Dessertation 2 effects of customer experience on customers.edited (1)

Effects of Customer Experience on Customers’ Recommendation and Repeat Purchases in
Chinese Electronics Industry

Abstract
The modern business environment is dynamic and characterised by intense competition forcing
businesses to formulate strategies geared towards customer satisfaction, retention, repeated
purchasing and loyalty. This research paper aimed at investing the impacts of customer
experience on customer’s recommendation and repeat purchasing in the Chinese electronic
industry. Based on the literature review regarding the customer experience, a good customer
experience is vital in determining the company’s profitability. The four key theories of consumer
behaviour discussed under the literature review in relation to customer experience includes the
theory of buyer behaviour, theory of reasoned action, theory of planned action and the theory of
trying. According to the theory of buyer behaviour, environmental factors that influence
consumer choice include marketing environment, social environment and the psychological
environment. According to the theory of reasoned action, individuals' behaviours are
approximated to be equal to the behavioural intentions derived from consumers' attitudes
towards the purchase of the product. Based on the theory of planned behaviour, the creation of a
perceived behavioural control depends on the combination of perceived present components that
influence consumer behaviour. The theory of trying that consumer’s intention to try is
determined by the subjective norm, expectation of success and attitude towards the service or
product. However, the existing literature does not conclusively cover the variables of customer
experience. To achieve the core objective of this research, the researcher tested the formulated
hypotheses based on the literature using descriptive statistics. Based on the research findings, a
good customer experience on customer’s recommendation and repeat purchase increases brand
reliability, increases the endowment effect and reduces the customer switching.
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Contents
Chapter 1..........................................................................................................................................1
Introduction......................................................................................................................................1
1. Research Background ..................................................................................................................1
1.1 Research Rationale.................................................................................................................3
1.1.1 Theoretical Rationale...................................................................................................... 3
1.1.2 Practical Rationale .......................................................................................................... 4
1.2 Research Objectives ...............................................................................................................4
1.3 Research Structure..................................................................................................................5
Chapter 2..........................................................................................................................................6
Literature Review.............................................................................................................................6
2.1 Introduction............................................................................................................................6
2.2 Customer Experience .............................................................................................................6
2.2.1 Customers’ Recommendation and Repeat Purchases ..................................................... 7
2.3 Theories on Customers’ Behaviour........................................................................................8
2.3.1 The Theory of Buyer Behaviour (TCB) ......................................................................... 9
2.3.2 The Theory of Reasoned Action (TRA) ....................................................................... 10
2.3.3 The Theory of Planned Behaviour (TPB)..................................................................... 11
2.3.4 Theory of Trying (TT) .................................................................................................. 12
2.4 Empirical Studies on Effects of Customer Experience on Customers’ Recommendation and
Repeat Purchases........................................................................................................................14
2.4.1 Impacts of customers’ experience on customer’s recommendation ............................. 14
2.4.2 Impacts of customers' experience with repeat purchases ............................................. 16
2.5 Summary ..............................................................................................................................18
Chapter 3:.......................................................................................................................................19
Methodology..................................................................................................................................19
3.1 Introduction..........................................................................................................................19
3.2 The Formulation of Hypotheses...........................................................................................19
3.4 Research Philosophy............................................................................................................21
3.5 Research Approach ..............................................................................................................22
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3.6 Research Strategy.................................................................................................................24
3.7 Research Design...................................................................................................................25
3.8 Data Collection Methods......................................................................................................25
3.9 Description of Data ..............................................................................................................26
3.9.1 Huawei.......................................................................................................................... 27
3.9.2 Lenovo .......................................................................................................................... 27
3.9.3 TCL............................................................................................................................... 27
3.9.4 Konka............................................................................................................................ 27
3.9.5 ZTE............................................................................................................................... 27
3.10 Data Analysis .....................................................................................................................28
3.11 Chapter Summary...............................................................................................................28
Chapter 4:.......................................................................................................................................29
Data Analysis and Presentation......................................................................................................29
4.1 Introduction..........................................................................................................................29
4.2 Description of the Sample....................................................................................................29
4.3 Profile of Respondents .........................................................................................................30
4.3.1 Gender........................................................................................................................... 30
4.3.2 Age Groups................................................................................................................... 31
4.3.3 Occupations .................................................................................................................. 32
4.3.4 Marital Status................................................................................................................ 33
4.3.5 Education Level............................................................................................................ 34
4.3.6 Monthly Income............................................................................................................ 35
4.3.7 Customer Experience on Recommendation and Repeat Purchase ............................... 36
4.4 Main Results.........................................................................................................................37
4.4.1 Overview....................................................................................................................... 37
4.4.2 Brand reliability increases as a result of positive customer experience on customer’s
recommendation in the Chinese electronic industry.............................................................. 38
4.4.3 Good customer experience on recommendation increases the endowment effect in the
Chinese electronic industry.................................................................................................... 40
4.4.4 Reduction in Customer Switching is dependent on good customer experience on repeat
purchase in the Chinese electronic industry. ......................................................................... 43
4.5 Summary ..............................................................................................................................45
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Chapter 5........................................................................................................................................29
Conclusion and Recommendation .................................................................................................46
5.1 Introduction..........................................................................................................................46
5.2 Conclusion............................................................................................................................46
recommendation in the Chinese electronic industry.............................................................. 46
Chinese electronic industry.................................................................................................... 47
5.2.3 Reduction in Customer Switching is dependent on Good Customer Experience on
Repeat Purchase in the Chinese electronic industry. ............................................................. 48
5.3 Recommendations ................................................................................................................49
5.3.1 Recommendations for Further Research ...................................................................... 50
5.4 Limitations ...........................................................................................................................50
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Chapter 1
Introduction
1. ResearchBackground
The modern business environment is dynamic and characterised by intense competition forcing
businesses to formulate strategies geared towards customer satisfaction, retention, repeated
purchasing and loyalty (Podolny, 2010). Failure to retain customers can lead to reduced business
revenue and in some instances it can result in the collapse of the enterprise. According to
Hosseini, Maleki & Gholamian (2010), improving customer experience can result in
recommendations and repeated purchasing which impact positively on the company's
profitability. Alrubaiee & Al-Nazer (2010) postulate that in the Chinese electronic market,
customers have a preference to high quality and affordability. However, quality and affordable
prices are not the only factors determining customer retention, loyalty and repeated purchasing.
Zhang, Dixit & Friedmann (2010) further argue that more research should be conducted to
determine the critical elements of customer experience. According to Prentice (2013), customer
retention and repeated purchasing result from customer satisfaction. Mandhachitara & Poolthong
(2011) provide six critical reasons why customer satisfaction is vital to the business growth.
Firstly, consumer satisfaction is a significant indicator of the customer's loyalty, repurchase
intentions and recommendations. Secondly, customer satisfaction is critical in reducing the
customers’ churn. Thirdly, customer satisfaction is essential for the business in realising the
customer’s lifetime value. Fourthly, customer satisfaction is vital in reducing the negative word
of mouth which can be very destructive to the business’s reputation. Fifthly, customer
satisfaction is essential because it is easier to retain the existing customers than the new ones.
Lastly, customer satisfaction is an important pointer of differentiation. Based on the
Mandhachitara & Poolthong (2011)’s arguments regarding customer satisfaction, it implies that
customer experience plays a critical role in repeated purchasing and recommendations.
Deng et al. (2010) note that the Chinese electronic industry is a competitive marketplace where
enterprises are competing for customers. Liu, Guo & Lee (2011) further argue that customer
satisfaction is considered as a significant differentiator. Therefore, to succeed in the competitive
marketplace, a business must consider the positive customer experience as the key element in its
strategies. As noted earlier, quality and affordable prices will not necessarily lead to repurchase
intentions and recommendations if the customer experience is detrimental (Kassim & Asiah

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Abdullah, 2010). In the industry where businesses produce similar high-quality products, good
customer experience is the major factor that can lead to high sales. Hanif, Hafeez & Riaz (2010)
expound that offering an amazing customer experience can create a great customer advocacy and
satisfaction. Customer advocacy is an essential ingredient of repurchasing intentions and
customer recommendations (Williams & Naumann, 2011).
The research conducted by Eid (2011) highlights three key steps that can lead to customer
satisfaction, retention, repeated purchasing and recommendations. Firstly, firms should adopt the
customer loyalty programmes in which customers are awarded for their repeated purchasing. The
rewards are also awarded to those customers who recommend one or more new customers to the
company (Eid, 2011). Secondly, some firms regularly send newsletter emails to their customers
to keep them updated. Thirdly, a firm can surprise and delight its customers by giving
unexpected offers. Majorly, this is aimed at creating a good customer experience that can lead to
customer loyalty, repeated purchasing intentions and recommendations. Ideally, organisations
must create a conducive environment for customers to feel the value of their money (Fang, Chiu
& Wang, 2011).
Zhang, Agarwal & Lucas (2011) note that the Chinese Electronic Industry has experienced
tremendous growth in the past decade. For instance, the electronic market has grown three times
faster compared to the country’s GDP (Lee, Xiang & Kim, 2011). The rapid growth in the
Chinese electronic industry has resulted from the economic liberalisation policies (Breznitz &
Murphree, 2011). For instance, in the years 2005, the Chinese electronic sector contributed about
7% of the total gross domestic product (GDP), which represented 16.60% of the country’s total
economic growth (Berger & Martin, 2011). The literature review further indicates that in the year
2011, China was ranked as the world’s leading market for the personal computers (PCs) (Lee,
Xiang & Kim, 2011). Some of the leading electronic firms in the Chinese market includes
Lenovo, Huawei, Panda Electronics, TCL and Haier to name but a few. The leading electronic
products in the Chinese market include computer-related goods, electronic parts and the software
industry (Yang, Lin & Ma, 2010). However, the success of the electrical industry is majorly
reliant on the willingness of the customers to consume its products. The increased willingness to
purchase the electronic products is based on customer satisfaction, loyalty, repurchase intentions
and customer recommendations (Har Lee, Cyril Eze & Oly Ndubisi, 2011). This research
project, therefore, undertakes to investigate the effects of customer experience on customers’

