The Effect of Internet Experience on Consumer Expectations of Responsiveness and Control in Offline Services Marketing Interactions

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1 The Effect of Internet Experience on Consumer Expecttions of Responsiveness nd Control in Offline Services Mrketing Interctions Lind F. Alwitt DePul University Lwrence O. Hmer DePul University Astrct The Internet is n exciting innovtion whose populrity continues to rpidly increse. As consumers use the Internet, the increse in their control my result in chnging expecttions of their interctions with usinesses in generl. The ccumultion of successful experiences in otining informtion nd negotiting terms during ctive, self-initited nd self-controlled online interctions my led consumers to expect more responsiveness nd control over offline mrketing interctions. This pper reports study conducted to exmine the hypothesis tht greter mounts of Internet experience would e ssocited with higher service expecttions for offline trnsctions. The results of the study suggest tht consumers with moderte levels of we usge expertise hve higher expecttions thn do consumers with low or high levels of we usge expertise. In other words, this study finds inverted U reltionship etween we usge expertise nd consumers expecttions of service providers. 1. Introduction The Internet is ecoming pervsive environmentl element for US consumers nd usinesses. Although the Internet ws unknown in the not-too-distnt pst, it hs mde its wy into the homes, offices, schools, lirries, nd voculry of consumers. While estimtes of Internet usge vry [6], it ppers tht upwrds of 62 million dults hve Internet ccess nd the Internet is used y 39% of the US popultion over the ge of 16 [8]. Additionlly, pproximtely 9% of Internet users re reported to spend more thn 10 hours per month online [12]. Further, Internet usge will likely increse with the doption of user-friendly we interfces such s WeTV nd the incresed vilility of low-priced (i.e., su- $1000) personl computers. Technologicl innovtions re continuously introduced into the mrketplce, nd mny hve n impct on the reltionship etween consumers nd firms. For exmple, television nd rdio llow firms to communicte with their consumers nd ATM mchines llow consumers unlimited (leit highly structured) interctions with nks. The Internet is similr to these innovtions in tht it llows firms to communicte with their customers (through compny-sponsored we-sites) nd it llows consumers unlimited interctions with firms. However, the Internet differs from previous innovtions in tht it ffords consumers greter mounts of control during interctions with firms thn most previous innovtions. Unlike typicl technology-enled interctions etween consumers nd firms, the consumer role in online interctions is ctive nd self-initited. For exmple, while online otining informtion, negotiting terms, nd mking purchses, consumers control when the interctions occur, their durtion, their content, nd their scope. Consumers hve less control in offline trnsctions, which tend to e firm-initited nd plce consumers in more pssive roles. As the online nd offline interctions my feture the sme firm or involve the sme product ctegory, the incresed control consumers experience during online interctions my led them to expect greter levels of service performnce nd greter mounts of control in offline interctions. This pper investigtes the reltionship etween Internet usge nd expecttions of offline service encounters. Service interctions were chosen for the scope of this pper ecuse of the uthors' elief tht the intngile nture of services would mke Internet experience prticulrly influentil on consumers' expecttions of services. Consumer decision mking reltive to product purchses encompsses severl ctivities including informtion gthering, lterntive evlution, purchse, nd post-purchse ehvior [9]. Mny of these ctivities re prticulrly importnt within the context of services mrketing ecuse the intngile nture of services limits consumers' ilities to evlute the service oth efore nd fter purchse nd consumption [18]. Therefore, service consumers re fced with the tsk of selecting high-qulity service providers, nd oth personl (e.g., word-of-mouth) nd /00 $10.00 (c) 2000 IEEE 1

2 impersonl (e.g., the Internet) informtion sources re used s to perform this tsk. In fct, some define the Internet s n informtion pplince tht consumers principlly use to otin informtion [16]. The informtion providing role of the Internet is further evidenced y studies which report pproximtely 65% - 70% of Internet users seek product informtion nd use their online time s tool for reducing the mount of instore shopping tht is required [5][17]. While the Internet is n impersonl medium, the role it plys in usiness - consumer reltionships is similr to the roles plyed y personl sources of informtion. The Internet, s n informtion provider in consumer-firm reltionships, ppers to serve qusi- opinion leder function ecuse it helps consumers decide wht informtion is relevnt in given sitution [13]. This function is typiclly performed y we serch engines nd we portls (e.g., which serve s conduits etween individul we pges nd consumers. The Internet lso ppers to fcilitte consumer