Consumers satisfaction of attributes in online product design

2.2 Theoretical framework

This section refers to the elements selected to be tested in this study in relation with the co-design process. The first part includes the most interesting website attributes, following by the most important attributes of the toolkit. Based on the literature, these attributes were the most important. Hence, it should be noted that the chosen attributes are not the only ones. Based on this study, by gaining an in-depth understanding of what consumers’ value and are satisfied with, while co creating, these attributes are chosen. Both are connected with reference to satisfaction, regarding the process and the impact on willingness to pay (WTP) is discussed and related to previous notions. In essence, there is a distinction made on the functional and experimental use of the attributes. Based on the relevant literature, the hypotheses that are going to be researched are also presented in this section.

2.2.1 Website attributes

With the fast development and increasing use of the World Wide Web, the ability to create and manage websites that fulfill one or more needs of users will become a essential factor for successful e-business. To a certain extent, a website may be regarded as a Computer application involving interactions with a computer environment. User experiences are heavily relied on the information published on the website, as well as the quality of the systems (DeLone and McLean 2003, McKinney et al. 2002).

Attributes are features or aspects of a website. From a user perspective, the website is a bundle of attributes with different capacities to satisfy their needs. Users use and look for different web attributes depending on their needs (Singh & Dalal; 1999). These attributes can be technology-orientated, like the structural properties of a site such as hyperlink multimedia modalities or they can be user oriented, moreover the qualitative experience of users like the navigability and demonstrability. Previous literature show generally key attributes of online customer satisfaction. The primarily assumption in these studies were that positive or negative attribute performance would have similar impact on the customers satisfaction. Otherwise other studies demonstrated that the negative performance will have a greater impact on satisfaction than the positive performance. Indeed, consumers can switch brand or leave the internet retailer with a single ‘click’.

Hence there is some distinction to make between two kinds of customer value, namely the utilitarian and the hedonic value. In the most recent marketing literature, the utilitarian value is based on the functional and the hedonic value is based on the experimental value of customers (Holbrook 1994; Duman & Matilla 2005). In essence, research has shown that consumers general attitude towards a product, service or a certain activity generally integrates both a hedonic and utilitarian dimension (Spangenberg, Voss & Cowley 1997; Voss et al 2003). Regarding to the online environments, several researchers have concluded that the hedonic aspect as well as the utilitarian aspect have an influence on the online behavior of consumers, which is consulting in, that while consumers are driven to engage in an online environment based on the instrumental aspect or utilitarian value derived from the experience, the hedonic aspect plays at least an equal role in their decision making. (Childers et al. 2001). In addition, Liu & Arnett (2000) vindicates, while the utilitarian aspect of online environments is of great importance, the hedonic pleasures is of equal relevance in order to motivate consumers participation and in the end the satisfaction.

Consumers experience utilitarian value when their task related needs and desires are fulfilled. Utilitarian value is described as instrumental and extrinsic (Holbrook 1999; Holbrook & Hirschman 1982). In particular, Huang (2005) argued that the utilitarian value of a given website is defined by users evaluation of the benefits derived from the functional attributes. Opposite to utilitarian value, the hedonic value is what consumers want to sense, feel, think act and relate (Holbrook 1999). Hedonic value can be defined as being subjective and experiential, such as feeling of fun and playfulness (Holbrook & Hirschman 1982; 1986).

Web design

Web design refers to the way in which content of the web site is presented to the customers (Ranganathan and Grandon, 2005). In a B2C (business to consumer) setting the web site design plays an important role in attracting, sustaining and retaining the interest of a consumer. The design of the web site is as important as its content and it has been studied in diverse contexts. For example, Loiacono (2002) find out that that pleasant atmosphere, as visual as well emotional appealing, encourages consumers to continue browsing and revisiting the website. Elements involved in designing a website such as background colors, fonts, graphics and styles become more important to provide improved consumer experience.

