Purchasing Behavior - Research Proposal Example

Purchasing Behavior Introduction: There are two approaches to consumer behavior. The first is positivism that regards the consumer behavior discipline as an applied marketing science, while interpretivism is a post modernist approach to consumer behavior that tends to focus on the act of consuming rather than the act of buying. The scope of interpretivism is however being constantly widened to include several non psychological facets into the complex portrait of the consumer towards a consumer society. (Solomon 2006). Purchasing behavior is complex and there may be many factors that may impact upon the decisions a consumer makes. This research study aims to assess the various factors that could possibly impact upon consumer purchase behavior. While there are psychological as well as external factors that could play a role, this study will focus upon the role played by the front line of a business in influencing purchase behavior. It also aims to assess the differences that may be discernable between front line behavior at retail outlets and service outlets and how this impacts upon consumer behavior. The research questions proposed in this study are: (a) How does front line in service industries influence purchasing behavior? (b) How does front line in retail establishments influence purchasing behavior? (c) How does the front line differ in service and retail based businesses? Frontline and purchase behavior: According to Jean Dunaway, the President of Bankers Training, “one of the best ways to keep your customers coming back is by putting out a frontline employee who is confident with him or herself. “(Dunaway, 2002:4). This may be especially relevant in service based industries such as the hotel industry, which is functioning within a highly competitive marketplace. In such industries, customer expectations of service quality are high, thereby leading to switching between service providers.(Harrington and Aklehurst, 2000). When an employee is satisfied on the job, this feeling of well being transmits itself to the customers as well and they are likely to experience a feeling of satisfaction with the service. The quality of service provided by the employees also impacts upon customer satisfaction [Parsuraman et al, 1994; Gundersen et al, 1996] and this quality of service may be defined as “a gap between customers’ expectations and the performance they receive” [Parasuraman et al, 1985]. Where service industries are concerned, the customer is likely to purchase the service where his/her expectation of quality is met or exceeded. The customer’s perception of the level of service will depend to a large extent upon the friendliness and efficiency of front line personnel, hence this may be an important factor influencing purchase behavior in service industries. According to McKenna , “when your front line feels good about themselves and how they are treated, they transmit that feeling on the job, which directly carries over and positively impacts the customer.” (McKenna, 2002:16). In the tourism and hotel industry in particular, in order to stay competitive, a four or five star hotel must endeavor to provide the best possible service from employees and excellent value for their money, because the present day economy is a service driven one, where a high level of customer service improves productivity [Zemke, 2000]. This is especially relevant in view of the fact that “customers are traveling more widely, returning with new ideas and new standards regarding accommodation provision.” [Cooper et al, 1996:172]. Consumer choices are no longer limited, but have expanded through globalization to the extent that they can now avail of products and services from all over the world. If customers are dissatisfied with the levels of service at one establishment, they are likely to switch to other providers who are able to ensure higher levels of quality of front line services, since the behavior of front line personnel plays a significant role in customer perception of the quality of service. For example, in the case of Southwest Airlines, the high levels of job satisfaction enjoyed by the employees of the Company (www.southwest.com) translates into a high level of service provided to customers, which enables Southwest Airlines to function competitively in the airline industry by offering low prices to customers while also offering quality service at the same time. In the retailing business, the front line may not necessarily be service based; it may be structural differences in store characteristics which can cause variation in retail prices across markets. The costs of procuring food, the labor and costs associated with the store operations and the competitive environment within which the retailer operates, as well as the consumer preferences in that area impacts upon the cost of goods and purchasing behavior (Liebtag, 2005). Stores that are smaller and older, do not include sophisticated inventory systems with fewer checkout lanes and parking spaces are likely to be frequented by low income shoppers. The recent trend in