Trust In Online Travel Booking

Published Date: 02 Nov 2017

Amr Hassan Radwan

The German University in Cairo

Correspondence concerning this Thesis should be addressed to Dr. Omar Ramzy

The German University in Cairo

Table of Contents

Factors Affecting Trust in Online Travel Booking in the Egyptian Market 1

Amr Hassan Radwan

The German University in Cairo 1

Correspondence concerning this Thesis should be addressed to Dr. Omar Ramzy 1

The German University in Cairo 1

Table of Contents 2

Introduction 3

Problem Symptoms: 4

Research Problem: 5

Research Questions: 5

Research Importance: 10

Research Objectives: 10

Research Assumptions: 11

Implications of research: 11

Research Gap: 11

Methods 12

Research limitations: 12

Thesis Structure: 12

Chapter Two 13

Literature Review 13

References 35

List of Abbreviations

ICT…………………………………………….Information and Communication Technologies

E-Tourism…………………………………………………………………..Electronic Tourism

E-Commerce……………………………………………………………..Electronic Commerce

IDSC………………………………………………..Information and Decision Support Center

TAM…………………………………………………………..Technology Acceptance Model

Introduction

The tourism industry was positively affected by the Information and communication technologies (ICT). The new methods of ICT has developed and created an innovative form of tourism which is the e-tourism, and it has changed the international tourism industry for good (D. Shanker, 2008). Nowadays e-tourism stands in a leading position in the electronic marketplace. The beauty of e-commerce comes from its low cost, which gives customers and business owners an innovative channel for communication and gathering information (Al-Maghrabi et. al, 2011).

The products and services of the travel industry seem to be suitable to be sold online, as their characteristics can easily work in the online atmosphere. Travel consumers can easily access online to explore different destinations around the world through the internet (Ancar, B. & Walden P., 2000).

Trust is an extremely important factor that determines the success of e-commerce, the process should be supported by consumer’ trust in vendors and goods which they can’t see. The future of internet booking depends on the ability to explore the impact of trust on online booking as well as factors influencing consumers’ trust (C. Wang et. al, 2009).

Many users are hesitant to make purchases on the Internet due to the lack of trust. Trust is one of the main reasons mentioned as a barrier to internet. Regardless of the importance of the role of trust in e-commerce for customers, there have been very little researches and studies on the nature of trust and its effect on on-line booking. This research will try to fill the gap (Lee & Turban, 2001)

Problem Symptoms:

A focus group of 5 members was made to discover the symptoms of the research problem. The group consists of 3 males and 2 females all of them are fund of travelling abroad. The most important issue for all of them to book their trips online is their fear from giving away their credit card information, not trusting the online agent, and fearing of fraud to happen on their account. Another issue for the females is that they are not technically aware of the procedure of booking online, they are already internet users but only for emailing and social networking. The last issue that was discussed is the ability to deal personally with the travel agent, and to guarantee the quality of hotels and destinations, and also to find someone to blame if anything goes wrong.

From the above symptoms we conclude the following research problem.

Research Problem:

Online trust is one of the main complications to retailers succeeding on the e-travel medium. Without trust, the online consumers are discouraged to use e-travel services. Especially in Egypt, lack of trust in online transactions is assumed to be the main reason stopping internet users from booking their trips online.

Research Questions:

Q1: Should online booking be the new way to book your trip among the Egyptian travellers?

Q2: What are the main factors affecting Egyptian travellers from using online booking for their trips?

Q3: What are the factors that affect trust in online travel booking among the Egyptian internet users?

Research Model:

Personal Characteristics

Technology readiness

Internet Knowledge

Website characteristics

Security

Privacy

Trust in online travel booking

Ease of use

Perceived Reputation

Demographics, Psychographics

Perceived Size

Factors affecting trust in online booking:

Personal characteristics:

According to psychology and sociology science, the characteristics of an individual are known to be the main source of effect that formulates the individual’s trust in others (Chen 2006). Many researchers stated that trust is formed by the initial connection between the individual and the caregiver; this connection’s acceptability edicts whether the individual improves a main direction that the others may or may not be trusted, therefore it affects his or her general "readiness to trust" or "propensity to trust" in the interactive connections (Ainsworth, Waters, & Wall, 1978; Bowlby, 1973; Erikson, 1968; Rotter, 1967) (as cited in Chen 2004).

Internet knowledge points to how much do you know about internet (Wei 2008). In the practice of accepting the internet technology, the role of Knowledge has not yet acknowledged sufficient attention. Potosky (2007) defined Internet knowledge as a number of different characteristics or abilities that is developed through time and is simplified from a number of tasks or practices comprising the Internet to another.

Technology readiness: Parasuraman (2000) stated that the technology readiness concept emphases on foreseeing customers’ tendency to use new technology. It can be defined as the mental state that enables or prevents a person from using new technology.

Therefore, the first and Second hypothesis are:

Hypothesis 1: A consumer’s Internet knowledge has a positive impact to his or her trust level in an online travel booking site.

Hypothesis 2: A consumer’s Technology readiness has a positive impact to his or her trust level in an online travel booking site.