In an online shopping area, academics investigated that online shoppers are aware of some of the discouraging features of online shopping, but these features do not deter them from shopping online. Hence, by online shopping, the implication for marketers is that they should focus on making the experience of online shopping more accommodating and more user-friendly since the positive features of online shopping ("convenience" and "efficiency") appear to be more important than the negative features ("effort/impersonality”).

Szymanski and Hise (2000) outlined that convenience and site design are among the major factors that determined customer satisfaction. This notion is also supported by Barnes and Vidgen (2000), who pointed out that visual appeal of a web site, is a vital attribute for the consumer satisfaction. According to Constantinides et al. (2009) consumers’ virtual impression and actions are influenced by design, atmosphere and other elements experienced during interaction with a given website, which meant to induce customer’s goodwill and affect the final outcome of the online interaction. Hence, factors contributing to the consumers’ perceived hedonic value are the level of entertainment and exploration consumers get to experience. In other words, a good web design will heighten the consumer’s satisfaction and experience in a positive manner, which leads to the following hypothesis.

Hypothesis 1:

1. 
   Evaluated web design has a positive effect on the process satisfaction
   

Navigability

Given that the Web is a navigational system, it is necessary for consumers to be provided with navigational support. According to Nielson (2000), navigation interface needs to answer three basic questions: Where am I? Where have I been? And where can I go? No matter how the navigation interface is designed, the website should be built on clear structure. According to the initial conceptualizing of the Technology Acceptance Model (TAM), a person’s attitude towards using a new technology depends on their perceived usefulness and ease of use when using the technology in question. While perceived usefulness refers to consumers perceptions concerning the result of a given experience, the ease of use refers to their perceptions regarding the process leading to the final result (Davis 1989).

Thus, a key challenge in building a usable web site is to create good links and navigation mechanism (Radosevich, 1997). In their study, Nah and Davis (2002) highlighted that navigation in an important element in building a usable website with good links and navigation mechanisms. This is also supported by Evans and King (1999) who suggested that organized and easy-to-navigate pages should be a primary consideration of a good web site. When websites are fast and easy to navigate, consumers experience with the given website will be high en therefore the consumers will be satisfied. On the other side, difficulties with navigating a given web site results in dissatisfaction and subsequently hack into the process with the website and switching of online environment (Palmer 2002, Katerattanakul, 2002). In addition, in studies done about online shopping, Oon & Khalid (2001, 2003) showed by comparing three sites that the one of the websites were found significantly flexible to navigate in comparison to the other websites and had the highest willingness to purchase the product. In the area of online co-creation, there will be a positive influence of navigability if consumers perceived the web site as easy to navigate and having a good structure (Evans and King 1999, Zeithaml et al 2000), which allows to the next hypothesis.
Hypothesis 1:

2. 
   Website navigability has a positive effect on the process satisfaction
   

2.2.2 Toolkit attributes

In an online mass customization system, the physical store is replaced by the toolkit. Such displacement has to convey experience and meet the high customer expectations connected with customization. This goes hand in hand with the demand for a steady quality of service. More essential is the fact that in mass customization the individual product is the direct result of the process. Von Hippel and Katz (2002) note that toolkits for user innovation are most effective and successful when toolkits are made user friendly. As already mentioned in the previous section, Von Hippel (2001) supports that the toolkit should enable five objectives in order to be effective, whereof user friendly is one of them. Accordingly, it has to enable users to carry out complete circles of trial and error earning, to offer them a solutions space that cover up the designs they want to create, to be “user friendly”, to provide common used modules that the user can incorporate into his/her custom design and to guarantee that the output will be producible. Dellaert and Dabholkar (2009) refer to three other attributes that act as antecedents for consumer intentions to use mass customization; (perceived) complexity, (perceived) enjoyment and (perceived) control.
Complexity

The “complexity” constructs used by Dellaert and Dabholkar (2009) can be compared with the opposite meaning of the ease-of-use according to Von Hippel (2001). Complexity refers to the customers awareness of how complicated it is to use on-line mass customization. They consider it as the only perceived cost-related with the online mass customization process and therefore support that increased complexity negatively affect the intention to use this process as it has a negative effect on the utility of the co-created outcome. They also point up that it is only accepted by customers in the case where the customization process gives a customized product that is regarded of higher utility, in such a way that the process should worth the attempting to finalize it. If this is not the case, consumers will be not satisfied. In essence, we can state that the complexity aspect of the toolkit is related to the perceived utilitarian value.

