The Impact of the Internet on Buyer Behavior in ... · useful to businesses in learning consumer...

คณะพาณิชยศาสตรและการบัญช ีมหาวิทยาลัยธรรมศาสตร

ปที่ 32 ฉบับที่ 123 กรกฎาคม-กันยายน 2552 ปที่ 32 ฉบับที่ 123 กรกฎาคม-กันยายน 2552

Dr.Siripong Charoensuk ISP Marketing Manager at TOT Public Company Limited.

The Impact of the Internet on Buyer Behavior in Globalization:

The Case of Thai Telecommunication E-Services

บทคัดยอ

ายงานฉบับนี้มุงหมายที่นำเสนอ ผลกระทบของอินเทอรเน็ตที่มีตอพฤติกรรมการซื้อของผูบริโภค โดยเนนการศึกษาไปที่ บริ การ e-se rv ice ของธุรกิจโทรคมนาคมในประเทศไทย เนื่องจาก

ผลกระทบของอินเทอรเน็ตดังกลาว รายงานนี้นำเสนอการพัฒนาแบบจำลองเพื่อเขาใจพฤติกรรมการซื้อของผูบริโภคกรณีบริการ e-service ของกิจการโทรคมนาคม โดยจากการศึกษาที่ผานมา รายงานฉบับนี้ ไดแสดงปจจัยที่จะมีผลตอพฤติกรรมการซื้อของผูบริโภคขณะเชื่อมตออินเทอรเน็ต บนพื้นฐานของความเขาใจเกี่ยวกับประสบการณและการรับรูเกี่ยวกับบริการ e-service นอกจากนี้ในแบบจำลองดังกลาวยั งแสดงถึ งการ เชื่ อม โยงขององคความรู อั น เกิ ดจากประสบการณของผูซื้อที่เปนเสมือนวงรอบแหงการเรียนรูเพื่อเขาใจพฤติกรรมของผูบริโภคในธุรกิจโทรคมนาคม

ABSTRACT

his study aims to make the contribution on the impacts of the internet on buyer b e h a v i o r b y f o c u s i n g o n T h a i telecommunication e-services. Because

the impact of the internet makes buyer behavior change, the applied model of buyer behavior using telecom e-services is developed to serve this change. Drawing from empirical study of the current literature, the paper reviews factors that affect online buyer behaviour based on the understanding telecom customers’ experience and perception of them about telecommunicat ion e-service. Also, the model p rov ides knowledge feedback fo r re-buy ing processes to customer experience as a learning loop to understand Telecom customer behaviour.

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วารสารบริหารธุรกิจ



1. INTRODUCTION Since the internet is acknowledged as the powerful tool in the business processes, many researchers have tried to reveal its impacts and influences. Especially, the power of the internet in supporting the buying behaviour of the customers is interesting in today business study. Buyer behavior means the activities that come from a person or organization on buying products or services. The activities include mental processes beginning from desiring products/services to making decision to buy products/services. According to Belch and Belch (2007, p.105), they defined buyer behavior as the process and activities which people engage in when they want to buy products or services. These processes and activities are composed of searching for product or service, selecting, purchasing, using, evaluating, and disposing of products and services so as to satisfy their needs and desires’. Buyer behaviour is an important topic because it describes the reason o f w h y p e o p l e w a n t t o b u y o n e k i n d o f products/services rather than another one. Strader and Hendrickson (1999, 2001) supported this idea and said that companies must understand customers’ need and try to create differentiate implications to be better than competitors in present competitive market. Buyer behaviour also explains about the decision-making process of customers that can be predicted as a key to success for long-term benefit in the today business. However, most studying about buyer behavior is normally done in non-technological business such as book store , music shop or DVD/VCD shop. Also, most of existing studies mainly consider only environmental factors such as season, culture, psychological and social issues as influences of buyer behaviour. Studying buyer behaviour in high technology like telecommunication will be greatly useful to businesses in learning consumer behavior especially when the internet is fully developed into the business process.

Conceptually, the word ‘globalization’ can be explained by the development of overall global structures such as the spreading of capitalism, uniting of trade zone and developing of global emerging media technology. The good example of emerging technology is the internet that brings a number of new opportunities into the globalization as well as the local region. Moreover, the internet and website provide convenient services to customers, who can manage their resource eff ic ient ly by themselves. Also, the internet can reduce cost that businesses pay in providing service to support customers’ need. Bitner (2001, p.376) supports that new technology, l ike internet , provides a new convenient and productive way to service customer as well as an easy way for customers to learn and get information about products/services. Moreover, the internet will change the service processes of business f rom the tradi t ional one to the fast electronic one. This means it will certainly change customers’ lifestyle and their attitudes about the service. The internet also plays the role of leading and motivating customer in making a decision to buy product/service, so understanding buyer behavior using the internet is a necessary issue for telecom businesses that want to be successful in the global market of this information era. This paper aims to examine the impact of the internet on buyer behavior of telecommunication e-services by contributing on the theory of buyer behaviour. However, this paper will only consider Thai buyer behaviour in telecommunication e-services. To make it clear, the telecommunication e-services in this paper mean the electronic service or web-based service of telecom companies that helps customer in three main categories such as managing their own profiles, changing their service information (Package or Promotion), and supporting payment activities. The structure of this paper can be divided in four main

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ปที่ 32 ฉบับที่ 123 กรกฎาคม-กันยายน 2552

parts. First, it reviews buyer behavior theory and the related studies of this field concerning the internet and telecom services. Next, global and Thai online behaviour are reviewed. Then, a model of using the internet to support buyer behavior in the market of telecommunication e-services will be developed based on the theory of buyer behavior. Lastly, managerial implication, further studied research and conclusion are presented to advance telecom business ability in dealing with the internet.

2. THEORETICAL

BACKGROUND AND

RESEARCH LITERATURE

REVIEW The field of buyer behavior was emerged in the 1960s and was interested in the international buyer behavior in the mid-1970s. In 1969, Engel, Kollat and Blackwell (1969), have set the classic model to explain about consumer decision making to buy products or services, called the EKB model. The EKB model is composed of problem recognition, information search, information evaluation, decision and post-purchase evaluation.