Characteristics of a Website:

Researchers after examining a business correlation, they also looked at the further side of this correlation: firm’s characteristics and its sales people. Chen (2006) have stated that the main difference between online and offline commerce is the "anonymous" nature of the earlier, where in e-commerce the retailer becomes "impersonal". The website has replaces the firm and its sales force where it plays an important role in facilitating the connection between the customer and the firm, and it acts as a "nonhuman" seller that works all the time, all day long every single day of the year without closing. This connection between a customer and an e-vendor becomes a very smooth interaction between the buyer and a website. In addition, the presence of a good website for the firm can certainly carry a feeling of a firm’s trustworthiness to the customers.

Perceived ease of use and usefulness: One famous model of understanding the relationship between technology and how it is adopted is the Technology Acceptance Model (TAM). The model studies the relation between how users develop attitudes towards technology and when they decide to adopt it (Davis, 1989; Mathieson, 1991; Straub et al., 1995; Szajna, 1996; Hu et al., 1999; Agarwal and Karahanna, 2000; Koufaris 2002). The two main legs for this model are perceived usefulness and ease of use of technology.

Privacy: Privacy over the internet is a critical issue, it lays in the ability to control what information to share about one ‘self and who can access this information.

Security: Confidentiality, integrity, and authentication or availability are the three main areas of security defined by the Computer Security Institute.

Thus, this study presents its third, fourth and fifth hypothesis.

Hypothesis 3: The perceived ease of use and usefulness of an online travel booking website impacts the customer’s overall level of trust in the e-travel agent.

Hypothesis 4: The level of privacy in an online travel booking website impacts the customer’s overall level of trust in the e-travel agent.

Hypothesis 5: The level of security in an online travel booking website impacts the customer’s overall level of trust in the e-travel agent.

Reputation of the company:

The reputation of the company is usually presented by issuing some of the company stories and customer’s recommendations on the company’s web site (H. Rezaei and H. Ebrahimi 2010). Doney and Cannon (1997) defined reputation as "the extent to which buyers believe that the selling organization is honest and concerned about its customers"(p.37)(as cited in Jarvenpaa & Tractinsky, 1999). Previous literatures exposed that hypothetical reputation affects trust in an online booking site. (Gould, 2007; Koufaris, 2004; Jarvenpaa et al., 2000; Riegelsberger et al., 2005; Van der Heijden et al., 2003)(as cited in H. Rezaei and H. Ebrahimi 2010) . If the company has a positive perceived reputation, customers show better trust in that company. Jarvenpaa & Tractinsky (1999) stated that when the seller’s reputation increases, building this reputation over time, the consequence from violating the trust of the customer increases, and later the perceived trustworthy the vendor is to be increases.

Hypothesis 6: The online travel booking store’s perceived reputation is positively related to consumer trust.

Perceived size of the e-travel agent:

A company’s size is regularly articulated by their investment in Web-page banners representing its size (Jarvenpaa & Tractinsky, 1999). Booking.com’s mission for example is "To help travelers of all backgrounds easily discover, book, and enjoy the best places to stay in the world" (www.booking.com). The impression of the customers towards the store’s trustworthiness is based on the size of the online store (Koufaris, 2004; Jarvenpaa et al., 2000; Van der Heijden et al., 2003). Jarvenpaa et al. (2000) stated that "What matters in forming those impressions is the consumer’s perception of the store’s size, rather than the store’s actual size".

Jarvenpaa and Tractinsk (1999) noted that the bigger the firm, the higher the trust of consumers in the company behind their perception of the company as an owner of significant resources invested in the market; and thus the higher the responsibility of the company to fulfill its promises to the consumer" (section 3, para. 2). In the same note, Koufaris (2004) proves the same point of increased consumers’ trust with the size of the company and that it will provide the services and support that customers need and that the company will be able to compensate the consumers in case of product failure.

Hypothesis 7: The online booking store’s perceived size is positively related to consumer trust in an Internet store.

Demographics and psychographics as a moderating variable:

Customers’ personal variables include psychographics and demographics. Psychographic variable reflects the customers’ lifestyle, and is mainly concerned about their interest, attitude and opinion. Firms used these variables to communicate with customers in order to develop audience profile, segmentation, psychographics…etc. (Ganguly et. al, 2011).

Research Importance:

The importance of this study lies between theoretical and practical meanings. From a theoretical viewpoint, this study improves our current understanding of customer trust in e-booking by constructing a theoretical model and providing indications for the key elements causing the formation of this concept. From a practical viewpoint, the study gives marketers useful information on designing e-marketing strategies that will develop, maintain and initiate customer trust that can eventually improve purchase intentions.

Research Objectives:

Ob1: Observing the relevance of a number of formerly identified factors in simplifying consumer trust in online transactions and especially online travel booking.

Ob2: Examining the factors hindering Egyptian internet users to book their trips online

Ob3: Studying appealing factors that may attract Egyptians to do online travel booking.

Ob4: Provide a theoretical model for factors affecting trust in online travel booking.

Ob5: Analyze and evaluate the role of trust in online travel booking websites, and how it will interpret the design of e-marketing strategies for these e-travel agencies.

Research Assumptions:

A1: The number of internet users in Egypt represents a big percentage of the population.

A2: Online travel booking in Egypt is still not the common way to book your trip.

A3: The online travel booking is taking over the traditional travel booking in the international market.

