CUSTOMER SATISFACTION AND LOYALTY FACTORS OF MOBILE COMMERCE AMONG YOUNG RETAIL CUSTOMERS IN CROATIA

Mobile technology has begun to transform the way young retail consumers shop, allowing them more intermediate control over purchasing process. With competition accelerating in retail industry, mobile devices have been used widely in delivering value-added services. Hence, mobile commerce is likely to make a strong influence on business activities, consumer behavior, as well as national and global markets. The purpose of this paper is to identify key factors influencing customer satisfaction and loyalty in mobile commerce by empirically-based research questionnaire. Based on previous literature, the paper builds sets of customer satisfaction and loyalty constructs for mobile commerce. Significant constructs and their relationships are examined by m-commerce satisfaction model employing structural equation model. Research findings indicate that all constructs significantly affect Smartphone customers’ satisfaction, except for the price. Furthermore, satisfaction has moderately strong influence on Smartphone customer’ loyalty. The implication of this research to researchers and practitioners is discussed.


INTRODUÇÃO
, potential benefits of this new transaction channel cannot be neglected.Mobile commerce has been predicted as the new upcoming trend in retail trade by several researches (Kalakota and Robinson, 2001;Liang and Wei, 2004).
According to Eurostat (2014) about 7% of EU population use handheld devices for purchasing while mobile purchasing penetration already exceeded 15% of population in the UK, Swedish, Danish and Norwegian market.This shows that mobile technologies are opening new opportunities for all participants in the retail supply chain.Yang and Forney (2013) highlight the effect of rapid adoption of mobile Internet and smartphones on capitalizing the new channel to serve the customers in the retail industry, enhancing their shopping experience by becoming a personal shopping assistant.
Due to benefits of m-commerce unlike existing types of commerce as well as its rapid growth, an increasing discussion on m-commerce appears in the literature in recent years (Choi et al, 2008;Dai and Palvia, 2009;Gupta and Madan, 2012;Kabir and Hasin, 2011;Lin and Wang, 2006;Wu and Wang, 2005).Moreover, customer satisfaction and loyalty in mobile commerce as key factors to m-commerce success are still not sufficiently examined -most of the researches paid attention to the customer's intention to accept m-Internet, rather than customer satisfaction in mobile commerce.
The student population is referred to as a large part of consumer Y generation in the research literature, highly aware of using digital tools in different purposes even in the process of buying goods and services (Archana and Heejin, 2008;Rahman and Azar, 2011).Hence, better understandings in consumers' behavioral intentions are of great importance to retailers and marketers in order to find the young consumers' attitudes towards convenience, functionality, price and reliability of mobile  (Bruner and Kumar, 2003;Choi et al., 2008;Kabir and Hasin, 2011;Kalakota and Robinson, 2001;Wu and Wang, 2005).Section two deals with the relevant studies to obtain both theoretical and methodological background.The research design is explained in Section three, whilst the results and model outcome are analyzed in Section four.The paper ends with discussion and conclusions in the final Section.

MOBILE COMMERCE DEFINITIONS AND ATTRIBUTES
Since mobile commerce is fully enabled throughout wireless technology, Chaffey (2007: 132) defines mobile commerce as electronic transactions and communications conducted by using different mobile devices and with the wireless connection.Also, Laundon and Traver (2007: 84) emphasize that mobile commerce is using traditional e-commerce models by leveraging wireless technologies.
According to Tiwari and Buse (2007), mobile commerce is described as any transaction, involving the transfer of ownership or rights to use goods and services, which is initiated or completed by using mobile access with the help of electronic devices, such as Personal Digital Assistant (PDA) or Smartphone.Tarasewich et al. (2002: 42)  (1) perceived value added; (2) innovativeness; (3) security perception; (4) privacy perception; (5) perceived usefulness; (6) perceived ease of use; (7) perceived cost; (8) compatibility; (9) perceived enjoyment; and (10) subjective norm.
Their results have shown that among those factors only innovativeness, privacy perception, perceived usefulness, compatibility and perceived enjoyment showed positive influence on mobile commerce adoption.Kim and Stenfield (2004) (Heller et al., 2003;Lin and Wang, 2006;Wai, 2012).