In an experimental study Kamali and Loker (2002) observe the involvement of consumers who designed a T-shirt using a toolkit. The outcomes of this study leads to a general interest in designing online as well as higher satisfaction with the toolkit as involvement increased. Consequently they found out that the higher level of interactivity also increases the consumers’ willingness to purchase. Dellaert and Stremersch (2003) study consumer interaction with a design toolkit for personal computers. Their findings were that there is a trade-off between the utility of a customized products and process complexity as perceived by the user. If the perceived complexity is high, perceived product utility decreases. Although, this study also point to the fact that the toolkit used appeal more to expert consumers. In a more recent study Dellaert and Stremerch (2005) linked complexity with product utility, process utility and customers intention to use customization using four customization configurations and found out there is a negative relationship among the complexity of the configuration and product utility.

From a customer’s perspective mass customization may lead to complexity. More customization does not necessary mean greater delight and therefore greater value for the customer. According to Dellaert and Stremersch (2005) customer satisfaction may not only appear after a certain customization level of the product, but also decrease because of the frustration a customer feels due the excessive choice of options and variety. Consumers will be confused if there is excessive variety of options to choose from and a lot of information to deal with. Moreover, the variety of options and information is one of the most important characteristics of mass customization to facilitate the customers the opportunity to completely design their requirements and lead in their ideal solution. Therefore the next hypothesis is constructed;

Hypothesis 2:

1. 
   Perceived complexity of the toolkit attribute has a negative effect on the process satisfaction
   

Enjoyment

The experience and the pleasure of using online mass customization are defined by Dellaert and Dabholkar (2009) as enjoyment. Studies on self-service technologies exposed that customers prefer an active role in the production or service due to the fact of the enjoyment they derive from it (Dabholkar and Bagozzi 2002, Dabholkar 1996). Schreier (2006) construed enjoyment as a result of the participation in an attractive technology-based experience of the excitement and pride of constructing an ideal product. Next to the role of complexity for using a toolkit, there is empirical evidence regarding the importance of the role of intrinsic motivation for online shopping (Venkatesh and Speier, 1999, 2000). Intrinsic motivation is a vital aspect for consumers evaluation of his/her experience of the online shopping process. Focusing on the online buying experience, Dabholkar and Bagozzi (2002) confirm that customers’ willingness to purchase a product is positively influenced by their perception of enjoyment they had gone through. Monsuwe et al. (2004) defined “enjoyment” as the fun and playfulness of the online shopping experience rather than from shopping task completion. Thus, persistent to the toolkit, enjoyment reflects consumers’ perceptions regarding the potential entertainment of using the toolkit. According to a more recent addition to the TAM is the enjoyment construct, which is also believed to contribute to the acceptance of new technology (Davis et al 1992). Whereas ‘usefulness’ and ‘ease of use’ reflects the utilitarian aspects, ‘enjoyment’ embodies the hedonic aspect.

A toolkit’s success is significantly correlated with that toolkits quality and with the industry conditions. Prigl and Franke (2005) studied the success of 100 toolkits offered in computer gaming and find out that success was significantly affected by the quality of the trial and error learning enabled by a toolkit, by the quality of fit of the solution space and by the quality of module libraries. Thereby, Schreier and Franke (2004) also hold on the importance of the toolkit quality that was customized with a simple toolkit. The study was focused on the value that users placed on particular goods like t-shirts and cell phone covers. Their foundations, measured by Vickrey auctions, was that willingness to pay for a custom designs significantly affected by the difficulty of designing with a toolkit. In contrast, the willingness to pay was significantly positively affected by enjoyment experienced in using a toolkit. Enjoyment in online mass customization approaches as a result of the participation in an attractive technology-based experience and of the excitement and pride of composing one’s supreme product (Schreier, 2006).
Hypothesis 2:

2. 
   Perceived enjoyment from the toolkit has a positive effect on the process satisfaction
   

Control

According to Wind and Rangaswamy (2001) mass customization is a buyer-centric strategy where the locus of control resides with the individual customer. In this sentence the success of mass customization depends strongly on efficient and effective manufacturer- customer interaction. The toolkit enables to fulfill these tasks. In a mass customization setting a consumer completes the entire design task in an autonomous and controllable way, with choice and discretion and gets instant feedback from the toolkit through trial and error (Von Hippel, 2001). Practically, these toolkits are very heterogeneous in terms of what a customer can do and how he can do. An effective toolkit supports an appropriate solution space. This solution space may vary from very large to small, and if the output tied to a particular production system, the design freedom that a toolkit can offer a user will be accordingly large or small. For example, Mi adidas provides consumer to design a shoe from the basics, while NikeID allows the consumers to design the shoe within specific product attributes. Thus, making choices from lists of options regarding such things like product attributes refers to a small solution space. Research in this range of option available, shows that consumers perceptions of control increases if they are given a choice of alternatives, rather than assigned to a given alternative. This notion of solution space more or less bargain with the term perceived control defined by Delleaart and Dabholkbar (2009). They express control as “the extent to which consumers believe they are able to determine the outcome of the mass customization process”. They found out that when customers experience is uncertain during the process, then consumers feel lowered their control and consequently could be a crucial factor that prevents them for using mass customized interaction systems. In a similar way, the decision to make or not to make a transaction is under the consumers control and this control results in an advantage of online shopping for consumers (Wolfinbarger, 2001). Applied to the e-commerce, control illustrates consumers’ perceptions whether getting information and purchasing products online is totally up to the consumer itself, because of the availability of resources and opportunities. Therefore we hypothesize that:

Hypothesis 2:

3. 
   Perceived control of the toolkit has a positive effect on the process satisfaction
   

2.2.3 Process Satisfaction and Willingness to pay

User satisfaction is a critical factor for the success of the principle of mass customization. Jonhnson & Gustofson (2000) confirms the importance of user satisfaction and discuss that only consumers who have a particular level of satisfaction with the toolkit will finalize the design process and consequently considering purchasing the product, with the notion always assuming that the satisfaction with the product designed is sufficiently high. In the literature, different academicians have their own understanding of satisfaction. For example, Chiou et al. (2002) examined the construct of satisfaction from the perspective of an aggregation of transaction experiences. Oliver (1999) defines it as perception of pleasurable fulfillment. Therefore the interactive nature of the Internet is a key attraction to building a relationship with customers (Hoffman et al. 1995). Moreover, the informative systems are important when it comes to satisfaction of the consumers in an online environment. In their experiment with online environments in clothing design, Kamali and Looker (2002) showed a significant increase of satisfaction with the navigability and usability of the Web site interface when the design involvement was introduced. Jayawardhena and Foley (2000) share the same vision as Nah and Davis (2002) about that the navigability plays an important role in whether consumers are satisfied or not with their online experience. According to Madu and Madu (2002) users become dissatisfied if the navigability of the website is difficult. In an indirect way this also guides to dissatisfy with the process of online co-creation.

According to several researchers and practioners, the web design, is essential for enhancing experience. In essence, the visual appeal of a website is considered to be a vital factor when it comes to enhancing customer satisfaction (Ha and Litman 1997; Barnes and Vidgen 2000).