A4: Online travel booking provides an easier and cheaper way than the traditional booking.

A5: Online booking is an unused feature in the Egyptian internet market.

Implications of research:

The objective of this study is to investigate the factors affecting trust in online travel booking in the Egyptian market. A better understanding of these factors might contribute in providing more conversant guidance to managers of online travel agencies willing to improve consumer trust in online booking.

Research Gap:

It was identified that trust is the key challenge for the fast growing and developing online transactions. Nonetheless, a limited number of studies have observed the main indicators of trust and their importance in the online travel industry. These researches have usually taken place in the western economies, with the entire advance in technology. Middle East and Africa though has never been observed when it comes to online travel booking. This study will try to contribute in covering this gap by testing the Egyptian internet users and why they don’t usually use internet to book their trips.

Methods

A quantitative method in the form of a questionnaire survey will be conducted among internet users in Egypt, in order to identify their levels of trust in online travel booking.

Sample Design

The sample involves a random set of Egyptian internet users. The analysis unit is the Egyptian adults who have experience with Internet use. The sampling population is all the Egyptian internet users (around 22 million users according to the internet world stats). As a result of the lack of sampling frame, the sampling method that should be used will be nonprobability sampling method, and the snowball nonprobability random sampling is the most appropriate method to use due to its essential features which allows the researcher to start with a small initial number of internet users and then they contact each other’s.

In order to develop a random sample, the questionnaire will be sent via e-mail, and posted to the Social networks. So, the sample would present a good percentage of the Egyptian internet users.

Research limitations:

The sample size cannot be comprehensive to all internet users in Egypt.

The research findings and conclusions are limited to the Egyptian market only.

The study is limited to the customers that book online in Egypt, and this still not a common way to book your trip in our culture.

This study is limited to validate the model variables, all other variables are held constant.

Thesis Structure:

The thesis will be presented through five chapters:

Chapter One: Presents an overview and a summary of the research. It rapidly goes through the research problem, objective, importance, the model, the research questions, hypotheses and finally the research methodology.

Chapter Two: Literature review and related researches, it will discuss the effect of internet users’ characteristics on trust, and the effect of travel booking website design on trust.

Chapter Three: Explains in details the role of perceived size and reputation of the travel agent and its effect on trust in online booking.

Chapter Four: Clarifying the details of the data analysis, applying the research methodology presented in chapters two and three and the answers to the research questions.

Chapter Five: Is the conclusion of the research, explaining the main findings of chapter four and recommendations and future work suggestion.

Chapter Two

Literature Review

Online Hotel Booking:

The use of the internet has added many new features to our life; one of these is the online shopping for goods and services. While you still want to stop by a store to physically interact with the products, the accessibility of online shopping cannot be beat. And for services like travel booking, doing so online is much easier and more effective (Nielsen, 2010). Lately, the number of travelers using the internet for planning their trips is increasing (U.S. Travel Industry Association, 2010); Forrester (2011) stated that holiday and unmanaged business travelers are spending around $102 billion online, expecting this to jump 41%, reaching around $143 billion during the next five years.

Technologies like the internet are quickly adopted in the Egyptian population in comparison to other Middle East countries (Business Middle East 2000). The services of the internet are improving with a high rate during the last few years. The Internet World Stats showed that in December 2011 the number of internet users in Egypt grown to 22 million users compared to 450,000 users in December 2000.

The emergence of the Internet in Egypt can be accredited to the combined efforts between the public and the private sector, which was directed by the Cabinet Information and Decision Support Center (IDSC), where they offered a free internet access for businesses in public and private organizations (Brown, 2000). Then the number of Internet users steadily increased, until the government launched a new initiative in January 2002, letting users to subscribe for free to the Internet service under a slogan of "Internet for all". Now Egypt is linking to the international online trend for financial services with the creation of electronic business solutions (Buhalis et. al, 2004)

The willingness to accept new technologies is the main pillar when the traveller decides to search, plan and book his/her trip online. The most cited technology recognition model called TAM (Davis 1989), explains the intentions of the user dealing with information technology. A recent study by Zhang et al. (2006) used this model to elaborate the e-travel agencies functions. According to their point of view, features like search ability, getting information about their destination, multimedia presentation, accessibility of online forums, and the wide range of choices are very beneficial for e-travel organizations that should make good use of the perceived usefulness concept and should lead to the potential users’ intention to use online travel agencies.

‘Easy and simple’ search and ‘being in control’ are two features that are somehow close to the idea of ease of use and should conclude to the traveler’s will to use the online travel agencies. A model was executed by Cho and Agrusa (2006) to test the attitudes of users towards online travel agencies and their satisfaction online. In this model, external variables like information, price, product/service, technology/usability, name of the brand, entertainment and advertisement factors.

Using an online travel agent has many advantages, some of these are: availability of information 24x7, convenience, easier information access for the selected destination, lower prices and also the ability to compare prices between several options (Law et, al. 2004; Zhang et al. 2006). On the other hand, using a traditional agent has the benefit of the availability of personal assistant service, experienced stuff, and consulting in planning big complex trips, also the support network during the trip if needed (Anckar and Walden 2001).