In the same year , Howard and Sheth introduced the theory of buyer behavior that reviews the process of customers when they want to buy products/services. By adapted learning theory concept , Howard and Sheth (1969) descr ibe purchasing behaviour and process related to that behaviour for the customers that can be industrial purchaser, end-consumer purchaser and house-hold purchaser. This theory explains decision format of purchaser as three different levels of problem solving (Loudon and Della Bitta, 1993, p.607). First, extensive problem solving refers to the beginning stage that purchasers have a little or no information about products/services they want to buy. Next, limited problem solving is the second stage that purchasers have rece i ved the i n fo rma t ion abou t those products/services, so they set service criteria as desired level for buying. However, they still have an uncertainty to select which products/services will provide them a maximum value and need more information before making a decision. Final ly , routinized response behaviour refers to the stage that purchasers have enough information to make a purchase and they also make a decision with confidence. In this stage, purchasers have more experiences with one brand that they can make a decision without doing evaluation.

Theory of buyer behavior Howard and Sheth (1969) stated that the theory of buyer behavior could be divided into four groups: input variables, output variables, hypothetical constructs and exogenous variables. Firstly, input variables are stimuli from buyer’s environment that concerns about individual, commercial or social issues. The significant stimuli are about the things that influence the direct experience of customer related to products/services, for example, product sizes and product characteristics while the symbolic stimuli refers to any things that are created to

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represent the products/services such as advertisings, brochures, and billboards. For social stimuli, they are about influences that created by environment such as family, social class and friend group. Secondly, output variables are outcomes of the model, like attention, brand comprehension, att i tude, and purchase behaviour. If customers want to gather information about products/services as much as it’s possible, they have an attention. For brand comprehension, it is an understanding of customers about information they receives from the attention stage. Next, attitude refers to the evaluation of possibility to satisfy customer and also it leads to intention and purchase. Thirdly, Hypothetical constructs are the key concept of theory that consists of learning constructs and perceptual constructs. The factors of hypothetical constructs are perceptual bias, motive, overt search, and confidence. It can be described that learning constructs play the role of notion formation in customer experiences while perceptual constructs support the information processing. Lastly, exogenous variables provide the evidence of buying behavior for marketing purposes but do not integrate decision-making processes. The exogenous variables are choice criteria, stimulus ambiguity and satisfaction. From the theory of buyer behavior, satisfaction of a customer is considered as an occurrence after consuming product/service, so it will represent only feedback relationship of purchasing. The theory also suggests that buying behavior mostly concerns the repetitive decision of brand-choice selection and customers will try to choose the brand choices that have the best possibility to satisfy their needs. This theory is suitable to explain buyer behaviour when consuming the products/services until the emerging of the internet technology. In addition, there are two kinds of relationship that links all factors together including Flow and Feedback. The ‘Flow’ link shows cause and effect relationship in forward way whi le ‘Feedback’ shows the cause and effect relationship in reverse way.

The theory of buyer behaviour can be explained as follow. Customers’ attention is created from three st imul i of customers’ environment (significant and symbolic stimuli from individual experience, Brand comprehension from commercial perception and Social stimuli from social occurrence). The results of the attention brings into perceptual bias that related to brand comprehension, motive, choice criteria and intention depending on the level of perception. Also, the feedback of attention generates st imulus ambiguity , mot ive, overt search and significant stimuli. When customers have a motive, they set choice criteria of selecting products/services that br ing to their att i tudes and intent ions to purchase product/service consequently. With the good brand comprehension, customer wil l feel confidence in products/services and this process creates strong intention and then purchasing the product/service. As can be seen in this theory, all of factors will lead to the intention as the result and this intention will create the purchasing process of the customer. The feedback of purchasing creates satisfaction or dissatisfaction of customers in products/services. When customers satisfy the products/services, they will have positive experience and strong confident with those products/services. This wi l l l ikely to cause the possibi l i ty of the products/services to be selected again in their next purchases.

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คณะพาณิชยศาสตรและการบัญชี มหาวิทยาลัยธรรมศาสตร


For example, herbal toothpaste may be

p re f e r r ed by a cus tome r who have a good

experience, prefer herbal favor or perceive good

social occurrence about herb. His good experience

leads to attention and perceptual bias of using the

herbal toothpaste. If the degree of perceptual bias is

strong enough, customer will create an intention and

purchasing that toothpaste. If the degree is not

strong, the customer just has a motive or he/she

wants to compare with other product brands. After

undermined evaluating process is finished and

confirmed that this toothpaste is the good choice, the

customer create at t i tude , in tent ion and then

purchasing consequently. However, some customers

may not have direct experience but they saw the

toothpaste in advertising. If the advertising give them

a high confidence with the herbal toothpaste,

intention will be created and possibly leaded to

purchasing. If the confidence is not high, customer’s

att itude wil l be first ly set and the intention to

purchase is created. After customers have used the

herbal toothpaste, satisfaction or dissatisfaction is

provided as evidence to customer when making a

next decision about the toothpaste.

In 1980s, the research stream in buyer

behav io r had s ign i f i can t l y i nc reased in the

internat ional context . Most of the research in

international buyer behavior tends to examine a

number of topics including buyer behavior, country of

origin, industrial buyer behavior, information seeking

and perceived risk (Li and Cavusgil, 1995). In this

period, Bettman and Park (1980) proposed the

information-processing model that mainly explained

the effects of prior knowledge and experience and

choice process on customer decision processes. This

model is a basic idea to understand the human and

technology interactive. In 1990s, the industrial buyer

behavior research became more interesting than in

the past and provided benefits for teaching and

operating businesses of buyer behavior. Moreover,

Law (1994) said that this research stream showed a

wide range of evidence of post-modernist analysis

and social phenomena. It also helped firms deal with

their counterparts, subsidiaries and suppliers. Even

though there were much debate about the difference

of consumer buyer behavior and organizational buyer

behavior. It was argued that both of them are quite

similar when compared in term of buying reason

Figure 1: Theory of buyer behavior

Source: Howard and Sheth (1969).

