E-commerce and marketing

E-commerce is becoming a popular marketing technique used by many companies throughout the world. Many individuals choose to purchase online instead of visiting actual stores because of the benefits it offers, like lower costs and time savings. E-commerce is now being used by the airline industry to advertise its products and services. In particular, the industry has shifted from the traditional ticket purchase to a more secure online flying ticket buying and selling, also referred to as e-ticketing. According to Escobar-Rodriguez and Carvajal-Turjillo (2013), by using the e-commerce strategy, airline industry has been able to reduce costs of production and expand their revenue benefits. To promote the sales, the tickets are advertised online since internet remains the best medium to induce consumers to purchase goods and services.

In Australia, online promotion of airline tickets has been on the rise with various airlines generating over 1.6 billion in profit every year. Continuous online advertisement enables the airline industry in Australia to attract thousands of travelers from different parts of the world. Various factors have been associated with the varying sales including pricing strategy, advertising levels, and consumer attitude. However, these are not explored often with many projects attempting to limit their investigation on the correlation of online purchase with the resulting benefits such as ease of use and brand availability. This study, thus, focuses on assessing the factors that determine the attitude of consumers towards making purchases of online ticket, specifically considering including pricing strategy, payment security, interactivity, and trust.

Project Objective

This study aims at investing the factors that influence the online purchasing of the flight tickets. In particular, the specific objectives that will be considered include: to assess whether pricing strategy has an impact on e-ticketing; to investigate whether payment security impacts the consumer’s attitude towards online ticket purchase; and to assess the level of influence of interactivity and trust on the online purchase of flight tickets. The findings will contribute to the airline industry in resolving the dilemma of embracing e-commerce as a marketing strategy to improve customer experience.

Project Scope

The study examines four factors influencing online advertisement including pricing, payment security, interactivity, and trust with a view of exploring their impacts on flight consumers. The literature will cover peer reviewed articles and journals which are dated from 2000 up to date. The area of study will be Australian airlines, in which students from Melbourne campus will be used as the participants.

Literature Review

This chapter is aimed at reviewing the key literature that identifies the gaps, thus, allowing the researcher to test and identify the factors impacting online purchase of airline tickets.

Online Advertising

Advertising is considered the best advertising tool as it largely impact the mind of consumers and offer wider scope of brand exposure to the public. According to Hassanein and head (2007), several airline companies use advertising as a means to reach their customers. However, it is important to note that there are different advertising elements utilized by individual airline companies including inflight magazines, overhead lockers, regional websites, and meal tray backs. The aspect of online advertising is also associated with increased revenues; according to Hassanein and Head (2007), this form of advertisement allows for long term inter-industry market share. Airlines in Australia have utilized e-advertisement as a means of creating awareness on specific carriers, routes, and new accessed regions. Bigné, Hernández, Ruiz and Andreu (2010) assessed that most airlines use internet advertising due to the resulting low-costs as well as easier means of meeting many consumers.

Pricing

Price usually determines the value of an item. Most companies usually adjust prices to meet the demand of consumers. The pricing strategy remains a critical parameter and factor influencing revenue generation. According to Bigné, Sanz, Ruiz, and Aldás (2010), the most significant means of attracting customers to purchase online tickets is through providing discounts or reducing the price of purchase. Due to the low-air tickets, most of the airlines are able to implement domestic travels more frequently (Chen and Barnes, 2007). Additionally, the use of printing paper ticket aids in the reduction of traveling cost as well as boosts the customer loyalty programs. If the price of the tickets is high, then few people would consider purchasing their flying tickets online. Verhagen, Meents and Tan (2006) claimed that since online tickets act as incentives to airlines, is has resulted in the low cost of production and increased efficiency levels.