Hudson et al. (2001) assumed that the influence of a traditional travel agent on consumer’s decision is huge, and booking a bigger trip with several stopovers might be quicker and easier than the online agent.

Many reasons were raised for travellers not booking their trips online, the most essential reasons are: lack of security, lack of trust, being non familiar with technology use, absence of personal service and the loyalty towards the traditional agent Lang (2000). It was stated by Card et al. (2003) that availability of personal services and face-to-face interference concludes in lower risks in travel planning and booking.

Trust

There is no one definition of trust, several literatures with several definition tried to explain the importance of trust. Trust in an on-line context refers to the consumer’s enthusiasm to be vulnerable to the company and believe that the firm will meet his expectations and will not misuse that vulnerability for its advantage (Martín and Camarero, 2008). The most common and most cited definition of trust was done by Mayer et al., (1995) who defined trust as "the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party" (p. 712).

Lee and Turban (2001) stated that Trust is a specifically vital factor when it comes to ambiguity and risk. Internet booking, as one of the new forms of e-commerce, includes more ambiguity and risk than that of the traditional booking. Customers are not yet that familiar with online shops, also customers need to check the quality of the products physically before buying it, and even make sure that their personal and financial information are safe (e.g., credit card numbers) before exposing it to the internet vendor whose behaviors and motivations are not well-known. That’s why it is important not to overestimate trust when it comes to e-commerce (Lee and Turban, 2001).

There are three main dimensions for trust; competence, benevolence, and integrity (Mayer et al., 1995, Mcknight et al., 2001). Competence was defined that the trustor believes that the trustee has the capability and/or authority to get the job done (Mcknight et al., 2001). Benevolence is the degree to which the trustor has confidence that the trustee wants to give him an advantage first, other than other financial motivations (Mayer et al., 1995). Integrity refers to the belief of the trustor, that the trustee makes fair settlements, always say the truth, performs in an ethical way, and keeps his promises (Mcknight et al., 2001).

Many researchers have conducted studies on on-line travel booking during the last years. Most of them tried to identify the factors that influence or affect on-line booking behavior. These researchers took different perspectives and focused on many factors in different ways. For example, T. Tang and W. Chi, (2005) suggest that "the empirical results, using structural equation modeling, indicated that perceived ease of use and perceived usefulness affect have a significant impact on trust in online booking". C. Wang, C. Chen and J. Jiang (2009) discover people who know more about online booking will trust and make more booking online.

In 2003, C. Naquin and G. Paulson claimed that peoples’ level of trust drop tremendously when the transaction is through the internet versus face to face communication. Other research explained that both online preliminary trust and knowledge of online vendor have an impact on purchase intention (Chen and Barnes, 2007). In 1999, Hoffman, Novak and Peralta trust is a main pillar to online transactions especially when uncertainty, anonymity and lack of control are factors that describe the transaction.

All the above studies and many others have contributed to the understanding and analyzing of on-line booking behavior. However, there is a lack of understanding of the effect of trust on online hotel booking and the factors influencing it.

Factors affecting trust in online booking:

Personal Characteristics:

Internet knowledge

Internet knowledge points to how much do you know about internet (Wei 2008). In the practice of accepting the internet technology, the role of Knowledge has not yet acknowledged sufficient attention. Potosky (2007) defined Internet knowledge as a number of different characteristics or abilities that is developed through time and is simplified from a number of tasks or practices comprising the Internet to another. Simply it is what the One knows about the internet, in terms of skills and language.

Wang et.al (2009) has stated that knowledge has a positive impact on online shopping trust, and is also encouraging online shopping activities. In other words, the knowledge of the customer may control their level of trust while shopping online and also may affect their online shopping intention. This means that when consumers’ knowledge increase, their confidence to shop online increase.

If the customer knows how to use the internet, and is aware of possible threats and hazards, he/she will be encouraged to use online booking more often. More skills in using the internet conclude in better control over the web interaction (Novak et al 2000). The users with internet knowledge have the ability to reduce threats and risks, like scams and viruses on the web. Flynn and Goldsmith (2001) proved that there is a positive influence between internet knowledge and e-commerce through its effect on online customers’ attitude. The findings emphasized the importance of the knowledge theory in clarifying some features of consumer behavior. As a result of gaining knowledge of a product, customers tend to make more purchases and feel more secure. There is a mutual relationship between greater knowledge that leads to more purchases, which also increases the knowledge of the product type.

Technology readiness:

Parasuraman (2000) stated that the technology readiness concept emphases on foreseeing customers’ tendency to use new technology. It can be defined as the mental state that enables or prevents a person from using new technology. The technology readiness concept is hypothesized as multi-dimensional which consists of confidence, innovativeness, anxiety, and uncertainty.

Although the technology of serving yourself differs in the online booking environment, it is also similar to the degree that it is regarded as a technology boundary and a user originated buying method that has no interaction with service employees. The Technology fretfulness was examined by Meuter et al. (2003), it shows peoples’ negative approaches to accept and use self-service technologies. As a result, people with low-technology fretfulness were more satisfied, and showed more loyalty behaviors.

Meuter findings assume that readiness to technology might have a positive influence on behavior outcomes overall. In Roger Research there was a proven positive relation between consumers’ technology readiness and online purchase intentions. The more ready consumers to use technology and innovations, the more likely they will make online purchase decisions. So technology oriented consumers are the first to adopt internet as a means of commerce to purchase stuff online.