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recommendation and repeat purchases in the Chinese electronics industry based on specifically
attributable components such as endowment effect, customer switching and loyalty. Based on the
existing literature, little has been established regarding the effect of customer experience on
customer's recommendation and repeat purchases. To address the existing gap, this dissertation
captures the impact of customer experience on customers’ recommendation and repeat purchases
on customer endowment, customer switching, brand reliability and loyalty.
1.1 ResearchRationale
1.1.1 Theoretical Rationale
In the recent years, numerous studies have been conducted to investigate ways of promoting
customer experience in organisations (Van Vaerenbergh et al., 2012). However, the current
literature fails to show the specific effects of customer experience on customers’
recommendation and repeat purchases. Many studies have majorly focused on how the
customers’ experience on customers’ recommendation and repeat purchases affect sales revenue,
profitability and the company’s reputation (Zhang et al., 2012). However, factors such as
customer endowment, customer switching and brand reliability have not be dealt with
conclusively. To bridge the existing gap, this research paper focuses on the customer endowment
effect, brand reliability and customer switching in the Chinese electronic industry.
Based on the information provided in the existing literature, the concept of brand reliability is
merely speculative and inadequate (Kim et al. 2012). It is essential to justify and assess the
contribution of customers’ recommendation and repeat purchase on brand reliability that the
previous research has ignored. The existing literature has focused more on linking the company’s
reputation with branding. However, it fails to justify that brand reliability is closely associated
with good customer experience, recommendation and repeat purchase. In the bid to bridge this
gap, this dissertation assesses the contribution of the customers’ experience on recommendation
and repeat purchase on brand reliability. Additionally, the contribution of customers’ experience
on recommendation and repeat purchases on the endowment effect has been neglected in the
existing literature (Alrubaiee & Al-Nazer, 2010). Zhang, Dixit & Friedmann (2010) define
customer endowment effect as a hypothetical believe that individuals value more what they have
compared to what is new. Further, Prentice (2013) argues that loyal customers will value what
they have more compared to what is new to the market. However, the existing studies have not
adequately addressed the impact of the customers’ experience on recommendation and repeat
purchase on the endowment effect. To address this existing gap, this dissertation will investigate

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the impact of customer’s experience on recommendation and repeat purchase on the endowment
effect. Similarly, much research has been done on customer loyalty but the studies have not been
linked it to customer switching. Most of the past researchers have concentrated on product
quality, affordability and discounts as the key components of customer loyalty (Mandhachitara &
Poolthong, 2011). However, the impact of customers' experience and repeated purchasing on
customer switching has not been conclusively researched. This research will bridge gap by
showing the contribution of customers' experience and repeated purchasing on loyalty. More
significantly, this dissertation will provide essential highlights to the future researchers on how to
fill similar existing gaps.
1.1.2 Practical Rationale
Practically, failure to maintain good customer experience can be very detrimental to the
organisation (Kassim & Asiah Abdullah, 2010). This can possibly result in the reduction in the
total sales, poor customer relations and no referrals. Based on this argument, it is essential for the
company to align its strategies towards customer satisfaction that will result in positive customer
experience, repeated purchasing and recommendations (Hanif, Hafeez & Riaz, 2010). This
dissertation, therefore, endeavours to investigate the effects of customers' experience on
recommendations and repeated purchasing on the Chinese electronic industry. The information
provided will help management to align their strategies towards customer satisfaction to improve
customer experience. International marketers will also benefit from the information provided by
this dissertation to make informed decisions concerning positive customer experience.
1.2 ResearchObjectives
Foremost, customer experience is enhanced through satisfaction techniques such as product
quality, availability, affordability, discount offers and loyalty programs (Williams & Naumann,
2011). The common effects of positive customers’ experience in the existing literature are
increased sales as a result repeated purchasing and recommendations. Therefore, the existing
literature has put more emphasis on how to attract more customers through the mentioned
customer satisfaction techniques, and little has been done on investigating the effects of
customers' experience on repeated purchasing and recommendations. There are several effects of
customers' experience in organisations, but this dissertation will concentrate on endowment
effect, brand reliability and customer switching. The mentioned effects resulting from customers'
experience on recommendations and repeated purchasing have not been conclusively researched
in the existing research. Firstly, brand reliance is critical in locking the potential competitors

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within the industry. Eid (2011) notes that having customers’ confidence in a specific brand can
help a company achieve a competitive edge in the market. Secondly, the endowment effect gives
customers a sense of ownership which ties them to a specific brand, and this is essential in
gaining a larger market share for the company. Customer loyalty has also been identified as the
key factor preventing the customers from switching to the other products (Williams & Naumann,
2011). This study, therefore, has a considerable influence on the effects of consumers’
experience on recommendations and repeated purchasing because it has captured the endowment
effect, brand reliance and customer switching. Therefore, this research project has obtained three
specific objectives namely:
 To examine impacts of customers’ experience on customer’s recommendation in Chinese
electronics industry
 To examine impacts of customers’ experience on repeat purchases in Chinese electronics
industry
 To recommend ways through which company’s operating in Chinese electronics industry
can optimize on customer’s experience to enhance customers’ recommendation and
repeat purchases
1.3 ResearchStructure
The core aim of this research is to investigate the effects of customer experience on customers’
recommendation and repeat purchase in the Chinese electronic industry. To achieve the targeted
objectives, this study has been structured into five key chapters. The first chapter provides an
exclusive research background, the research rationale, objectives and the research structure.
Chapter two provides a review of the past literature in the similar field done by other researchers.
The third chapter provides a detailed methodology on how the objectives of this study are
achieved. The fourth chapter presents the key findings and results while the last chapter provides
an overall conclusion and recommendations.

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Chapter 2
Literature Review
2.1 Introduction
According to Palmer (2010), an excellent customer experience is critical to the success of any
organisation. Lemke, Clark & Wilson (2011) define customer experience as an outcome of the
interaction between the business and customers in a specified period. The result of the interaction
between the organisation and the business can be either positive or negative. A positive customer
experience is not only beneficial to the client, but also to the organisation as a whole. Further,
Biedenbach & Marell (2010) expound that a positive customer experience is essential for
customer’s recommendation and repurchasing. Based on Lemke, Clark & Wilson (2011)'s
definition, it is vital for all firms to prioritise customer satisfaction. The study's aim was to
investigate the effects of customer experience on customer's recommendation and repeated
purchase in the Chinese electronic industry. This chapter presents the literature review from the
work of the past authors related to this topic. The chapter is divided into five sections. The first
section introduces this chapter while the second section provides an overview of the customer
experience. Under the client experience section, the researcher reviewed the past literature on the
customer' recommendation and repeat purchase. The third section provides the theories of
consumer behaviour while the fourth section provides a review of the empirical studies on the
effects of customer experience on customer's recommendation and repeated purchasing. The last
section provides a comprehensive summary of the whole chapter.
2.2 Customer Experience
According to Maklan & Klaus (2011), a good customer experience can significantly increase
consumer spending, loyalty and customer's recommendation. However, to achieve an excellent
customer experience, Kamaladevi (2010) provides four distinct critical disciplines. Firstly, the
company must align its strategic approach to customer satisfaction. Secondly, the company must
understand customer needs and address them appropriately. Thirdly, the business needs to design
its products and services to match customer's expectations. Fourthly, it is essential for the
organisation to measure customer satisfaction through the analysis of customer feedback. As
noted earlier, the success of any business is reliant on the willingness of the customer to buy,
repurchase and recommend. The Chinese electronic market is not an exception. Good customer
experience is necessary in the Chinese electronic industry for various reasons. For instance,