the United States has been for customers to shift their retail food shopping to non traditional outlets such as Walmart and Costco and this is due to their status as one-stop stores, where products are offered at low prices. In this instance, it may not be the level of service which is as important as the prices of the goods and the manner in which they are displayed, as well as the facility of saving time by shopping for all items under one roof. Technology also plays an important role in influencing purchasing behavior. Where service based industries are concerned, this may take the form of advertising. This helps to help to generate trust in customer’s minds about the quality and satisfaction inherent in the advertised brand, by influencing their cognitive thinking processes (Li and Minard, 2006). In retailing however, technology is useful in aiding and enhancing consumer experiences to promote purchasing behavior. For example, the furniture retailer IKEA has improved its services through the addition of kiosks. One example of such a kiosk which has been examined in a case study conducted by Rowley and Slack (2003) is that of allowing customers of IKEA to view the sofas that they are considering purchasing covered in various fabrics which are available in that range, thereby providing the customer a more educational and informative shopping experience that is likely to result in the selection of a product that meets the customer’s taste and requirements.(Rowley and Slack, 2003). With the facility of online shopping which is now available through the tools of technology, customers are also inclined to frequent those businesses where they can enjoy the ease and facility of the online environment and gain value at the same time. For example, one recent study found that the perceived usefulness, playfulness and price are the key determinants of the perceived value of online music that is purchased (Chu and Lu, 2007). The facility of technology also allows the facility of testing consumer choices in computer simulated environments, which is likely to be very useful in predicting market shares and the promotion sensitivity for brands among consumers.(Burke et al, 1992). The atmosphere of the retail outlet at Starbucks is one example of how the atmosphere of a retail outlet can impact upon sales. The stores are spacious and well designed and offer customer the facilities of listening to music, burning personalized CDs or surfing the Internet while enjoying a cup of Starbucks coffee (www.starbucks.com). All of the above examples appear to demonstrate that customers are more inclined to shop at outlets where they enjoy convenience, low prices and a pleasant experience while shopping. There may also be other factors that influence consumer purchase behavior. There may be social elements to be considered; for instance shoppers may be more likely to purchase a brand of good or service that has been recommended to them by their close relatives or friends. Cultural elements may dictate certain purchases; for example Jewish customers would be more likely to purchase kosher items. The element of novelty or innovation in a product or service may generate higher levels of purchasing behavior, thus enabling the establishment to gain a competitive advantage. In some instances, legal restrictions may limit the kind of front line service that can be provided. A notable example of this is the tourism industry after the 9/11 incident, where increased levels of security at airports and concomitant delays frustrated many travelers and produced a back lash in terms of reduced business. On this basis, it may thus be concluded that whether an establishment is a service oriented one or a retail based establishment, the quality and nature of its front line service may influence consumer perceptions about the service or product, If consumer perceptions are largely favorable, the business sis likely to thrive and gain repeat business, but if the front line is inadequate or dissatisfactory it is likely to impact negatively on purchase behavior. Methodology: The proposed study will be primarily a qualitative one, because there is a subjective element involved in it. The element that needs to be assessed is how front line specifications influence consumer perceptions and thereby impact upon consumer behavior. This study proposes to examine a wide range of factors, including ambience of the purchase establishment, lighting, music, level of service provided, technological aids, layout, speed and ease in shopping. The research instrument proposed to be used in the study is a survey questionnaire that will be circulated among consumers, both at service based industries such as hotels as well as retail outlets. The survey questionnaire is to be preferred in this study since it does not involve direct observation by a researcher, but allows for collection of data on the basis of which inference scan be made about purchasing behavior. Moreover, this study proposes to use a Likert style questionnaire where verbal responses will be ranked along a range of numerical scales, which also allows for