2019

ConsumerPerceivedValue&Location-BasedServiceMobileApplicationANALYZINGTHEEFFECTOFPERCEIVEDVALUEDIMENSIONSONCOMMITMENTANDBEHAVIORALINTENTIONANDPRIVACYCONCERNSONBEHAVIORALINTENTIONANISALEVINAWIDHYANA-S1942611

FacultyofBehavioral,ManagementandSocialScience(BMS)Chair

ExamCommittee:Dr.MirjamGaletzka Dr.IrisvanOoijen

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AbstractPurpose:ThepopularizationofsmartphoneshasbroughtaboutfundamentalchangesinLocation-BasedServices(LBS).Inthisarticle,thedirecteffectsofvariousvaluedimensionsareanalyzed:monetary,convenience,emotional,social,conditionalandepistemicvalue.Theimportanceofperceivedvalueincustomersoncustomerdecisionmakingiswellknown.Yet,fewstudiedassessthedirecteffectofperceivedvaluedimensiononcommitmentandbehavioralintention,specificallyinusingmobileLBSapplication.Fundamentally,inthisdigitalera,thespreadingofLBShasraisedprivacyconcernsduetothepotentialmisuseofuser’sinformation.Thus,privacyconcernwasaddedtothemodel.

Method:AquantitativemethodusingsurveytargetedtotheendusersofGO-JEKwereconductedtoexaminewhetherperceivedvaluedimensionsandprivacyconcernhaveeffectoncommitmentandbehavioralintention.

Mainfindings:Conditionalvalueandconveniencevaluemostlyinfluencedbehavioralintention,followedbyepistemicvalue.Theeffectofmonetaryvalueandprivacyconcernwerenotsignificant.Emotionalvaluehadthehighestinfluenceoncommitment,followedbyconditionalvalue,whilesocialvaluewasfoundnosignificant.

Implications:Theprimaryimplicationinthisstudyisthevalue-basedapproachgivesagoodfoundationforsegmentingandplanningmarketingstrategiesaseffectivemarketingstrategiesrequiresgoodknowledgeabouttheneedsandvalueperceptionsofeachcustomersegment.AddingprivacyconcerntothemodelgaveinsightsonwhethercustomersconsiderprivacywhenusingLBSapplication.

Keywords:consumerbehavior,consumerloyalty,consumerperceivedvalue,location-basedapplication

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TableofContents

Abstract

1. Introduction………………………………………………………………………………………………………………4CaseofGO-JEK…………………………………………………………………………………………………….…….6

2. TheoreticalFramework……………………………………………………………………………………………..82.1CustomerPerceivedValue………………………………………………………………………….…..…...8

2.1.1ValueDimensions…………………………………………………………………….…….…………..10

2.2TheImpactofPerceivedValueonCommitmentandBehavioralIntention…….…..13

2.3.PrivacyConcern…………………………………………………………………………………………………15

3.Methodology……………………………………………………………………………………………………………...17

3.1Pre-test………………………………………………………………………………………………………………...17

3.2QuantitativeMethod……………………………………………………………..……………………………..17

3.2.1Procedure……………………………………………………………………..……………………………..18

3.2.2Participants……………………………………………………………..……………..…………………...18

3.2.3Measures……………………………………………………………………………………………………..19

3.2.4ReliabilityAnalysis………………………………………………………………………………………..22

3.2.5FactorAnalysis……………………………………………………………….…………………………....22

4.Results

4.1DescriptiveAnalysis………………………………………………………………….…………………………..23

4.2CorrelationAnalysis…………………………………………………….………………………………………..23

4.3RegressionAnalysis……………………………………………………………….………………….…………..24

4.4HypothesesOverview……………………………………………………………………………………………25

4.5AdditionalAnalysis…………………………………………………………………..…………………………...26

5.Discussion…………………………………………………………………………….........................................30

6.TheoreticalandPracticalImplications………………………………………………………………………..33

7.Limitations………………………………………………………………….……………………………………………...34

References………………………………………………………………………………………………………………………35

AppendixA……………………………………………………………………………………………………………………..44

AppendixB……………………………………………………………………………………………………………………..51

AppendixC……………………………………………………………………………………………………………………..58

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1Introduction

Location-based services (LBS) have gained attention as companies are facing new

opportunitiesinofferingmorecustomizedservices.Theabilitytoidentifycustomer’slocation

ata certain time isoneof themostpromisingapplicationsof LBS.Positioning techniques

assisttheserviceprovidersofferentirelynewservicesoraddvaluetothecurrentonesby

takingthecontextusageintoaccount(Barnes,2003;Harter,2000).

AccordingtoDurietal.,2001,Location-basedServicesorLBSare,“Servicesinwhich

thelocationofapersonoranobjectisusedtoshapeorfocustheapplicationorservice.The

other applications for location-based information are related to advertising, roadside

assistance, fleet management, people tracking, road pricing and location-based products

(Barnes,2003).JunglasandWatson(2008)definedLBSasanyservicethattakesintoaccount

thegeographiclocationofanentity.Thetermofentitycanbeeitherhumansorotherobjects.

Location-based services (LBS) can also be described as services that depend on and are

enhancedbythepositionalinformationofthemobiledevice(Hirsch,Kemp&Ilka,2006;Dhar

& Varshney, 2011). Sadoun and Al-Bayari (2007) explained that LBS consist of three

components:(1)themobilepositioningsystem,(2)themobiletelephonynetworktodeliver

servicestotheusers,and(3)theLBSapplication.

Withthegrowingpopularityofsmartphones,moreattentionisbeingpaidtotheLBS

industry.LBScanalsobedefinedasnetwork-basedservicesthatintegrateamobiledevice’s

location or position with other information in order to provide added value to the user

(Barnes2003;Xu&Gupta2009).Smartphoneswithbuilt-inGPSareabletoprovideusers

with novel experiences through a variety of LBS applications. There aremany benefits of

installingLBSapplicationsonsmartphones,bothforcustomersandcompanies.Forinstance,

LBS-based target advertising can be performed by connecting to ‘searching’ or ‘call

connecting’ functions, and commercial functions such as automatic payments are also

enabled(Ryu,2010).

Previously,duetothetechnologicallimitationsofphonefeatures,LBSwereconfined

torelativelysimpleservicessuchastrackingthelocationofemployeesandgoods;searching

for specific places; identifying one’s current location; and checking weather or traffic

conditions.Withtheadvanceddevelopmentoftechnology,companieshavebeeninnovating

bycombiningLBSandmobileapplications.Mobileapplicationswereinitiallydevelopedfor

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generalfunctionalpurposes,forinstanceemailing,calendarsandweatherinformation.Due

to public demands and the development of mobile technologies, more functions were

createdsuchas,mobilegames,banking,order-tracking,GPSandlocation-basedservices.One

of the reason people choosewhat they are using is perceived value. Fundamentally, the

popularity and massive growth of smartphone usage has generated studies on the

comprehensiveadoptionofnewmobileapplications.

Customersneed tounderstandhowtheservicebringsvalue to theireveryday life.

Perceivedvalueplaysanintegralroleinpersuadingcustomerstousetheservices.Thistheory

isrelevantasexaminingcustomerperceivedvalueisessentialinassessingcurrentservices

and for the development of further ones, since customer segments may have different

motivestouseservicesandthusperceivedifferentvalueinthem.Thepurposeofthestudy

istoanalyzetheeffectofperceivedvaluedimensions(monetary,convenience,emotional,

conditional andepistemic value) and privacy concern on attitudinal and behavioral

componentsofloyalty:commitmentandbehavioralintentionstouseLBSapplication.Privacy

concern is added to themodel asnowadaysmany customersarebecomingawareof the

extent towhich they are sacrificing their privacywhen engaging online. Privacy is a fast-

growingconcern,andcustomersaresensitivetocompaniesthatfailtoprotectandrespect

it.

This study applies the theory of consumption values (Sheth et al., 1991) to LBS

applications as the theoretical basis for verifying the factors influencing customers’

commitment andbehavioral intention. The theoryexplainshow fivedimensionsof value,

whicharefunctional,social,emotional,conditional,andepistemicvalues,influencebehavior.

Functionalvalueisanalyzedtounderstandcustomers’perceptionoftheLBSapplication,the

price,andquality.Socialvalueconcernsthedegreeofusefulnessforconsumers,asinfluenced

bypeeropinion.Emotionalvalueisaboutcustomers’emotionstowardtheLBSapplications.

Conditional value is the measure of utility based on a certain situation or circumstance

experiencedbythecustomers.Epistemicvalueexaminescustomer’snaturalurgetodesire

knowledgeandseekfornovelty.Inshort,thetheoryisdesignedtoincreaseunderstandingof

consumerchoicebehaviorandassistpractitioners,policymakers,andacademicresearchers

indeterminingwhatmotivatesspecificchoices.Additionally,Pura(2005)mentionedabout

mediation effect happened between emotional value and behavioral intention through

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commitment, though the research did not suggested mediations happened to other

perceivedvaluedimensions.