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several firms are offering similar electronic products and they compete for customers. It implies
that those companies with a good customer experience will have a competitive edge. Shaw,
Dibeehi & Walden (2010) argue that more than 80% of the customers can prefer to pay more for
a product as long as they are served well. The first importance of a good customer experience is
that it improves satisfaction. Additionally, a positive customer experience fosters customer
loyalty, repurchase, increased sales revenue, customer referrals and churn reduction. Ling, Chai
& Piew (2010) also note that an enhanced customer experience is important because it builds a
positive customer relationship. The Chinese electronic industry has evolved over the past decade
to emerge as the best electronic market in the world (Conitzer, Taylor & Wagman 2012).
Innovations made in China are the key contributors to the tremendous growth of the electronic
industry. Therefore, customer experience is a significant factor in the determination of
organisational success.
2.2.1 Customers’ Recommendation and Repeat Purchases
As noted by Clottey, Collier & Stodnick (2011), customer satisfaction leads to customer's
recommendation and repeat purchases. A satisfied customer can recommend a prospective
customer to buy and repurchase a certain good or product. Kim & Lee (2010) defines customer’s
recommendation as a written or oral recommendation to a prospective client to go ahead and
purchase a good or service. Further, Solomon et al. (2014) expound that a satisfied customer
endorses a product or service because his expectations are met or exceeded. More importantly,
customer’s recommendation and loyalty are driven by product quality, good customer service
and a good experience. The same aspects of customer loyalty and satisfaction result to repeat
purchasing. According to Maklan & Klaus (2011), repeat purchase behaviour and customer’s
recommendation are influenced by three determinants namely brand loyalty, perceived quality
and emotional satisfaction. Kamaladevi (2010) claims that increasing the customer loyalty by 5%
can increase profitability by 20-80%. Profitability is a result of increased repeat purchases and
customer referrals. The consumer's judgement regarding the superiority of a service or product is
influenced by the perceived service quality (Shaw, Dibeehi & Walden, 2010). The client
compares the product’s perceived quality with his expectations. Palmer (2010) notes that
customer loyalty, customer recommendation and repeat purchasing are achieved when an
organisation exceeds customers’ expectation. According to Maklan & Klaus (2011), emotional
satisfaction plays a significant role in influencing customer's recommendation and repeat

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purchases. He further notes that emotional satisfaction creates a strong link between the
company's products and customers which result in loyalty, customer's recommendation and
repeated purchasing. The assertions of Maklan & Klaus (2011) are supported by Shaw, Dibeehi
& Walden (2010) who argue that emotional satisfaction differs from the general customer
satisfaction. Based on Shaw, Dibeehi & Walden (2010) arguments, there are two types of
customers; a satisfied customer and an emotionally satisfied customer. An emotionally satisfied
customer has a stronger attachment and connection to the company's products. However, a
satisfied customer only gets satisfaction from the company's products and services but lacks the
strong emotion, commitment and connection to the company. As noted earlier, the Chinese
Electronic industry has grown in leaps pounds and its success is entirely reliant on the customers'
willingness to purchase the products. Those companies that exceed customers' expectation have a
competitive edge. Profitability in the industry is significantly determined by customer's
recommendations and repeated purchasing. As expounded by Clottey, Collier & Stodnick
(2011), in the Chinese electronics industry, consumers are greatly influenced by the word-of-
mouth and in-store marketing. This differs from other markets such as the US where consumers
are typically captive to particular electronic brands. Clottey, Collier & Stodnick (2011)’s
arguments are supported by Kim & Lee (2010) who note that most of the electronic consumers
in the Chinese cities purchase products based on emotional aspirations and customer’s
recommendations. Therefore, most of the Chinese electronic firms tend to leverage on in-store
and the word-of-mouth marketing techniques when conveying product’s information to the
consumers. However, to succeed in the in-store and word-of-mouth marketing, a company must
ensure that its existing customers are emotionally satisfied to increase customer’s
recommendations and repeated purchasing.
2.3 Theories on Customers’ Behaviour
Solomon, Russell-Bennett & Previte (2012) note that the existing literature has put more focus
on consumer behaviour and consumer decision-making approaches. However, before the early
1950s, most researchers approached consumer behaviour only from the economic perspective
(Young et al., 2010). The most common approach that was used to evaluate consumer behaviour
was the utility theory model (UTM) which solely focused on the act of purchasing (Foxall,
2014). According to the UTM, a customer makes a choice based on his expectations regarding
the product or service. Based on the assumptions of the UTM, a customer is regarded as a

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rational decision-maker whose major concern is self-interest (Foxall, 2014). However, later
studies on consumer behaviour disagreed with the UTM’s assumption that a customer is rational
economic being. According to the contemporary studies, customer behaviour is not only
influenced by the purchasing act, but also customer recognition, purchase intentions, customer’s
recommendation and the evaluation of the available alternatives (Sheth, 2011). The four core
theories of consumer behaviour forwarded by the contemporary studies include: theory of buyer
behaviour, theory of reasoned action, theory of planned behaviour and the theory of trying
2.3.1 The Theory of Buyer Behaviour (TCB)
The first consumer decision-making model was developed by Howard in the year 1963 to
explain customer behaviour (Solomon, Russell-Bennett & Previte, 2012). Later in the year 1969,
Howard and Sheth improvised the consumer decision-making model into the theory of consumer
behaviour (TCB) (Sheth, 2011). According to TCB, environmental factors that influence
environment (Sheth, 2011). The TCB integrates the factors that influence consumer choice into
an interpretable information process. The major aim of the TCB was to help businesses interpret
and analyse various purchasing scenarios. The theory of buyer behaviour is made up of three
basic exogenous variables that determine the consumer behaviour as shown in Figure 1.
Figure 1: The Main Components of the Buyer Behaviour Theory.
Source: Sheth (2011).
The input variables entail various environmental stimuli such as significative stimuli, symbolic
stimuli and the social stimuli that the customer is exposed to. For instance, the significative
stimuli comprise of the actual components of brands, products and services confronted by the
consumers. The symbolic stimuli refer to the manner in which marketers and advertisers
represent products and brands to the consumer. On the other hand, the social stimuli refer to the
influence of friends, family members or reference groups. The consumer decision-making
process is influenced by the mentioned stimuli.

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The two categories of the intervening variables include the perceptual constructs and the learning
constructs (Sheth, 2011). The perceptual constructs comprise of information sensitivity,
perceptual bias and the information search. Information sensitivity is the extent that the
consumer can control the flow of information stimuli (Sheth, 2011). The perception bias is the
alteration of the of the existing consumer’s knowledge by the new information. The information
search refers to the activeness of the buyer in search of new information which influence
consumption choices. The buyer internalises both the input variables and the intervening
variables before making a decision to buy.
2.3.2 The Theory of ReasonedAction (TRA)
The early researchers developed a prescriptive cognitive model (PCM) which put more emphasis
on attitudes and beliefs that were viewed as the main determining factors of customers' buying
behaviour (Albarq & Alsughayir, 2013). According to Weisberg, Te'eni & Arman (2011),
individuals' overall attitudes toward objects are derived from their beliefs about the objects'
attributes. Later, the PCM was improvised to the theory of reasoned action (TRA) which
incorporated the assessment of consumer behaviour on addition to attitudes and beliefs (Albarq
& Alsughayir, 2013). According to the TRA, individuals' behaviours are approximated to be
equal to the behavioural intentions derived from consumers' attitudes towards the purchase of the
product. Similarly, the TRA acknowledges the assumption of the subjective norm, which is the
power of influencing others' behavioural intentions (Fishbein & Ajzen, 2011). The theory
implies that individuals have the power of influencing others to accept and acknowledge their
concepts. Based on the notion of consumer behaviour, a customer is motivated to purchase a
product or a service based on the view of others. However, Marshall et al. (2010) notes that in
some situations, a relative contribution of an attitude and a subjective norm may not necessarily
predict a consumer behaviour. Similarly, the influence on behavioural intention depends on the
propensity to caring about other people's beliefs, attitudes, product quality, perceived quality and
emotional satisfaction. The other significant attribute of TRA is that attitudes towards the act of
purchasing a product can be measured rather than simply having a positive attitude towards a
product (Dzewaltowski, 2010). Consumers can have the right attitudes towards products, but not
towards the acts of buying them. Based on the previous research findings, various empirical
studies have shown a higher correlation between attitudes towards behaviour to behavioural
intention. However, some researchers have disputed the high correlation arguing that it is due to

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unclear circumstances (Dzewaltowski, 2010). Despite the criticism, the TRA demonstrates that
the customer’s intention to purchase a product can be influenced by others. Therefore, customer
experience on customer’s recommendation and repeat purchasing can be greatly influenced by
attitude and the beliefs of others. The components of the TRA are shown in Figure 2.
Figure 2: Theory of Reasoned Action (TRA)
Source: Albarq & Alsughayir (2013).
2.3.3 The Theory of Planned Behaviour (TPB)
The theory of planned behaviour (TPB) extends the concepts of the theory of reasoned action
(TRA) but puts more emphasis on the intention to predict a behaviour. According to TPB, the
creation of a perceived behavioural control depends on the combination of perceived present
components that influence consumer behaviour (Shah & Mohamed Sayuti, 2011). Based on
various studies, the findings of TPB conclude that that factors that influence consumer
behavioural intentions are attitude and subjective norms (Han, Hsu & Sheu, 2010). The TPB is
considered superior to TRA because the empirical tests show that it has enhanced behaviour
predictability ability. The elements of the TPB are shown in Figure 3:

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Figure 3: Theory of Planned Behaviour (TPB).
Source: Han, Hsu & Sheu (2010).
Based on Figure 3, the consumer’ intention to buy behaviour is influenced by attitude, subjective
norm and the perceived controlled behaviour. Similarly, the behavioural, normative and the
control beliefs play a vital role in influencing the intention to buy. According to Ajzen (2011), an
individual's purchase intention can be influenced by those who already believe that a particular
product provides the perceived quality. However, other contemporary studies argue that both the
TPB and the TRA should be modified to incorporate more variables that can increase consumer
behaviour predictability. The major weakness of both TPB and the TRA is that consumer
behaviour's predictability is reliant on the researcher's capability to measure all attributes that
form attitude (Ajzen, 2011). Similarly, both the TPB and the TRA rely on the assumption that
extensive cognitive process is critical before a consumer makes a purchasing decision. This
assumption is challenged by Solomon et al. (2012) who argues that over-reliance on the
cognitive process neglects other influences that may result from spontaneity and emotions. The
pointed out limitations are vital in the context of Chinese electronic industry where emotional
satisfaction is considered as one of the key influencers of customer’s recommendation and repeat
purchase.
2.3.4 Theory of Trying (TT)
The theory of trying (TT) gives an alternative approach to other models such as the TPB and the
TRA (Carsrud & Brännback, 2011). The TT does not only examine consumer’s explicit
behaviour, but also assess the consumer’s act of trying to act. According to the TT, the

