FACTORS INFLUENCING GENERATION Y‘S ONLINE PURCHASE INTENTION IN BOOK INDUSTRY BY ANGELA YONG YEN CHI CHAI MEI CHEE CHIANG FU CHENG TEE YEE VON A research project submitted in partial fulfillment of the requirement for the degree of BACHELOR OF INTERNATIONAL BUSINESS (HONS) UNIVERSITI TUNKU ABDUL RAHMAN FACULTY OF ACCOUNTANCY AND MANAGEMENT DEPARTMENT OF INTERNATIONAL BUSINESS NOVEMBER 2014 i Copyright @ 2014 ALL RIGHTS RESERVED. No part of this paper may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, graphic, electronic, mechanical, photocopying, recording, scanning, or otherwise, without the prior consent of the authors. ii DECLARATION We hereby declare that: (1) This undergraduate research project is the end result of our own work and that due acknowledgement has been given in the references to ALL sources of information be they printed, electronic, or personal. (2) No portion of this research project has been submitted in support of any application for any other degree or qualification of this or any other university, or other institutes of learning. (3) Equal contribution has been made by each group member in completing the research project. (4) The word count of this research report is _________________________. Name of Student: Student ID: Signature: 1. ANGELA YONG YEN CHI 11UKB05058 __________________ 2. CHAI MEI CHEE 11UKB02659 __________________ 3. CHIANG FU CHENG 11UKB02658 __________________ 4. TEE YEE VON 11UKB04501 __________________ Date: _______________________ iii ACKNOWLEDGEMENT We would like to express our sincere gratitude to everyone who has contributed their time and efforts by helping us to complete the dissertation throughout the duration time. We are grateful for their kindness in giving us advices, encouragement, suggestion, assistance and thoughtful contribution on every stage in completing this research project. First and foremost, thousands of thank to our supervisor, Ms. Malathi Nair who guided and supervised us patiently and tolerantly. She continually provided timely, insightful and constructive feedbacks which have created a great value to us. She had devoted her valuable yet precious time and efforts to guide us in completing this project. Therefore, we would like to convey our special thanks to her for the assistance, encouragement and guidance. Next, we would also like to express our gratitude to University Tunku Abdul Rahman (UTAR) by giving us the opportunity to conduct this research project. We are able to learn and gain more experiences in conducting a research which is useful in future. Furthermore, we also have developed a clearer image about the factors influencing Generation Y‘s online purchase intention in book industry. Last but not least, we would also like to express our deepest appreciation to all the respondents who had contributed their time and efforts in filling up the questionnaires. They have given their valuable feedbacks that assist us in completing this research project. With the help and support from the respondents, we have successfully completed the parts of questionnaires. Thank you. iv TABLE OF CONTENTS Page Copyright Page…………………………………………………………………….....ii Declaration…………………………………………………………………………...iii Acknowledgement…………………………………………………………………...iv Table of Contents………………………………………………………………….....v List of Tables………………………………………………………………………....ix List of Figures………………………………………………………………………...x List of Abbreviations………………………………………………………………....xi List of Appendices…………………………………………………………………...xii Preface……………………………………………………………………………….xiii Abstract……………………………………………………………………………...xiv CHAPTER 1 INTRODUCTION……………………………………………….…..1 1.0 Introduction…………………………………………………….….....1 1.1 Research Background…………………………………………….......2 1.1.1 Internet Usage……………………………………………......2 1.1.2 Evolution of Book Industry……………………………….....4 1.1.3 Trend of Purchasing Books Online……………………….....4 1.1.4 Definition of Generation Y……….……………………….....5 1.2 Problem Statement……………………………………………….......7 1.3 Research Objectives………………………………………………....9 1.4 Research Questions…………………………………………….…...10 1.5 Significance of Study………………………………………… …....11 1.6 Chapters Layout……………………………………………… …....12 1.7 Conclusion……………………………………………………….….13 CHAPTER 2 LITERATURE REVIEW…………………………………………...14 2.0 Introduction………………………………………………………....14 2.1 Review of Literature…………………………………………….….15 2.1.1 Customers‘ Intention to Purchase Online…………………..15 v 2.1.2 Brand Name………………………………………………16 2.1.2.1 Definition of Brand Name……………………..16 2.1.2.2 Relationship between Brand Name and Online Purchase Intention………………………..……….