Bymean of a survey, themodel is tested,with the results giving both theoretical

implicationsandpracticalimplicationsontheusefulnessinusingthetheoryofconsumption

valuesundertoday’srapidtechnologicaldevelopment.It isessentialtoknowwhetherthis

theoryisstillrelevantornotnowadaysastheapplicationsofLBShavegrownfast.Moreover,

practicalimplicationswereobtainedonhowtoincreaseawarenessofusingLBSinawaythat

givesarealisticpictureofhowLBSapplicationscreatevalueforcustomers.Addingprivacy

concernprovidesanunderstandingonhowtoaddresscustomers’uneasinesstosharetheir

data.Thus,themainresearchquestionis:Howdoperceivedvaluedimensionsandprivacy

concerninfluencecommitmentandbehavioralintentionstouseLBSapplication?

ThisstudyexaminestheLBSofferedbyGo-Jek,anapplicationthatprovidesvarious

kindsofservicestocustomers,fromorderingmotorcycletaxistoarrangingamasseurfora

house-massage. However, this paperwill only focus on the taxi services provided by the

applications.

CaseofGo-Jek

Inearliermobilephoneswithfewerfunctions,alsoknownasfeaturephones,LBSwere

confined to simple location-tracking services. Smartphones, however, have completely

changedLBSwiththeirpowerfuloperatingsystemsandvariousapplications.LBSapplications

withawidevarietyofbusinessmodelshaveemerged,andLBSandridesharingapplication

havebeencombined.Forinstance,Go-Jek,amotorcycletaxiphoneserviceinIndonesia,isan

applicationtoorderaridethatallowuserstoselectandstorepre-definedlocationssuchas

homeandwork.Inadditiontoregularrides,Go-Jekoffersvariouson-demandservicesunder

the brand. Go- Food (food orders and deliveries), Go-Send (logistics), Go-Pay (mobile

payments)andGo-Life(lifestyleservices,suchasmassageandhairstyling)areafewproduct

linesunderGo-Jekcompany.AsamarketleaderinIndonesia,Go-Jekprocessesmorethan

100milliontransactionsforits20-25millionmonthlyusers(Potkin,2018).

Go-Jek has becomeone of remarkable phenomenon in Indonesia for its one-stop

applicationthatmakescustomer’slifeeasier.Itallowspeopletoorderaservicethroughthe

application.Oncepeopledoit,thesystemwillfindthenearestdriver,whoisalsoequipped

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with an android phone, to minimize the waiting or delivery time through a geolocation

algorithm.Thedriver’spicture,nameandcontactdetailwillbeshowntoeasecustomersfor

communicatingwiththedriver.Chatfeature isalsoavailableforcustomerstocontactthe

drivermoreeasily.

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2TheoreticalFramework

Thereisalackofknowledgeonthefactorsthatpredictwhetherpeoplewillusean

applicationwithLBS.ThisstudyaimstoexplaintheroleoftheLBS,theoryofconsumption

values,andprivacyconcernrespectivelyanddevelopthehypotheses.

2.1CustomerPerceivedValue TechnologyisonlyanenablerofnewandinnovativeLBS.Customers’evaluationof

the usage experience is not based on the technology but mainly on how valuable they

perceivethelocation-basedinformationtobeincertaincontext(Lehrer,Constantiou&Hess,

2011).Thisisrelevantespeciallyinthelocation-basedapplication,wherethepersonal,social,

psychologicalandphysicalcontextshouldbetaken intoaccountwhiletheservice isbeing

used(Carroll,Howard,Peck&Murphy,2002a;Tamminen,Oulasvirta,Toiskallio&Kankainen,

2004).

Customervalueisacquiredfromaperson’sexperienceandinteractionwithaproduct

orservice.Itbecomesafundamentalissueinmarketingresearchsinceitislinkedtooverall

business performance. Customer value perception provides a relevant background for

assessingmobileservicesandthevalueofthecontentsfromacustomer’spointofview,since

customersmayperceive thevalueofanofferingdifferentlybasedonneeds,preferences,

personalvalueandfinancialresources(Ravald&Grönroos,1996).Valueperceptionmayalso

varybasedontheusagesituation(Anckar&D’Incau,2002).

An extensive framework on consumption-related values, which incorporates

literaturefromseveralfieldsareofferedbythetheoryofconsumptionvalues(Shethetal.,

1991).Thequestion‘whywebuywhatwebuy’isafundamentalissueinconsumerbehavior,

marketingandeconomicsliterature.Theoriesofconsumptionvaluesandconceptssuchas

utility,valuecreation,andcustomerloyaltyareallwell-establishedconceptsinthemarketing

literature,andalsodepictthefactors influencingpurchasedecisionsandthefutureuseof

productsandservices.Thesetheorieshavebeenappliedinelectronicmarketingcontexts.For

example:consumerdecisionstouseornotusetheInternetforpurchasing(Andrewsetal.,

2007),andconsumerdecisionsaboutusingmobilecontentservices(e.g.Pihlström&Brush,

2008;Pura,2005).Previousstudieshaverevealedconsumerperceivedvalueasanimportant

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antecedentofthepurchasingintentionortheuseofaservice(Parasuraman&Grewal,2000;

Shethetal.,1991;Sweeney&Soutar,2001;Zeithaml,1988).Other findingspropose that

mobileserviceuse isnot technologydriven,butvalue-driven instead(Constantious,2009;

Pura, 2005). This is especially relevant in themobile services,where the personal, social,

psychological and physical context that the service is being used in should be taken into

account(Carrolletal.,2002a;Tamminenetal.,2004).

Theimportanceofthetheoryofconsumptionvaluesliesinpostulatingthatcustomers

balance value assessments for making informed, intrinsically and extrinsically motivated

consumptiondecisions(Kimetal.,2007).Manyscholarsagreethattherearetwomotivesfor

acquiringproductsandservices:functionalneeds,andnon-functionalneeds,associatedwith

social,emotional,andepistemicvalues;theseconceptsmayalsobeappliedinthedomainof

IT(Tureletal.,2010).

Previousresearchers(Kimetal.,2007;Tureletal.,2007)mentionedthattheusersof

informationandcommunicationtechnology(ICT)arenotonlyusingthetechnology,butalso

usingittousetheservice.InordertounderstandthebehaviorsofICTusers,studiescannot

only consider the technology utilities, but also take other factors into account, such as

emotional,psychological,orsocialfactors(Wang,etal.,2013).Moreover,boththemarketing

andtheInformationSystems(IS)disciplineshaveempiricallyshownthatperceivedvalueis

multi-dimensionalandcanbemeasuredbyavarietyofinstruments(Pura,2005;Sweeney&

Soutar, 2001). Several empirical studies have applied the perceived value concept to

investigatetheadoptionandusageofmobiletechnologies,suchasmobileinternet(Kimet

al.,2007), location-basedservices(Pura,2005),ormobiledataservices(Kim&Han,2009;

Yang&Jolly,2009),Thosestudiesdiscoveredthesignificantinfluencesofperceivedvalueon

customers'adoptionorusagebehaviors.Therefore,thisstudyutilizedthemulti-dimensional

valueapproachtoanalyzetheeffectsoncommitmentandbehavioralintention.

Pura (2005) did a similar research in analyzing the effect of five value dimensions

towards attitudinal and behavioral components of loyalty: commitment and behavioral

intentions.ThestudyexaminedtheLBSofferedbyadirectoryserviceproviderthatallows

peopletofindthenearestservicelocationbyorderingtheinformationviaatextmessage.

Theresultsindicatedthatcommitmentandthreevaluedimensions:conditional,convenience

and monetary value had a significant, positive relationship with behavioral intentions.

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Conditionalvaluehadthestrongestinfluenceonbehavioralintentions,followedcloselyby

commitment.Then,conveniencevalueandmonetaryvaluehadaminoreffectonbehavioral

intentions,comparedtootherconstructs.Furthermore,theothervaluedimensionshadan

indirecteffectviacommitment.Thus,commitmentwas influencedstronglybyconditional

valueandalmostasstronglybyemotionalvalue.Onthecontrary,thepositiveeffectsofsocial

valueoncommitmentandthenegativeeffectofepistemicvalueonbehavioral intentions

werenotsignificant.However,Purahadnotincludedprivacyconcernasoneofthepredictor

forbehavioralintention.Thus,thecurrentstudyaddprivacyconcerntoexaminewhetherit

hasimpactonbehavioralintention.

Thesefindingsareexplainedfurther inthenextsectionandusedasreferencesfor

hypothesesforthisstudy.

2.1.1ValueDimensions

Sheth et al. (1991) identified five value dimensions, which are functional, social,

emotional,epistemicandconditionalvalue.Sincenomeasurementitemswerereportedto

validate thisperceivedvaluemodel in themobileapplications context,other researchers’

workhasbeenusedassupporttodefinethesedimensionsindetail,primarilyadaptedfrom

Pura(2005)whousedthesamedimensionsforelectronicself-servicecontext.

