Management Strategy of e-business
Management Strategy of e-business
  • 정현제 기자
  • 승인 2019.10.25 12:24
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Service quality raises repurchase rate in e-business



The service industry is expanding its scope to e-business with a fair share of attention. Its differentiated marketing strategies have captivated many hearts of manufacturers in relation to the source of sales and income as well as securing the advantageous positions in the field. Unlike in the past where companies competed by cheap price, the trend today is asking them to fight with quality of the services as a tool to attract consumers’ attention.

To go one step further, quality of the services is not only about selling products but also about providing quality services itself. E-business is a platform to offer autonomous trade and information to both companies and consumers and it is the job of the formers to offer better services than their rivals to the latters if they want to keep the number of their customers now or increase them in the future.

However, the details of the quality services online still seem to be poor. Part of this ascribes to individual standards of each company including the standards of its service developments and assessments which were resulted in ineffective analysis on customer satisfaction and repurchase rate. It means that they need to pay more attention to ‘user-friendly online platform’ and ‘reaction time’ alongside ‘easy payment’ and ‘promotion of consumer activities’.

Quality services separate its core services from peripheral services. Literally, peripheral services are services that support the contents of the core services in order to add values; the interface factors, web structures and web designs play important roles in this.

So called the ‘e-services’, in a way, is defined as ‘two directional online customer services’. The ‘two directional’ in this case means ‘interaction’ and it is widely accepted as the core conception of e-services among specialists in the field. The ‘interaction’ happens between providers and receivers, or companies and consumers, through online business platforms such as web page, blog and SNS etc,.

However, these ‘intangible’ services platforms have some limitations to be realized online. Firstly, we need to understand the fact that the interface can mean a trace of ‘tangibility’. Secondly, inseparability, as we have seen in e-services, encourages consumers to participate in both production process and consumption process; yet consumers are not necessarily to produce and purchase at the same time. Thirdly, heterogeneity, unlike in the field of online, adopts processes that are used in manufacturing in order to enable communication and to maintain consistency.

Services are divided into core services and peripheral services. The core services are the reasons of its existence in the market while the peripheral services are the tools to support the values of the core services. The structural elements of services can be used online in terms of ‘physical market’ but it requires user interfaces. Absence of interface means impossibility of trade so the role of interface is crucial. UI, for example, should provide the followings: easy and high performing navigation, correct link, charming colors and graphics and appealing font and shape of texts. Lack of these followings can be resulted in poor sales and eventually losing royal customers to rival companies which have better interfaces and service platforms.

The quality of e-services consists of core services, peripheral services (supporting services) and PCP. PCP stands for Pivotal, Core and Peripheral. Pivotal is the property that most affects consumers which products or brands they want to buy and it is the result of ‘interaction’ between service providers and consumers. For example, if the service type is information service, the property of pivotal is something related to ‘quality of information’. In other words, pivotal is the very factor that affects the buying decision of consumers the most. The ‘core property’, on the other hand, is a tool to help obtain the pivotal property through promoting customer recognition and interaction. The core property consists of four values: guarantee, reaction, empathy and trust. The ‘peripheral property’ is not as important as pivotal property and core property but it can provide added value to consumers; the UI elements such as ‘tangibility’ and ‘access’ belong to this category.

Consumers react to a certain product and service based on the following three quality categories: basic quality, result quality and stimulation quality. They all share the same conception but have different service elements. Firstly, the basic quality is the quality in which consumers take for granted; they do not appreciate the services that are more than this basic quality but they complain when this ‘basic’ is absent. Secondly, the result quality is the quality exposed by media and recognized by both companies and consumers; absence of this result quality can bring disappointment to the consumer’s side and disadvantage to the company’s side. Thirdly, the stimulation quality is the quality in which consumers do not even know its existence or do not care; so consumers are not disappointed by absence of this stimulation quality; but it brings a significant impact when executed effectively as it can turn the ordinary customers into royal customers.

Applying these three qualities to websites, there seemed to be certain consumer preferences that decided the characteristics of each category. 1) Basic quality: the rational period of information, accuracy of information, ambience of website, safety of website solubility and appropriate use of customer information. 2) Result quality: satisfying customer demands. 3) Stimulation quality: new technology, obtainment of knowledge, exciting contents and user-participation.

It is notable that some of the researches on e-services seem to measure the level of e-services by combining the existing service quality assessments and the characteristics of websites. Five elements come into importance in this case: empathy, conviction, customer support, tangibility and user-friendliness.

At the end of the day, the core property plays the decisive role in terms of its benefits and incentives that must go more to consumers. In order to keep rolling these important elements as effective and powerful as they should be, companies must secure excellent web environment that makes the trade as easier as possible from ordering to delivery and after care services.

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