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because individual customer will purchase not only to satisfy himself/herself but also to influence others as same as the organizational customers (e.g. Howard and Sheth, 1969; Wilson, 2000). However , the previous study of buyer behavior has a weakness for neglecting the new technology such as the internet that has dramatically increased in the buying process of customers in these days. Karl Mann (1999) supported that the area of buyer behavior study still left the issues about the impact of the internet and any new computer technology on buyer behavior. Similarly, Zeithaml, Bitner and Gremler (2009, p.15-16) suggested that technology provides tremendous supports to customers in accessing the information for making dec i s i on , cho i c e s o f s e r v i c e o f f e r i ng , and conveniences in contact with company and it need to be researched to understand buyer behaviour with the new technology. Some topics in buyer behaviour seem to be conducted predominantly. For example, Electronic Data Interchange (EDI) has received much attention in the buyer behaviour literature but direct buying on the Internet remains largely unstudied. Clearly, this situation creates several research questions concerning the buyer behaviour with the Internet. For instance, some interesting research questions about buyer behaviour and internet are how t he i n t e r ne t commerce and emp loyee empowerment affect our concepts of the buying center? And how do the internet influence buyer behav ior theor ies and f rameworks of buy ing situations, professional purchasing, and many other aspects of marketing? Another weak point is that buyer behavior theory seems to pay less attention on re-buying process that can predict the long-term benefit of businesses. Re-buying process comes from accumulated knowledge and exper ience that c u s t ome r s p e r c e i v e wh e n c o n s um i n g t h e products/services and then their attitudes will be created from that experience as their database for

next purchasing. Ehrenberg (1988) agreed that studying about penetration and re-buying process of the customer can properly predict buyer behavior aspects in the next purchases. Especially, re-buying process will be an important key in buyer behavior study. Online buyer behaviour Most of the research in this area has two main streams. On the one hand, researchers see online customer behaviour is different from traditional customer behaviour, so they focus on finding factors that shape consumer behaviour and modeling the online purchasing process (Guttman et al., 1999; Mile et al., 2000; Li and Zhang, 2002, Mcknight et al., 2002, Constantinides, 2004). On the other hand, some researchers consider online buyer behaviour as next step further of traditional buyer behaviour. They bel ieve that the fundamenta l of onl ine buyer behaviour is similar to the traditional one but some factors would be included, especially trust and confidence (Lee, 2002, Liang and Lai, 2002, Suh and Han, 2002). By reviewing the literature about online buyer behaviour, Bellmann and his colleagues in 1999 who studied the predictors of online behavior found that there are two main reasons of internet buyer behavior. First, customers normally use the internet as a part of their lifestyles. Second, customers do not have much time to spend for the traditional ways of shopping. Guttman, Moukas and Maes (1999) did survey about buyer behavior and the internet and described 6 stages model in explaining buyer behaviour with the internet. This six stages model includes price negotiation, shipping option, financial center , customer he lp , user preferences and personalization. In 2000, Mile and his colleagues had studied further from Guttman, Moukas and Maes (1999) by including three additional stages in the model of buyer behavior such as identify & manage

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criteria, search for products & merchant and compare alternatives & choose. Next, Gronroos et al., (2000) proposed the NetOf fe r model for the v i r tua l marketspace. This model explains internet buying as service consumption that embraced elements like user interface, facilitating services and supporting services. These three elements are supported by information related to online behaviour. Furthermore, base on 424 responses about behavioral factors of onl ine users, Lee (2002) found that electronic business should focus on the traditional marketing factors, for example customer-service center, security, warranty and accurate billing rather than web-savvy features or virtual storefront design. N e x t , C h e u n g e t a l . ( 2 0 0 3 ) d i d a comprehensive literature review in online buyer behaviour and suggested the framework of online consumer behaviour based on the model of intention, adoption and continuance (MIAC). The study also identifies factors affecting online consumer in two main categor ies , uncont ro l lab le fac tors and controllable factors. Uncontrollable factors are consumer character is t ics and env i ronmenta l i n f l u e n c e s wh i l e c o n t r o l l a b l e f a c t o r s a r e p r o d u c t / s e r v i c e c h a r a c t e r i s t i c s , m e d i um cha rac t e r i s t i c s and me rchan t / i n t e rmed i a r y characteristics. Further, Kau and his colleagues in 2003 studied online behavior in the aspect of their demographic make-up, psychographics, navigation expertise, shopping experience and so forth. They found that customers in different groups have different psychographics, navigation expertise, and shopping exper ience . Moe and Fader (2004) developed the model of conversion behaviors that consist of accumulating of visited effects and threshold purchasing effects. On the one hand, the accumulating of visited effects means that the customers have experiences in using the internet and gathering many good supported evidences until they have enough confidence to buy from the webs. On

the other hand, threshold effects mean the temporary desire of buying occurred from attractive webs or services on web but these effects may grow or decrease when customers have more experiences. Similarly, Constantinides (2004) suggested that businesses or e-marketer should be considered the customer’s virtual experience as a major parameter i n f l u e n c i n g o n l i n e p u r c h a s i n g . Mo r e o v e r , Constantinides (2004) proposed the further research question about studying the web experience from different types of web sites. Why study buyer behaviour in telecommu-

nication e-services? The t e l ecommun ica t i ons i ndus t r y i s significant in the global and local market as an infrastructure provider for the transportation of business information. The World Trade Organization (cited in Cowhey & Klimenko, 1999) reported that the high level of investment in the telecommunication sector can be used as a predictor of high economic growth and acceleration of economic development bo t h na t i ona l l y and g l oba l l y . Because t he telecommunications industry rapidly introduces and uses new technologies and communication networks, it was one of the first industries that use or provide electronic services to both business and individual customers. For example, in the United Kingdom by 1999, telecommunications providers had provided an advantage in electronic commerce by enabling the web services to facilitate telecom customers such as internet bill pay and online shopping (Bishop 1999). In term of economic growth, Telecom Asia (2000) reported that Telstra had done a user survey in 2000 and found that data telecom services show a significant growth for more than 50% of Asia market due to the increasing of customers who use the internet. The impact of these events directly affected the selection of telecommunication services of the customer because the internet can be easily used by