Socialvalueisdescribedasthesocialapprovaloranenrichedsocialself-conceptthat

emergesfromusingtheservice(Sweeney&Soutar,2001).Socialvaluehasbeenproposedto

bepositivelyrelatedtocommitmenttoarelationshipwiththecompany(Hennig-Thurauet

al.,2002;Wangetal.,2004).However,Pura(2005)foundthatsocialvaluedidnothavea

significant impact on commitment for the reasonpeoplemight use the services privately

while on the move and there might not be any social contacts there when travelling in

unfamiliar places. Furthermore, earlier research also supports that in electronic

environments,family,friendsandpeersdonotposeasmuchsocialpressureforstartingto

useself-servicesastheydointraditionalservices(Fitzgerald,2002). It is interestingtosee

howsocialvaluewillplayoutinLBSapplicationscontext.However,inGO-JEK’scasethereis

aprobabilitythatsocialenvironmentplayrolessincethereisafamouswordinIndonesia,

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“Gojekinaja”,whichmeans“Justorder‘gojek’todoit”.Forexample,inameetingwhenan

individual wants to send a small package in a short period of time, his/her colleague

recommendsusingGO-JEKtodeliverit.Therefore,itisexpectedthatasignificantrelationship

willhappenbetweensocialvalueandcommitmenttowardsLBSmobileapplications.

H1.SocialvaluehasapositiveimpactoncommitmenttoGO-JEK

Emotionalvalueisattainedwhenaproductorservicearousedfeelingsoraffectivestates

(Shethetal.,1991;Sweeney&Soutar,2001).Afunorenjoyableexperiencewhenusingthe

servicefor instancehasarelationshiptoemotionalvalue(Holbrook,1994).Entertainment

andfunseekinghavebeenreportedascustomers’motivestousemobileservices(Leung&

Wei, 2000). Pura (2005) revealed that emotional value has the strongest influence on

commitmentandhasanindirecteffectonbehavioralintentionsthroughcommitmentaswell.

Furthermore, emotional value helps to strengthen the emotional connection with target

customers,whichisimportanttogainloyalcustomers(Butz&Goodstein,1996).Hence,the

authorexpectedapositiverelationshipbetweenemotionalvalueandcommitmenttowards

usingLBSmobileapplications.

H2.EmotionalvaluehasapositiveeffectoncommitmenttoGO-JEK

Conditional value can be described as situations that impact the choice. Such

circumstancesmightberegular,onceinalifetimeevents,oremergencysituations(Shethet

al.,1991).Holbrook(1994)proposedthatconditionalvaluedependsonthecontextinwhich

the value judgment happens and exists only within a specific situation. Context can be

specified as under certain conditions depending on time, location, the social and

technologicalenvironment,ormentalstateoftheuser(Pihlström&Brush,2008).Itistobe

expectedthatconditionalvaluewillbeextremelyimportantinLBSsincetheyareusedfirstly

inaspecificcontextorsituation.Inturn,contextisexpectedtointensifytheneedtousea

certainserviceinaspecificsituationandthusinfluencetheintentiontousetheservice.For

example, if a person is stuck in the traffic, he or she can use themobile LBS ride-hailing

application toorder foramotorcycle rider topick themupwhere theyareandget them

wheretheywanttogo.Forthatreason,conditionalvalueisexpectedtopositivelyinfluence

bothcommitmentandbehavioralintentions.

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• H3.ConditionalvaluehasapositiveeffectoncommitmenttoGO-JEK

• H4.ConditionalvaluehasapositiveeffectonbehavioralintentionstouseGO-JEK

Functional value is obtained from effective task accomplishment. It often relates to

monetaryvalueorsupremacycomparedwiththealternatives(Shethetal.,1991).Wanget

al.(2004)definedfunctionalvalueas“utilityderivedfromtheperceivedqualityandexpected

performanceoftheproductorservice”. Ina literatureaboutconsumerbehavior,efficient

taskfulfillmentisalsoreferredtoastheoutput/inputratio,convenience,availabilityorease

of use (Holbrook, 1994). Moreover, convenience is an important factor in using mobile

technologyinadditiontotaskfulfillment(Anckar&D’Incau,2002;Caroletal.,2002a,b).For

thosereasons,inthisstudyfunctionalvalueaspectsareportrayedbytwovaluedimensions,

monetaryvalueandconveniencevalue.AccordingtoresearchdonebyWangetal.,(2004),

functional value has a direct effect on behavior. Pura (2005) found that monetary and

conveniencevaluehaveapositiveinfluenceonbehavioralintentionwhenusingmobileLBS.

Therefore, it is expected that monetary value and convenience value affect behavioral

intentionspositively.

• H5.MonetaryvaluehasapositiveeffectonbehavioralintentionstouseGO-JEK

• H6.ConveniencevaluehasapositiveeffectonbehavioralintentionstouseGO-JEK

Pura (2005) explained that epistemic value of using LBS relates to experienced

curiosity,novelty,orobtainedknowledge.PihlströmandBrush(2008)describedepistemic

valueasnoveltyvalueandthebenefitgainedfromlearningnewwaysofdoingthings.Inan

LBS application context, it also inevitably involves the curiosity for a new content and

knowledgegainedthroughtestingnewservices.Noveltyisoftenpresentedasareasonfor

tryingnewservices.However, somepreviousstudies’ resultsshowedthatnoveltyaspects

may negatively influence overall perceived value and also indirectly behavioral intentions

(Donthu&Garcia,1999;Duman&Mattila,2005).ResearchdonebyPura(2005)showedthat

epistemicvaluehadnosignificanteffectonbehavioralintentionstousemobileserviceLBS.

Customers who are motivated by epistemic value commonly return to their regular

consumptionpatternsaftercontentedwiththechange(Shethetal.,1991).Customersmay

notusetheserviceagain,norfeelcommittedtotheserviceproviderandtheapplicationin

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general since the novelty value disappears. Thus, epistemic value is expected to have a

negativeinfluenceonbehavioralintentionsinLBSapplicationuse.

H7. Epistemic value has a negative effect on behavioral intentions to use LBS

application

2.2TheImpactofPerceivedValueonCommitmentandBehavioralIntention

YangandPeterson(2004)arguedthatperceivedvaluenotonlyaffectsconsumption

choicedecisionasitsoriginalview,butmayalsoinfluencemanyotherbehavioraloutcomes

such as customer satisfaction, behavioral usage intentions, and loyalty. Customers’ value

perceptionshavebeen found to increase individuals’ readiness tobuyanddecrease their

searchintentionsforalternatives(DeRuyter&Bloemer,1999;Grewaletal.,2003;Hellieret

al.,2003).Inearlierresearch,behavioralintentionshavebeenusedbyseveralresearchersto

predictloyalbehavior(Ajzen&Fishbein,1980;Duman&Mattila,2005;Gremler&Gwinner,

2000;Mathwicketal.,2001;Odinetal.,2001;Sweeneyetal.,1999;VanRieletal.,2004).

Furthermore,several researchershaveconfirmedthatcommitmentandbehavioral

intentionsarebothloyalty-relatedconcepts,yetbydefinitionthesevariableshavedifferent

constructs(Beattyetal.,1988;Pritchardetal.,1999).Loyaltyisdefinedasthecombination

ofbrandattitudeandbehaviorwhichmeasuretowhatdegreeanindividuallikeandbuysa

brandrepeatedly(Day,1969;Pritchard&Howard,1997).Theseloyaltyindicatorsgenerally

describewhatproportionofbuyer’sbehaviorarebasedonorattributedto loyalattitude.

Commitmentisdifferentfromthiscombineddefinitionasitisusuallyconsideredinpurely

affectivetermsthatmeasureconsumer’sattitudeofattachmenttoabrand.Commitmentcan

bereferredasapsychologicalforcethatlinksthecustomertotheorganizationwithwhich

the customer does business (Fullerton, 2005). Morgan & Hunt (1994) supported this

differenceanddescribedcommitmentasanenduringdesiretocontinueanattachmentor

relationship.Johnsonetal.(2001)reportedthataffectivecommitmenthadalargereffecton

loyalty than satisfaction in four of the five industries studied in that investigation.

Additionally,earlyviewsonloyaltyfocusedonlyonrepeatpurchasebehavior,howeverthe

definitions of customer loyalty include both the attitudinal and behavioral component

(Morgan&Hunt,1994;Oliver,1999).

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Behavioralintentionisinfluencedbyrepeatedepisodesofpositiveaffecttowardthe

brand,andbydefinitionsuggestsabrand-specificcommitmenttore-purchase(Oliver,1999).

It isa loyaltystatethatcontainswhatappearstobethedeeplyheldcommitmenttobuy.