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consumer’s intention to try is determined by the subjective norm, expectation of success and
attitude towards the service or product (Carsrud & Brännback, 2011). Previous studies have
shown evidence that behaviour is a key influencer of consumer choice. Similarly, the TT
integrates behaviour as a key component that influences the choices made by the customer.
Figure 4 presents the elements of the theory of trying (TT)
Figure 4: Theory of Trying (TT)
Source: Carsrud & Brännback (2011).
According to Sandve & Øgaard (2013), besides behavioural intentions, the theory of trying
emphasises that a consumer can have a behavioural goal in various situations, which he expects
to fulfil. However, Carsrud & Brännback (2011) note that in the modern business context, the
theory of trying is mostly applied in the health-related decisions compared to retail consumption.
Despite this, the theory puts forward an important aspect of consumer behaviour that is the act of
trying to purchase or repurchase a product. The goal-directed behaviour is essential in
influencing consumer decisions because of the desire of trying to act. According to Carsrud &
Brännback (2011), desire is a stronger variable and predictor of the behaviour intentions than
other variables such as attitude, subjective norm or behavioural control. For instance, in the

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Chinese electronic industry, the desire to purchase related electronic products is likely to
influence consumer behaviour compared to subjective norm and attitudes. The main limitation of
the goal-directed behaviour model is its complexity in interpretation. However, when compared
to the TPB and TRA, the theory of trying puts more focus on the goal-directed behaviour which
has a higher predictability of the consumer behaviour.
2.4 Empirical Studies on Effects of Customer Experience on Customers’ Recommendation
and Repeat Purchases
2.4.1 Impacts of customers’ experience on customer’s recommendation
According to Young et al. (2012), positive customer experience results from emotional
satisfaction that impacts positively on customer loyalty. The empirical study carried by Jansson-
Boyd (2010) suggest that there is a strong relationship between customer satisfaction, customer
loyalty and profitability. The study utilised a data set comprising 1,200 retail customers from 59
firms and used regression analysis in examining the relationships among customer satisfaction,
loyalty and profitability. The results showed consistency among the multiple measures under
consideration that revealed that there is a strong relationship among customer satisfactions,
customer loyalty and profitability. The strong relationship between the three tested variables also
implies that a positive customer experience results in increased profits. The increased
profitability is due to customer satisfaction that leads to customer retention, repeat purchase and
customer's recommendations (Zarantonello & Schmitt, 2010). However, despite showing that a
positive customer experience increases customer loyalty, the study failed to identify the
endowment effect, brand reliability and the impact of customer experience on customer
switching. Similarly, the past literature has associated customer loyalty and satisfaction with
affordability and product quality (Gössling et al., 2012). Not much has been done to investigate
the impact of positive customer experience on brand reliability. According to Van Doorn et al.
(2011), customer's recommendations can have a strong correlation to brand reliability. However,
more research is needed to show precisely how customer experience on customer's
recommendation impacts on brand reliability. Therefore, there is an existing gap that need to be
addressed in the current and future studies relating to the effects of customer experience on
customer's recommendation to help management understand how brand reliability can lead to
increased sales.
Palmer (2010) notes that much of the existing literature has solely concentrated on the impact of
customer satisfaction on loyalty, but little has been done to investigate the impact of customer

15
experience on the intention to switch. Similarly, Liu, Guo & Lee (2011) argues that the few
studies that have tried to investigate the impact of customer experience on switching intention
only link it to customer satisfaction. However, most of the past literature agree that customer
satisfaction can significantly influence the likelihood of customer's recommendation and
repurchase intentions. This is in line with the theory of consumer behaviour which argues that a
favourable customer attitude can increase the intention to buy. Similarly, the theory of buyer
behaviour notes that positive attitude and beliefs regarding a certain product can greatly
influence others in purchasing similar products (Yuksel, Yuksel & Bilim, 2010). Based on the
theories of consumer behaviour, customers recommend others to purchase similar products
because they have already experienced the perceived quality. However, there is no clear linkage
on how customer recommendation influence customer switching. Kumar (2010) conducted a
research on the impact of customer satisfaction on customer switching and loyalty in the banking
industry. The study utilised the questionnaire method based on the survey method in which 120
respondent customers participated. Based on the research findings, it was noted that customer
satisfaction was the major determinant of customer switching. It implies that the rate of customer
switching is high whenever a client is dissatisfied. However, the study fails to link customer
switching to the customer experience on recommendations. As noted earlier under the theories of
consumer behaviour, attitudes, beliefs and subjective norms greatly influence the behaviour of
others. The current research literature does not precisely show the impact of customer experience
on recommendations on customer switching. Zhao et al. (2012) argue that dissatisfied customers
can turn away prospective clients from the company. Therefore, there is a high likelihood that
consumer’s attitudes, beliefs and subjective norms have either direct or indirect impact on
customer switching. This research aims at investigating how the customer experience on
customer’s recommendation can influence customer switching. From a snapshot point of view,
Hernández, Jiménez & Martín (2010) note that a customer with negative attitude and beliefs
regarding a particular product can greatly demotivate a prospective client from purchasing a new
product by 70-90%. It is critical to carry out an extensive research to investigate how customer's
experience on recommendation influence customer switching.
Additionally, numerous researchers have put a little effort into investigating how customer
experience on recommendation affects the endowment effect. Previous studies have focused on
the impact of customer loyalty and customer satisfaction on sales (Oliver, 2014). Therefore,

16
many firms have taken an assumption that customer experience correlates to loyalty while
ignoring the impact of customer’s recommendation on the endowment effect. Based on the
current literature, many firms believe that the best way of achieving customer loyalty is through
the provision of affordable prices and product quality. The research conducted by Nam, Ekinci &
Whyatt (2011) on the impact of customer recommendation and customer feedback on sales
revealed that higher customer ratings translated to increased sales revenue. The study majorly
shows the linkage of customer experience on recommendation and increase in sales revenue. On
this view, many firms are devoting much effort in managing customer feedback as the best way
of passing information about their products. Therefore, this shows that much need to be done to
help management understand the impact of the endowment effect that result from customer
experience on the recommendation. This research will attempt to fill this gap by identifying the
possible ways customer's recommendation affects the endowment effect. The endowment effect
is the feeling of ownership that is developed by the consumer. For instance, instead of the client
saying that he is going to purchase a laptop, he will simply say "Am heading to buy my Lenovo
laptop". This clearly demonstrates that the consumer trusts Lenovo than any other brands in the
market because he has endowment effect on it.
2.4.2 Impacts of customers' experience with repeat purchases
The majority of the previous studies have linked repeat-purchase to loyalty programmes. As
noted earlier, customer loyalty is influenced by emotional satisfaction. Many firms have
employed loyalty programmes based on the previous research findings to increase repeat
purchase intentions. Hong & Cho, (2011) expound that the commonly used loyalty programmes
include discounts, credit buying, use of simple redeemable points system and tier system.
Further, Oliver (2014) notes that financial returns greatly depend on the increase in the market
share that result from repeat purchases. Therefore, most of the existing literature agree that a
positive customer experience can result in increased sales. In a competitive market such as the
Chinese electronic industry, customer loyalty programmes are vital to gaining competitive
advantage. Based on the research conducted by Hernández, Jiménez & Martín (2010), the
replication and extension of repeat purchase are directly linked to the loyalty programmes. The
study relied on 592 respondents who were requested to provide their respective experiences on
product purchases. The closed-ended questionnaire method was used and the findings were
interpreted using statistical techniques. The higher scores indicated that repeated purchasing

17
resulted from customer loyalty programmes. Many other researchers have emphasised that repeat
purchase is results from customer loyalty. However, the studies fail to show the impact of
customer's experience on brand reliability. Rahbar & Abdul Wahid (2011) note that customer
loyalty alone does not result to repeat purchasing. The assumption undertaken by many firms is
that repeat purchasing is majorly linked to customer loyalty, thus ignoring other vital aspects
such as brand reliability. Very few studies have discussed brand reliability as the outcome of
customer’s experience on repeat purchasing. Sheth (2011) notes that brand reliability is an
outcome of emotional satisfaction, customer loyalty, customer recommendation and repeat
purchasing. However, most of the researchers have failed to show how brand reliability is linked
to customer's experience on repeat purchasing. This study will fill the identified existing gap by
investigating how customer's experience on repeat purchasing impact on brand reliability.
Young et al. (2010) postulates that repeat purchasing greatly depends on consumer behaviour
and the level of satisfaction. The repeat purchase intention is significant to the company's
profitability targets because it determines the number of purchases made during a particular
period. The research conducted by Solomon (2012) reveals that negative customer experience
results to buyer's remorse that greatly reduces the repeat purchase behaviour. The consumer's
remorse is a feeling of regret resulting from dissatisfaction after purchasing a certain product.
The study investigated the impact of buyer's remorse on the repeat purchase intentions. The
researcher employed qualitative methodology in which semi-structured interviews were used. A
sample of 400 employees was randomly selected from five companies. The findings revealed
that consumer's remorse has a negative impact on repeat repurchase intentions because most of
the respondents indicated that they will not repurchase the same product that initially dissatisfied
them. To a greater extent, the study helped to show a linkage between buyer's remorse and
customer switching. However, the aspect of customer's experience on recommendation was
ignored. As noted earlier, repeated purchasing behaviour is greatly influenced by the attitudes
and beliefs of others. Therefore, much need to be done on investigating how customer experience
on repeat purchases influence customer switching. Similarly, the current literature does not
clearly show how customer experience on repeat purchasing influence the endowment effect.
Much concentration is diverted to satisfaction-retention relationships. In the effort to achieve
satisfaction-retention relationships, many researchers have diverted their intentions on the factors