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them to penetrate market information that contains data of the product, price, policy, promotion and channel for customer searching around the world. Maddox et al . (1997) supports that customers r e c o g n i z e a n d n o t i c e w e b a d d r e s s o f telecommunication companies as contact information when they look at all advertisements. Surprisingly, new internet users show a highly percentage to visit telecommunication web sites within the next month after finding web addresses from the advertisements. For the research about telecommunication, it was found that most of researches in this field are emp i r i c a l s t u d y a bou t t h e mac r o v i ew o f telecommunication such as the government policy, e c o n o m i c i m p a c t , t h e e f f e c t o f W T O , telecommunication policy, and regulatory framework. However, there are few researches about the micro view of telecommunication services such as telecom service quality, behaviour intention, and customer behavior. Therefore, some researches were conducted on the strategy, business alliance, service quality, customer satisfaction, behaviour intention and loyalty (Wang and Lo 2002; Charoensuk, S 2006), but all of them neglect to consider buyer behavior that is one of the impor tant par ts o f today’s market ing . Athanassopoulos and Liakopoulos (2003) supported t h i s i d e a a n d s a i d t h a t t h e s u c c e s s o f telecommunication industry mainly concerns about customer issues and their behaviors that can be r e l a t e d t o t h e o v e r a l l p e r f o r m a n c e o f telecommunication industry. Another point is that information technology like the internet will open the new opportunities in dealing with local and global telecom customers. Thus, the internet can easily make a cross-border commercial trading and provide abundant of related information. Also, it will get rid of problems in dealing with long distance customers.

The telecommunication industry is a huge business that may influence any business activities in this information era as the infrastructure, so this industry will play the important role in global electronic market. Bishop (1999) agreed those telecommunication providers are now gaining business advantages by being internet service provider and e-commerce facilitator. This is a main reason that this paper intends to study the impact of the internet on buyer behaviour in telecommunication e-service. Also, this topic will apply to the telecom businesses when they plan to go electronic market. However, telecommunication by itself has complex details because it has two folds to be considered: (1) technology area and (2) business area. Technology area concerns about service quality that comes from technology standard, network support and telecom equipment while business area considers competitive performance, value offering and service as the key drivers (Barnes and Glynn 1993, p 43). To cope with these requirements, telecom firms have to find the optimized solution in providing advance technologies and precisely understanding customer needs in operating services at the same time. Chan (2000) argued that the internet is becoming a necessary part of telecom f i rms that can be shaped telecom companies in operating data networks, provisioning broadband, improving services and providing wholesale/resale to customers. However, there are no researches that mainly consider buyer behavior of telecommunication services influenced by the internet for customer decision making. When trying to apply the theory of buyer b e h a v i o u r ( H ow a r d a n d S h e t h , 1 9 6 9 ) i n telecommunication e-services, many questions have been addressed. First of all, the theory of buyer behaviour only concerns the interactions between human and human how the theory can be applied for e-service that has interactions between human and mechanism. Steckel et al., (2005, p. 312) supports this statement by saying that:

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Little research to date has addressed the question of how consumers evaluate and choose such complex (typically information technology-oriented) consumer-firm interaction mechanisms. Two potentially relevant areas of research that have begun to address related questions are the literature on information technology adoption in organizations (e.g. Davis et al., 1989) and self service technology acceptance (e.g. Dabholkar and Bagozzi, 2002). Secondly, what components of theory of buyer behaviour need to be adapted when it is used with electronic services and in what way? For example, factors that generate attitude, choice criteria or perceptual bias of e-service may be different from traditional service and needed to be reviewed. Thirdly, the business process of telecommunication is specific and differs from consumer products or other services so it needs the specific model for telecom business. For instance, some factors like service monitoring, technical support or service level agreement (SLA) are necessary only for the telecom business and needed to include in the model. To close the theoretical research gaps, conducting research about the impact of the internet on buyer behavior can benef ic ia l ly reveal the advantages to telecom firms in coping with using e-services of telecom customers. It can also be used as a business prototype for other businesses which want to understand buyer behavior of e-services and prepare themselves for marketing in electronic market. Also, scholars in this area have tried to develop models that define customer participation with e-services but the new integrative model of online buyer behaviour are a lso needed in order to promote systemat ic investigations of its elements (Li and Zhang, 2002; Steckel et al., 2005). Thus, it is clear that studying the impact of the internet with buyer behavior in telecommunication service will be useful for most businesses in applying their knowledge in the further steps of the electronic market.

E-service: definition and importance Voss (1999, 2003) defines e-service as service in the virtual market that uses new media such as the web for delivery of the service. For this reason, e-service is defined as a web-based service (Reynolds, 2000). Additionally, Boyer, Hallowell and Roth (2002) see e-services as services that are comprised of all interactive services and delivered on the internet by using advanced telecommunications, information, and multimedia technologies. According to Rust and Lemon (2001), the term ‘e-service’ expresses the true nature of the web as it becomes a key to effective marketing in the information era. They also remark upon three critical aspects of e-service: true interactivity with customers, personalization and real-time adjustment for customer offering. Voss (1999, 2000) has shown the difference between e-service and e-commerce in terms of customer relationship marketing. He explains that service on the internet can be distinguished from pure sales on the web, with little or no service content to pure service, free or with a service contact. Recently, Rowley (2006) has defined e-service as service mediated through technology and points out that two inherent characteristics of e-service are the availability of information and need for some degree of self service: E-service is deeds, efforts or performances whose delivery is mediated by information technology (including the Web, information kiosks and mobile devices). Such e-service includes the service element of e-tailing, customer support and service, and service delivery (Rowley, 2006). In terms of benefits, Voss (2000) asserts that good elements of e-services are fast response, a u t oma t i c r e s p o n s e , o r g a n i z e d c u s t ome r communication, choice of phone follow up, ability to check status, a large volume of service enquiries, the

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ability to automate status checking, and the provision of links to frequently-asked questions. Lavenburg (2005) found that using the internet in retail business can enhance company image, the acquisition process of business and post purchase supports. All these elements explain the advantage of e-service that service firms can use to benefit their customers and c r ea t e compe t i t i v e advan t ages ove r o t he r competitors. Indeed, it became clear in the course of the research that e-service is increasingly important in the operation of service firms.