Therefore, commitment and behavioral intentions should be measured as individual

constructs. Previous research supports the importance of commitment in relationship

marketingandhowitisnecessarytounderstandthereasonsbehindthebehavior(Dwyeret

al.,1987;Gundlachetal.,1995;Morgan&Hunt,1994;Roosetal.,2005).

Behavioralintentions,asanaffirmedlikelihoodtoengageinacertainbehavior,are

important indicators of customers’ future behaviors. According to the Theory of Planned

Behavior (TPB), behavioral intentions trigger future behaviors (Ajzen & Fishbein, 1980).

Favorablebehavioralintentionsleadtocustomerloyalty,whichisdefinedas‘‘adeeplyheld

commitmenttorepurchaseorpatronizeapreferredproductorserviceinthefuture’’(Oliver,

1997). Behavioral intentions canbe viewed as signals that showwhether a customerwill

continue toutilize a company’s servicesor switch toadifferentprovider (Zeithamlet al.,

1996).

Inservicemarketing,commitmenthasbeenfoundtobethemostimportantfactorof

loyalcustomerbehavior(Gundlachetal.,1995;Harrison-Walker,2001;Johnsonetal.,2001;

Wetzelsetal.,1998).Moreover,committedcustomerstendtobemoretoleranttoservice

failures (Mattila, 2004). It is important tomeasure commitment to the LBS application in

order to estimate if a customer is completely loyal or only use the same mobile LBS

applicationoutofhabit,convenienceorconstraints.Commitmentisespeciallyimportantin

theLBSapplicationcontext,whereusagedecisionsaremadeinacertainsituationalcontext

andpeoplemaynotusetheapplicationfrequently,butcanstillberegardedasloyaltoone

applicationiftheyarecommittedtousethesameapplicationnexttimetheneedappears.

Previousresearchsuggestedthatcommitment isoneofthemaindriversof loyalty

besideperceived value (Fullerton, 2005;Hennig-Thurauet al., 2002;Odekerken-Schroder,

1999;Pagani,2004;Wangetal.,2004).Itisexpectedthattheimportanceofcommitmentin

drivingloyalbehaviorisevenhigherinthelocation-basedcontext.Researchconductedby

Pura (2005) found that commitment positively influence behavioral intentions in the LBS

context. Therefore, it is expected that commitment has positive effect on individual’s

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intentiontousemobileLBSapplication.

H8.CommitmenthasapositiveeffectonbehavioralintentionstouseLBSapplication

2.3PrivacyConcern

Privacybecomesconsumers’concernastheconsequenceofusingtheLBStechnology.

This phenomenon is the so-called ‘location-aware future’ (Wilson, 2012). Consumers

acknowledgethattheirlocationcanbeobservedthroughcameras,mobilephonesandother

electronicdevices.AsstatedbyKinsley(2010)andsupportedbyAnderson(2010),LBSare

classified as anticipatory technology. LBS, specificallymobile LBS application need users’

consensustoallowtheapplicationtoseetheirlocationsandutilizetheinformationtoprovide

servicestoconsumers.Hence,withouttheagreementfromtheconsumers,LBSwillnotwork

(Theodorakopoulosetal.,2014).Furthermore,tousethefullpotentialofLBS,customershave

tocomplywiththeuseofmarketingandarewilling,aswellascomfortable,toprovidetheir

personalinformationsuchascustomers’locationthroughtheirsmartphones.

Itiswellknownthatprivacyconcernsmakepeopletobemorecautiousaboutdisclosing

their information (Culnan,1993;Culnan&Bies,2003;Dinev&Hart,2006; Li et al., 2011;

Metzger, 2004). For instance, a study byMalhotra, Kim&Argawal (2004) found that the

internet users concern about the collection of their personal information and for what

purposesthisinformationwillbeused.Researchersfoundthatcustomerswhocaregreatly

about theirprivacyare less likely toresponsepositivelycomparedtoconsumerswith less

privacy concerns.Consumerswhohavehigher levelofprivacy concernaremorehesitant

towards LBS and are less open-minded to the potential advantage of this service (Han&

Maclaurin,2002;Ward,Bridges,&Chitty,2005;Xu,etal.,2011).Inconclusion,thehypothesis

is:

H9.PrivacyconcernhasinsignificanteffectonbehavioralintentiontouseGO-JEK

TheresearchmodelillustratingthehypothesizedrelationshipsisshowninFigure1.

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Figure1.TheoreticalFramework

EmotionalValue

ConditionalValue

MonetaryValue

ConvenienceValue

EpistemicValue

Commitment

BehavioralIntention

H1

H2

H4

H5

H6

H7

PrivacyConcern

H8

SocialValue

H3

H9

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3Methodology

3.1Pre-test

Apre-testwasconductedtoexaminewhethertheconstructsofconsumerperceived

valuearerelevantforthecontextoflocation-basedserviceapplication,whichinthiscaseis

GO-JEK.Interviewswereheldwith7participantswhoseagerangedfrom18to26-year-old

whohaveexperienceinusingtheLBSapplications.Therewere4femalesand3maleswho

tookpart inthetest.Aquestion listwasusedto initiateandguidethe interviewusingan

open-endedquestioningtechnique(seeAppendixC).Thetopicsintheinterviewconsistedof

participants’understandingregardingtheLBSapplication,thefivevaluedimensionsusedby

previousliterature:social,emotional,functional,conditionalandepistemicvalueandtherole

ofprivacyconcern.Moreover,non-directivepromptsandprobingquestionswereused to

assist in initiatingand focusing interview.The instrument thuswas refinedwith regard to

content,wordingaccuracy,andrelevance.Thisprocedurehelpedtomakethefinalsurvey

instrumentmorevalidandclearer.

From the results, it can be concluded that respondents were aware of GO-JEK

existenceandmostoftheindividuals’reasonstochooseGO-JEKwhenorderingamotorcycle

taxi.ParticipantswerealsoawarethattheysharedpersonalinformationwithGO-JEK.

3.2QuantitativeMethod

Inordertoexaminehowperceivedvalueofcustomersandprivacyconcernimpact

commitmentandbehavioral intentions tousemobileLBS,aquestionnairewasconducted

among the customers. The objective of the survey was to discover whether customers

perceivedvalueshaveinfluenceoncommitmentandbehavioral intentionsandtheroleof

privacyconcernonbehavioralintentions.Customerperceivedvaluesweremeasuredusing

itemsfrompreviousliterature(Pura,2005;Chen&Dubinsky,2003;Dodds&Monroe,1991;

Soutar & Sweeney, 2003; Sweeney &Soutar, 2001; Sweeney et al., 1999) which were

adaptedaccordingtotheresultsofthepre-test.Commitmentandbehavioralintentionswere

measuredwithitemsrelatedtotheuseoftheappingeneral.Themeasureswereadapted

andmodifiedfrompreviouslyestablishedcommitmentandbehavioralintentionsmeasures.

Constructs forprivacyconcernswereadaptedandmodified frompreviousstudies (Smith,

18

Milberg&Burke, 1996;Dinev&Hart, 2006). See Table 1 for the completemeasurement

items.

3.2.1Procedure

The datawere collectedwith online survey targeted the end users ofmobile LBS

application. The survey consisted of 40 questions regarding topics related to consumer

perceivedvalueandloyaltyinLBSapplicationcontext.Thesetopicsarecreatedtotestthe

hypothesesstated in the theoretical frameworkandweremeasuredona five-pointLikert

scaletoseehowpeopleratecertaintopics.Score1isfor‘totallydisagree’and5isfor‘totally

agree’.Demographicquestionsandbackgroundquestionswerealsoincludedtofilterwho

has filled the survey to prevent the lack of controllability over who filled in the survey

(Granello&Wheaton,2004;Lefever,Dal,&Matthiasdottir,2007).Thetopicswerepicked

based on their relation to the research topic, their theoretical background and the

tested/provedusabilityandreliability.

AscanbeseeninAppendixA(inEnglish)andAppendixB(inIndonesian),thesurvey

started by explaining the reason for conducting this research and presented some basic

informationsuchasduration,thecompanycase,andprivacyassurance.Then,onthefirst

questiontherewasaninformedconsentstatingthattheparticipantwasvoluntarilytaking

part in this research. Followed by the demographic questions: gender, age, domicile and

completededucationlevel.Afterthisintroductorypart,therealsurveybeganbyintroducing

Go-Jekasthecasestudy.Questionsaboutthefrequencyofend-usersusingGo-Rideservice

inaweekwasincluded.Then,thesurveywasdividedto9parts,basedoneachconstructas

explainedinthetheoreticalframeworks.Lastly,attheendofthesurvey,theparticipantwas

thankedforhis/hertime.Theresultswereanalyzedbytheresearcherandstatedintheresult

sectionofthisthesis.

3.2.2Participants

Earlier research advised targeting surveys only to those respondents who have

experienceofusingtheapplication(Pura,2005).Thus,Indonesianend-usersofthemobile

LBSapplicationsweretargetedtofill inthesurvey.Thequestionnairewassharedthrough

instantmessagingandsocialmediaplatforms(WhatsAppandFacebookinparticular).Since

19

Go-JekisoriginallyfromIndonesiaandthevastmajorityofIndonesiansarefamiliarwithit,

thesurveywasinBahasaIndonesia.