quantitative assessment of the responses received. Participants and sampling: Convenience sampling is the method proposed to be used in this study. Although random sampling is ideal, this study is confined to a small geographical area and the collection of responses from a sufficiently large number of respondents and establishments within this area on a truly random basis may be difficult. It is proposed to distribute the survey questionnaire among at least 200 shoppers and customers of service industries, by requesting them to take a few minutes to complete the questionnaire by ticking the response they consider appropriate. Limitations: One of the limitations in this study may be the relatively small number of participants in the study. In view of the paucity of time and resources, the numbers of consumers surveyed is limited. It is necessary to target consumers at retail and service outlets rather than administering the survey online, to ensure authenticity of responses and more time is involved. But this study is still likely to provide valuable insight and add to the existing research on purchasing behavior. References: * Burke, Raymond R, Harlam, Bari A, Kahn, Barbara E and Lodish, Leonard M (1992). “Comparing dynamic consumer choice in real and computer simulated environments”, Journal of Consumer Research, 19(1), pp 71 * Chu, Ching-Wen and Lu, Hsi-Peng, 2007. “Factors influencing online music purchase intention in Taiwan: An empirical study based on the value intention framework”, Internet research, 17(2), pp 139 * Dunaway, J. (2002). “Training links customer service and compliance”, ABA Bank Compliance, 23, pp 4-8. ABI/INFORM database. * Gundersen, M. G., Heide, M., Olsson, U. (1996). “Hotel Guest Satisfaction among Business Travelers: What are the important factors?” Cornell Hotel and Restaurant Administration Quarterly, April, pp 72 - 78. * Harrington, D and Aklehurst, G (2000). “An empirical study of service quality implementation”, The Service Industries Journal, 20(2), pp 133-56 * “Hear Music” Available online at: http://www.starbucks.com/retail/hearmusic_jump.asp ( Accessed: April 18, 2008) * Li, Fuan and Miniard, Paul M (2006). “On the potential for advertising to facilitate trust in the advertised brand.” Journal of Advertising, 35(4), pp 101-113 * Liebtag, Ephraim, S (2005). “Where you shop matters: store formats drive variation in retail food prices”, Amber Waves, 3(5), pp 12-19 * McKenna, T. (2002). “Service training your front line”, National Petroleum News, 7, ABI/INFORM database. * Parasuram, A., Zeithaml, V., Berry, L. (1985). “A Conceptual Model of Service Quality and its Implications for Future Research”, Journal of Marketing, 49, pp 41-50 * Parasuram, A., Zeithaml, V., Berry, L. (1994). “Reassessment of Expectations as a Comparison Standard in Measuring Service Quality: Implications for further research.” Journal of Marketing, 58, pp 111-124. * Rowley, Jennifer and Slack, Frances (2003). “Kiosks in retailing: the quiet revolution”, International Journal of Retail and Distribution Management, 31 (6/7), pp 329 * Solomon, M. et al. (2006). “Consumer Behaviour: European perspective”. London: Prentice-Hall. * Southwest Airlines careers. Available online at: http://www.southwest.com/careers/ (Accessed April 18, 2008) * Zemke, Ron (2000). "The Best Customer to have is the One Youve Already Got." Journal for Quality and Participation. 23(2), pp 33-5. Factors influencing online music purchase intention in Taiwan; An empirical study based on the value-intention framework Ching-Wen Chu, Hsi-Peng Lu. Internet Research. Bradford: 2007. Vol. 17, Iss. 2; pg. 139 Abstract (Summary) The purpose of this paper is to provide an explanation of factors influencing online music purchase intention of Taiwanese early adopter of online music, which can help the online music practitioners of Taiwan to develop better market strategies. An empirical survey was used to test the hypotheses. Data were collected from a total of 302 online Taiwanese early adopters of online music. A structural equation modeling (SEM) is proposed to assess the relationships of the research model. The findings in this paper show that the perceived value of online music is a significant factor in predicting the purchaser intention of buying online music in Taiwan. Also, the beneficial factor of the perceived usefulness and playfulness are identified in addition to the sacrificing factor of the perceived price for assessing the value. Moreover, purchasers and potential purchasers differ in the determinants underlying the perceptions of value, which customers hold towards online music. Practical implications - The results in the paper facilitate to understand what encourages and impedes the purchase intention of early adopters of online music in Taiwan. The value of this paper is to establish a theoretical model incorporating the value-intention framework into technology acceptance model to investigate the purchase behavior of early adopter of online music in Taiwan. The results of this study help online music practitioners of Taiwan and other Asian countries culture similar to Taiwan to create a success business model.  »  Jump to indexing (document details) Full Text (6437  words) Copyright Emerald Group Publishing Limited 2007 Introduction In recent years, the hedonic-oriented online content has been growing at a dramatically fast speed. Among those contents, online music is steadily forming a part of the commercial landscape in an increasing rate ([22] Koiso-Kanttila, 2004). According to [34] Strategy Analytics (2005) report, people in North America and Western Europe spend billions of dollars to purchase music from sources like Apple Computers iTunes Music Store, Napster, Yahoo and a hoard of Internet service providers. Revenues generated from online music in those two regional markets have been more than quadrupled, from $1.1 billion in 2005 to $4.5 billion by 2010. However, when compared with the rapid growth of the online music markets in the USA and Western Europe, no such success has emerged in Asia. In light of the recent survey by [38] Synovate (2005), 70 percent of Asians who own an MP3 player and download music from the Internet in a typical week are not willing to pay for such downloads, particularly in Great China Region including Mainland China, Taiwan, and Hong Kong, the proportion is nearly up to 80 percent. The online music service indicating, legal music, web sites is an innovative product, and it may cause the enormous change of procurement behavior of the music works. Like a lot of Asian countries, the online music market of Taiwan at present has just sprouted. According to Technology Adoption Life Cycle ([32] Moore, 1991), the early adopters consist of technology enthusiasts and visionaries. The enthusiast refers to whom feels a great interest in brand-new technologies and hopes to take the lead in obtaining them, and the visionaries refers to whom have inclinations of easily visualizing, understanding and accepting interests of new technologies and whom tend to buy the products in order to realize their dreams. If practitioners cannot launch the early market smoothly, it is very difficult to make a profit to support the financial issue, and even may withdraw from the market, such as iMusic ([39] Taipei Times , 2006). On the contrary, if practitioners create favorable models of early adopters, not only they may succeed in early markets but also there will be great help for entering the mainstream market. Thus, to the practitioners who still look for success business models, it is important to investigate which factors are significant for early adopters of online music. Accordingly, we propose the first research question: what are the key factors identified by early adopters of online music in Taiwan? To raise the market share of early market of online music, the practitioners not only increase the new customer indicating potential purchaser in this study but also have to keep the repurchasing or continual subscribing rate of existing customers indicting purchasers. As a result, to make a better understanding of the different factor of purchasers and potential purchasers is necessary. We propose the second research question: Do those determinants vary in the purchase process of purchasers and potential purchasers? Over the past decade, the researchers of information technology (IT) have paid much attention to why people accepted hedonic-oriented IT ([43] Venkatesh and Brown, 2001; [42] van der Heijden, 2004). In this effort, Technology Acceptance Model ([8] Davis, 1989) based on believe-attitude-intention-behavior theory had been employed ([24] Koufaris, 2002; [17] Hsu and Lu, 2004; [42] van der Heijden, 2004). However, TAM is applied primarily to explain acceptance and usage of IT in the workplace. Unlike simple IT adoption, online music purchase behavior embraces not only IT adoption but also the hedonic consumption behavior. Online music consumers must possess the characteristics of both hedonic-oriented IT adopters and consumers. Therefore, this study subsumes customer value theory in IT acceptance studies to answer two research questions. The findings of this study may help online music practitioners to construct marketing strategies, and also help researchers to understand the hedonic-oriented online purchase behavior of Taiwanese. Value-intention framework [10] Dodds and Monroe (1985) developed the value-intention framework, which assumes that the individual willingness to perform a certain behavior is directly influenced by perceived value of behavior consequences. A lot of studies have examined issues related to the nature and application of value owing to the important role in predicting certain behaviors ([5] Chen and Dubinsky, 2003; [45] Zeithaml, 1988). The value-intention framework ([10] Dodds and Monroe, 1985) proposed an overview of the relationships among the concepts of perceived sacrifice, quality, and value. Among them, perceived value is regarded as the core construct. [44] Woodruff (1997) defined value as "the trade-off between of benefit, i.e. the received component, and sacrifices, i.e. the given component". However, the value is individualistic and personal. It can be considered from various