Website characteristics:

Trust is an important factor in online transactions as many vendors online aren’t familiar to users. Thus Trust stands as a strategic pillar for any online transaction to take place. (McKnight and Chervany, 2001–2002). It is also more difficult to gauge the trustworthiness of e-vendors than brick-and-mortar vendors (Palmer et al., 2000).

Purchasing online happens in an unfamiliar environment to the consumer as it puts the consumer in a position where he faces many challenges as the inability to inspect the product and its features or talk to the vendor face to face which the consumer was used to in all his normal purchase events (Grazioli and Jarvenpaa, 2000). Consequently the consumers feel higher risks associated with online transaction due to the lack of face to face interaction and the inability of physical inspection of the product. Another risk for the consumer is the lack of trust that vendors will protect the privacy of the personal information provided at the point of purchase (Dellarocas, 2001).

Building on the above, barriers for consumers to purchase online is also associated to the insecurity felt by consumers in providing their personal information online to vendors and the fear the this information might be accessed by hackers (Tynan, 2000). Media plays a role in this as stories about privacy; hackers and possible fraud make purchase on line a more challenging process (Green, 2000; Schmitt, 2001).

Consequently many consumers are hesitant to get into booking online process which translates into the slow widespread of electronic commerce due to the lack of trust in the attributes of electronic vendors and in the whole web based process (Aldridge et al., 1997; Hoffman et al., 1999). To overcome this barrier, e-vendors must exert effort in promoting trust to help consumers to take the online purchasing decision. The only way to do this is that vendors understand the psychology and attributes of this consumer to be able to use different strategic tactics to convince him to purchase online (Aldridge et al., 1997).

In the start, there is no relationship history and thus trust can’t be the basis as there is no personal experience history. Yet trust can be built quickly based on information made available for the consumer (Meyerson et al., 1996, p. 170). Limited or simple signals or cues might be huge drivers for trust (Menon et al., 1999), such as the trustee’s voice (Baldwin, 1992, p. 462) or physical appearance (Riker, 1971). For example, one of the researches done by Dion et al. (1972) in prospective dating found that subjects with more attractive looks are often perceived as ‘good’ person category than unattractive ones. Transforming the theory to trust, attractive or good looking individuals are often more worthy of trust or perceived as more trustful vs. unattractive ones. Dion and his fellows called this the ‘what is beautiful is good’ stereotype.

Each website has its own "personality" and "physical presence", which plays an important role in encouraging or discouraging the purchase intentions of the customers through their trust and acceptance. For example Booking.com mission is: "to offer an informative, user-friendly website with the best prices guaranteed. Our goal is to provide business and leisure travelers with the easiest to use and most cost-effective way to discover and book from a broad selection of accommodations, wherever they travel in the world".

Early internet literatures like Murphy (1999) has supported this point of view, where he stated that some of the website’s features and layout like the graphics, ease of use and appeal has a direct influence on the customer’s clicking frequency and directions.

On the Internet, the interface of the vendor is the online storefront as is the first gate for the consumer to meet the vendor and know about him. This is where the first impression is created and thus if the consumer find the vendor website of high quality, the more likely the consumer will trust the vendor capability, product or service and will develop a willingness to depend on the vendor.

Fung and Lee (1999) stated that website information quality and well-designed interface improve the chances that the consumer will trust the website. This is similar to trusting a bank that has an impressive prosperous physical appearance and trusting that this bank will offer a quality service and this isn’t behind knowing the employees running the bank but because physical appearance imply it is a well-managed one.

Perceived ease of use and usefulness:

One famous model of understanding the relationship between technology and how it is adopted is the Technology Acceptance Model (TAM). The model studies the relation between how users develop attitudes towards technology and when they decide to adopt it (Davis, 1989; Mathieson, 1991; Straub et al., 1995; Szajna, 1996; Hu et al., 1999; Agarwal and Karahanna, 2000) (as cited in M. Koufaris & W. H. Sosa, 2002). The two main legs for this model are perceived usefulness and ease of use of technology. The company’s website represents a certain technology form; the two TAM belief variables will also have an impact on customer trust beliefs online.

In the marketing, salesperson is also an important factor that determines the trust of the customer in the company and product sold (Andaleeb and Anwar, 1996). Salesperson experience, knowledge (Crosby et al., 1990; Doney and Cannon, 1997) and personality (Hawes et al., 1989) are strongly associated with customer trust in him and consequently with trust in the company.

Online, there is no salesperson but assuming that the same theory applies, the customer interacts with the web site instead and customer perceiving the site as a trusted and useful source of info can increase the customer trust in the company and thus helps the purchasing process online.

Not only that but a website has a more important role in online shopping as consumer perception of a website as informative and user friendly can be a guarantee for the company’s capabilities (Chow and Holden, 1997). The Company’s website role extends also standing as the company control mechanism i.e. the tool it uses to enable and secure transactions with its customers. So the company’s control mechanism is a main factor to gaining a customer’s trust (Tan and Thoen, 2000-2001). Thus a useful informative website positively correlates with trust in the company (Friedman et al., 2000; Tan and Thoen, 2000-2001; McKnight et al., 2002).