A crucial aspect of a website towards the WTP is moreover the transaction capability of a given website. Also mentioned before, according to Pelpls et al. (2001) who pointed out that privacy concerns are negatively related to purchase behavior and decision, which is also supporting by Bellman et al. (1991), who found evidence supporting that consumers concerns about payment security mediate the relationship attitude toward shopping online and therefore actual purchasing. Consequently, we should expect that this same argument is applicable to the WTP. However, findings of past research about the relationship between satisfaction and WTP are equivocal. While some researchers provide evidence of a significant positive relationship, there are others who find no direct relationship between these constructs.

This theory can be applied in a similar way for the interactive systems. According to Piller and Moeslein (2003), the design of a toolkit, which enables customer interaction with the interface, influences the buying decision and customer satisfaction. They conclude that only consumers that use the toolkit and who have experienced a certain level of satisfaction with the customization process are probable to complete it and to finally purchase the co-designed product. In other words we can say that customer satisfaction is an element which can possibly be improved because of the individualization of product features to customer requirements.

Franke and Piller (2003) presented an equation that represents customer decision making process for customized products. Only in the case that the expected returns exceed the expected costs, mass customization will be employed. According to those academicians, these returns have two dimensions. One is the rewards from the unique shopping experience, as satisfaction with the fulfillment of a co-design task (Dellaert and Stremersch 2003), and the other one is the increment of utility from the better fitting to specific needs of a co-designed product, in other words, the value of product customization.

In online product co-design, the interaction bonds the experience and customer expectations with the customization process. Companies that provide customers with customization toolkits have to take care of the trust and reliability customers perceive in order to reduce the perceived risk and offer them an enjoyable and wonderful experience, which is offering customers not just a product but a solution capability (Tseng and Piller, 2003). According to Riemer & Totz (2001) the satisfaction with the process has a large impact with the product, while mass customizing. Since the customized product is a direct result of the co-creation process, it is to be expected that the value of the experience has an impact on the product value (Dellaert & Stremersch 2005, Franke & Piller 2003). In summary, a successful configuration process will therefore have an impact on both process and product satisfaction. Willingness to pay, as a measurement, is connected with satisfaction in the current literature in both offline and online shopping environments and recently also in the mass customization environment. This study will test the nature of this relationship based on a specific existing co-design website and to examine it in depth after consumer’s experience the process satisfaction.
Hypothesis 3:

Satisfaction with the process will have a positive effect on WTP for the customized product.

2.2.4 The effect of moderators

Concerning the experience during the co-designing process, several authors have argued about prospective downsides of consumers’ integration into the value creation process. The most argued downside is the information overload, although several appearances can be given for this appellation. For example, mass confusion can be a type of information overload. Mass confusion describes the incapability dealing with large numbers of choice decisions to be made during the co-designing process (Huffman and Kahn, 1998). In their study, Huffman and Kahn (1998) provide consumers to preference rating for different levels of a single attribute. They conclude that an attribute-based decision leads to higher CS than alternative-based attributes. Dealing with choices during the co-designing process is also closely related to another sample of information overload, namely the incapability to match needs or desires with the product attributes. Although, consumers have a clear understanding of their own desires, they might not be able to choose the best solution. (Thomke and von Hippel, 2002) This argument shows that the customization process cannot be separated from the customized product. The close relationship between the co-designing process and product is also been supported by Riemer and Totz (2003), who stated that satisfaction with the co-designing process impacts product satisfaction. In similarity, this can be seen in research showing that customers’ perceptions of retail environments can have an influence on buying behavior (Mattila and Wirtz, 2001), which is closely related to the WTP. This part portrays the effects of product satisfaction and transaction capability on the WTP.

In the past, many executives trusted their instinctive that higher CS would lead to improved company performance. According to much academician, consumer satisfaction becomes an important focus of corporate strategy. Oliver (1997) defined satisfaction as “the summary psychological state resulting when the emotion surrounding disconfirmed expectations is coupled with a consumer’s prior feelings about the consumer experience.” It is a “perception of pleasurable fulfillment” in the customer’s transaction experiences. Hence, customer’s satisfaction is certainly an important factor for mass customization in order to be successful. The process itself might be a source of subjective value. It is likely that users enjoy the design process due to a "flow" experience (Csikszentmihalyi 1996) and the joy of performing an artistic and creative act. Riemer and Totz (2001) argue that customer satisfaction is not only related to the quality of the customized product itself but as well to the quality or the web- based configuration process and interface, which essentially determine the customer’s motivation and capability to adopt required configuration task and finally purchase the product. Therefore, the active role of designing the product is likely to represent a psychological benefit to users.