aspects, and such value is evaluated as high or low depending on individual subjective assessment. Most previous studies have examined perceived value as a substitute for actual value ([40] Tam, 2004). [45] Zeithaml (1988) defined perceived value as "the consumers overall assessment of the utility of a product based on perceptions of what is received and what is given". Moreover, quality is considered as the received component in the original value-intention framework. Perceived quality can be defined as consumer assessment regarding the global excellence or superiority of a product ([15] Holbrook, 1996). Perceived quality can be inferred as intrinsic and extrinsic cues. Intrinsic cues involve the physical composition of products such as color, flavor, and texture. Meanwhile, extrinsic cues are product-related but not part of the physical product itself, such as brand, advertising, and store image ([41] Teas and Agarwal, 2000). Sacrifice describes what must be given up or paid to perform a certain behavior. In the hedonic consumption decision process, price is what a customer pays in money term for a product obtaining. Therefore, price is often used as the key measure to represent what customers have to sacrifice to gain a product. [40] Tam (2004) showed that the more monetary cost customers perceived they have to pay in acquiring products, the lower value they have perceived. Since previous research has demonstrated the multidimensional and context-dependent nature of perceived value, the constructs of the initial model change with the circumstances of online music purchase. This study examined perceived benefit as a substitute for perceived quality to assess the gain while listening to online music. The perceived benefit is based on intrinsic attributes of online music such as usefulness and playfulness; moreover, the price and effort are considered as monetary and non-monetary sacrifices respectively. Finally, consumers willingness to buy is influenced by perceived value of customers; further, perceived value can be boosted by increasing the benefit or by reducing the sacrifices associated with product purchase and use. Research model The research model (see Figure 1 [Figure omitted. See Article Image.]) adapted from the value-intention framework identifies key factors that influence perceived value and purchase intention of early adopters in an online music setting. The construct relationships among these hypotheses are elaborated below. Purchase intention and perceived value Perceived value is the core variable in the research model. Since perceived value is based on an overall assessment of the costs and benefits of a given market offering in a particular customer application, it reflects the net gain obtained by consumers from their consumption behavior ([45] Zeithaml, 1988). Previous studies have provided sufficient evidence for the positive influence of perceived value on consumer willingness-to-buy ([45] Zeithaml, 1988; [37] Sweeney et al. , 1997; [11] Dodds et al. , 1991). Thus, perceived value provides a useful indicator of intention to purchase online music. This study defines perceived value as the consumer perception of net benefit gained in exchange for the sacrifices while listening to online music. Moreover, purchase intention is defined in this study as the degree to which the consumer would like to purchase online music in the future. The following hypothesis is proposed: H1. Perceived value is positively related to purchase intentions towards online music. Perceived benefit Individuals assess value based on the net gain of utility between what benefits are received and what sacrifices are incurred by performing the behavior. The original value-intention framework considered the perceived quality as the get-component in assessing value. Perceived quality is inferred according to the physical component of product and product-related attributes. In the context of online music, the matter that needs to be understood is the utility of consumers when listening to online music rather than physical components or product-related attributes. Consequently, this study considers that perceived benefit substitutes for quality to measure the gains from online consumers view. Consistent with previous literature on consumer behaviors, the research model comprises two benefit dimensions, including functional and recreational benefits ([7] Childers et al. , 2001), for predicting the benefits perceived by online consumers. In the online music setting, functional benefit refers to as the perceived usefulness construct, while recreational benefit refers to as the perceived playfulness construct. Perceived usefulness Perceived usefulness is defined by focusing functional and convenience benefits. This study defined perceived usefulness as the degree to which the consumer believes that listening to music online would fulfill the certain purpose. Although online music web sites aim to provide people with an entertaining experience, they also provide functional benefits to them. For example, online music web sites provide more diversiform music works and