3. GLOBAL INTERNET BUYER

BEHAVIOR The purpose of this study is to examine the impact o f the in te rnet on buyer behav io r in globalization, focusing on Thai telecommunication e-services. For clear understanding, this part of paper is organized into three subtopics. Firstly, it shows history of the internet, the world usage statistic and most popular behaviours of global users when they go online. Secondly, benefits of telecom e-services are presented to understand the advantages of using telecom e-services in Thailand. Finally, this paper will analyze the situations of telecom e-services in Thailand and also suggested the existing e-services from current telecom operators both wireline and wireless. 3.1 Nature of the internet and global buyer

behavior The internet is an amazing information technology that was firstly invented by the military section and it was still kept for military purpose until 1996 when independent internet service providers ( I S P ) c o u l d c a r r y t h e i r o w n t r a f f i c f o r commerc ia l i za t ion . Dur ing tha t t ime , one o f communication technologies was used by large

organizat ions in business transact ion on web commerce called Electronic Data Interchange (EDI) but this technology has never reached the level of popularity for web trade because of its high cost, slow development of standard and the complexity of development. In 1992, the first World Wide Web (www) was released by Corporation for Research and Educational Networking (CERN) for information seeking purpose and became much more popular than EDI that can be proved by the continuous increasing of internet user and the growth of electronic market. Because the internet uses the concept of packet switching that can run many works simultaneously, so it is very helpful for doing business on web sites. Now web sites have become a popular media in commerce and internet has been known as an efficient marketing tool for penetrating customer needs. According to internetworldstat website (2009), the world internet usage grows up more than 100%

in every part of the world. This website shows that

the world total growth of internet users is about

342.2% calculating from 2000 to 2009.

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คณะพาณิชยศาสตรและการบัญชี มหาวิทยาลัยธรรมศาสตร


Another point is that the internet speed is

cont inuously increased to run the amount of

information smoothly as well as the increasing of

people who online in the internet shows significant

number. It was argued by Bickerton et al. (1997, p.

30-31) that customers in the 21st century, have

numerous alternative products/services to choose

and internet marketing can respond the customer

needs that direct to high sale volumes and revenues.

Vicari and Kohler (1999) supported that the internet

user behavior depends on the access speed that

users have when they connect to the internet. This

situation confirms that high speed internet service will

be more attractive for users than low speed service

when they want to use the internet. From this

viewpoint, it can be related to the telecommunication

infrastructure or internet service provider who

provides internet service to prepare for high-speed

broadband access that will be a significant key for

internet commerce.

If we consider about internet behaviour, there

are several categories of internet user behaviour,

which also appear in every part of the world. And this

result will show the significance in revealing internet

activities in business. Liu et al., (2002) suggest that

the online user behaviours can be divided into eight

main categories:

1 .Web Brows ing 2 . Ins tant Messag ing

3.Audio-Video Playing 4.Mail SMTP-POP3 using

5.Archive file Transfer 6.Chatting 7.Forum Participating

8.Game Playing

As can be seen from eight categories, most

of them show the behaviour of internet users when

they go online. Many internet users may have done

more than two kinds of behaviour at the same time.

For example, when a user searching information by

search engine (i.e. Google or Yahoo), he/she may

also chat with MSN or read an e-mail. Furthermore,

these eight categories have shown relations with

other services both inside and outside the group. The

eight online behaviours can easily bring incomes to

the firms that aware and prepare to complete on the

internet. Moreover, the internet shows the cross-

65

Table 1: World internet usage and population statistics

(Source: www.internetworldstats.com/stats.htm)




border commerce, so it is undoubtedly believed that

the internet makes buyers feel the easiness of buying

foreign products/services and also bring the firm to

be a global company. Erika (2000) suggested that the

keys to target international online customers are

making sure that your business are attractive enough

to international customers or another one is going out

and finding them. Furthermore, she stated that

targeting international customers on web businesses

has to be done based on the understanding of the

differences of international web use. This point of

views is also supported by Mooij (2004) who said

that the effective international marketing has to

understand the differences that come from various

value perspectives of people in different countries.

3.2 Benefits of Telecom e-services

The internet market is known as a perfect

market. The concept of the perfect market is about

the basic symmetry of supply and demand or selling

and buying (Anderson, 1997). This concept means

customers have an equa l chance to rece ive

information and to access the market as both seller

and buyer. This is the theoretical assumption for the

most perfect and beneficial markets. According to

Markillie (2004) the internet is working similarly to a

perfect market due to the customer can receive the

information before buying as a buyer while he/she

sometime provides information as a seller. From this

viewpoint, the website is becoming an important

channel to promote company’s brand, products and

services, although some businesses do not sell

online. Markillie also pointed out that today the

internet is changing buyer behaviours in buying

products/services and this situation also occurs in the

telecommunications industry.

Telecom e-services reduce operational

costs, especially employee costs such as overtime,

and can improve cus tomer re la t ionsh ips o f

telecommunications providers through the quick

responded service. Porter (2001, p.71) confirmed that

the internet is the powerful tool in the present day for

enhancing the operational effectiveness, especially

easing and speeding the access to real- t ime

information. Moreover, Porter (2001) suggested

another benef i t of the internet , the st rategic

positioning, which is the ability to define a distinct

value proposition and a cleverly making decision

what not to do. However, the internet markets for

telecommunication services are still in their initial

stages, so the impacts on buyer behaviour are now

being reviewed by users and providers, and it may

take some time for a telecommunications provider to

rea l ize what the i r customers th ink about the

developing situation of the internet technology.

There are three main ways that the internet

influences consumer behaviour towards telecom e-

services.

• Firstly, the internet provides many choices

for customers to select telecom services with

information that they can use to make a decision

whether to buy or sell. This statement is supported

by many research and empirical studies (Silverman et

66



al. , 2001; Koufaris, 2002; Li and Zhang, 2002).

According to Bellman, Lohse and Johnson (1999),

looking for product information on the internet is the

most important predictor of online buying behaviour

and customers choose the internet because they

want the convenience rather than cost saving. As

suggested by Markillie 2004, European shoppers do

research many kinds of products before purchasing

anything at shops or department stores (see Figure 2).