18
driving consumer satisfaction (Conitzer, Taylor & Wagman, 2012). However, the influence of
customer experience on the endowment effect has been ignored.
Based on the existing literature, there are three basic inconsistencies identified regarding
customer experience on recommendation and repeat purchase (Palmer, 2010). Firstly, the
existing literature has put more emphasis on customer loyalty as the key impact of customer
experience on recommendation and repeat purchase. However, the effect of customer
recommendation and repeat purchase on brand reliability has been ignored. Secondly, the
previous researchers' findings on customer switching are inadequate because little has been done
to link customer switching to customer's recommendation and repeated purchasing. Many studies
conclude that customer switching is majorly influenced by the buyer's remorse. Thirdly, the
endowment effect has not been associated with the customer experience on recommendation and
repeat purchasing. Therefore, this study's main aim is to address the identified inconsistencies to
help management formulate strategies that will help the firms in the Chinese electronic industry
to generate more sales.
2.5 Summary
The previous literature review indicates that positive customer experience is significant for any
business that anticipates increasing its profitability. Customer recommendation and repeat
purchasing result from loyalty and the perceived product quality. Customer's recommendation is
a written or oral recommendation to a prospective client to go ahead and purchase a good or
service. Repeat-purchase intention is greatly influenced by emotional satisfaction. Based on the
existing literature, the four core theories of consumer behaviour are the theory of buyer
behaviour, the theory of reasoned action, the theory of planned behaviour and the theory of
trying. According to the theory of buyer behaviour, environmental factors that influence
environment. The theory of buyer behaviour integrates the factors that influence consumer
choice into an interpretable information process. The major aim of the theory of the buyer
behaviour is to help a consumer to analyse various purchasing scenarios to make the right choice.
The theory of planned action puts more emphasis on attitudes and beliefs that were viewed as the
main determining factors of customers' buying behaviour. Further, the theory of planned action
shows that individuals' behaviours are approximated to be equal to the behavioural intentions
derived from consumers' attitudes towards the purchase of the product. The theory further

19
acknowledges the assumption of the subjective norm that is the power of influencing others'
behavioural intentions. Based on the theory of trying, the consumer's intention to try is
determined by the subjective norm, expectation of success and attitude towards the service or
product. Previous studies have shown evidence that behaviour is a key influencer of consumer
choice. It is also vital to note that the existing literature has focused on profitability and customer
loyalty as the key impacts of customer experience on recommendation and repeat purchase.
However, the previous literature has not focused on customer experience and customer's
recommendation impact on brand reliability, customer switching and the endowment effect. This
study will address the current gap by closing investigating how customer experience on
recommendation and repeat purchasing influence brand reliability, customer switching and the
endowment effect.
Chapter 3:
Methodology
3.1 Introduction
The method selected is very critical in determining the success of any study because the research
findings are reliant on the methodology (Flick, 2015). According to Pickard (2012), the use of
inappropriate methodology can lead to misleading research findings. This chapter provides an
overall methodology that was used by the researcher to achieve the research objectives. The
research hypotheses were formulated based on the literature review and the core objectives of
this research. The formulation of the research questions was also based on the core objectives of
this research. This chapter also presents the research philosophy, approach, strategy and the
research design that was used to attain the core objectives of this research. The chapter also
presents the methods used to collect data. Data analysis techniques are also explained in detail.
The last section provides a comprehensive summary of the whole chapter.
3.2 The Formulation of Hypotheses
Creswell (2013) defines the research hypotheses as speculative statements made by a researcher
concerning the possible outcome of the study experiment. Further, Punch (2013) argues that it is
possible to formulate research hypotheses from the reviewed literature. There are three specific
reasons why research hypotheses are critical in this research. Firstly, as noted by Punch (2013),
researchers that do not have hypotheses are like sailors in the sea without a compass. The
researcher used the formulated hypotheses as a guide to achieving the study objectives.

20
Secondly, the hypotheses help the researcher in highlighting the cause of the problematic
situation under study. Thirdly, as argued by Rossi, Wright & Anderson (2013), by using the
hypotheses, the researcher can accurately and precisely conduct a scientific research because
they help in separating the irrelevant observations from the relevant ones. Considering the
existing literature, more emphasis has been put on how customer experience impacts on the
company’s profitability and the level of loyalty (Zhao et al. 2012). The literature also shows that
a good customer experience can increase repurchase intentions and customer recommendations.
Similarly, the theories of consumer behaviour show that the customer’s perception towards a
product or service is influenced by attitude, beliefs and the perceived quality. A negative
customer experience can adversely affect the company's profitability because it will reduce
loyalty, repurchase intentions and customer's recommendations (Zhang et al., 2011). Just like
any other market, in the Chinese electronics industry, customers’ intentions to repurchase and
recommend greatly rely on the perceived service quality, attitudes and beliefs (Zhang, Dixit &
Friedmann, 2010). When studying the impact of customer experience on customer's
recommendation and repeat purchases, it is essential to consider brand loyalty, customer
switching and the endowment effect. As noted in the literature review, the past literature has put
more focus on profitability and customer loyalty levels. However, to help management improve
its efficiency in customer experience, it is essential to study and investigate how customer's
recommendation and repeat purchasing affects brands reliability, customer switching and the
endowment effect. Brand reliability, customer switching and the endowment effect if not well
managed can impact negatively on the overall profitability of any firm operating in the Chinese
electronic industry (Zarantonello & Schmitt, 2010). Therefore, the firms must focus on
emotionally satisfying their customers to create strong relations between them and their brands.
Similarly, emotional satisfaction can greatly reduce customer switching and increase the
endowment effect. Based on the presented arguments, the researcher formulated three
hypotheses as shown below:
Hypothesis 1:Brand reliability increases as a result of positive customer experience on
customer’s recommendation in the Chinese electronic industry
Hypothesis 2: Good customer experience on recommendation increases the endowment effect in
the Chinese electronic industry.

21
Hypothesis 3:Reduction in Customer Switching is dependent on good customer experience on
repeat purchase in the Chinese electronic industry.
3.3 ResearchQuestions
1. How does customer experience on recommendation impact on brand reliability in the Chinese
electronic industry?
2. How does customer experience on recommendation impact on the endowment effect in the
Chinese electronic industry?
3. How does customer experience on repeat purchase impact on customer switching in the
Chinese electronic Industry?
3.4 ResearchPhilosophy
According to Rossi, Wright & Anderson (2013), research philosophy is a vital segment in
research methodology because it helps the researcher to effectively and appropriately collect
data. As defined by Bunniss & Kelly (2010), research philosophy entails the development of
knowledge on how the research should be conducted. There are two specific reasons why the
researcher had to understand the research philosophies before collecting data. Firstly, the
research philosophy selected guides the researcher on which specific methods are used in
collecting and analysing data (Bunniss & Kelly, 2010). Secondly, understanding the research
philosophy helps the researcher to enhance his creativity required in the exploration of the
methodology. The two most common types of research philosophy are positivist and interpretive
philosophy. Bunniss & Kelly (2010) note that a researcher must understand the differences
between the research philosophies to effectively and appropriately select the research
methodology. According to the positivist philosophy, generalising, quantifying observations and
evaluating results is done using statistical methods (Al-Habil, 2014). Similarly, positivism
philosophy is based on explanations, tangibility and objectivity. Further Al-Habil (2014) notes
that positivism philosophy is highly reliant on a structured methodology and it is frequently used
in the natural sciences. The researcher in this study adopted the positivism philosophy because
the research findings were evaluated using the statistical methods. Based on the motives of this
study, the researcher aimed at investigating the impact of customer experience on customer's
recommendation and repeat purchase. The observable facts under study were brand reliability,
customer switching and the endowment effect that were measured using the ordinal numbers.
The scores were ranked using the Five Likert scale and were analysed using the descriptive