quicker search service to online users than traditional music stores do. In fact, effectively accessing music and relevant information has become one of the key benefits sought by online music consumers. Hence, this study believes that perceived value will increase with perceived usefulness of online music. The following hypothesis is proposed: H2. Perceived usefulness is positively related to perceived value in online music setting. Perceived playfulness Since perceived playfulness focuses on recreational benefit, this study defined perceived playfulness as the degree to which the consumer believes that enjoyment could be derived when listening to online music. For example, according to [16] Holbrook and Hirschman (1982), listening to music is a kind of hedonic consumption acts based not on consumer knowledge of reality, but rather on consumer desires. Additionally, [27] Lacher (1989) indicates that people who listen to music is seeking for fantasy fulfillment and deep emotional stimulation. Consequently, this study believes that perceived value will increase with perceived playfulness. The following hypothesis is proposed: H3. Perceived playfulness is positively related to perceived value in online music setting. Perceived sacrifice Perceived sacrifice is defined as individual feeling regarding giving something up ([9] Dodds, 1999). When making decisions with regard to online music purchase, online consumers certainly consider both monetary and non-monetary costs. Price is frequently used as the key measure representing what consumers have to pay money to obtain a product. Nevertheless, individuals do not always remember actual product prices, and previous studies have revealed that consumers encode prices meaningfully ([31] Monroe, 1973). Consequently, researchers have reached a consensus that monetary costs should be used to measure perceived price encoded by consumers instead of using actual product prices ([31] Monroe, 1973). On the other hand, research on consumer behavior indicates that other costs are relevant to consumers. For example, [28] Lovelock (2001) incorporated non-monetary cost, such as physical or psychological efforts, in consumer perceptions of sacrifice. Therefore, in an online music setting, perceived ease of use captures the non-monetary cost and the associated instrumentality. Perceived price Economically rational shoppers generally see price as an important financial cost component ([45] Zeithaml, 1988). Previous studies found that price increases, perceptions of value would decline ([26] Kwon and Schumann, 2001). [9] Dodds (1999) pointed out if a price is unacceptable, consumers will then assess the product with little or without net value. Indeed, seeking the best price is a key motivation of online consumers ([36] Swatman et al. , 2006). This study defines perceived price as the degree to which the consumer believes that he/she must pay in money to obtain online music. Consequently, the following hypothesis is proposed: H4. Perceived price is negatively related to perceived value in online music setting. Perceived ease of use Non-monetary sacrifice must be acknowledged. Numerous previous works found non-monetary sacrifice to be an important influence on acceptance of hedonic-oriented IT. [1] Atkinson and Kydd (1997) found significant effects of ease of use on the Internet usage for entertainment. [42] van der Heijden (2004) found that perceived ease of use is a significant predicator of adoption intention for hedonic-oriented IT. This study defines perceived ease of use as the degree to which the consumer believes that listening to online music is effortless. Accordingly, this study believes if online consumers perceive that they can reduce effort, namely reduce perceived sacrifice, an increase in value can then be achieved. The following hypothesis is proposed: H5. Perceived ease of use is positively related to perceived value in online music setting. Difference between online music potential and actual purchasers To enhance understanding and management of online music potential and actual purchasers, this study examined whether the antecedents of perceived value will change over time during the purchase process. The purchasers refer to the person that have already bought online music, and the potential purchasers refer to the person who are enthusiastic about purchasing online music, but have not bought yet. Many studies have empirically examined the factors that lead to the initial adoption and subsequent continued usages of IT at the individual adopter level are difference ([19] Karahanna et al. , 1999). Furthermore, researches on consumer behavior have provided some evidence for indicated differences in the determinants of initial and continued purchase intention ([4] Cao and Gruca, 2004). Therefore, the following hypothesis is proposed: H6. The determinants of perceived value of online music purchasers are different from the determinants of potential purchasers. Research method This study is known as a hypothesis-testing research in which deduction is applied to test theories so as to create new experiences or observations