• Secondly, internet-based services (web

se r v i c e s o r e - s e r v i c e s ) imp ro ve cus t ome r

relationships or involving conditions. These services

also provide a sense of personalize experience when

customers use the internet-based service to search

or buy products or services. For example, the

customers can create personal user account and

password in on-line banking and then they can set

the favour i te issues or in te res ted top ics by

themselves. In detail, web services or e-services are

based on a se l f -serv ice technology in which

cus tomers per fo rm as serv ice prov iders fo r

themselves (Broderick & Vachirapornpuk, 2002). In

addition, Hamid and Kassim (2004) found that the

internet has a positive impact on customer loyalty,

personalized services and consumer behaviour.

• Finally, the internet provides convenient

facilities to customers such as the 24x7 services, no

regional restrictions, easy to use and fast responses

(Zeithaml, Bitner and Gremler 2009). Many research

papers indicate that convenience is a vital factor that

influences customer going online (Gronroos et al.,

2000; Constantinides, 2004; Steckel et al., 2005).

In conclusion, the internet has great influence

on buyer behavior of customers. Because the internet

provides many advantages to customers, telecom

firms should aware and prepare themselves before

adapting the internet technology to their business

process. The figure below shows the ratio of the

offline purchase after searching the European online

shoppers (Figure 2).

Figure 2: Look before you leap:

Survey of EuropeanOnline Shoppers

Source: Markillie (2004)

3.3 The telecom e-services in Thailand In Tha i land , many te lecommunicat ion

providers initially develop internet services to serve

the i r customers . Gunawardana , Wi thers and

Tangki tvanich (2000) have observed that the

emerging market of Thai telecommunications is driven

by new technologies and economics and the internet

is a technology to serve telecommunications firms at

present not only for regional customers but also for

international customers. Using the internet technology

provides many challenges for telecommunications

prov iders : there is no t ime l imi t in serv ic ing

customers; it is easy to create both new customers

domest ica l ly and internat ional ly (no regional

restrictions); and it is possible to improve customer

67

Look before you leap

Researched online and boughtoffline in the past three monthsBought online in the past three months

Ratio of offline purchases afteronline research to online purchases

Books

Music

Event tickets

Leisure travel

Video/DVD

Clothing

ComputerhardwareComputer/Video gamesCars

Computersoftware

Source forrester

Have you done any of the following in the post three months?**,%

*Survey of Europoin online shoppers

0 5 10 15 20

1.21

1

1.44

1.50

1.38

1.13

1.29

1.50

2.00

na

1.25

~

na




satisfaction because they can select services by

themselves from a self-service menu rather than be

l imited to select the choices in brochures or

catalogues.

Table 2: Types of e-services and Telecom operators in Thailand

(Source: TOT, True, TT&T, AIS, DTAC, TrueMove, Hutch, and ThaiMobile websites)

For the telecom e-service in Thailand, it can

be separated by types of telecom operator: wireline

operators and wireless operators. There are four

wireline operators and five wireless operators. The

wireline operators are TOT public company limited

(TOT), True Corporation (True), TT&T Corporation

(TT&T), and Maxnet while wireless operators are

Advance I n f o Se r v i c e ( A I S ) , T o t a l Acce s s

Communication (DTAC), True Corporation (TrueMove),

Hutch and ThaiMobile. The services which these two

groups of operators serve customer mainly are voice,

internet and value-added services. As stated earlier,

68



telecom e-services in Thailand are initially developed,

so only few services are provided to serve the

customers depend on the ability of each telecom

operator. Some operators provide more than 15

services and other operators are ranging from 10 to 2

services. However, all of services can be integrated in

three main groups such as managing their own

profiles, changing their service information (Package

or Promotion), and supporting payment activities.

As presented in Table 2, Telecom e-services

in group 1 (Managing their own profiles) includes

making the customer’s profile, change customer’s

i n f o rma t i on ( add r e s s , n ame , pas swo rd , o r

preferences), viewing current promotion, and news &

privi leges. For Telecom e-services in group 2

(Managing service information), this group, for

example , inc ludes on l ine order ing , changing

promotion or package, and applying or changing

value-added service. Next, the group 3 is, for

example, bill payment, payment history report, check

usage and credit limit. However, the number of

telecom e-service would be increased in the near

future due to the cost-saving efficiency and service

availability.

4. THE APPLIED MODEL OF

BUYER BEHAVIOR WITH

THE TELECOM E-SERVICES

As stated in earlier section, the theory of

buyer behaviour by Howard and Sheth (1969) seems

to neglect the technology issue, especially in human

and mechanism interaction. The importance of study

human and mechanism interact ion is steadi ly

increased by the number of internet users from every

part of the world (Gronroos et al., 2000, p.243).

Therefore, the study of human and mechanism

interaction in relating to buyer behaviour is limited

especially in telecommunication business that, in fact,

plays the role of internet provider and facilitator. Also,

there are general agreements from academics and

practitioners that understanding the steps of the

buying process, factors affecting decision making

process and a model in explaining online buyer

behav i o u r a r e n eces sa r y f o r ma r k e t e r s t o

comprehend in business (Gronroos et al., 2000;

Silverman et al., 2001; Koufaris, 2002; Li and Zhang,

2002; Kotler, 2003; Constantinides, 2004; Steckel et

al., 2005). To study online buyer behaviour, there are

several theories that researchers used to explain, for

example, theory of buyer behaviour, technology

acceptance model (TAM), and flow theory (Guttman

et al., 1999; Mile et al., 2000; Silverman et al., 2001;

Koufaris, 2002; Li and Zhang, 2002; Cheung et al.,

2003; and Constantinides, 2004). In this paper, the

applied model is developed based on theory of buyer

behaviour and the understanding of customer’s

experience when using telecom e-services. The

model is illustrated in Figure 3 below.

To begin with, this model will be described

in term of experienced perception, learning and value

acceptance of telecom customers when using

internet e-service. The experience of online buyer

behaviour is a vital factor in explaining online

purchasing decision. Kotler (2003) and Constantinides

(2004, p 112-113) support the importance of studying

experience of online users by saying that web

experience is a major factor that influences the

customers when making online purchasing, so study

experience of online buyer behaviour is necessary.