22
statistics. There are three specific benefits that are attributable to the use of the positivism
philosophy. Firstly, the positivism philosophy helped the researcher to verify empirically the
research findings, thus making them more reliable (Saunders & Lewis 2012). Secondly, the
positivism philosophy helped the researcher to remain objective because the study required
adherence to a highly structured methodology. Thirdly, the positivism approach played a critical
role in enabling the researcher to establish a cause and effect relationship. On the other hand,
interpretive philosophy is based on understanding and belief that the social world of business is
highly complex and cannot be formulated in the social science (Saunders & Lewis 2012).
Therefore, the interpretive philosophy was inappropriate for this study because it required
generalisation and data quantification to generate the research findings. The interpretive
philosophy is largely based on meanings, introspection and gaining understanding, but this study
was based on data quantification and statistical evaluation. As compared to interpretative
philosophy, the positivism philosophy was the most appropriate in this study.
3.5 ResearchApproach
Holstein & Gubrium (2013) expound that a research approach is majorly based on the selected
research philosophy. The two common research approaches are deductive and inductive
approaches. Table 1 provides the differences between inductive and deductive approach.
Table 1: Inductive Vs. Deductive Research Approaches
Deductive Approach Inductive Approach
The Main objective is to test a theory Aimed at generating a new theory
Begins with hypotheses Begins with research questions
More focus on causality More focus on exploring new phenomenon
Source: Holstein & Gubrium (2013)
Saunders et al. (2011) argue that in the inductive approach, a researcher will first collect data that
is relevant to his topic of study. After collecting the required data, the researcher will check the
data patterns to help him in generating theories that can explain the identified patterns. Figure 2
provides a summary of the steps required when using the inductive research approach.
Figure 5: Inductive Approach

23
Source: Saunders et al. (2011)
As shown on both Table 1 and figure 2, the inductive approach is aimed at generating a theory to
explain the phenomena. Similarly, the inductive approach begins with the research questions
rather than the hypotheses (Saunders et al., 2011). Further, the inductive approach puts more
emphasis on the exploration of new phenomenon or using the previous phenomenon to explain a
concept.
On the other hand, the deductive research approach reverses the steps outlined under the
inductive research approach (Easterby-Smith, Thorpe & Jackson, 2012). In most cases, the
researchers using the deductive approach begins with social theories whose data implications are
tested to determine their reliability. The deductive approach is associated with scientific
investigations (Creswell, 2012). Deductive researchers study the existing literature out of which
they formulate the hypotheses. The hypotheses are tested using descriptive statistics. Figure 3
provides the steps followed when conducting research using the deductive approach.
Figure 6: Deductive Research Approach
Source: Creswell (2012)
As noted earlier, the research approach selected is based on the selected research philosophy.
The inductive approach is based on interpretivism or phenomenology while the deductive
approach is associated with natural sciences that are based on positivism (Collis & Hussey,
2013). Based on the requirements of this study, the researcher aimed at empirically testing the
observations using the descriptive statistics. Similarly, the researcher used the existing literature
and theories to formulate the research hypotheses. The hypotheses were analysed and empirically
tested to generate the research results. Since this research was quantitative, it was essential for

24
the researcher to adopt the deductive approach. The quantitative research puts emphasis on the
specific variables, numbers and figures (Creswell, 2013). The deductive approach also helped the
researcher in establishing the causal and effect relationship between the variables and how they
impact on customer experience on recommendation and repeat purchasing in the Chinese
electronic industry. The inductive approach was not appropriate for this study because it is based
on interpretivism phenomenology. Unlike the deductive approach, Table 1 shows that the
inductive approach aims at generating new theories to explain the phenomena. Additionally, the
inductive approach begins with research questions and focuses on exploring the new phenomena.
Therefore, based on the objectives of this study, the deductive approach was the most appropriate
approach as opposed to the inductive approach.
3.6 ResearchStrategy
Ary et al., (2013) explain that using an appropriate research strategy is critical in answering and
addressing the study questions. The three common research strategies are experimental, case
studies and surveys. Each research strategy is applied based on the research approach and the
philosophy used. However, Tashakkori & Teddlie (2010) argue that in some situations, it is
possible to use surveys in case studies. Experimental research strategy shows the link between
the independent and interdependent variables (Tashakkori & Teddlie, 2010). As noted by Babbie
(2015), experimental research strategy is commonly used in exploratory studies to answer the
questions ‘why’ and ‘how’. The survey research strategy is used by those researchers who use a
large amount of the collected data from the selected samples. The survey research strategy is also
used to collect the quantitative data that is analysed using either the inferential or descriptive
statistics (Babbie, 2015). The case study is the most common traditional research strategy that is
commonly in the social sciences. This research aimed at studying the impact of customer
experience on recommendation and purchase in the Chinese electronic industry. The researcher
collected large quantitative data using the online questionnaires. The collected data was analysed
using the descriptive statistics. Therefore, based on the nature of this research, the researcher
adopted the survey research strategy. The experimental and case study research strategies were
not used because they are majorly used in exploratory studies. Exploratory studies are associated
with phenomenology in qualitative research where only a small amount of data is collected and
analysed (Babbie, 2015). However, this study involved the collection of a large amount of data
from the sampled customers that was quantitatively analysed.

25
3.7 ResearchDesign
As noted by Tashakkori & Teddlie (2010), to successfully attain the research objectives, the
researcher needs to determine effectively the study design. According to Tashakkori & Teddlie
(2010), the researcher must weigh the benefits and disadvantages of using each research design
before settling on the most appropriate. There are various research designs that the researcher
must be aware of before attempting to conduct research. The two common research designs are
exploratory and descriptive research designs (Tashakkori & Teddlie, 2010). In the exploratory
research design, the aim of the researcher is to generate a new hypothesis and more focus is
diverted to exploring the new phenomena (Creswell, 2013). On the other hand, the descriptive
research design is categorised into the case study and statistical methods. The case study method
is highly employed in the commerce industry. The aim of the case study method is to establish
the cause and result of the phenomena (Creswell, 2013). The statistical method is majorly used in
descriptive studies that involve quantitative data analysed using the statistical and mathematical
techniques. The nature of the research greatly determines the type of research design to be used.
This study aimed at investigating the impact of the customer experience on recommendations
and repeated purchasing in the Chinese electronic industry. As mentioned earlier, the three
variables under investigation are the brand reliability, customer switching and the endowment
effect. The data was collected using questionnaires and analysed using statistical methods.
Therefore, based on the nature of this research, the most appropriate research design was
descriptive.
3.8 Data Collection Methods
Research Findings are greatly influenced by the method used to collect data (Kim, 2015). Based
on the research requirements, data can be collected using either primary or secondary sources.
The secondary data is readily available from the existing published and unpublished materials.
The published materials can include books, journals and the periodicals (Kim, 2015). The
unpublished material may include the available information from the online sources and recorded
tapes. However, Turpin, Asano & Finlayson (2015) note that it is sometimes impossible to
acquire secondary materials required on specific research topics. Therefore, despite the
availability, the secondary sources may not be always reliable. Additionally, Creswell (2013)
notes that secondary information is poorly arranged making it unreliable for primary researchers.
The primary researchers follow a complex and strict procedure when verifying the sources of
data collection (Creswell, 2013). For instance, primary researchers scrutinise data sources to

26
verify their reliability. Secondary data cannot be easily scrutinised or verified, thus making it
impossible to be used in this research. The research aimed at investigating the impact of
customer experience on customer's recommendation and repeat purchase. The three variable
under study were brand reliability, customer switching and the endowment effect. The researcher
collected data using online questionnaire that is a primary source. The primary method of
collecting data was the most optimal for achieving the core objectives of this research.
Additionally, the researcher had extensive experience in primary data collection methods which
made it more relevant to this research. There are various benefits of using the primary sources of
data. Firstly, the researcher had full control of the method of collecting the data that suited the
research objectives. Unlike the primary data, the researcher had a maximum choice and control
of the data that was analysed to meet the objectives of this research. Secondly, the researcher
achieved higher levels of accuracy that he could not have attained if the secondary data was
used. Thirdly, the researcher opted to use online questionnaires that were faster, cheaper and
accurate. Similarly, it is quicker to analyse data collected from the online questionnaires.
According to Zikmund et al. (2012), online questionnaires are flexible because the researcher can
change the questions anytime to fit his requirements. Further, Zikmund et al. (2012), note that
the researcher can be more selective because he can screen participants only to select those who
match research profile. Lastly, the online questionnaire as a data collection tool provides
standardised responses that are easier to analyse using statistical methods. Despite the many
benefits of using the primary data, the researcher encountered one key challenge. The researcher
did not get an opportunity to interact face to face with the participants. However, this did not
hinder the researcher from attaining valid information that enabled him to achieve the core
objectives of this research. Additionally, the use of online questionnaires was superior to other
primary sources such as the interview because they only target a small population.
3.9 Description of Data
The customers were randomly selected from the five Chinese cities with the highest
concentration of electronic products. Customers were randomly selected from the cities of
Beijing, Shanghai, Guangzhou, Hong Kong and Tianjin. A total of 180 customers were targeted.
50 customers were selected from Beijing, 30 from Shanghai, 40 from Hangzhou, 30 from Hong
Kong and 30 from Tianjin. Participants were customers of the following electronic companies