…18 2.1.3 Convenience…………………………………………….....21 2.1.3.1 Definition of Convenience……………………...21 2.1.3.2 Relationship between Convenience and Online Purchase Intention………………………………….22 2.1.4 Product Variety…………………………………………....24 2.1.4.1 Definition of Product Variety.............................................................. 24 2.1.4.2 Relationship between Product Variety and Online Purchase Intention……………………….....25 2.1.5 Price……………………………………………………….....28 2.1.5.1 Definition of Price…………………………..….28 2.1.5.2 Relationship between Price and Online Purchase Intention……………………………..29 2.2 Review of Relevant Theoretical Models……………………….....32 2.3 Proposed Conceptual Framework………………………………...34 2.4 Conclusion…………………………………………………….…..35 CHAPTER 3 METHODOLOGY………………………………………………..36 3.0 Introduction……………………………………………………….36 3.1 Research Design…………………………………………………..36 3.1.1 Quantitative Research…………………………………......36 3.1.2 Descriptive Research……………………………………...37 3.2 Data Collection Method………………………………………......37 3.2.1 Primary Data………………………………….……..........37 3.2.2 Secondary Data…………………………………………...38 3.3 Sampling Design……………………………………………….....38 3.3.1 Target Respondents……………………………………….38 3.3.2 Sampling Technique………………………………………39 3.3.3 Sampling Size…………………………………………......39 vi 3.4 Research Instrument…………………………………………….…40 3.4.1 Questionnaire Design……………………………………...40 3.4.2 Pilot Test……………………………………………….…..41 3.5 Constructs Measurement……………………………………….….42 3.5.1 Origins of Construct………………………………….……43 3.5.2 Scale of Measurement………………………………….….45 3.6 Data Processing…………………………………………………....47 3.6.1 Questionnaire Checking……………………………….…..47 3.6.2 Data Editing……………………………………………..…47 3.6.3 Data Coding…………………………………………….…48 3.6.4 Data Transcription………………………………………....48 3.6.5 Data Cleaning………………………………………….…..48 3.7 Data Analysis………………………………………………….…...49 3.7.1 Descriptive Analysis………………………………….……49 3.7.1.1 Frequency Distribution……………………….....50 3.7.2 Scale Measurement………………………………….……..51 3.7.2.1 Reliability Test……………………….…………51 3.7.3 Inferential Analysis……………………………………......52 3.7.3.1 Pearson‘s Correlation Coefficient………….…...52 3.7.3.2 Multiple Regression Analysis…………….….....53 3.8 Conclusion………………………………………………………....55 CHAPTER 4 DATA ANALYSIS…………………………………………….......56 4.0 Introduction…………………………………………………….…..56 4.1 Descriptive Analysis…………………………………………….....56 4.1.1 General Information…………………………………….....57 4.1.2 Respondent Demographic Profile……………………….....62 4.1.3 Central Tendencies Measurement of Construct…………....69 4.1.3.1 Online Purchase Intention…………………….....69 4.1.3.2 Brand Name……………………………………..71 4.1.3.3 Convenience……………………………………..73 4.1.3.4 Product Variety……………………………….....75 4.1.3.5 Price……………………………………………..77 4.2 Scale Measurement………………………………………………...79 4.2.1 Internal Reliability Test…………………………………....79 vii 4.3 Inferential Analysis…………………………………………............80 4.3.1 Pearson Correlation Analysis……………………….............80 4.3.2 Multiple Regression Analysis……………………….............81 4.3.3 Hypotheses Testing…………………………………............84 4.4 Conclusion…………………………………………………….........86 CHAPTER 5 DISCUSSIONS, CONCLUSION AND IMPLICATIONS…...........87 5.0 Introduction…………………………………………………….......87 5.1 Summary of Statistical Analyses……………………………….......88 5.1.1 Descriptive Analysis…………………………………..........88 5.1.1.1 Demographic Information………………….........88 5.1.1.2 General Information………………………..........89 5.1.2 Central Tendencies Measurement of Construct………........89 5.1.3 Scale Measurement……………………………………........90 5.1.4 Inferential Analysis……………………………………........90 5.1.4.1 Pearson Correlation Analysis………………........90 5.1.4.2 Multiple Regression Analysis……………….......90 5.2 Discussions on Major Findings………………………...…….....….91 5.3 Implications of the Study…………………………………….....….96 5.3.1 Managerial Implications………………………………........96 5.3.1.1 Brand Name……………………………….....….97 5.3.1.2 Convenience…………………………………......97 5.3.1.3 Product Variety…………………………….........98 5.3.1.4 Price…………………………………………......98 5.4 Limitations……………………………………………………........99 5.5 Recommendations………………………………………………...100 5.6 Conclusion…………………………………………………….......101 REREFENCES..........................................................................................................102 APPENDICES...........................................................................................................114 viii LIST OF TABLES Page Table 1.1: World Internet Usage and Population Statistics June 30, 2012...................2 Table 3.1: Result of Pilot Test......................................................................................42 Table 3.2: Table of Constructs.....................................................................................43 Table 3.3: Sample Items of the