ctivism y providing consumers with forum for positive nd negtive word-of-mouth (WOM) communictions. Positive WOM communictions include product recommendtions, testimonils, nd the formtion of consumer uying groups [10]. Negtive WOM includes grievnce we sites tht cn e sponsored y compny, ut re most often sponsored y disstisfied consumers (e.g., 2. Effect of online experience on offline interctions This pper presents study investigting the reltionship etween the extent of Internet usge nd expecttions of offline service encounters. Compred to consumers in offline consumer - firm interctions, online consumers hve gret del of control over their interctions with firms ecuse of the nture of the Internet llows consumers to control the content of their online interctions with firms. By using hypertext links nd other nvigtionl tools, consumers control the content to which they re exposed nd the order in which the content will e viewed. This is different from mss medi interctions in which the content nd presenttion order is completely controlled y the firm. Consumers lso experience greter mounts of service-provider responsiveness while online ecuse the Internet lso llows consumers to ctively engge in dilogues rther thn pssively listening to firm s monologue in the form of television commercil or rdio dvertisement. These dilogues re possile ecuse consumers cn emil questions to we site sponsors who respond with personlized nswers. Consumers cn lso engge in dilogues with other consumers y using cht rooms tht re sponsored y firm or y other consumers. Finlly, consumers cn link to other we sites to gin informtion in response to question or re of interest. The vriety of dydic interctions mde possile y the Internet mkes online consumer firm interctions more like fce-to-fce interctions thn like trditionl medi interctions. Consequently, consumers my use their online experiences to form expecttions of fce-to-fce (i.e., offline) interctions. Mny studies hve found personl experience to e source of informtion from which service expecttions re formed [4] [14] [15] [18]. Any pst experience tht is deemed y the consumer to e relevnt to prticulr service encounter my e used to form expecttions of tht encounter. Therefore, therefore it consumers my se their expecttions of offline trnsctions on their online experience if they perceive their online trnsctions to e relevnt to their offline trnsctions. This is especilly likely to hppen with consumers expecttions of oth the control they will hve nd the firm s responsiveness in offline interctions ecuse consumers hve gret del of control in online environments nd we sites re very responsive to consumers ctions nd queries. With incresing mounts of online experience, consumers re incresingly likely to use the experience to form expecttions of offline encounters ecuse the rtio of online experiences to totl experiences increses. Perceived control over service interction is of prticulr interest to service providers ecuse it cn led to greter consumer stisfction [2]. Expecttions hve een found to ffect consumer perceptions of stisfction nd qulity in numer of contexts [3] [4]. A reson we expertise is likely to influence expecttions of offline service encounters is tht cognitive structures for cquiring informtion out specific domin differs mong people with different levels of we expertise. We experts know how to get informtion online. Their cognitive structures out informtion cquired online with regrd to specific service domin differ from those of less expert we users in severl wys [1]. First, their cognitive structures hve more detil. Second, ecuse they hve redy ccess to informtion out specific service domin they re likely to e exposed to more informtion nd more likely to know which informtion is relevnt to mking decisions in tht service domin. Tht is, their we expertise, pplied to specific service domin, is likely to mke them more expert in the service domin. Third, ecuse of their greter we expertise, they re wre of the complexities of using informtion out services. Thus, the following hypotheses were investigted: Hypothesis 1: We expertise is ssocited with higher expecttions of consumer control in offline service interctions /00 $10.00 (c) 2000 IEEE 2

3 Hypothesis 2: We expertise is ssocited with higher expecttions of firm responsiveness in offline service interctions. 3. Method In order to study the effects of we experience over rnge of service settings, the clssifiction frmework developed y Lovelock [7] ws used to select eight services tht served s settings for our study. The Lovelock frmework suggests tht services cn e clssified long two dimensions: 1) the extent to which the chrcteristics of the service cn e customized (e.g., legl services re customized to the needs of ech individul while fst-food mels lend themselves to very little customiztion); nd 2) the extent to which the service employees re le to exercise judgment in defining the nture of the service received y customers (e.g., professors exercise gret del of judgment during service delivery while nk tellers exercise very little judgment). Using two vlues ( high nd low ) for ech of the two dimensions results in four-cell clssifiction frmework. Two services from ech of the cells (for totl of eight services) were selected to serve s the settings for this study in order to provide rnge of different kinds of services. Prticipnts in the study were 85 undergrdute students from lrge Midwestern university, who were surveyed in groups. They were sked out their ownership of computer/telecommuniction devices, use of e-mil nd the we, their perceptions of the we nd degree of use of the we. In ddition, ech respondent ws sked for expecttions out two types of offline service providers. Prticipnts were ssigned to four groups, ech of which completed different form of the survey instrument. The surveys differed in the specific offline service providers, out which respondents were sked, with ech form contining two of the eight service settings discussed in the previous prgrph (see Tle 1). All eight services re commonly used, nd students re highly likely to e fmilir with ll of them. Rep. 1 Rep. 2 Tle 1. Service settings Customiztion High Low Judgement Judgement High Low High Low Sit-Down Dentl Doctor Movie Resturnt Clening Hir Stylist Bnk Clss Fst-Food Internet experience, the independent vrile of key interest, ws conceptulized s the mount of direct exposure to the Internet, excluding e-mil usge. It ws opertionlized s function of frequency of use of the Internet nd length of time Internet hs een used. This score rnged from 1 to 30, with totl possile mximum score of 30 (use the we t lest once dy x used we for more thn 3 yers) nd possile minimum score of 1 (never used the we). Respondents were ctegorized s to Internet experience s low (score less thn 16), moderte (score etween 16 nd 20) nd high (score more thn 20 or hd own homepge regrdless of frequency nd length of we usge). Two prticipnts did not provide sufficient informtion to e ctegorized. This resulted in 23 low, 31 moderte, nd 29 high expertise prticipnts. As mnipultion check, e-mil usge nd expecttions out we usge were relted to Internet experience. We experts were more likely to use e-mil (Χ 2 (8) = 62.32, p=.000) nd lso use it vi we pge (Χ 2 (2) = 40.47, p=.000). Reltive to those with low Internet experience, those with moderte nd high Internet experience were more likely to view severl chrcteristics of the we s importnt (see Tle 2). Additionlly, incresed Internet experience ws ssocited with n increse in considering the we site s response speed n importnt chrcteristic. With incresing Internet experience, respondents were more likely to hve looked for informtion from suppliers, ordered online, nd purchsed online. Fewer prticipnts with low Internet experience were likely to hve crried out these tsks. Internet experience is not relted to sex, ge, income, or work sttus. Service qulity nd expecttions of service qulity hve een conceptulized s multi-dimensionl y severl uthors [3] [11]. The present study mesured two dimensions of expecttions: responsiveness nd consumer control. Responsiveness is widely ccepted dimension of service qulity nd ws included in the present study ecuse of the responsive nture of online interctions (e.g., we sites re interctive nd designed to respond to the queries nd wishes of Internet users). Responsiveness ws opertionlized with 12-items, ech mesured using five point scle with response options rnging from "Strongly Disgree" to "Strongly Agree". The 12-item scle ws deemed relile with Cronch's lph vlue of.85. Although not investigted in previous empiricl or conceptul studies, consumer control is dimension of expecttions tht is prticulrly relevnt to the present study. It ws conceptulized s the degree to which consumers expect to hve influence over the people nd processes used in service delivery nd the informtion flow during delivery. Consumer expecttions of control were opertionlized s the respondent's men response to 10 scle items with Cronch's lph vlue of.77. Scle is different from other pper- which to use? /00 $10.00 (c) 2000 IEEE 3

4 Tle 2. Perceptions of the internet y expertise groups Perceptions of Expertise Group ANOVA We* Low Mod High Results The ility to use the we when you wnt to. The ility to select your own pth through the we site. **Hving control over the mount of time you spend on ech we pge. Hving control over the pges you ccess. The ility of the we site to provide informtion. The we site s ility to keep my pyment informtion secure F(2,78)=10.4 6,p=.000 F(2,78)=4.19,p=.019 F(2,78)=2.52 1, p=.087 F(2,78)=5.36,p=.007 F(2,78)=5.48 8,p=.006 F(2,78)=3.37 7,p=.039 Cell entries represent mens for the given group nd the given item. *Ech item ws mesured with scle whose vlues rnged from 1 (Not t ll importnt) to 4 (extremely importnt). NOTE: Within ech row, mens with the sme letters re not significntly different (α =.05; except for ** where α =.10). 