Privacy:

Privacy over the internet is a critical issue, it lays in the ability to control what information to share about one ‘self and who can access this information. Analyzing the characteristics of a website, web site privacy is mainly related to collecting personal information from the consumers which might result into negative feelings towards this company and reluctance to share this information (Ranganathan and Ganapathy, 2002).

According to Miyazaki and Fernandez (2001), collecting personal information about the consumer by placing cookies without their knowledge and approval reduces the consumer feeling of privacy and consequently credibility of the company and trust in it. Several past researchers such as Chellapa (2005), Suh and Han (2003) have proven that website privacy is a pre-requisite to trust.

Security

Confidentiality, integrity, and authentication or availability are the three main areas of security defined by the Computer Security Institute. Confidentiality is that personal information provided is secured and can’t be accessed by other parties. Integrity is when consumer’s information is kept without any interference or corruption to the data. Authentication means that nobody should be able to imitate others when they are using the Internet. There are views that websites for online stores should be audited and certified by a 3rd part to ensure security standards are high (Krishnamurthy, 2001).

Ranganathan and Ganapathy (2002) highlight the usage of secure modes by online companies for transaction. Several studies such as, Koufaris and Hampton-Sosa (2004), Chellapa (2005), Chen and Barns (2007) have proven the positive relation between high security standards and trust with the online vendor

Perceived Reputation:

Reputation is a basic pillar that influences customer trust online (Chu et. al, 2009), as consumers search for reputable stores to shop from (Yaobin et. al, 2007). Reputation is the history of the firm’s past actions and results that ensure the customer of the firm’s ability to deliver on its objectives and reach its results as evaluated by third parties (Yunjie, et. al, 2004). Basically, the consumer attributes good reputation to company’s competency and goodwill (Kim et. al, 2005).

It is difficult to build and maintain a good reputation as this process requires a lot of time, effort and consistency from the vendor side towards the customer. It is a process that can easily become undermined. As a result, reputation will remain a dependable variable upon which customers will assess trust in the company (Koufaris, M., Hampton-Sosa, W., 2004). Many empirical studies proved that reputation is a major factor that affects trust and consequently online booking (Jarvenpaa, et. al, 2000).

Firms known to have a good reputation are always keen to keep it by avoiding acting opportunistically (Chiles and Mcmackin, 1996). They know that the costs of dishonest & unreliable behavior are perceived to be higher for firms that already have a good reputation and can cost them much, especially if their customers are in a small circle where they can communicate and exchange opinions and experiences (R. Axelrod, 1984).

In the industrial buyer context, the seller’s reputation positively correlates with the consumer’s trust in the seller (S. Ganesan, 1994). In the Internet marketing context, Quelch and Klein (1996) debate that Internet consumers will prefer and go to sites that they are already familiar with from normal regular channels. Lohse and Spiller (1998) relates their physical store reputation will influence how consumers value and perceive their website

Talking about company’s reputation online and how important it is for the customer to predict company’s attitudes and behavior. This might be the first encounter between the customer and the company, thus the only way to know about it is through other customers’ testimonials. Doney and Cannon (1997) defined reputation as "the extent to which buyers believe that the selling organization is honest and concerned about its customers" (p.37) (as cited in Jarvenpaa & Tractinsky, 1999).

Previous studies proved that reputation is an important pillar for any online store (Gould, 2007; Koufaris, 2004; Jarvenpaa et al., 2000; Riegelsberger et al., 2005; Van der Heijden et al., 2003) (as cited in H. Rezaei and H. Ebrahimi 2010). The good reputation of a company helps the consumer to have bigger trust in the company. To build this reputation, the vendor has invested many resources and avoided the cost of violating the consumer trust and thus the more trustworthy the seller is perceived to be (Jarvenpaa & Tractinsky, 1999)

Consumers believe that companies who have good reputation have exerted great effort and time in that and thus are unwilling to blow it up with few misses by pursuing opportunistic, short-term gain (L.G. Telser, 1980). In short, the theory is that a company with good reputation always has an incentive to do so and consequently will continue to act in the same way.

It is proposed that a reputation is transferable among firms, and a consumer accept the widely known view about the company and use it to form an opinion regarding trusting the company (S. Ganesan, 1994). So if the masses believe that a company has a good reputation in terms of honesty and integrity then a consumer is more likely to process those qualities and use them to determine the degree to which he can trust the company (Koufaris and Sosa, 2004).

It is believed that the firm’s care towards its customers determines the level of trust of customers in the vendor (R.C. Mayer, et.al, 1995). The relevance of reputation in the online context has been proven by eBay and other online auctions through reputation-feedback systems. Buyer trust and attitude is influenced by feedback information while increased future business and risk of retaliation from unsatisfied buyers influence seller attitude (S. Ba, P.A. Pavlou, 2002)

The positive correlation between reputation and trust is demonstrated in the online environment in another study. McKnight et al. (2002) tried to proof the relation between reputation and trust online by telling some respondents that an ad mentioned that the law firm running the website was among the top 50 in the nation.