Interactivity

Interactivity has also been considered an important factor in online purchasing of flight tickets (Hsin Chang and Wen Chen, 2008; Rose, Hair and Clark, 2011). The concept refers to the ability of a company to openly and effectively interact with the customers either through chat programs or through email. Interactivity can be gauged through feedback; the organization should set questions which are answered by the customers regarding services provided. According to Sam, Fazli and Tahir (2009), such responsive websites ensure that customer concerns are addressed promptly. Interactivity affects the satisfaction levels of customers and as such e-ticketing can help in achieving this objective.

Payment Security

Security remains a key issue when purchasing goods online. Most of these trading processes are always paid via credit cards while others done through online cash transfers. Amaro and Duarte (2015) noted that when customers decide to purchase goods online, nearly 75% of the Internet shopper stress on credit-card security (Ruiz-Mafé, Sanz-Blas, and Aldás-Manzano, 2009; Harridge-March, 2006). With proper website security and protected privacy among customers, the level of satisfaction increases. Thus, payment security is very important in influencing the online purchases as far as e-ticket is concerned.

Trust

In buying and selling transactions online trust remains crucial as well as critical factor, especially in e-commerce where there is high level of uncertainty. According to Bart, Shankar, Sultan and Urban (2005), trust in e-commerce websites is directly linked to the loyalty of customers to the businesses. Shah Alam, and Mohd Yasin (2010) adds that online shopping includes great risk compared to the traditional business modes; this increases the vulnerability of the customers, and may affect their level of participation. Thus, online trust is necessary to help reduce the hesitancy level of consumers (Kim, Ferrin and Rao, 2008; Ling et al., 2011). In the airline industry, e-trust is a critical role in the perception of consumers towards purchasing online tickets. If they have high level of trust with the company, then the levels of purchases rise over time.

Research Questions

The main research question of the study is: what are the factors influencing online purchase of airline tickets?

The specific questions of the study include:

What are the impacts of pricing strategy on e-ticketing?

How does payment security impact the consumer’s attitude towards online ticket purchase?

How does interactivity affect online ticket purchase?

What is the impact of trust on the level of flight tickets online purchase?

Research Design and Methodology

To conduct the study, the researcher will consider a quantitative research method. The methodology attempts to gather numerical data to measure a group of people in the attempt of explaining a particular phenomenon. The goal of a quantitative research is to determine the relationship between two or more variables. In the case of the study, the dependent variable considered is the rate of online flight ticket purchase while the independent variables include the price strategy, payment security, interactivity, and trust. The research project is exploratory in nature as it attempts to investigate the relationship between different variables. It, thus, entails the study of consumer perception on the preference of online flight ticket in relation to different factors.

Research instrument and data analysis process

The study involves the collection of factual data on the perception of consumers regarding e-ticketing. Thus, the best research instrument for collecting data is the questionnaire which will be self-administered. The questionnaire will be divided into two sections; personal information, internet usage information, and perception about purchase of online tickets. The opinions of the participants regarding the purchase will be collected using a LIKERT five-point scale. The data will be analyzed using statistical analysis software, SPSS. In order to find out whether there is a significant difference between the means of the variables; t-test will be used to analyze the data.

Sample

The sample of study will involve student participants from the Holmes Institute, Melbourne. With an estimated number of students in the school being 8000, the study will consider 70 students to represent the study. This is determined by the Raosoft Sample Size Calculator which suggests that the minimum sample should be 68 (confident level = 90% and marginal error = 10%). To select the samples, a convenient sampling method will be conducted at the library area. The method is considered because of the fact that students from different faculty can be met at the library. The method also avoids biases that may include only a particular faculty.

Reliability and validity of data

To ensure content validity of the study, a thorough literature review was conducted on the subject addressed. All the secondary resources used are up-to-date and are peer reviewed. For a valid data collection method, the questionnaires will be pilot-tested and have a professional expert review it, after which the content and clarity be improved. The pilot test respondents will be excluded from the main sample to ensure validation and test the hypothesis. In regards to the reliability of data and results, the study will assess the measurement model which entails estimating internal consistency and testing construct validity. The Fornell composite reliability will be used to calculate the internal consistency.