Therewere517responsescollected,with407ofthemwereselectedtocontinueafter

datacleaningprocedure(145malesand262females).Themajorityoftheparticipantswere

from Jakarta (39,8%) andWest Java (32,7%).Moreover, 53,8 percent of participants had

obtainedaBachelordegreeand24,1percenthadgotaMasterdegreeorPhD.

Lastly, the frequency of respondents using Go-Jek per week was considered. The

frequencyanalysiswasconductedtoanalyzeparticipants’responsesonthequestion“How

oftendoyouuseGO-JEKinaweek?”.Accordingly,34.2percentoftherespondentspecified

usingGO-JEKforlessthantwodays,24.6percentusedit2to3days,22.9percentusedGO-

JEK4to5daysand18.4percentusediteveryday.

3.2.3Measures

The datawere collectedwith an online questionnaire targeted to Indonesian end

usersofthemobileLBSapplication.250respondentsweretargetedtofillinthesurvey.Earlier

researchadvisedtargetingsurveysonlytothoserespondentswhohaveexperienceofusing

theapplication(Pura,2005).Thiswasconsideredespecially important inserviceareas like

LBS application where non-users usually have no practical perception of the application.

Hence, the precondition for participating in the surveywas that the respondent has had

experienceofusingthemobileLBSapplication.Backgroundquestionswereaskedtoensure

thatthecustomersactuallyhadusedatleastonesearchwordlistedinthesurvey.

The dependent variables were measure on five-point Likert scale. Accordingly,

participantsweregivenchoicestoanswerrangingfromstronglydisagreetostronglyagree

(1.Stronglydisagree;2.Disagree;3.Neutral;4.Agree;5.Stronglyagree).

Tomeasuretheconstructsoftheconceptmodel,severalquestionshadbeenadapted

fromearlierresearchasshowninTable1andthecompletequestionnairecanbefoundin

AppendixA(inEnglish)andB(inBahasaIndonesia).

20

Table1.MeasurementItems

Constructs Itemsandtheirsources LabelCronbach’s

AlphaFactorLoading

MonetaryValue (AdaptedandmodifiedfromChen&Dubinsky2003;Dodds&Monroe1991;Sweeney&Soutar2001)

.78

1. ThepricethatGO-JEKoffersisacceptable

MV1

.78

2. GO-JEK’sservicesaregoodvalueformoney

MV2

.71

3. TheservicesbyGO-JEKarebettervalueformoneythanIwouldpayforthesameserviceviaotherapplications

MV3

.68

4. TheaffordablepriceiswhatattractedmetouseGO-JEKregularly

MV4

.67

ConvenienceValue

(AdaptedandmodifiedfromAnderson&Srinivasan,2003;Mathwicketal.2001)

.84

5. IsavetimeandmoneywhenIorderviaGo-Jek

CNV1

.64

6. IvaluetheeaseofusingGo-Jekapplication

CNV2

.47

7. IvaluetheoptionofusingGo-Jekapplicationinstantlyviamobiledevice

CNV3

.53

8. IvaluetheconvenienceofusingGo-Jek CNV4 .53 9. UsingGo-Jekapplicationmakesmylife

easierCNV5

.63

10. UsingGo-Jekapplicationisanefficientwaytomanagemytime

CNV6

.70

SocialValue (AdaptedandmodifiedfromSoutar&Sweeney2003;Sweeney&Soutar2001)

.81

11. IfeelsocialpressurefrommyfamilytouseGo-Jek

SV1

.86

12. IfeelsocialpressurefrommyfriendstouseGo-Jek

SV2

.83

13. IlookforsocialapprovalwhenIuseGo-Jek

SV3

.80

14. AgoodimpressionfrommysocialenvironmentiswhatIamaimingforwhenusingGo-Jek

SV4

.55

EmotionalValue (AdaptedandmodifiedfromSoutar&Sweeney2003;Sweeney&Soutar2001)

.86

15. UsingGo-Jekgivesmepleasure EMV1 .55 16. UsingGo-Jekmakesmefeelgood EMV2 .76 17. UsingGo-Jekmakesmefeelrelaxed EMV3 .81 18. IdonotfeelanxiouswhenusingGo-Jek EMV4 .73ConditionalValue (Createdforthisstudy)

.83

19. IvaluetheservicethatGo-Jekoffers CND1 .75

21

20. IvaluethehelpfromGo-JektogetwhatIneedinacertainsituation

CND2

.80

21. IvaluetheindependenceofplaceandtimeofferedbyusingGo-Jek

CND3

.72

22. Go-Jekeasesmydailyactivity CND4 .55EpistemicValue (AdaptedfromDonthu&Garcia,1999) .83

23. IuseGo-Jektoexperimentwithnewwaysofdoingthings

EPV1

.68

24. IuseGo-Jektotestoutthenewapplication

EPV2

.76

25. IuseGo-Jekoutofcuriosity EPV3 .86 26. IuseGo-Jektosatisfiesmy

inquisitivenessEPV4

.87

Commitment (AdaptedandmodifiedfromFullerton(2003),Garbarino&Johnson(1999)andZeithamletal.(1996))

.90

27. IfeelloyaltouseGo-Jek CM1 .81 28. Go-Jekhasagreatdealofpersonal

meaningformeCM2

.72

29. IamaloyaluserofGo-Jek CM3 .82 30. IconsiderGo-Jekasmyfirstchoiceto

orderthistypeofserviceCM4

.81

BehavioralIntention

(AdaptedfromGremler&Gwinner(2000),Taylor&Baker(1994)andZeithamletal.(1996))

.70

31. IintendtocontinueusingGo-Jek’sservicesinthefuture

BI1

.67

32. IwillusesimilarapplicationslikeGo-Jekmorefrequentlyinthefuture

BI2

.77

33. ThereisaprobabilitythatIwillorderotherservicesorproductbyGo-Jekinthefuture

BI3

.76

34. IcanrecommendGo-Jektoothers BI4 .48PrivacyConcern (AdaptedandmodifiedfromSmithetal.,(1996);

DInev&Hart(2006)) .86

35. ItbothersmetodisclosemypersonalinformationtoGo-Jek

PC1

.65

36. Iamconcernedthatotherpeoplemaymonitormycurrentlocationcontinuously

PC2

.79

37. Go-Jekiscollectingtoomuchinformationaboutme

PC3

.77

38. IamconcernedthattheinformationIsubmittoGO-JEKcouldbemisused

PC4

.81

39. Go-Jekmaydivulgemypersonalinformationtounauthorizedpartieswithoutmyconsent

PC5

.75

40. Mypersonalinformationcouldbemis-usedwhentransactingwithGo-Jek PC6

.79

22

3.2.4ReliabilityAnalysis

Cronbach’sAlphascorewasusedtocheckthereliabilityoftheconstructs.Asshown

inTable2,allconstructs(MonetaryValue,ConvenienceValue,SocialValue,EmotionalValue,

ConditionalValue,EpistemicValue,Commitment,BehavioralIntentionandPrivacyConcern)

werereliablesincetheCronbach’sAlphascoreswereatleast.70.

3.2.5FactorAnalysis

Toknowwhetherallitemscreatedmeasuredtherightconstruct,factoranalysiswas

conducted(Table2).Inordertoseethecorrelationamongthefactorsandtherelationship

amongtheitemsintheconstructs,orthogonalrotation(Varimax)methodwasusedtorotate

thefactorsoneanother.Itwasproposedthataconstructshouldhaveatleastthreeitems

with>0,4factorloadingscore(Field,2013).

Fromthe results shownabove,mostof the itemswere fittedwitheachconstruct,

except two items in Commitment constructwhich supposedly are in Behavioral Intention

construct.Thiscouldbeduetosimilarmeaningbehindeachstatement.However,basedon

CronbachAlphaanalysis,itwasconcludedthatthetwoconstructswerestillacceptabletobe

consideredasbehavioralanalysisconstructs.

23

4Results

4.1DescriptiveStatistics

Mean and standard deviation for each variable were measured for this study.

Accordingtothecollecteddata,socialvaluehadthehighestscorewithM=3.63,SD=.77,while

conditionalvaluehadthelowestscorewithM=1.89,SD=.49.Theanalysisresultscanbefound

intable2.

Table2.DescriptiveStatisticsVariables N Mean Std.Deviation

SocialValue 407 3.63 .77

EmotionalValue 407 2.39 .57

ConditionalValue 407 1.89 .49

MonetaryValue 407 2.26 .60

ConvenienceValue 407 1.86 .51

EpistemicValue 407 2.80 .80

Commitment 407 2.51 .79

BehavioralIntention 407 2.18 .52

PrivacyConcern 406 2.69 .76

4.2CorrelationsAnalysis

In this section, linear relationships between different variables are revealed.