and which mainly relies on quantitative, empirical methods ([23] Kothari, 1985; [25] Kumar, 2005; [29] Lucas, 1991). Moreover, because of following two causes, a sample survey is the most appropriate approach to the problem of this study. First, this study aims at quantitative explanation asks about the individual behavior of Taiwanese society. Second, the sample must be relatively large and representative to allow generalizing findings to a predefined population ([33] Pinsonneault and Kraemer, 1993; [23] Kothari, 1985). The essential procedures in conducting a sample survey research are described as following. Measurement development The questionnaires were mainly adapted from relevant prior studies and carefully modified to reflect the characteristics of online music. Scale items for purchase intention, the perceived value and price were adapted from marketing survey ([11] Dodds et al. , 1991; [37] Sweeney et al. , 1997; [40] Tam, 2004); scale items for perceived usefulness, playfulness, and ease of use were from IT acceptance studies ([8] Davis, 1989; [42] van der Heijden, 2004). All scale items were measured via a five-point Likert scale, ranging from highly agree (point 5) to lowly disagree (point 1). The initial questionnaire was pre-tested on nine doctoral students, and five graduate students majoring in e-commerce to check the suitability of the wording and format. Furthermore, a pilot test was conducted on 128 college students to validate the instrument. Both of the tests with slightly changes in wording were made. A list of the items is displayed in Table I [Figure omitted. See Article Image.]. Data collection An online questionnaire survey was used to collect data. It was employed for two reasons. First, the subjects of this study are those persons interested in online music and are familiar with the Internet so an online questionnaire survey may relatively target at them. Second, usage of online survey in social science research has increased in recent years because of several strengths such as low cost, widespread reach, speed, convenience, and ease of data entry and analysis ([6] Cheong and Park, 2005; [12] Evans and Mathur, 2005; [18] Johnson, 2006). A message asking participant to fill out the questionnaire in terms of any paid online music web sites which they had used or known, along with a hyperlink to the survey form, was posted in 30 popular music-related forum web sites, such as Yahoo, Kimo (http://tw.yahoo.com), Hinet (www.hinet.net), KKBOX (http://kkbox.com.tw), music power (www.musicpower.com.tw), KKCITY (http://bbs.kkcity.com.tw), and campus Bulletin Board Systems in Taiwan over a two-week period. To increase the response rate, we offered participants who completely filled out the questionnaire an opportunity to take park in a draw for several prizes as an incentive. At the same time the atypical cases, repeated responses were controlled. Data analysis and results The online survey yielded 312 responses, of them, 302 were complete and valid. In total, 68 percent of the respondents were female, and 91 percent were below 30 years old. Subject occupations ranged widely, but over three-fourths of the respondents were students. Students dominate the majority of the sample, because they are the main consumers in the music market of Taiwan. Moreover, of the final sample, 206 were from purchasers of online music and 96 were from potential purchasers. Table II [Figure omitted. See Article Image.] lists the demographic statistics of all samples and groupings. Test of the measurement model The data collected were tested for measures of fit by confirmatory factor analysis using LISREL 8.51. The measurement model includes 22 items describing six latent constructs. The test of the measurement model demonstrated good fit between the data and the proposed measurement model. The chi-square for the measurement model was calculated to be 372.51 ( P =0.00) with 194 d.f. The χ 2 /df value was 1.92, less than the three criteria suggested by [14] Hayduck (1987). The GFI here was 0.90, which is equal to the benchmark. The various goodness-of-fit statistics are summarized in Table III [Figure omitted. See Article Image.]. In summary, the measurement model has a good fit with the data, based on assessment criteria such as GFI, CFI, NFI, RMSEA and RMR ([2] Bagozzi and Yi, 1988). To confirm the adequacy of the measurement model, reliability and construct validity were considered. First, computing the individual item reliabilities, the loadings were greater than 0.7, expect for PE1 did not lie well on their underlying constructs. The loading of PE1 was 0.68, very close to 0.7, for this reason, all scare items were remained (see Table IV [Figure omitted. See Article Image.]). [3] Campbell and Fiske (1959) proposed two aspects of construct validity: convergent and discriminant validity. Convergent validity is the degree to which multiple attempts to measure the same concept is in agreement. The notion is that two or more measures of the same thing should correlate highly if they are valid measures of the concept. Both the coefficients of composite reliability