In addition to the process, the output of this customization process might also be of high value. The self-designed product is unique and it has been found that people assign greater value to products that are unique than the standard products, with keeping the objective value being equal (Brock 1968; Fournier 1991). In a similar way, this is also supported in empirical studies conducted by Franke and Piller (2004) and Schreier (2006), who suggest that the users intention to pay for self-designed products can be much higher than in case of the standard products. Besides, Kamali and Loker (2002) found that customers’ satisfaction with the co-design leads to high levels of intention to purchase the product that they designed. Therefore, satisfaction with the configuration process and the resulting outcome will determine customers’ decision whether to buy the customized product or not.

Moreover, the interaction between user and the use of the online customization can be easier than the alternative costly interaction between the manufacturer and the user in the process of market research. Most notable, the information obtained by the help of this online co-creation is located at individual level. Then, the manufacturer can produce and deliver a product to suit the individual user. The resulting fit between the preferences and the product itself should yield a higher level of satisfaction with the created product and subsequently increase the customers’ willingness to pay. From the same viewpoint, focused on toolkits, Franke and von Hippel (2003) show in an empirical study on Apache’s software, that users definitely have unique needs, leaving many displayed with standard products. They also exposed that users claimed that they are willing to pay a substantial premium for improvements which satisfy their individual needs. This relationship is important because price is directly linked to profitability. Furthermore, the general belief that satisfied customers are willing to pay higher prices is typically based on anecdotal evidence (Finkelman 1993; Reichheld and Sasser 1990). However, based on the abovementioned arguments, product satisfaction will have a positive effect on the willingness to pay and therefore the following hypothesis is formed:

Hypothesis 4:

1. 
   Product satisfaction has a positively effect on WTP.
   
2. 
   The effect of process satisfaction on WTP is higher, the higher the product satisfaction is.
   

Nowadays, the internet is a hot medium and e-commerce allows consumers for changing the way of purchasing goods and services. When the website and internet technologies become more established, the consideration is turning to the factors that influence the accomplishment of websites. Yamada (2001) explains how new opportunities for customers participation on apparel websites have expanded from catalog-like offerings to interactive offerings. When it comes to the economic profitability of the business, is the question of whether, based on a consumers’ reaction to a web site, that person is likely make a purchase from the web site. A key element among the economic profitability of the business is trust (Cheskin Research and Studio Archetype/Sapient, 1999; Jarvenpaa et al., 1999; Marcella, 1999; Sisson, 2000). This notion is also shared by many website designers, developers, consultants and marketers, who stated that the present of trust in website interactions is crucial to the vital success of the interaction between the consumer and the firm. The prominence of trust in the online world is acknowledged, but there is limited theoretical support for its role in online interactions. However, it is not obvious that all forms of trust can be understood in one definition. Therefore, this study restricts its definition of this section to a bundle of separate terms. The term transaction capability is used to refer to the underlying features of security/privacy, trust and payment mechanism. The website offers this attribute as having features of both a salesperson and a storefront in the offline world. Since transactions on the internet occur without personal contact, consumers are generally concerned with legitimacy of the vendor and authenticity of products or services (Chen and Dhillon, 2002). Trust focuses on consumer confidence in the website as part of a buyer-seller transactional exchange, and consumer’s “willingness to rely on the seller and take actions in circumstances where such action makes the consumer vulnerable to the seller” (Jarvenpaa et al., 1999).