Furthermore,thescoreofthecorrelationcoefficientsgavetheinsightsaboutthestrength

anddirectionoftheserelationships.Table4displaysthewholeresult.

Pearson’s correlationanalysiswasperformed.Themost significant correlationwas

between conditional value and convenience value (r=.62, p<.01). Privacy concern and

commitmenthadthelowestrelationcorrelationscore(r=-.15,p<.01).

24

Table4.CorrelationAnalysis

SocialValue

Emotiona

lVa

lue

Cond

ition

al

Value

Mon

etary

Value

Conv

enience

Value

Epistemic

Value

Privacy

Concern

Commitm

ent

Beha

vioral

Intention

SocialValue 1

EmotionalValue .18** 1

ConditionalValue -.08 .47** 1

MonetaryValue .11* .35** .40** 1

ConvenienceValue -.10* .50** .62** .49** 1

EpistemicValue .20** .21** .13** .15** .08 1

PrivacyConcern .07 -.18** .03 -.04 -.06 .17** 1

Commitment .13* .57** .40** .43** .46** .16** -.15** 1

BehavioralIntention .00 .40** .47** .33** .47** .24** -.02 .50** 1

**.Correlationissignificantatthe.01level(2-tailed)*.Correlationissignificantatthe.05level(2-tailed)

4.3RegressionAnalysis

This section discusses the result of regression analysis thatwas conducted in this

study.Hierarchicalanalysiswasdonetoexaminetheinfluenceofperceivedvaluedimensions

andprivacyconcernoncommitmentandbehavioralintention.Inthisstudy,twomodelswere

analyzed. The firstmodel tested the influenceof perceived valuedimensions andprivacy

concernoncommitment.Onthesecondmodel,thestudyaddedcommitmentaspredictor

andtestedfortheirinfluencetowardsbehavioralintention.

Perceivedvaluedimensionsandprivacyconcernwereabletoexplainedaround40

percent of the variance on commitment in using GO-JEK application (Adj. R2=.396,

25

F(4,405)=38.991,p<.001).Inthismodel,itcouldbeinferredthatcommitmentwasstrongly

influencedbytheemotionalvalue(ß=.366,p<.001),whereasepistemicvaluehadinsignificant

effectoncommitmentwithbetascoreof=.044,p=.281(seeTable5).

Furthermore,perceivedvaluedimensionsandprivacyconcern,withtheadditionof

commitmentaspredictor,weretestedtowardsbehavioralintentionandcoulddescribed37

percentofbehavioralintention.Theregressionanalysisofthemodifiedmodelrevealedthat

commitment(ß=.314,p<.001)hadsignificantinfluenceonbehavioralintention.Amongstall

predictors, emotional valuehad themost insignificanteffectonbehavioral intentionwith

betacoefficientscore.009,p=.865,inwhichthedetailcanbefoundinTable6.

Table5.RegressionAnalysisonCommitment

ß Sig. df(reg,res) F Adj.R2

Model1 .000 (7,405) 38.991 .396SocialValue .057 .174 EmotionalValue .366 .000 ConditionalValue .059 .259 MonetaryValue .189 .000 ConvenienceValue .147 .008 EpistemicValue .044 .281 PrivacyConcern -.081 .046

Table6.RegressionanalysisonBehavioralIntention

ß Sig. df(reg,res) F Adj.R2

Model2 .000 (8,405) 30.199 .366SocialValue -.039 .367 EmotionalValue .009 .865 ConditionalValue .211 .000 MonetaryValue .016 .735 ConvenienceValue .161 .005 EpistemicValue .153 .000 PrivacyConcern .012 .767 Commitment .314 .000

4.4HypothesesOverview

Fromtheinterpretedanalysisresultsintheprevioussections,Table8showswhether

all formulated hypotheses in this researchwere supported or not. Overall, therewere 4

supportedhypothesesand5werenot.

26

Table8.HypothesesOverview

Hypotheses ResultH1 SocialvaluehasapositiveimpactoncommitmenttousetheLBS

applicationsNotsupported

H2 EmotionalvaluehasapositiveeffectoncommitmenttousetheLBSapplications

Supported

H3 ConditionalvaluehasapositiveeffectoncommitmentinusingtheLBSapplication

NotSupported

H4 ConditionalvaluehasapositiveeffectonbehavioralintentiontouseLBSapplication

Supported

H5 MonetaryvaluehasapositiveeffectonbehavioralintentionsinusingtheLBSapplication

Notsupported

H6 ConveniencevaluehasapositiveeffectonbehavioralintentionsinusingtheLBSapplication

Supported

H7 EpistemicvaluehasanegativeeffectonbehavioralintentionstouseLBSapplication

NotSupported

H8 CommitmenthasapositiveeffectonbehavioralintentionstouseLBSapplication

Supported

H9 PrivacyconcernhasnegativeeffectonbehavioralintentiontouseLBSmobileapplication

Notsupported

4.5AdditionalAnalysis

Additional analysis was conducted to know whether the current model can be

modifiedand/orchanged.Inordertodiscoverwhetherthereareindirecteffectsofperceived

valueonbehavioralintentionthroughcommitment,thisstudyperformedthePROCESStool

byHayesasthemediationanalysis.ThisSPSSadd-onanalyzedthedatatofindifamediating

effectispresent,andifitissignificant.Amediationissignificantwhenthefollowingcriteria

is met: the relationship between independent and mediating variable is significant, the

relationship between the mediating variable and dependent variable is significant, the

relationship between the independent variable through the mediating variable to the

dependent variable is both significant and stronger than the relationship between the

independentanddependentvariableifthemediatingvariablewouldnotbepresent(Hayes,

2013).

AlthoughthedialogboxinPROCESSonlyhasonespotforanindependentvariable,

thereisanotherdialogboxwhereotherindependentvariablescanbeincludedascovariates.

Addingothervariablesusingthisdialogboxmakesnodifference intermsofhowthetwo

variablesaretreatedintheregressionequation.

27

Accordingtotheresults,theeffectsofsocialvalueoncommitment(b=.06,p=.17)was

found as insignificant. Since the criteria is the relationship between independent and

mediatingvariablehastobesignificant,mediationisnotmet.

Figure 2 shows the results of mediation analysis of commitment on behavioral

intention.Emotionalvaluewasfoundtohaveasignificantinfluenceoncommitment(b=.511,

p<.001)andcommitmenthasasignificanteffectonbehavioralintention(b=.205,p<.001).

Withaconfidenceintervalof95%(.07,.16)ofindirecteffectwhichdonotcrosszero,itcan

beassumedthatemotionalvaluehasanindirecteffectonbehavioralintentionthroughsocial

value.

Conditional value was found to not have significant effect on commitment (b=1,

p=.26).Sincethecriteriaof“therelationshipbetweenindependentandmediatingvariableis

significant”isnotmet,meaningnomediationwasfound.Inthiscase,commitmentdidnot

actasmediatorbetweenconditionalvalueandbehavioralintention.

Moreover, Figure 3 shows that monetary value has a significant influence on

commitment (b=.251, p<.001) and commitment showed significant effect on behavioral

intention(b=.205,p<.001).Furthermore,withaconfidenceintervalof95%(.023,.087)ofthe

indirecteffectwhichdidnot cross zero,mediation is indicated.Therefore,mediationwas

occurredbetweenmonetaryvalueandbehavioralintentionthroughcommitment.

EmotionalValue

Commitment

BehavioralIntention

.511 .205

.105(Withcommitment)

.008(Withoutcommitment)

.023CI[.065,.165]

Figure2.PROCESSAnalysisforMediationofCommitmentbetweenEmotionalValueandBehavioralIntention

28

Conveniencevaluehasaninfluenceoncommitmentwithb=.230andp<.05,aswellas

commitmenthassignificanteffectonbehavioralintention(b=.205,p<.001).Despitethatboth

results indicatedthatthere isamediation,therelationshipbetweenconveniencevalueto

behavioral intention through commitment was weaker than the relationship between

conveniencevalueandbehavioralintentionwithoutcommitmentasmediator.Hence,itcan

beassumedthatmediationisnotmet.Amoredetailedinsightintothemediationeffectand

canbeseeninFigure4.

Epistemicvalueshowed insignificanteffectoncommitment (b=.04,p=.28).Thus, it

canbeassumed thatmediation through commitment is notoccurringbetweenepistemic

valueandbehavioralintentionasoneofthecriteriaisnotmet.

Privacyconcernhadsignificantnegativeinfluenceoncommitment(b=-.09,p<.05)and

commitmenthadsignificantinfluenceonbehavioralintention(b=.21,p<.001).However,with

MonetaryValueBehavioralIntention

Commitment.251 .205

.052(Withcommitment)

.014(Withoutcommitment)

Figure3.PROCESSAnalysisforMediationofCommitmentbetweenMonetaryValueandBehavioralIntention

.016CI[.023,.087]

ConvenienceValue

Commitment

BehavioralIntention

.230 .205

.047(Withcommitment)

.165(Withoutcommitment)

Figure4.PROCESSAnalysisforMediationofCommitmentbetweenConvenienceValueandBehavioralIntention

.021CI[.007,.090]

29

confidenceintervalof95%(-.04,-.001),theresultsindicatedthattherewasnoindirecteffect

betweenprivacyconcernthroughcommitment.Therefore,mediationisnotoccurred.