and average variance extracted (AVE) were tested for convergent validity. Composite reliability assessed the internal consistency of the measurement model. All constructs had a higher composite reliability (see Table V [Figure omitted. See Article Image.]) than the benchmark of 0.6 recommended by [2] Bagozzi and Yi (1988). It suggests that a high internal reliability of the data existed. The AVE indicates what percentage of the variance of the construct any individual item explains. All constructs have AVE higher than the benchmark of 0.5 recommended by [13] Fornell and Larcker (1981) (see Table V [Figure omitted. See Article Image.]); therefore, it was concluded that the items adequately explained the variance. Consequence, examine with composite reliability and AVE verified that a high convergent validity existed in the constructs. Discriminant validity is the degree to which measures of different concepts are distinct. The thought is that if two or more concepts are unique, then valid measures of each should not correlate too highly. The data demonstrated that the shared variances among variables, the values present under diagonal in Table V [Figure omitted. See Article Image.], were less than the variances extracted by the constructs, the values present on the diagonals in Table V [Figure omitted. See Article Image.]. These certify that constructs are empirically distinct. In conclusion, the statistical results indicated that the test of the measurement model including convergent and discriminant validity measures was satisfactory. Test of the structural model The causal structure of the proposed research model was also tested. The test of the structural model demonstrated reasonable fit between the data and the proposed structural model. The estimation of the structural model yields a chi-square of 405.66 ( P =0.00) with 198 d.f. The χ 2 /df value was 2.05. The GFI provides evidence of a reasonably fitting model (GFI=0.89); therefore, all other indices are within the recommended range of acceptability. Consequently, the structural model demonstrated good fit to the data. The various goodness-of-fit statistics are summarized in Table III [Figure omitted. See Article Image.]. Hypothesis testing Figure 2 [Figure omitted. See Article Image.] illustrates the results of the research model with non-significant paths as dotted lines, and the standardized path coefficients between the constructs. Most of the hypotheses ( H1 , H2 , H3 , and H5 ) were significant in SEM prediction, except for perceived ease of use ( H4 ). To examine whether purchasers and potential purchasers differ in their determinants of perceived value of online music, the path analyses for purchasers and potential purchasers were examined. The path coefficients and explained variances for the model are shown in Figures 3 and 4 [Figure omitted. See Article Image.] respectively. The results displayed that the determinants of perceived value for purchasers are different from the determinants of potential purchasers. Consequently, the empirical evidence supports H6 . Discussion There were two major research questions in this study. The first question was to examine what are the key factors identified by early adopters of online music in Taiwan. Based on data collected from 302 online music consumers, the results correspond to the first question. Purchase intentions of early adopters of online music can be predicted reasonably well according to perceived value of online music. Moreover, perceived usefulness, playfulness, and price are the key determinants of perceived value of online music. The second question was to examine whether those determinants considering in the purchase process are different between purchasers and potential purchasers. The analytical results indicate perceived playfulness and price are crucial for potential purchasers, while perceived usefulness, playfulness, and price are crucial for purchasers. The determinants of perceived value may change over time during the purchase process. The significant findings supported by this empirical study are discussed as follows. The valuation of online music is significant influenced by individual perceptions regarding benefit and sacrifice. In terms of benefit, perceived playfulness is a significant predictor of perceived value of online music. This finding is consistent with the previous hedonic-oriented IT studies ([17] Hsu and Lu, 2004; [42] van der Heijden, 2004). Furthermore, perceived usefulness is another significant predicator of purchase intention. Although some studies have proposed that usefulness loses its dominant predictive value in favor of playfulness ([42] van der Heijden, 2004) in hedonic-oriented IT acceptance field. In accordance with research by [24] Koufaris (2002), the significance of perceived usefulness shows that utilitarian value remains important even when the behavior in question does not involve system usage inside the workplace. In relation to sacrifice, the results demonstrate that price significantly influences online music purchase decisions, as indicated by the path coefficient of -0.63 ( p Read More