The outcome was summarized as they found that the perceived reputation had a positive correlation on both trusting beliefs in the company as well as trusting company will deliver on its objectives in case of new customers. However, the study used a fictitious legal services web site, yet it is important to study the relationship on other types of websites such as customer product websites used in our study (McKnight et al. 2002). It is expected that same results will apply proving a positive relation between perceived reputation and initial trust in online booking.

Friends’ feedback and word of mouth advertising can affect how customer perceives vendor and their level of trust in him. Researches proved that the trust process in the online environment is affected greatly by vendor’s reputation and word of mouth in social networks. Retailer reputation might be an important factor especially for customers who don’t have previous experience (Beldad et al, 2010).

Normally popular brands are expected to realize more success on the internet as natural consequences. Risk was reduced when customer is familiar with the brand. If product or service on hand is trusted by the customer then his perceived risk is lower and thus customer will be more inclined towards trust (March, 2006).

This makes reputation an important asset for the vendor that determines his success and thus it is required that he puts lots of time and effort to build it and maintain it. Proving the fact that Perceived reputation is closely linked with customers’ trust in vendor’s website (Teo et. al, 2007). Consequently sellers, who have good reputations, should continue doing so.

User’s knowledge of the brand whether online or offline can affect the user’s trust in the online vendor (P. Benjamin, et. al, 2008). The association between the vendor and his brand is huge as the pros and cons of the vendor become associated with the brand in the customer’s mind. So when the customer encounters a brand, all the qualities associated with its vendor is recalled and influences the purchase decision. Therefore, strong brand name can help the vendor build trust with the customer and thus sell easily. Brand and reputation can be built through repeated interactions with consumers and advertising (P. Benjamin, et. al, 2008).

Research by Lowry et al. (2008) showed that unknown web vendors can fasten their trust building process by linking their brands to other well-known brands, which is known as brand alliance.

In a branding alliance between a well-known brand and a relatively unknown brand, the consumer’s perception of the well-known brand positively spills-over the consumer’s perception of the unknown brand. On the other hand, the consumer’s perception of the well-known brand remains unaffected by the unknown brand unless it takes part in a bad behavior that spoils the reputation of both brands. Therefore, unknown brand vendors who can win the trust of a well-known brand vendor through their good behavior or attitude can establish quick trust bonds with the customers through the alliances it can form with well-known brands (P. Benjamin, et. al, 2008).

Perceived Size:

The customer’s trust towards a company can be increased by another variable, which is the Company size, as shown in the offline commerce studies (Doney and Cannon, 1997). When the customers are dealing with a big company, they assume that it has the essential competences and skills to provide them with the desired services and support they need, thus increasing their trust towards this company (Chow and Holden, 1997). Similarly, big companies may indicate to customers that they are better in service recovery and compensation in case of service or product failure, as they already invested more on their name in the market (Jarvenpaa et al., 2000).

Many studies assume that the size of the store helps customers in developing their impressions towards the trustworthiness of the store. What is more important than the actual size of the store is the customer’s perception of the store’s size (like volume of sales or number of sold products) (Sirkka L. et. al, 2000)

In the normal or offline marketing channels, the consumer (trustor) refers to the size in order to trust the seller (tustee). The observation of large size organizations infers that other customers trust and deal successfully with it. Others’ experiences are considered to be the reason to believe that the organization will commit to its promises (Doney and Cannon, 1997). Also large size organizations indicates that they have the required experiences and capabilities for supporting the customer, like technical support service, trust is encouraged with such services (S. Chow and R. Holden, 1997)

Big size stores should control their suppliers, as a result the observation of product trustworthiness and consistency is increased. Customers assume that larger sellers invest more in their resources and hence have more to lose than a smaller seller acting in an unreliable way. The merchandise type may be an important variable in testing the effect of store size on trust. The more doubt, obscurity, or ongoing necessity on the seller (e.g., for after sales service) essential in the type of merchandise, the more important the store’s resources to the customer, and hence the bigger impact of the store’s perceived size in defining its trustworthiness (Sirkka L. et. al, 2000).

Only one study has examined the correlation between perceived size of the company and consumer’s trust in online commerce. 184 undergraduate and MBA students were examined by Jarvenpaa, Tractinsky, and Vitale (2000) in Australia, they concluded that the online store size has a positive relationship with customer’s trust when dealing with online travel services store, but it has no relationship with trust when dealing with an online bookstore.

Koufaris and Hampton-Sosa (2004) suggested that the reason behind this variance could be the low risk in online bookstore shopping process than in an online travel store. They also did a questionnaire survey consisting of 212 subjects in their study, which concluded that these subjects don’t have enough cues to help in forming an observation towards the store’s size (Koufaris & Hampton-Sosa, 2004). Although previous researched on online trust deployed the observation of store’s size by knowing the sales figures and number of available products (Jarvenpaa, Tractinsky & Vitale, 2000). For this reason they removed the size variable from the hypothetical model.