4. Results It ws hypothesized tht the responsiveness of we interctions would led experienced Internet users to expect higher levels of responsiveness in offline interctions. This hypothesis ws prtilly supported y the dt s Internet experience ws significntly relted to expecttions of responsiveness (F (2,82) = 7.350, p =.001). Specificlly, the moderte experience group hd significntly higher expecttions thn the low experience group (p =.018). However, the high experience group hd expecttions tht were significntly lower thn the moderte experience group (p =.001), nd not significntly different from the low experience group (p =.670). Thus, there ws n inverted "U" shped reltionship etween Internet experience nd expecttions of responsiveness in offline encounters (see Figure 1). Expecttions of Responsiveness Low Med High We Expertise Note: Mens with the sme letter re not significntly different (α =.05). Figure 1. Expecttions of responsiveness in offline interctions It ws further hypothesized tht the incresed control tht consumers experience online would led more experienced Internet users to expect greter mounts of control in offline interctions. As with expecttions of responsiveness, this hypothesis ws prtilly supported y the dt s Internet experience ws significntly relted to consumers' expecttions of control in offline interctions (F (2,80) = 4.091; p=.020) (see Figure 2). Agin, significnt (p =.020) inverted "U" reltionship ws found etween Internet usge nd expecttions of consumer control with the moderte experience group hving higher expecttions tht either the low or the high experience groups. Expecttions of Control Low Med High We Expertise Note: Mens with the sme letter re not significntly different (α =.05). Figure 2. Expecttions of control in offline interctions /00 $10.00 (c) 2000 IEEE 4

5 5. Discussion This study investigted the reltionship etween we experience nd expecttions of offline service interctions. It ws hypothesized tht incresed we experience would e ssocited with incresed expecttions of responsiveness nd consumer control. However, the dt suggest tht Internet experience hs nonliner reltionship with expecttions of offline interctions. More specificlly, there ppers to e n inverted U shped reltionship etween we experience nd offline expecttions of consumer control nd firm responsiveness with modertely experienced Internet users hving higher expecttions of offline encounters thn Internet users with little experience or gret del of experience. The inverted U reltionship etween we experience nd expecttions of offline interctions suggests tht the reltionship etween the two vriles is more complex thn ws hypothesized. One explntion of the results is tht s consumers evolve from inexperienced Internet users to modertely experienced Internet users, they trnslte their online experiences into expecttions of online nd offline interctions. In other words, inexperienced consumers my consider we interctions s suset of the lrger group of consumer-usiness interctions. However, consumers who hve gret del of we experience re less likely to trnslte their online experiences into expecttions of offline encounters. Rther, fter consumers otin lrge mounts of we experience they cn contrst online nd offline interctions. As consumers move from moderte experience to greter experience they think of online interctions nd offline interctions s two seprte groups of usiness-consumer interctions; they re less likely to use their experiences with one group to form expecttions of the other group. In sum, the inverted U reltionship etween we usge nd offline interctions my indicte tht the reltionship etween online nd offline interctions chnges s consumers ecome more experienced with online interctions. This explntion of the inverted "U" results is consistent with chrcteristics of expertise [1]. People with greter we expertise re wre of the complexities of using informtion out services. They should e less likely thn less expert we users to over-generlize the use of informtion cquired on the we to perceptions out offline service encounters. Novice we users re lso less prone to infer tht specific instnce of informtion is typicl of the product/service ctegory ut for different reson -- they do not hve the ility to determine wht informtion cn e cquired online. Thus people with moderte we expertise re more likely to over-generlize the use of informtion cquired on the we to their perceptions of control over offline service interctions. There re other possile explntions of the lower level of perceived control of offline interctions y expert we users. First, erly we users my hve other chrcteristics, unrelted to their extent of use of the internet, tht predispose them to expect less control in service interctions. For exmple, they my hve lower expecttions out the qulity of ll socil encounters, including service encounters. Second, ecuse we experts re more wre of the content ville on the Internet, their expecttions out offline service encounters my depend on whether nd wht informtion is ville out specific service on the Internet. For exmple, we experts re likely to e wre tht Internet informtion relevnt to choosing n irline for n upcoming trip is more ville thn is informtion out specific doctors for selecting specilist. Their expecttions out control over choosing nd irline my differ from choosing physicin. Third, the results my e specific to the student smple used in the reserch. The incresed use of oth online nd offline interctions for services suggests tht currently, while the consumer popultion hs reltively little experience with the we, mrketers with n online presence should ttempt to hve high level of coordintion etween their online nd offline interctions with consumers (i.e., online nd