Another key consumer concern is privacy. Online merchants gather consumers’ information in various ways such as registration and cookie files. According to Hoffman et al. (1999), almost 95% of Web users have declined to provide personal information to Web sites at one time or another when asked. In brief, e-consumers are lacking in trust, which is a broadly defined subject. That lack of trust is one of the most frequently cited reasons for consumers not purchasing from Internet vendors is also supported by Grabner-Krauter and Kaluscha (2003).

Theoretical studies have explored technologies and mechanism used online to promote trust like usage of third parties (van den Berg & van Liehout, 2001). Tan and Thoen (2000/2001) presented in their study a generic model of trust that consist of the trust in the other party and the trust in the control mechanism used to make certain the transaction is successful. A study of internet consumers by Cheskin Research and Studio (1999) identified that six dimensions that contribute to feelings of trust in e-commerce sites; navigation, presentation, ease of use, seals of third parties, company reputation and effective technology. Given the absence of physical experience and contact, trust may be important in the online buying experience. In line with the commercially use of a web site, online customers have been reluctant to buy online due their distrust of the security of online shopping (Hoffman, et al. 1999). This is also in line to Pelpls et al. (2001) who pointed out that privacy concerns are negatively related to purchase behavior and decision. This is also supported by Bellman Johnson and Lohse (1991), who found evidence that consumers’ concerns about payment security can mediate the relationship between attitude toward shopping online and the actual purchase. Trust levels may therefore affect shopper’s willingness to buy, willingness to pay and their willingness to return to the site (Hoffmann 1999). These findings related that trust is in general consistent with transactional capability.

Consumers are likely to engage in relational behavior to achieve greater efficiency in their decision making and to reduce the perceived risks associated with future choices (Seth & Parvatiyar 1995). In the online co-design process the consumer creates, while not thinking to the transaction capability. This will appear in the final step when the consumer decides to actual buy or to ask to the WTP for the created product, also called the purchase stage. According to Hosmer (1995) consumers make important buying decisions, in part, on their level of trust in the product, salesperson, and the company. Back to the purpose of customization, consumers design online due unique needs with the intention to purchase the self-designed product. The making of the decision to purchase the product moves along the traits of shopping online.

Correspondingly, decisions made by internet shopping involve trust, not only between the company and the consumer, but also between the consumer and the computer system, where transaction are executed (Lee and Urban, 2001). Many researchers and academician point the critical role of trust in online environments, especially the aspect of transaction capability for finalize a buying decision. According to Gefan (2000) consumers are also concerned about the online payment security, reliability and privacy policy of the online store. For example, security of monetary transaction, which is a key customer concern, influences the quality of a web site. Almost 50 % of the transactions rated as unsatisfactory consist of concerns about security of transactions (Elliot and Fowell 2000). Hoffman (1999) confirms this concern with the notion that consumers fear the process of typing over credit card information to e-tailers.

Therefore, security is a critical factor in online shopping and also suggested be critical by purchasing when co-designing online. Although, this can be divided into concerns about data and transaction security (Ratnasingham, 1998; Rowley 1996). Security involves protecting users from the risk of fraud and financial loss from the use of their credit card or other financial information. Security risk perceptions have been shown to have a strong impact on attitude toward use of online financial services (Montoya-Weiss et al. 2000). Bhatnagar et al. (2000) explain that the risk appropriate to shopping on the internet occurs since consumers are concerned about the security of transmitting credit card information over the internet. A number of online merchants offer alternative payment methods such as telephone transaction or e-checks to overcome consumers’ fears. New technological advancements for Internet security, like digital signatures and certificate, reduce consumers’ perception of risk related to the transaction in online shopping. Privacy statements and security policy are represented and explained in fulfillment policy. Consumers perceive the privacy and security depending on the extent to which fulfillment service is provided on the Web. For example, consumers check the order procedure or use customer support service to assure whether the site supports secure transaction process.