For SMEs in Singapore, a possible relation between the firm size and the overall satisfaction was found, showing that the apparent satisfaction level was more likely to increase when respondents are working from a bigger firm. The existence of size of firm as an important variable in manipulating implementation success is in proportion to existing studies (Chong, et. al, 2004)

Previous literatures have shown that larger sized firms are moderately better than other firms where new technologies speculation is concerned (Pavitt et. al, 1987; Siddharthan, 1992). Furthermore, firms with larger size are in a better place to benefit from the advantages of new innovation. Comprehensive financial position and the right circumstances have strong effect on the implementation of new technologies and also in investing on innovation. Bigger companies have the advantage of hiring skilled employees, which might be essential for using new technologies in an effective and efficient way, accordingly result to a better satisfaction in its execution and adoption (Chong, et.al, 2004)

Demographics and psychographics as a moderating variable:

Customers’ personal variables include psychographics and demographics. Psychographic variable reflects the customers’ lifestyle, and is mainly concerned about their interest, attitude and opinion. Firms used these variables to communicate with customers in order to develop audience profile, segmentation, psychographics…etc. (Ganguly et. al, 2011).

It was stated by Lastovicka (1982) that cultural principles lead to lifestyle behaviors. But the individuals choose the principles that match their personality. Therefore the psychographic variables depends more on individuals than on cultural variables. Many former researches have indicated that psychographics have an effect on shopping behavior; they also stated that market segmentation can depend on psychographic variables (Tauber, 1972). Dutta-Bergman (2002) stated that the customer’s personal variables like age and psychographics do have an effect on their internet use. Many scholars studied the impact of psychographic variables, being fund of computers, nature of trust and price awareness on online shopping behavior (Lee and Turban, 2001; Chen and Barns, 2007).

It was found by Li et al (1999) that males shop online more than females do. Smith and Whitlark (2001) carried out a segmentation was done for male and female internet users to identify their essential characteristics. It was also argued by Van Slyke et al (2002) that gender has an effect on online shopping behavior. The role of gender in the transformations in attitude towards online shopping was investigated by Dholakia and Chiung (2003). Black (2005) stated that many factors affect purchase intention, like income, age, gender, cost of living, level of education and crime index. Also the website usability is affected by age and gender according to Venkatesh and Agarwal (2006).

Case Studies:

Expedia:

Expedia.com® is the world’s leading online travel provider, helping millions of travelers per month easily plan and book travel. Expedia.com (http://www.expedia.com/) aims to provide personalized service, the latest technology and the widest selection of vacation packages, flights, hotels, rental cars.

Challenge

Expedia, the holiday booking company, has to think of a new way to engage people when they look for hotels online. The aim was to create a tool that would increase sales and brand awareness in a lovely 'we trust you' sort of way.

Solution

They provided a search 'n' book tool that gives it straight to the customer. That accurately tells him everything he needs to know about hotels in any given area worldwide.

expediahotelview.com is the result. And it's much more exciting than the utilitarian name would suggest. They put every piece of information on the hotels – warts, impartial reviews, flickr photos and all – into a world first mashup with Google, using Street View to show exactly where the hotels are and what they look like without soft focus. Which is why, with expediahotelview.com to help, the customer would think twice before booking the K-Porte Inn, Dubai: 'The room smelled of sweat and stale tobacco...'

Result

150,000 website visits, 2 minute average dwell time. Site has been localized for Spain, Italy, France and Germany but plans for world domination are afoot

Local case study:

TravcoTravel.com:

Introduction:

Travco Travel Company is the most reputable destination management company in Egypt. It offers complete solutions for the widest array of travel services including cultural, recreational, adventure, corporate, conferences and special group arrangements as well as the most exciting incentive travel packages.

The company’s years of collaboration with major airlines and hotels in Egypt, in addition to the group’s extensive experience as owner and operator of various tourist facilities and services, has enabled it to customize virtually every type of tour and group incentive package, from desert safari trips and enticing resort holidays, to special creative packages that highlight cultural, recreational and truly adventurous experiences. Travco’s ability to match the most sought-after destinations with traveler demands, results in a steady stream of satisfied customers.

The group provides outgoing travel packages, ticketing, and hotel accommodation services via its Call Centre, as well as twelve retails outlets in Cairo, Alexandria, Mansoura, Damietta, Sohag, and Aswan. Moreover, there are plans to expand the retail network aggressively by opening its thirteenth branch in Egypt, which will soon take place in Tanta, followed by another five expected retail branches throughout various cities in Egypt by 2010.

Challenge:

Travco Travel thought about how to facilitate website usage for their customers, in order for them to make their reservations and bookings in an easy way. Also they thought about encouraging the Egyptian customers to search for their trips and make bookings online.

Solution:

Travco Travel, the group’s travel and tourism arm, has recently revamped its website introducing plenty of new features, highlighting the wide range of products and services it offers.

Through the home page, visitors can now easily navigate through the company’s branches in the Middle East and Asia, depending on their geographical location. Moreover, online real-time booking across all the Middle East offices are made accessible to facilitate travel booking, as the world’s travel behavior has dramatically changed toward e-travel solutions.

The new system supports this new online booking solution allowing for real time bookings across not only the company's brands of hotels, car rentals and travel packages and partner airlines, but also on a global level providing greater customer knowledge and management for the company, which in turn, helps service clients in a more efficient manner.

Results:

Furthermore, it provides its customers with the latest, functional and user-friendly technology. The sections are easily navigated through the main tabs and buttons which are mostly clickable from the home page. There is a wealth of information on the destinations, types of accommodation, tours and activities, maps, transportation and useful traveler tips.