27
Huawei, Lenovo, TCL, Konka and ZTE. The respondents were contacted using the email
addresses and phone calls.
3.9.1 Huawei
Huawei is one of the biggest private electronic companies in China belonging to the
telecommunications and equipment sector (Lee, Xiang & Kim, 2011). The company was
founded in the years 1987 with its headquarters in China. The company has both Chinese and
international customers. The products provided to the customer by the Huawei are smartphones,
mobile, broadband networks and tablet computers among others with a total revenue of US$4.5
billion in2014 indicating the large customer base the company holds (Liu & Agbola, 2014).
3.9.2 Lenovo
Lenovo is among the biggest public electronic companies in China whose headquarters are in
Beijing. The company belongs to the computer hardware and electronics. The company serves
both the Chinese and the international market (Lee, Xiang & Kim, 2011). The key products of
Lenovo are smartphones, storage devices, tablets, printers, televisions among others. At the end
of 2014, the company's total revenue amounted to US$46.3 billion which is a reflection of the
large customer base the company has both in China and internationally (Liu & Agbola, 2014).
3.9.3 TCL
TCL is a public electronics company headquartered in Huizhou China. The company serves both
Chinese and International customers. The key products of TCL are televisions (TV) sets, mobile
phones and the video Cameras. At the end of 2014, the company had a total revenue of US$16.4
billion which shows that the company has a significant customer base in China (Liu & Agbola,
2014).
3.9.4 Konka
Konga is a public company in China founded in the year 1980. The headquarters of Konka is at
Shenzhen in China. The company operates in the electronic company and it majorly serves the
Chinese market (Lee, Xiang & Kim, 2011). The company's products include television sets, set-
top boxes, refrigerators and other related products.
3.9.5 ZTE
The ZTE a public electronic company trading on the Chinese Stock Exchange. The company
belongs to electronic industry and networking equipment. The company started in the year 1985
and its key products are smartphones, hardware, software, computers, and tablets among others
(Lee, Xiang & Kim, 2011). The company serves both the Chinese and international market. At

28
the end of the year 2014, the company recorded a revenue of US$ 81.7 billion. This revenue
amount is an indication of the large customer base that the company holds (Liu & Agbola, 2014).
3.10 Data Analysis
Kim (2015) defines data analysis as the process that uses statistical and mathematical techniques
to systematically recap, describe, evaluate and condense data. Further, Kim (2015) expounds that
the process used to analyse data influences the research outcome. This research’s core objective
was to investigate the impact of customer experience on customer’s experience on repeat
purchase. The researcher used deductive approach and online questionnaires to collect data. The
researcher adopted the quantitative data analysis in which the statistical techniques were applied.
The descriptive statistics used made the research findings more convincing and appealing. To be
more specific, the researcher utilised the measure of the central tendency (Mean) in analysing
data. The customers who participated in this study ranked their responses regarding the particular
variables on the Likert-scale whose score were from 1-5. The measure of central tendency was
the most appropriate because most of the data was distributed normally. Turpin, Asano &
Finlayson (2015) argue that descriptive statistics presents data in a more convincing,
understandable and meaningful way. The inferential statistics is used when the data required for
analysis is not fully available. However, based on this research, the data was fully available and
that is the reason the researcher adopted descriptive statistics.
3.11 Chapter Summary
This chapter presented the methodology employed by the researcher to achieve the core
objectives of this research. Three hypotheses were formulated based on the existing literature.
The research philosophy adopted was positivism because this was a quantitative research. The
researcher in this study adopted the positivism philosophy because the research findings were
evaluated using the statistical methods in which the mean was used. The research utilised
deductive approach. The deductive approach helped the researcher in establishing the causal and
effect relationship between the variables and how they impact on customer experience on
recommendation and repeat purchasing in the Chinese electronic industry. The three research
strategies discussed were the survey, case study and experiment. This study adopted the use of
the survey strategy because the researcher collected a large amount of quantitative data that was
analysed using the statistical methods. Similarly, the researcher adopted the use descriptive
research design. Primary sources were used to collect data. The online questionnaires were used
because of flexibility and the researcher could change the questions anytime to fit his

29
requirements. Further, the researcher was more selective because screened participants only to
select those who matched research the profile. The secondary data was not used because of its
unreliability and it could not be easily scrutinised or verified. Additionally, the secondary data
was not used because its information is poorly arranged making it unreliable for primary
research.
Chapter 4:
Data Analysis and Presentation
4.1 Introduction
According to Kim (2015), data analysis is the process of simplifying data into constituents that
can be readily observed and interpreted. This research aimed at investigating the impacts of
customer experience on customer's recommendation and repeat purchase in the Chinese
electronic industry. Based on the goal of this research, the process of data analysis ensured that
all the three formulated hypotheses were testable. This chapter presented the overall research
findings and the structure, which was adopted by the researcher in achieving the key objectives.
As noted by Kim (2015), the process of data analysis involves interpreting data to uncover any
hidden trends with an aim of establishing statistical relationships that can be observed and
interpreted easily. This chapter has five main parts. The first section introduces the chapter and
provides the overall structure adopted by the researcher to achieve the research objectives. The
second and third sections present the sample description in which the gender, age bracket,
education level, marital status, monthly income and occupational ranking are discussed in detail.
The fourth section provides a detailed discussion of the analysed data to test the research
hypotheses while the last section provides the comprehensive summary of the chapter.
4.2 Description of the Sample
The researcher only concentrated on China since this research aimed at investigating the impact
of customer experience on recommendation and repeat purchasing in the Chinese electronics
industry. It is, therefore, clear that the researcher targeted electronic customers who live in
China. The 180 sampled customers resided in cities such as Beijing, Shanghai, Guangzhou,
Hong Kong and Tianjin. The mentioned cities also had a high concentration of electronic
companies such as Huawei, Lenovo, TCL, Konka and ZTE. The data was mainly collected using
the online questionnaire attached in the appendix. Since the customers were sampled using the

30
online questionnaire, the geographical limits did not hinder the researcher from reaching the
target population. More than 90% of the sampled customers had purchased various electronic
products from the mentioned electronic companies. Therefore, the customers had the required
experienced on customer recommendation and repeat purchasing in the Chinese electronic
industry. The answers provided by the participants were reliable and honest since the answering
of the questions was voluntary. More than 500 participants showed the interest in participating in
the online survey, but the researcher had to narrow down the number to 180. The researcher
screened the participants to match the study profile age, gender, marital status, education level,
monthly income and occupational ranking. The researcher also ensured that the participants had
customer experience on Huawei, Lenovo, TCL, Konka and ZTE, which are some of the biggest
electronic firms in China. The questionnaires were administered electronically to the 180
respective respondents who were the target of this study. Interestingly, out of the 180
electronically distributed questionnaires, 175 were all filled and returned representing 97.2%.
The 2.8% percent of the unreturned online questionnaires was insignificant and could not affect
the study results.
4.3 Profile of Respondents
4.3.1 Gender
Out of the 175 participants who successfully filled and returned the online questionnaires, 95
were male, and the rest were female. Therefore, the male participants represented 54.3% of the
targeted population while 45.7% represented the female. Table 2 and Figure provides the
summary of gender representation in this research.
Table 2: Gender
Gender Category Number of Participants Percentage
Male 95 54.3%
Female 80 45.7%
Source: Author.
The results of Table 2 are summarised in Figure 7 as shown below:

31
Figure 7: Pie Chart Representing Gender Participants
Source: Author
The difference between male and female participants was 8.6% that was insignificant. Therefore,
the difference in gender representation did not influence the study outcome in this research.
Based on research conducted by Clottey, Collier & Stodnick (2011), in China, the percentage of
the male gender is slightly higher (51.2 %) than that of the female that stand at 48.8%. On this
view, the researcher was able to achieve the gender balance, which ensured that the research
findings were not biased.
4.3.2 Age Groups
The target sample comprised of different age groups to ensure that all categories of the electronic
customers participated in this research. Therefore, the selected age groups composed of ages 15-
24, 25-54 and above 65. However, the majority of the respondents (45.7%) belonged to the age
group 25-54 followed by age group 55-64 that represented 25.7% of the total respondents. Those
participants who belonged to age group 14-24 comprised of 20% of the total sampled population.
Those customers who were above 65 years old represented 8.6% of the entire study sample.
Table 3 and figure 8 provides a summary of the age groups of the customers who participated in
this research.
54%
46%
0%0%
Respondents' Gender Representation
Male
Female

32
Table 3: Age Groups
Age Group Number of Participants Percentage
15-24 35 20%
25-54 80 45.7%
55-64 45 25.7%
65 and Above 15 8.6%
Source: Author
The results presented in Table 3 are summarised in Figure 8.
Figure 8: Respondents’ Age Groups
Source: Author
4.3.3 Occupations
The target sample comprised of the employed, unemployed and students. All the participants in
Age group 14-24 were students in high schools, colleges and universities. Those under age group
25-54 were employed in both public and private institutions. The majority of those participants
in age-group 55-64 were self-employed while those above age 65 were unemployed or had just
retired from their respective jobs. The researcher took into consideration of the occupational
ranking to compare their varying customer experiences on recommendation and repeat purchase
in the Chinese electronic industry. Table 4 and Figure 9 provides the summary of the
respondents' occupational ranking.
22%
49%
28%
1%
Respondents' Age Groups
15-24
25-54
55-64
65 +

33
Table 4: Occupational Ranking
Occupation Number
Employed 80
Self Employed 45
Students 35
Unemployed 15
Source: Author
The results of Table 4 are also summarised using Figure 9.
Figure 9: Respondents’ Occupational Ranking
Source: Author.
4.3.4 Marital Status
The respondents as well were categorised based on their marital status. 23 of the respondents
were married, 150 were single while 2 were divorced. Figure 10 illustrates the respondents’
marital status in terms of percentages.
46%
26%
20%
8%
Respondents' Occupational Ranking
Employed
Self-Employed
Students
Unemployed