Research limitation

There are various possible limitations of the study. First, while the research participants reflect potential online ticket purchasers, they may not be a true reflection of the general consumer population. This can, thus, result in the data irregularity. Since the sample of study involves 70 students, the process of administering questionnaire may be time consuming and expensive. In addition, some of the participants may not be willing to participate; this may affect the reliability of the study.

Research plan and time schedule

Holmes Institute is based in Australia, thus, during the summer seasons the schools are closed. For this reason, the questionnaires will be collected during the winter period when students will be resuming back to the college. The study, thus, will be conducted using the plan below:

The school administration will be contacted regarding permission to carry out the study within the school compound

After confirmation from the school, the samples will be selected using the sampling method selected by the study.

Consents will then be requested among the students who will agree to participate voluntarily.

Questionnaires will be administered and data collected

The findings will be analyzed and crucially reviewed

The results will be presented and future recommendations made to the Australian Airline industry

Research timetable

Point Topic

No. of Weeks

Introduction

1

Literature Review

2

Methodology

1

Data collection and Analysis

3

Conclusion and Implications

2

Conclusion

The use of e-commerce strategy has brought with it numerous benefits to consumers. Customers no longer rely on the physical cues to make a purchase decisions or create time in order to go make purchases. With the online advertisement method, many organizations have managed to attract more consumers in buying and selling of products. There are various factors online that affect their decisions and include trust, security, price strategy, and interactivity levels. These factors affect the purchase intention of consumers that in the end affect the online purchase of flight tickets. From the reviewed literature, it has been revealed that trust, payment security, online advertisement, low-pricing positively relate to purchase intention online hence affecting the buying of flight tickets. The hypothesis of the study suggests that there is a great consumer impact created by the factors addressed. Thus, to ensure that there is increased competitiveness in airline business, the company needs to be keen on the factors that have been discussed. In fact, increasing the consumers’ trust seems to override all the other factors.

References

Aldás-Manzano, J., Lassala-Navarre, C., Ruiz-Mafe, C. and Sanz-Blas, S., 2009. The role of consumer innovativeness and perceived risk in online banking usage. International Journal of Bank Marketing, 27(1), pp.53-75.

Amaro, S. and Duarte, P., 2015. An integrative model of consumers’ intentions to purchase travel online. Tourism management, 46, pp.64-79.

Bart, Y., Shankar, V., Sultan, F. and Urban, G.L., 2005. Are the drivers and role of online trust the same for all web sites and consumers? A large-scale exploratory empirical study. Journal of marketing, 69(4), pp.133-152.

Becerra, E.P. and Korgaonkar, P.K., 2011. Effects of trust beliefs on consumers’ online intentions. European Journal of Marketing, 45(6), pp.936-962.

Bigné, E., Sanz, S., Ruiz, C. and Aldás, J., 2010. Why some Internet users don’t buy air tickets online. Information and communication technologies in tourism 2010, pp.209-221.

Bigné, E., Hernández, B., Ruiz, C. and Andreu, L., 2010. How motivation, opportunity and ability can drive online airline ticket purchases. Journal of Air Transport Management, 16(6), pp.346-349.

Chen, Y.H. and Barnes, S., 2007. Initial trust and online buyer behaviour. Industrial management & data systems, 107(1), pp.21-36.

Escobar-Rodríguez, T. and Carvajal-Trujillo, E., 2013. Online drivers of consumer purchase of website airline tickets. Journal of Air Transport Management, 32, pp.58-64.

Escobar-Rodríguez, T. and Carvajal-Trujillo, E., 2014. Online purchasing tickets for low cost carriers: An application of the unified theory of acceptance and use of technology (UTAUT) model. Tourism Management, 43, pp.70-88.

Flavián, C., Guinalíu, M. and Gurrea, R., 2006. The role played by perceived usability, satisfaction and consumer trust on website loyalty. Information & Management, 43(1), pp.1-14.