Constructs..................................................................43 Table 3.4: Five-points Likert Scale..............................................................................46 Table 3.5: Rule of Thumb of Cronbach‘s Alpha Coefficient Size...............................51 Table 4.1: Online Purchase Experiences......................................................................57 Table 4.2: Intention to Purchase Books Online in Future............................................58 Table 4.3: Duration of Using Internet for Shopping....................................................59 Table 4.4: Frequency of Purchase via Internet (during the past six month)................60 Table 4.5: Familiarity towards Various Online Bookstores.........................................61 Table 4.6: Gender.........................................................................................................62 Table 4.7: Age Group...................................................................................................63 Table 4.8: Marital Status..............................................................................................64 Table 4.9: Race.............................................................................................................65 Table 4.10: Academic Qualification.............................................................................66 Table 4.11: Profession..................................................................................................67 Table 4.12: Monthly Income........................................................................................68 Table 4.13: Central Tendencies Measurement of Online Purchase Intention..............69 Table 4.14: Central Tendencies Measurement of Brand Name....................................71 Table 4.15: Central Tendencies Measurement of Convenience...................................73 Table 4.16: Central Tendencies Measurement of Product Variety..............................75 Table 4.17: Central Tendencies Measurement of Price................................................77 Table 4.18: Summary of Reliability Test.....................................................................79 Table 4.19: Pearson Correlation Analysis....................................................................80 Table 4.20: Model Summary........................................................................................81 Table 4.21: ANOVAa..................................................................................................82 Table 4.22: Coefficientsa..............................................................................................82 Table 5.1: Summary of the Results of Hypotheses Testing..........................................91 ix LIST OF FIGURES Page Figure 1.1: Internet Users in the World Distribution by World Regions......................3 Figure 2.1: Theoretical Model 1...................................................................................32 Figure 2.2: Theoretical Model 2...................................................................................33 Figure 2.3: Proposed Frameworks................................................................................34 Figure 4.1: Online Purchase Experiences.....................................................................57 Figure 4.2: Intention to Purchase Books Online in Future...........................................58 Figure 4.3: Duration of Using Internet for Shopping...................................................59 Figure 4.4: Frequency of Purchase via Internet (during the past six month)...............60 Figure 4.5: Familiarity towards Various Online Bookstores........................................61 Figure 4.6: Gender........................................................................................................62 Figure 4.7: Age Group..................................................................................................63 Figure 4.8: Marital Status.............................................................................................64 Figure 4.9: Race............................................................................................................65 Figure 4.10: Academic Qualification...........................................................................66 Figure 4.11: Profession.................................................................................................67 Figure 4.12: Monthly Income.......................................................................................68 Figure 5.1: Proposed Conceptual Model......................................................................96 x