A similar dimensional distinction can be made about the satisfaction for the transactional capability for a given web site. Szymanski and Hise (2000) investigated consumers’ satisfaction with internet shopping, and found that greater satisfaction with online shopping is positively correlated with consumer perceptions of the convenience, product offerings, product information, site design and financial security of an online store relative to traditional store. Hence, based on the arguments made on the critical role, consumers’ perception of transactional capability could influence their satisfaction with online co- designing. Similarly the transaction capability may therefore also affect the WTP. Hence, by mass customization, the online experience is a critical factor for completing the process and the ability of a merchant is reflected in its ability to handle sales transactions and the expertise to generally conduct business online. Findings of past research and recent studies support also the notion that there is a positive relationship between consumer satisfaction and financial performance (Anderson et al. 1997; Reichheld and Sasser 1990; Rust and Zahorik 1993). When consumers experience superior states of satisfaction, they perceive a high outcome of a trade and therefore are willing to pay more than less satisfied consumers, because this results in an reasonable relation of outcome to input. In online product co-design, intensive interactions take part to connect the experience and customer expectations with the customization process. Companies that provide websites have to take care of the trust and reliability customers perceive in order to reduce the perceived risk. Also in arrangement with the purchase stage of online consumers, privacy/security, payment mechanism, speed of operations may affect the satisfaction. Compared with the traditional economy, the online economy is more aware of the need for privacy/security (Friedman et al. 2000, Culnan 1999). This lack of trust, privacy and security concerns often lead to lost sales. Therefore, if improving the transaction capability and design a secure and convenient payment mechanism, it will raise the consumers’ degree of satisfaction. According to the prior research (Elliot and Fowell, 2000; Szymanski and Hise, 2000), the transactional capability as perception of security risk, privacy concerns and lack in trust, is expected to have a negative effect on the process.

However, there is no specific research done about the effect of transactional capability on process satisfaction in an online mass customization setting. In this study transactional capability will be examined as a mediator towards the WTP. Thus, the expectation arise that transaction capability, as a website attribute, will moderate the relationship between consumers’ satisfaction with the co-design process and the willingness to pay in a negative way. Along with the aforementioned arguments about the effect of security, privacy and trust in this section, the following hypothesis is formed;
Hypothesis 5:

1. 
   The higher satisfaction with the transaction capability, the higher the WTP will be.
   
2. 
   The effect of process satisfaction on the WTP is higher when the satisfaction of transactional capability is high.
   

2.2.5 Conceptual framework

In this section, the theoretical framework of this current study will be illustrated. It should be marked from the literature review that the past studies founded a great variety of factors that affect the customers’ evaluation of the co-design process. Also discussed in the previous parts, only some of them were selected.

Web site attributes

Toolkit attributes

Product

Satisfaction

Process Satisfaction
Willingness to Pay

Web design 1a

Navigability 1b

Transanction Capability

Complexity 2a

Enjoyment 2b

Control 2c

H1

H2

H3

H4a

H4b

H5a

H5b

Figure : Conceptual model

Figure 1 represents the conceptual model that is used as a guideline for the present study. It captures the elements that are expected to influence satisfaction after a co-design experience and intention to say positive things about it. It includes the hypotheses that were formed in the previous section and are summarized in the following table. The following table summarizes the formed hypotheses in order to facilitate the reading of the study.

Table 1: Summary of Hypotheses

Hypothesis 1: Website navigability has a positive effect on the process satisfaction Web design has a positive effect on the process satisfaction

Hypothesis 2: Perceived complexity of the toolkit attribute has a negative effect on the process satisfaction Perceived enjoyment from the toolkit has a positive effect on the process satisfaction Perceived control of the toolkit has a positive effect on the process satisfaction

Hypothesis 3: Satisfaction with the process has a positive effect on WTP for the customized product.

Hypothesis 4: Product satisfaction has a positively effect on WTP. The effect of process satisfaction on WTP is higher, the higher the product satisfaction is.

Hypothesis 5: The higher satisfaction with the transaction capability, the higher the WTP will be. The effect of process satisfaction on the WTP is higher when the satisfaction of transactional capability is high.