Harridge-March, S., 2006. Can the building of trust overcome consumer perceived risk online?. Marketing Intelligence & Planning, 24(7), pp.746-761.

Hassanein, K. and Head, M., 2007. Manipulating perceived social presence through the web interface and its impact on attitude towards online shopping. International Journal of Human-Computer Studies, 65(8), pp.689-708.

Hsin Chang, H. and Wen Chen, S., 2008. The impact of online store environment cues on purchase intention: Trust and perceived risk as a mediator. Online information review, 32(6), pp.818-841.

Kim, D.J., Ferrin, D.L. and Rao, H.R., 2008. A trust-based consumer decision-making model in electronic commerce: The role of trust, perceived risk, and their antecedents. Decision support systems, 44(2), pp.544-564.

Kim, H.B., Kim, T.T. and Shin, S.W., 2009. Modeling roles of subjective norms and eTrust in customers’ acceptance of airline B2C eCommerce websites. Tourism management, 30(2), pp.266-277.

Rose, S., Hair, N. and Clark, M., 2011. Online customer experience: A review of the business‐to‐consumer online purchase context. International Journal of Management Reviews, 13(1), pp.24-39.

Ruiz-Mafé, C., Sanz-Blas, S. and Aldás-Manzano, J., 2009. Drivers and barriers to online airline ticket purchasing. Journal of Air Transport Management, 15(6), pp.294-298.

Shah Alam, S. and Mohd Yasin, N., 2010. What factors influence online brand trust: evidence from online tickets buyers in Malaysia. Journal of theoretical and applied electronic commerce research, 5(3), pp.78-89.

Sam, M., Fazli, M. and Tahir, M.N.H., 2009. Website quality and consumer online purchase intention of air ticket.

Verhagen, T., Meents, S. and Tan, Y.H., 2006. Perceived risk and trust associated with purchasing at electronic marketplaces. European Journal of Information Systems, 15(6), pp.542-555.

APPENDIX 1

RESEARCH QUESTIONNAIRE

The questionnaire below is part of the research instruments employed for a study entitled “factors influencing the online purchase of flight tickets.” Please go through the instructions for each section and respond appropriately. Note that the responses are confidential, and will be use purposefully for the research.

SECTION A: PERSONAL INFORMATION

Please tick your answer in the box given.

1. Gender

[ ] Male [ ] Female

2. Education level

[ ] Freshman

[ ] Continuing student

[ ] Graduate student

3. Age level

[ ] < 20 years

[ ] 21-24

[ ] 25-30

[ ] > 30

SECTION B: ONLINE TICKET PURCHASE INFORMATION

Please read through the description below and rate the frequency of your answer according to the statement. Consider the scale below:

1 = Strongly Disagree

2 = Disagree

3 = Neutral

4 = Agree

5 = Strongly Agree

Price strategy impact on online flying ticket purchase

1. The online sites offer lower prices

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

2. The price of the tickets are offered at discounts

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

3. The payments can be done 24/7 thus enhancing convenience

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

Trust impact on online flying ticket purchase

4. Trust in an airline company impacts my purchase decision and satisfaction

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

5. Courtesy and knowledge of employees convey their level of trust and confidence

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

6. The airlines are able to perform the promised services accurately

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

7. The airline companies provide care and attention that consumers require

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

Interactivity impact on online purchase

8. The company website provides platforms for consumers to air their views

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

9. The website offers an interactive function in which the company and online visitors can interact and share experiences

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

10. The company’s website create a forum in which customers share information and experiences

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

Payment security impact on online flying ticket purchase

11. The company’s online shopping strategy is secure

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

12. The airline offers secure sockets layer (SSL)

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]

13. The website of the company provides third party payment security seals which are displayed on the home page

[ 1 ] [ 2 ] [ 3 ] [ 4 ] [ 5 ]