference of Indian Economic Association, December.
CNBC.com 2018. CNBC.com. [online] CNBC.com. Available at: https://www.cnbc.com/2018/07/12/amazon-to-take-almost-50-percent-of-us-e-commerce-market-by-years-end.html [Accessed 19 Oct. 2018].
Lewis, S., 2015. Qualitative inquiry and research design: Choosing among five approaches. Health promotion practice, 16(4), pp.473-475.
Lu, J., Liu, S., Cui, L., Pan, L. and Wu, L., 2017. Crowd wisdom drives intelligent manufacturing. International Journal of Crowd Science, 1(1), pp.39-47.
News.com.au. 2018. News.com.au. [online] Available at: https://www.news.com.au/finance/business/retail/what-amazons-whole-foods-deal-means-for-australia/news-story/2279750bc147720059ebf290b621fc92 [Accessed 19 Oct. 2018].
Patra, S.K., Mahapatra, D.M. and Patnaik, R., 2016. Diffusion of Technological Innovation in Business: A Study on New Generation Business in India in E-Business Environment. Parikalpana: KIIT Journal of Management, 12(2).
Pomering, A. and Johnson, L., 2018. Building sustainability into services marketing: expanding decision-making from a mix to a matrix. Sustainability, 10(9), p.2992.
Porter, M.E. and Heppelmann, J.E., 2015. How smart, connected products are transforming companies. Harvard Business Review, 93(10), pp.96-114.
Qu, W.G., Pinsonneault, A., Tomiuk, D., Wang, S. and Liu, Y., 2015. The impacts of social trust on open and closed B2B e-commerce: A Europe-based study. Information & Management, 52(2), pp.151-159.
Guercini, S. and Runfola, A., 2015. Internationalization through e-commerce. The case of multibrand luxury retailers in the fashion industry. In International Marketing in the Fast Changing World (pp. 15-31). Emerald Group Publishing Limited.
Ramanathan, U., Subramanian, N. and Parrott, G., 2017. Role of social media in retail network operations and marketing to enhance customer satisfaction. International Journal of Operations & Production Management, 37(1), pp.105-123.
Sharma, G. and Lijuan, W., 2015. The effects of online service quality of e-commerce Websites on user satisfaction. The Electronic Library, 33(3), pp.468-485.
Yi, Y. and Nataraajan, R., 2018. Customer satisfaction in Asia. Psychology & Marketing, 35(6), pp.387-391.
Zablah, A.R., Carlson, B.D., Donavan, D.T., Maxham III, J.G. and Brown, T.J., 2016. A cross-lagged test of the association between customer satisfaction and employee job satisfaction in a relational context. Journal of Applied Psychology, 101(5), p.743.
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