When considering the elements of online buyer

behaviour, Constantinides (2004, p 113) suggests that

the study of web experience would include elements

like searching, browsing, finding, selecting, comparing,

evaluating information, interacting and transacting

with the online firms. This paper will review the

current literatures with factors affecting online buyer

behaviour and try to map these factors with the

69




telecom e-service characteristics. Similarly, Steckel at

al., (2005) suggest that the objectives of customer

when using interactive processes include acquiring

i n f o rma t i o n abou t a p r oduc t , d e f i n i n g i t s

characteristics, placing the order and obtaining the

manufactured product.

Figure 3: The Applied model of buyer behavior

with the internet for telecom e-services.

As can be seen from Figure 3, the model is

divided into three main parts such as input, buyer’s

decision process and purchase decision. First of all,

the inputs of this model are two types of input:

internal stimuli and external stimuli. The internal

st imul i mean inf luences occur from their own

preferences or previous experience of customers

which may have effects over their buying behaviour

with the telecom e-services. Some academics have

defined the internal stimuli as demographic, personal

issue (expectation), cultural issue, economic, social

and experiential issues (Howard and Sheth, 1969;

Kotler, 2003; Constantinides, 2004). For external

stimuli, this paper considers them based on business

characteristics of telecommunication and related

environment factors such as marketing stimuli ,

product/service characteristics and web quality. In

addition, Li and Zhang (2002, p. 510) indicates

70



external stimuli of online buyer behaviour that are

three dimensions such as legal framework to protect

customers from online transaction losses, the system

of third party recognition and number of competitors.

As suggested by Belch and Belch (2007), customers

undertake both an internal (memory) and an external

search as the input when they want to make a

purchase decision. Also, Engel, Kollat and Blackwell

(1969) and Engel, Blackwell and Miniard (1995)

suggests that the inputs of buyer behaviour model

are all kinds of stimuli that come from related issues

concerning with customer, like individual experience

and pre ference , bus iness character is t ic and

environment factors.

Second part, the model presents buyer’s

decision process of online buyer behaviour in telecom

e-services. After customers have recognized their

internal and external stimuli, they have an attention

and want to identify service criteria for selecting the

one that matches their needs. As suggested by

Bovee et al., (1995, p.117), attention is the cognitive

process of customers after receiving stimuli in which

they selectively concentrate on one aspect and

ignore other things. Next, when attention of the

customers occurs, customer will identify service

criteria to find the suitable solution for them. For

example, the customers may have an attention to use

the mobile package after viewing TV advertisement.

However, they want to choose only one mobile

operator that provide them maximize value, so they

set service criteria that they want as an expected

level before searching and making a decision. Belch

and Be lch (2007 , p .114-119) suppor ted that

c o n s u m e r s u s u a l l y e v a l u a t e a l t e r n a t i v e

products/services in terms of the functional and

psychological benefits that businesses or other

service providers offer by comparing with their

expected needs. From this viewpoint, Belch and

Be lch (2007) a lso suggested that market ing

o rgan i za t ion needs to know wh ich bene f i t s

consumers are seeking and therefore which attributes

are most important in terms of making a decision.

Further, when customers recognize a need

for products/services, they go online and search for

that the products/services related information. In this

model, the customers select to search their needs via

the internet by using Web browsing, search engine or

other internet-based methods. For telecom e-services,

the searching tools are facilitated by key word,

conceptual parameter , site navigat ion, search

facilities, and search process (Silverman et al., 2001;

Constantinides, 2004). Steckel et al., (2005, p.313)

describes that the internet make customers easier to

o b t a i n a b u n d a n t i n f o r m a t i o n r e l a t e d t o

products/services they are interesting. For instance,

the customers do searching with Google search,

Yahoo search or AltaVista for telecom services and

this internet searching also provides personalization

to the customers by allowing them to customize their

search with key word matching, key preference or

related these issues. The personalization is suggested

by many researchers in the field of online buyer

behaviour as the future study (Silverman et al., 2001,

p.27; Steckel et al., 2005, p.315). For telecom e-

services, the word ‘personalization’ in this paper refers

to the design of personalized decision tools of

telecom e-service web-pages provided for customers

when using internet-based services. Shih (1998)

suggests that the web service should offer the users

opportunities to reconstruct the web sites as their

preferences. In detail, the personalization of telecom

e-services fits with two service groups, managing

their own profile and managing service information.

The result of searching brings into the

perceptual bias that, on the one hand, leads to

confidences in using telecom e-services, value

comprehension and purchase respectively. Steckel et

al., (2005) support that the abundance of information

from the internet will lead customer to the perceptual

71




bias, making one choice more favorite than other

alternative choices. For the relationship of confidence

and value comprehension, this relationship draws

from psychological issue of onl ine customers.

Confidence refers to a sense of reduced anxiety and

comfort in knowing what to expect to customers

before developing their relationship with service

operators while value comprehension means the

acceptance of benefits when customers using the

service (Zeithaml, Bitner and Gremler, 2009, p. 183).

After customers have a value comprehension, the

online purchase will happen. On the other hand, the

perceptual bias of the customers makes them

evaluating a choice criterion that is composed of

three facilitated buying factors such as price option,

shopping option and security option (Silverman et al.,

2001, p. 8). Price option is about the methods that

internet seller and buyer agree to use for setting the

price such as price plus sending fee, e-bidding or e-

auction (Guttman et al., 1999; Silverman et al., 2001).

For shopping option and security option, these two

o p t i o n s a r e me t h o d s t h a t i n t e r n e t s e l l e r

accommodate buyer for their purchasing such as e-

payment, credit card payment or money transfer with

internet security protection (Constantinides, 2004).

Therefore, the evaluation process of customer will

make on the basis of maximize value acceptance for

service offerings in telecom operators.

Next, attitude of customers is created after

they evaluate and accept three previous choice

criteria. The attitude refers to strongly feeling or

belief of a person - both positive and negative -

toward a product, service, idea, or issue (Bovee et al.,

1995, p.121). The attitude of the telecom internet user

comes from their beneficial advantages of the internet

services. Further, there are some supported issues

that need to be added into the model of buyer

behaviours in telecom e-services. This is similar to

supporting payment activities (Table 2.) of current

telecom e-services. However, when comparing with

the current telecom e-services, an only payment

act iv i ty was found to be served the te lecom

customers. There are four main topics of supporting

tools. Firstly, Customer Relationship Management

(CRM) is a software-based supported tool that helps

telecom operators managing overall relationship with

the customers. This software manages telecom

s u p p o r t s s u c h a s c a l l c e n t e r , h e l p d e s k ,

representative, web site, and securing financing

(Silverman et al., 2005). Next, 24x7 service monitoring

and call center are two necessarily supporting

processes which telecom operators have used to

serve the customers. Finally, service level agreement

(SLA) is a negotiated agreement between customer

and service provider about minimum acceptance level

of telecom service to serve the customers. If telecom

providers provide all of these three advantages,

customers will positively perceive a good attitude in

telecom e-services.