offline interctions should present consumers with similr options, processes, nd choices). This need for this coordintion stems from the lck of distinction etween online nd offline interctions y mny consumers (i.e., consumers new to the Internet trnsfer their experiences with one type of interction to their expecttions of the other type of interction). This lck of distinction further implies tht the competitors of given firm include oth online nd offline firms within the sme service ctegory (e.g., for inexperienced nd modertely experienced Internet users, the competitive set for mzon.com includes rnesndnole.com nd trditionl Brnes nd Nole retil outlets). As more consumers gin experience with the Internet, experiences with one type of interction my e less likely to trnsfer to expecttions of the other type of interction. If experienced Internet users do mke distinction etween online nd offline interctions, the coordintion etween online nd offline interctions ecomes less importnt over time s consumers gin experience with the Internet. For experienced Internet users experiences with one type of interction my not trnsfer to expecttions of the other type of interction. Attempts to coordinte online nd offline interctions my ecome less importnt. The distinction etween online nd offline interctions lso hs implictions for the competitive environment in which firms operte. Firms tht mrket to experienced Internet users re likely to /00 $10.00 (c) 2000 IEEE 5

6 fce competition tht is specific to the type of interction. For exmple, for experienced Internet users, the competitive set for mzon.com includes rnesndnole.com ut not trditionl Brnes nd Nole retil outlets. 6. Conclusion This reserch investigted the reltionship etween Internet experience nd expecttions of offline consumer-usiness interctions. Internet experience, s it incresed from low to moderte levels, ws ssocited with incresingly high expecttions of offline service interctions. However, s Internet experience incresed from moderte to high, it ws ssocited with lower expecttions of offline service interctions. The results of this study suggest tht consumers with low nd moderte mounts of Internet experience my group online nd offline interctions into single ctegory, while consumers with high mounts of Internet experience my distinguish etween online nd offline service interctions. Future reserch in this re should ttempt to understnd why highly experienced Internet users distinguish etween the two types of interction nd exmine other possile explntions of the results. 7. References [1] Al, Joseph W. nd J. Wesley Hutchinson (1987). "Dimensions of Consumer Expertise", Journl of Consumer Reserch, 13 (Mrch), [2] Bteson, John E.G. nd Michel K.M. Hui (1990). "The Effects of Perceived Control nd Customer Crowding on the Service Experience", Mrketing Science Institute Report , Mrch, Cmridge, MA: Mrketing Science Institute. [3] Boulding, Willim, Ajy Klr, Richrd Stelin, nd Vlrie A. Zeithml (1993), "A Dynmic Process Model of Service Qulity: From Expecttions to Behviorl Intentions," Journl of Mrketing Reserch, 30(Ferury), [4] Cdotte, Ernest R., Roert B. Woodruff, nd Roger L. Jenkins (1987), Expecttions nd Norms in Models of Consumer Stisfction, Journl of Mrketing Reserch, 24(August), [5] Hs, Liz (1998, June 1). Internet: Source of dt nd sles. Computer Reseller News, 791, 91 nd 96. [6] Hoffmn, Donn L., Klseck, Willim D., Novk, Thoms P. (1996, July 9) Internet nd we use in the United Sttes; Bselines for commercil development (On-line). Aville: Www2000.ogsm.vnderilt.edu/ppers/Internet_demos_jul y9_1996.html [7] Lovelock, Christopher H. (1983). Clssifying Services to Gin Strtegic Mrketing Insights. Journl of Mrketing, 47(Summer), [8] Mguire, Tom (1998). We nets the msses. Americn Demogrphics, 20(12), [9] Mowen, John C. nd Michel Minor (1998). Consumer Behvior, 5 th edition, Upper Sddle River, NJ: PrenticeHll. [10] Negroponte, Nichols (1997, July 7). Psst! Trnsctions. Fores, 160(1), [11] Prsurmn, A., Vlrie A. Zeithml, nd Leonrd L. Berry (1988), "SERVQUAL: A Multiple Item Scle for Mesuring Consumer Perceptions of Service Qulity," Journl of Retiling, 64 (Spring), [12] Roertson, Stephens & Co, [13] Rust, Rolnd T.(1997). The dwn of computer ehvior: Interctive service mrketers will find their customer isn t humn. Mrketing Mngement, 6(3), [14] Scott, Crol A. nd Richrd F. Ylch (1980), Consumer Response to Initil Product Tril: A Byesin Anlysis, Journl of Consumer Reserch, 7(June), [15] Smith, Roert E. nd Willim R. Swinyrd (1983), Attitude-Behvior Consistency: The Impct of Product Tril Versus Advertising, Journl of Mrketing Reserch, 20(August), [16] Verzone, Ronld D. ( 1996). Younger consumers wnt eduction, ccessiility. Best s Review (Life/Helth), 96(10), 74. [17] Wong, Wylie (1998, Ferury 2). Consumer uy into Internet. Computer Reseller News, No. 774, 103. [18] Zeithml, Vlrie A. (1981). How Consumer Evlution Processes Differ Between Goods nd Services. In J.A. Donnelly nd W.R. George (eds.) Mrketing of Services. Chicgo: Americn Mrketing Assocition, [19] , Leonrd L. Berry, nd A. Prsurmn (1993), The Nture nd Determinnts of Customer Expecttions of Service, Journl of the Acdemy of Mrketing Science, 21(Winter), /00 $10.00 (c) 2000 IEEE 6