30

5Discussion

This study focused on discovering the influence of perceived value dimensions on

commitment and behavioral intention among Indonesian who use GO-JEK application.

Moreover,theeffectofprivacyconcerntowardsbehavioral intentionwasexploredasthe

GO-JEKapplicationisbasedonsharingdata. It is importanttounderlinethatthescientific

literatureonperceivedvaluedimensionswhich thehypotheseswerebuilton,hadmainly

focused onmobile service context in comparison with location-basedmobile application

(Pura,2005).Inthecontextofcurrentstudy,privacyconcernwasaddedasanotherpredictor

ofbehavioral intentionascustomerssharedtheirpersonal informationtoGO-JEKandit is

essentialtoknowcustomers’perceptiononthismatter.

AnonlinequestionnairewasdistributedtousersofGO-JEK.Thenextparagraphwill

presentthediscussionofthisstudy’sfindingsmorecomprehensivelyandalsocomparethe

resultstoexistingliterature.Furthermore,limitationsregardingthisstudywillbediscussed

aswellastherecommendationsforfuturerelatedresearch.Thechapterwillbeendedwith

anoverallconclusionofthewholestudy.

Theresultinthisstudyindicatedthatsocialvaluedoesnothaveasignificantinfluence

oncommitment.ThisfindingconfirmedthepreviousstudybyPura(2005)thatstatedsocial

environmentdidnotplay a significant role inmobile service context. InGO-JEK case, the

reasonmight be thatGO-JEK is an application that offers service. Individuals use itwhen

needsariseandnotusingitbecauseofsocialenvironment.Moreover,socialvaluedidnot

have significant impact on behavioral intention. In addition, people might often use the

application on the move in private. Earlier research also suggested that in electronic

environment,family,friendsandpeersasmuchassocialpressuretouseself-servicesasthey

dointraditionalservices(Fitzgerald,2002).Nysveenetal.(2005)suggestedthatsocialaspects

influencetheintentiontouseservicesmoresignificantly inexperientialthangoal-directed

mobileservice.Hence,socialvaluemightbemoreimportantinmobileLBSthatemphasize

socialinteractionwithingroupinacustomer-to-customercontext,e.g.location-basedmobile

gaming.

31

Commitment was strongly influenced by emotional value, which confirmed the

previousstudythatsuggestedemotionalvaluehadthestrongestinfluenceoncommitment

(Pura,2005).Emotionalvaluerelatestopositivefeelingsandfun.However,inlocation-based

serviceapplication,contextemotioncanalsomeanfeelingsafewhenusingtheapplication

and avoiding negative feeling. Thus, building commitment with communication that

emphasizes the pleasant, safety, emotional aspects of using the application in a certain

situationwhichcouldhelpcustomerstodifferentiatesandrememberGO-JEKnexttimewhen

theneedarisesandstayloyaltouseGO-JEKinthefuture.

Different results were obtained for conditional value, which surprisingly had no

significant influence towards commitment but had significant impact towards behavioral

intention.Itwasimpliedthatindividualsarenotcommittedtouseapplicationforordering

services from GO-JEK in certain situations. Pura (2005) found that conditional value had

significant influence for both commitment and behavioral intention. Contrasting results

betweenthisstudyandPura’smightbebecauseofthedifferentcasestudy.WhilePura(2005)

tookmobile service, this research chose ride-sharing applicationwhere customersdonot

committooneapplication.

Monetaryvaluereferstogoodvalueformoneyandanacceptableprice.Thisstidy

revealed thatmonetary value had significant impact on commitment. In general, GO-JEK

applicationuserswerepricesensitive,butpricemaynotbeoneofthemostrelevantfactors

whencustomersassessedthevalueofapplication.Itisamatterofpriceperceptioncompared

tootheralternativesandcustomerswhoseetheserviceprovidedbyGO-JEKtobeaffordable

andgoodvalueformoneywhentheyneedtheservicemaybewillingtopayfortheservice

intherightcontext.Thisreasonisprobablycustomerswhousethelocation-basedapplication

evaluate the service by its usefulness and whether it is helpful in specific situation. For

example,whenamanagerisinhurrytocatchameetingbutgotstuckinatrafficjam,ordering

amotorcycle taxi through GO-JEK is the solution to reach the destination on time, even

thoughitisfarsincethemotorcycle-taxirateisquiteaffordable.

Conveniencevalueisamajorattractorofself-servicetechnologiesingeneraldepicting

the ease of getting a motorcycle-taxi, compared to other alternatives, which was also

32

supportedinthisresearch.Thetimesavedandconveniencegainedbyorderingforaservice

withamobiledevicecouldbeessentialandvaluabletocustomers.Theconvenienceliesin

theabilitytoordertheridebasedoncustomers’chosenlocation.Ameansoftransportcan

be ordered easily and instantly, and it may even be more efficient than using a public

transport.Asaresult,thecustomerscanordertheridewithouthavingtohailontheroad.

Epistemicvaluehadsignificanteffectonbehavioralintention.Thismightbebecause

GO-JEKalwaysupdatingtheirapplicationandingeneraloffersvariousservices.Culturemay

alsoplayrolesinceIndonesianiscontinuouslycuriousabouttechnology.Inaddition,GO-JEK

regularlyreleasesinnovationswhichmayexcitethecuriosityofcustomers.

Privacyconcernreferstousers’worriesinsharingpersonalinformationtolocation-

basedapplication.Theresults inthisstudy indicatesthattherewasstronglynosignificant

influence of privacy concern on behavioral intention. This finding is contradicted with

previousstudieswhichsuggestedthatconsumerswhohavehigherlevelofprivacyconcern

aremorehesitanttowardsLBSandarelessopen-mindedtothepotentialadvantageofthis

service(Culnan,1993;Culnan&Bies,2003;Dinev&Hart,2006;Lietal.,2011;Metzger,2004).

This finding canbedue tonormsandbehaviors regardingprivate andpublicmatters are

different across culture (Moore Jr., 1984). There is a probability that Indonesian differ

substantially in howmuch they care about privacy. Culture and normsmight affect how

individualssee

Accordingtoadditionalanalyses,therelationshipsbetweenseveralperceivedvalue

dimensions and behavioral intention aremediated through commitment. Only emotional

value,monetaryvalueandconveniencevaluehaveamediationthroughcommitment.There

islackofstudythatdiscussabouttheroleofcommitmentasamediatorbetweenperceived

valueandbehavioralintention.Pura(2005)foundthatemotionalvaluehadindirecteffecton

behavioralintentionthroughcommitment.Chen(2012)suggestedthatcommitmentactsas

mediator between customer satisfaction and customer loyalty in e-service context. These

findingsc

33

6TheoreticalandPracticalImplications

Theresultsofthisstudywhichwasconductedinordertocontributetothescientific

knowledgeregardingconsumers’choicebehavior,canworkasaguidanceforfutureresearch.

Basedontheresearchfindings,itisindicatedthattheoryofconsumptionvaluesbyShethet

al. (1990) are still relevant in the location-basedapplication context. Privacy concernwas

added to themodel as onlineprivacy is directly related toone’s ownphysical security in

today’sdigitalworld.Sincenosignificanteffectsofmonetaryvalueandprivacyconcernon

behavioralintentionwerefound,itcanbebeneficialtocontinuetheinvestigationoftherole

ofprivacyconcernandmonetaryvalueamongIndonesiansinthisfast-changingdigitalworld.

Theprimarypractical implication in this study is the value-basedapproachgives a

good foundation for segmentingandplanningmarketing strategiesaseffectivemarketing

strategiesrequiresgoodknowledgeabouttheneedsandvalueperceptionsofeachcustomer

segment.Moreover,communicatingthebenefitstopotentialcustomershelpstoattractnew

customerswhosharesimilarvalueperceptionswiththecustomersthecompanywishesto

keep.

DifferentiatingtheapplicationfromcompetitorsisnecessaryIfthecompanywantsto

gainacommittedcustomerbasewhostayscommittedandspreadpositiveinformationby

word of mouth communication. The results give indication that social value has major

influenceoncommitment.Hence,emphasizingasatisfyingexperiencewiththeapplication

helps to build commitment. In addition, conditional value also had a strong effect on

commitment,indicatingthatindividualsarecommittedtousetheirapplicationforordering

serviceincertainsituations.