As suggested by Porter (2001, p.65), the

internet technology provides better opportunities for

business to establ ish i ts dist inct ive strategic

posi t ion ing than the prev ious generat ions of

information technology. The attitude brings into the

intention stage and goes on to purchase via telecom

e-services. After purchasing via telecom e-service,

72



customers may either satisfy or dissatisfy on the

telecom services. Li and Zhang (2002, p.514)

supported that satisfaction of online customers is

evaluated by the level of achieving expectations. If

expectations are met, the degree of satisfaction is

high and it will influence intentions, decisions and

purchasing positively. Therefore, most of current

literatures about online buyer behaviour seem to

cons i de r on l y sa t i s f ac t i on bu t t he a r ea o f

dissatisfaction response remains unstudied. In this

paper, the applied model takes into account to

provide both sat is fact ion and dissat is fact ion

responses after purchasing via telecom e-services as

the learning log of the customers and telecom

operators for next decision making. For example, if

customers experience satisfaction, they will remember

it as knowledge feedback for re-buying process not

only for themselves but also for their societies.

However, when customers experience dissatisfaction

with the telecom service, they do not want to buy

th is serv ice next t ime and may te l l th is bad

experience to their families or other peer groups. As

supported by Belch and Belch (2007, p.120-126), they

said that:

Once the consumer has purchased and used the product, they will evaluate their purchasing decision. They compare the product’s performance with their expectations. If the product does not perform as expected they wil l experience post purchase dissatisfaction. When consumers purchase high involvement products, that are more expensive products for which they exert a greater purchasing effort in terms of time and search, they usually experience some level of discomfort after the purchase. That is, they experience some doubt that they made the right choice.

In the theory of buyer behavior, Howard and

Sheth (1969) neglected the interactions between

human and mechanism and technological issue. Also,

the applied model would consider the responses after

purchasing both satisfaction and dissatisfaction as

the knowledge feedback for re-buying process that is

shown in Figure 3. Moreover, the reviewed studies

have shown that re-buying process or commitment

process of customers is necessary to benefit trades

on the internet because it shows the linkage of the

satisfaction and dissatisfaction result as the inputs for

next purchasing process. In this paper, the applied

model represents the buyer behaviour of online

customers when using the telecom e-services. This

applied model will help the telecom business to

understand the buyer behaviour of their customers

when they have participated in the telecom online

service (Athanassopoulos and Liakopoulos, 2003).

5. MANAGERIAL

IMPLICATIONS AND

FURTHER STUDIES

In summary, the internet will surely affect

buyer behavior in the global context of businesses

and the company who prepare to understand this

change will get more advantage than others who

neglect it . For telecommunication firms, it is a

business relating to new technology for supporting

their customers and the internet is one of the first

choices that most of them use in every part of the

world. To become the successful telecom businesses,

understanding the model of online buyer behavior

and its process are the first priority to serve the

customers online. Moreover, telecom firms should do

survey every year about customer expectation and

their perception in the services because both of them

will predict the way that telecom companies should

focus to cope with the change of customers’ behavior

and their environments. Also, telecom operators

would pay attention to supporting tools like Customer

73




Relationship Management (CRM), 24x7 monitoring,

Call center, and Service Level Agreement (SLA).

Study on the l inkage between buyer

behav io r and cus tomer dec i s i on mak ing o f

technological products/services is an interesting

further research. Because buyer behavior shows the

whole picture of customer intention when buying

products/services while decision making will tell

telecom firms what should be focused to support

telecom e-services purchasing. Another kind of further

study is the study on the degree of perception and

expectation of technological products/services which

are useful to explain buyer behavior in purchasing

situations. Thus, the further researcher should look

carefully about the impacts of new technologies on

buyer behavior field and should conduct the research

in the particular area that can cover or extend the

theoretical context of buying behavior theory or

decision-making model.

However, the purpose of this study was not to

test an applied model of buyer behaviour with the

internet for telecom e-services, because so far such

models have not been suggested in literature. Instead,

the purpose of this study aims to develop the

relationship among elements of online buyer behaviour

of telecom e-services. In future studies, the applied

model would be hypothesized for further testing.

6. CONCLUSION

This paper reviews the impact of internet on

buyer behavior in globalization by focusing on

telecom e-services. It also offers the applied model of

buyer behavior for telecom service by studying the

impact of the internet to guide the telecom firms in

dealing with their customers, especially in IT era.

Firms that understand buyer behavior with the

internet can survive in today competitive situation.

According to buyer behavior field, it’s now

challenged by technology advancement, especially

the internet. However, few researchers have paid

attention to study the effects of the internet on buyer

behaviour, so it should be reviewed to extend the

theoretical knowledge. Moreover, there are very few

researches that study the buyer behaviour with

interactions between human and mechanism, for

example human and electronic services. Also, the

researches in telecom services mostly focus on

mac ro v i ew r a t he r t h an t h e m i c r o v i ew o f

telecommunication services like purchasing behavior.

To close these two gaps, the applied model of buyer

behavior with the internet for telecom e-services is

developed to understand the customers when using

internet services. The concept of this model is about

experiences and perceptions that have affected on

buyer behavior of telecom e-services when using the

internet. This new model is added by factors such as

searching processes, personalization and supporting

tools that are facilities of the internet technology.

Furthermore, the model is also added the knowledge

feedback for re-buying process to assure the effects

of customers’ experience for previous purchase.

Moreover, this feedback also link to their related

group of customers as word of mouth to decide

buying process in the future. In conclusion, this

model would be helpful for telecommunication

operators when dealing with their buyers and the

internet technology in globalization.

74



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