34
Figure 10: Respondent’s Marital Status
Source: Author
Based on Figure 10, the majority of the respondents were single representing 86% of the entire
target market. The married respondents were the second with a representation of 13%. A subtle
group of the respondents comprised of the divorced individuals with a representation of 1%. As
explained by Clottey, Collier & Stodnick (2011, the young and single Chinese have a higher
affinity to fashionable electronic products as opposed to the married and the aged. Additionally,
the married also go shopping electronic products for themselves and their children. The balanced
marital status based on the level of affinity to purchasing electronic products in China helped the
researcher to get unbiased data.
4.3.5 Education Level
It was critical for the researcher to profile the respondents based on their education level. The
Educational level was divided into three categories namely high school level, diploma and
university levels. 60 respondents had the university education, 80 with diploma education, and
the rest had the secondary school education. The respective percentages of each participants'
level of education are shown in figure 11.
86%
13% 1%0%
Respondent's Marital Status
Single
Married
Divorced

35
Figure 11: Respondents’ Education Level
Source: Author.
As summarised in Figure 11, the majority of the respondents had diploma level of education. The
percentage of the diploma level respondents was 45.7%. The second highest level of education
was the university, which comprised of 34.3% of the study sample. The secondary education
level respondents comprised of only 20%.
4.3.6 Monthly Income
Participants were also categorised based on their monthly salaries. Their monthly income greatly
determined the purchasing capability of the respondents. For instance, the monthly salaries were
separated using four levels as shown in Table 5 and figure 12.
Table 5: Monthly Income
Level of Income Below RMB
25,000
Between RMB
26000-49,000
Between RMB
50,000-59,000
Above RMB
60,000
Respondents 35 80 60 10
Source: Author
The respective percentage proportions of the respondents’ monthly salary are illustrated using
figure 12 as shown below.
0
5
10
15
20
25
30
35
40
45
50
University Level Diploma Level High School Level
Respondent's Education Level
Education Level

36
Figure 12: Respondents’ Monthly Salary
Source: Author
As indicated in Figure, the majority of the respondents (43%), earn a monthly income of between
RMB 26,000-59,000 which is attributable to the fact that they are new in employment and trying
to progress in their careers. The respondents who were earning a salary of between RMB 50,000-
59,000 comprised of 33% of the entire study sample representing a relatively higher professional
ranking. 19% of the respondents represented a group earning below RMB 26,000 of which the
majority are homemakers and college student who engage in part-time paid jobs. Only 5% of the
respondents earn above RMB 60,000.
4.3.7 Customer Experience on Recommendation and Repeat Purchase
The researcher considered it essential to rank respondents based on their experience on customer
recommendation and repeat purchase. This profiling was significant to help the researcher avoid
any bias in the research findings. Ten respondents had no experience customer recommendation
and repeat purchasing while the rest had experience on customer recommendation and repeated
purchasing. The respective percentage proportions are provided in Figure 13.
19%
43%
33%
5%
Respondent's Monthly Income
Below RMB 25,000
Between RMB 26,000-49,000
Between RMB 50,000-59,000
Above RMB 60,000

37
Figure 13: Customer Experience on recommendation and Repeat Purchasing in the Chinese
electronic industry.
Source: Author.
4.4 Main Results
4.4.1 Overview
The researcher targeted at establishing the impacts of customer experience on customer
recommendation and repeat purchasing in the Chinese electronic industry. According to Kim
(2015), to achieve the research objectives, it is critical to analyse the respondents' responses. The
respondent's responses were ranked on 1-5 Likert-scale. The scale was marked Strongly
Disagree, Disagree, Neither Disagree, Agree and Strongly Agree from 1 to 5 respectively.
Therefore, the mean score of 3.0 indicates that the respondents agreed to the study question's
requirement. A mean score of less than 3.0 implies that the respondents did not agree with the
question's requirement. Impartiality is indicated with exactly the mean score of 3.0 in which the
respondents neither agreed nor disagreed with the asked questions. The researcher was able to
test all the three research hypotheses that included:
 Brand reliability increases as a result of positive customer experience on customer’s
recommendation in the Chinese electronic industry.
 Good customer experience on recommendation increases the endowment effect in the
Chinese electronic industry.
 Good customer experience on repeat purchase in the Chinese electronic industry reduces
customer switching.
94%
6%0%0%
Respondents Experience on Recommendation and Repeat
Purchase
With Customer Experience
No Customer Experience

38
recommendation in the Chinese electronic industry
Based on the first objective and hypothesis, the researcher aimed at examining the impacts of
customers’ experience on customer’s recommendation in Chinese electronics industry.
According to the first hypothesis, brand reliability increases as a result of positive customer
experience on customer’s recommendation in the Chinese electronic industry. The researcher
tested the first hypothesis using the variable brand reliability. Using brand reliability as the key
variable in testing this hypothesis, the researcher formulated five questions related to the
variable. The responses were scored on 1-5 Likert-scale in which the values stood for strongly
disagree, disagree, neither agree nor disagree, agree and strongly agree respectively. The scores
were analysed using the descriptive statistics. The mean score above 3.0 showed that the
respondents either agreed or strongly agreed with the question’s requirement. Further, the mean
score of exactly 3.0 indicated impartiality implying that the respondents neither disagreed nor
agreed with the questions requirement. The mean score below 3.0 indicated that the respondents
either disagreed or strongly disagreed with the questions requirement. The descriptive statistics
results with the respective mean scores are illustrated in Table 6 and Figure 14.
Table 6: Descriptive Statistics on Brand Reliability
Descriptive Statistics
Source: Author
Variable N
Minimu
m
Maximu
m Mean
Std.
Deviation
Always prefer the same recommended brand 175 1.00 5.00 3.6343 1.07370
Attracted to the same recommended brand 175 1.00 5.00 3.4343 1.15717
Motivated to use same recommended brand 175 1.00 5.00 3.7886 .96840
Remains loyal to the recommended brand 175 1.00 5.00 3.8457 .99086
Try another brand not recommended 175 1.00 4.00 2.1371 .79766
Valid N (listwise) 175

39
The above descriptive statistics on brand reliability as summarised using Figure 14.
Figure 13: Descriptive statistics: Brand Reliability.
When asked whether, after a recommendation to buy an electronic product by a friend, they will
always prefer the same product the next time they are going to buy a similar product, the mean
score was 3.6343. The mean scored on this question implies that a positive customer experience
on recommendation greatly increases brand reliability in the Chinese electronic industry. The
outcome of this question is in line with the findings of Young et al.(2010)who argues that the
increase in sales is directly correlated to the extent to which both existing, and potential
customers rely on the company's brand. Further, the higher mean scored on this question
indicates that the potential customers rely on the experience of the existing customers before they
trust a new electronic brand in the Chinese electronic industry.
The second question asked respondents whether they are attracted to the same electronic product
brand recommended to them as opposed to other products. The respondent’s answers scored a
mean score of 3.4343 which was above 3.0 indicating that they either agreed or strongly agreed
with the question’s requirement. The higher score in this question also explains that brand
reliability is greatly influenced by customer’s experience on recommendations in the Chinese
0
0.5
1
1.5
2
2.5
3
3.5
4
Mean Standard Deviation
Scores
Variables
Brand Reliability
Always prefer the same recommended brand Attracted to the same recommended brand
Motivated to use same recommended brand Remains loyal to the recommended brand
Try another brand not recommended

40
electronic industry. Similarly, the respondents were asked whether they are motivated to use the
same electronic product recommended to them. The mean scored on this question was 3.7886
which is above 3.0 implying that they either agreed or strongly agreed. The outcome of this
question shows that the strong desire to remain loyal to a particular electronic brand in the
Chinese electronic market is significantly influenced by the customer's experience on a
recommendation. Further, the respondents were asked whether when an electronic product is
recommended to them, they assess its quality and whenever satisfied, they remain loyal to the
brand. The mean score was 3.8457 which was relatively higher compared to other positive
feedbacks. It, therefore, implied that the majority either agreed or strongly agreed to the
requirement of the question. Additionally, the outcome of this question shows that in the Chinese
electronic industry, customers do not only rely on customer's recommendations to remain loyal
to a particular brand, but they also assesses product quality. Whenever satisfied with the
product’s quality, customers’ reliability on the brand increases.
Lastly, the respondents were asked whether they intend to try another electronic product brand
besides the one recommended to them. Based on the fact that the recommended product met their
expectations, the respondents' answers scored a mean score of 2.1371. The mean score was
below 3.0, which implied that the respondents either disagreed or strongly disagreed with the
question's requirement. The outcome of this question shows the strong relationship between the
brand reliability and the customer's recommendation. The respondents indicated that they were
not ready to try another electronic brand besides the one recommended to them as long as it
meets their expectations. Therefore, the respondents' responses based on the five analysed
questions indicated that a positive customer experience on recommendations increases brand
reliability in the Chinese electronic industry.
Chinese electronic industry
The second hypothesis was in line with the first objective of this research. According to the
second hypothesis, good customer experience on recommendation increases the endowment
effect in the Chinese electronic industry. The same approach was used in which a mean score of
exactly 3.0 indicated impartiality, a mean score of below 3.0 indicated disagreed or strongly
disagreed. Similarly, a mean score of above 3.0 implied that the respondents either agreed or

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