34

7Limitations

Location-basedserviceapplicationwithdifferentaims,e.g.datingandlocationbased

gamingmay produce different results, possibly increasing the influence of emotional and

social value. Individuals who have experience in using other types of location-based

applicationbesideGO-JEKmayhavedifferentperspectivesonperceivedvalues.Therefore,it

isnecessarytomentionthelimitationregardingthenumberofconstructs.Thecomponentof

perceived value included only a limited number of construct. There are several others

constructs thatmaybeapplied in the future research. Therefore, researchers shouldalso

considerthattheconstructscanchangedependsonthecontextofthestudy.Second,this

research was conducted only for Indonesian. Customers’ value perceptions and their

influenceoncommitmentandbehaviormaydifferindifferentcultures,andresultsindicated

theweightofinfluenceofdifferentvaluedimensionsshouldbeinterpretedcarefully,atleast

with regard toWesternorEuropeanmarketswhere theculture is considered tobemore

individualistic.Thus,theresultscanbedifferentforothernationalitiesorinothercountries

sincethecultureandnormsareunalike.

Themodel,ingeneral,canbeappliedtoassessapplicationindifferentmarkets,yet

furtherresearchisneededtoanalyzedifferencesbetweentheinfluenceofvaluedimensions

inAsian,EuropeanandAmericanmarkets.Therefore,furtherresearchisencouragedinall

kindsofLBSapplicationinordertobeabletocompareperceivedvaluetodifferenttypesof

location-basedapplicationandgeneralizetheresultsglobally.

35

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AppendixA–Survey(inEnglish)Dearparticipant,Welcometothismarketingresearch.Thissurveyisconductedaspartofamasterthesis.Beforeyoustarttotakepartinthesurvey,pleaseconsiderthefollowinginformationcarefully.Thismarketingresearchisaboutconsumerperceivedvalueandlocation-basedservicewithfocusontheeffectofperceivedvaluedimensionsoncommitmentandbehavioralintentionandprivacyconcernsonbehavioralintention.Itwilltakenomorethan10minutestocompletethesurvey.Anyinformationgatheredfromthisstudyisgoingtobekeptconfidentiallyandwillbeusedforacademicresearchpurposesonly.Yourparticipationisvoluntaryandthusyouhavetherighttowithdrawfromthestudyifyouwishtodoso.Ifyoubeginthestudy,youmayleavethestudyatanypointduringthestudy.Therearenoknownrisksinvolved.PleasereadtheinstructionsbeforeansweringthesurveyandwewouldbegladifyoudonotleaveyourPCordeviceduringthecompletionofthesurvey.Thisstudywilltakenomorethan10minutesforyoutocompletethesurvey.Inaddition,twoluckyparticipantswouldgetachancetowinGo-PaybalanceRp100.000aftercompletingthesurvey.Forquestions,concerns,orcomplaintsaboutthestudyyoumaycontactmeanytimeviaemail:anisalevinawidhyana@student.utwente.nlIfyouwouldliketoparticipateinthisstudy,pleaseselect"YES",otherwiseselect"NO"Thankyou.

45

BackgroundQuestions

1. Howoldareyou?a. <17year-oldb. 17-25-year-oldc. 26-34yearoldd. 35-40year-olde. <40year-old

2. Whatisyoursex?

a. Maleb. Female

3. Domicile

a. Sumaterab. Jawac. Kalimantand. Sulawesi

4. Completededucationallevel

a. SeniorHighSchoolb. Bachelorc. Master/PhD

KnowledgeaboutLocation-basedService(LBS)andGO-JEKGO-JEKisamotorcycleride-hailingphoneservicesestablishedin2010.Itsapplicationoffersmanyservices,suchasGO-RIDE,GO-CAR,GO-FOOD,GO-MASSAGE,GO-SENDetc.IthasbecomeoneofIndonesianphenomenonfromitsone-stopapplicationthatmakesourlifeeasier.ThisresearchwillbefocusingonGO-JEKasanapplicationandalltheservicesitoffers.

1. HaveyoueverusedGO-JEK?a. Yesb. No(pleasestopthesurveyhere)

2. HowoftendoyouuseGO-JEKinaweek?

a. Everydayb. 4–5daysc. 2–3daysd. <2days

46

PerceivedValueMonetaryvalue

1. ThepricethatGO-JEKoffersisacceptable1 2 3 4 5O O O O O

2. GO-JEK’sservicesoffergoodvaluesformoney

1 2 3 4 5O O O O O

3. TheservicesbyGO-JEKarebettervaluesformoneythanIwouldpayforthesameservicebyothercompany1 2 3 4 5O O O O O

4. TheaffordablepriceiswhatattractsmetouseGO-JEKregularly

1 2 3 4 5O O O O O

ConvenienceValue

5. IsavetimeandmoneywhenIorderviaGO-JEK1 2 3 4 5O O O O O

6. IvaluetheeaseofusingGO-JEKapplication

1 2 3 4 5O O O O O

7. IvaluetheoptionofusingGO-JEKinstantlyviamobiledevice1 2 3 4 5O O O O O

8. IvaluetheconvenienceofusingGO-JEK

1 2 3 4 5O O O O O

9. UsingGO-JEKmakesmylifeeasier

1 2 3 4 5O O O O O

10. UsingGO-JEKisanefficientwaytomanagemytime

47

1 2 3 4 5O O O O O

SocialValue

11. IfeelsocialpressurefrommyfamilytouseGO-JEK1 2 3 4 5O O O O O

12. IFeelsocialpressurefrommyfriendtouseGO-JEK

1 2 3 4 5O O O O O

13. IlookforsocialapprovalwhenIuseGO-JEK1 2 3 4 5O O O O O

14. AgoodimpressionfrommysocialenvironmentiswhatIamaimingwhenusing

GO-JEK1 2 3 4 5O O O O O

EmotionalValue

15. UsingGO-JEKgivesmepleasure1 2 3 4 5O O O O O

16. UsingGO-JEKmakesmefeelgood

1 2 3 4 5O O O O O

17. UsingGO-JEKmakesmefeelrelaxed1 2 3 4 5O O O O O

18. IdonotfeelanxiouswhenusingGO-JEK

1 2 3 4 5O O O O O

48

ConditionalValue

19. IvaluetheservicethatGO-JEKoffers1 2 3 4 5O O O O O

20. IvaluethehelpfromGO-JEKtogetwhatIneedinacertainsituation

1 2 3 4 5O O O O O

21. IvaluetheindependenceofplaceandtimeofferedbyusingGO-JEK1 2 3 4 5O O O O O

22. GO-JEKeasesmydailyactivity

1 2 3 4 5O O O O O

EpistemicValue

23. IuseGO-JEKtoexperimentwithnewwaysofdoingthings1 2 3 4 5O O O O O

24. IuseGO-JEKtotestnewtechnology

1 2 3 4 5O O O O O

25. IuseGO-JEKoutofcuriosity1 2 3 4 5O O O O O

26. IuseGO-JEKtosatisfiesmyinquisitiveness

1 2 3 4 5O O O O O

Commitment

27. IfeelloyaltouseGO-JEK1 2 3 4 5O O O O O

49

28. GO-JEKhasagreatdealofpersonalmeaningforme

1 2 3 4 5O O O O O

29. IamaloyaluserofGO-JEK1 2 3 4 5O O O O O

30. IconsiderGO-JEKasmyfirstchoicetoorderthistypeofservice

1 2 3 4 5O O O O O

BehavioralIntention

31. IintendtocontinueusingGO-JEK’sserviceinthefuture1 2 3 4 5O O O O O

32. IwillusesimilarservicelikeGO-JEKmorefrequentlyinthefuture

1 2 3 4 5O O O O O

33. ThereisaprobabilitythatIwillorderotherservicesorproductbyGO-JEKinthefuture1 2 3 4 5O O O O O

34. IcanrecommendGO-JEKtoothers

1 2 3 4 5O O O O O

PrivacyConcern

35. ItbothersmetodisclosuremypersonalinformationtoGO-JEK1 2 3 4 5O O O O O

36. Iamconcernedthatotherpeoplemaymonitormycurrentlocationcontinuously

1 2 3 4 5O O O O O

37. GO-JEkiscollectingtoomuchinformationaboutme1 2 3 4 5

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O O O O O

38. IamconcernedthattheinformationIsubmitonGo-Jekcanbemisused1 2 3 4 5O O O O O

39. Go-Jekmaydivulgemypersonalinformationtounauthorizedpartieswithoutmyconsent1 2 3 4 5O O O O O

40. MypersonalinformationcanbemisusedwhentransactingwithGo-Jek1 2 3 4 5O O O O O

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AppendixB–Survey(inBahasaIndonesia)

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AppendixC–Pre-testQuestionslist:

1. Whatdoyouknowaboutlocation-basedapplication?2. HowfardoyouknowGO-JEK?3. Whatisyourconsiderationwhenyouchoosetoorderamotorcycle-taxiviaGO-JEK?4. DoyourealizethatyouaresharingyourpersonalinformationwithGO-JEK?Ifyes,do

youknowwhatkindofdataGO-JEKcollected?