METHODOLOGY AND SAMPLE
The research survey was conducted on student population in 2015.The quantitative data was collected through online questionnaire in Google Docs.The questionnaire was distributed through social network platform Facebook and through Google Classroom.
Based on the questionnaire components of prior studies, a modified questionnaire was developed, which consisted of three main parts: (1) Personal information, ( 2  The majority of students use Smartphones as a primary mobile device (96.4%).There are only a few non-Smartphone users in the sample (3.6%).Among the population of Smartphone users (292), there were 238 respondents (81.5%) with over 2 years' experience of Smartphone usage, followed by the group with 1-2 years' usage experience (14.4%).The remaining part of the sample (4,1%) was the customers with up to one-year experience.
From these results we can conclude that this student generation has been familiar with mobile technology from their teenage ages.
According to the research results, majority of students in Croatia do not purchase via mobile devices (35.2%), while 30% of them are purchasing 2 to 6 times per year.26.6% of respondents are purchasing once per year, while only 8.2% are online shoppers on a regular basis (more than 6 times per year).
There are great differences when analyzing types of products and services that students  The model and research design are in line with similar studies conducted for the retail industry (Hair et al., 2013).

In
To test the research hypothesis and investigate the relationships between antecedents of customer satisfaction and their satisfaction and loyalty, this study used SmartPLS software.All model estimations were conducted on meancentered data using the path weighting scheme (Ringle et al., 2005).Descriptive statistics and normality of data were calculated using the SPSS software.4, such values are shown to be larger than 0,7, so high levels of internal consistency reliability have been demonstrated (Bagozzi and Yi, 1988;Hair et al., 2012;Wong, 2013).Average Variance Extracted (AVE) values are calculated to check convergent validity and it is found that all of the AVE values are greater than the acceptable threshold of 0,5 (Bagozzi and Yi, 1988;Wong, 2013), so convergent validity is confirmed.
According to the research results (Table 4 and   Figure 2 The constructs also meet the Fornell-Larcker criterion of discriminant validity (Fornell and Larcker, 1981) meaning that all the constructs are sufficiently distinct for structural model assessments (Table 5).Furthermore, an examination of absolute standardized outer loadings (Appendix 1) indicates a sufficient level of indicator reliability with all loadings exceeding the acceptable value of 0,7.
The inner model path estimations suggest that functionality has the strongest effect on satisfaction (0,328), followed by reliability (0,281), convenience (0,164), visibility (0,127), and price (0,046).Except for price, all hypothesized path relationships are statistically significant (Table 6).Moreover, satisfaction has moderate effect on Smartphone customer's loyalty (0,622) and the relationship is statistically significant.Thus, it can be concluded that functionality, reliability, convenience and visibility are good predictors of Smartphone customer's satisfaction, and satisfaction is strong predictor of their loyalty.Previous studies also found that technology and device compatibility positively affect customers' satisfaction (Bhattacherjee, 2001;Özer et al., 2013).Moreover, the study revealed that various content offers and availability of  (Choi et al., 2008;Kuo et al., 2009).Knežević et al. (2015) also found that availability of the service and information about products are main values of mobile applications shopping in comparison to traditional shopping.
Other elements that are important for Smartphone customers' satisfaction include: easiness of approach and navigation through the m-commerce content, together with the design of screens that facilitates m-commerce.
Numerous studies pointed out the importance of ease of use for customer satisfaction and behavioural intentions (Chong and Marthandan, 2008;Ofori et al., 2016;Özer et al., 2013;Wu and Wang, 2005).The results revealed that fulfilling the customers' expectations regarding a level of price for using m-Internet does not significantly impact their satisfaction due to its weak effect (0,046) in the linkage.The result can be explained by the fact that target population in this research were students who mostly download free applications and contents.However, the results indicate that functionality of devices, variety of content and its reliability are more important and effective strategies for mobile commerce providers than a simple price reduction (Choi et al., 2008).
Based on the research results, the mobile commerce providers should (re)design their m-commerce applications to achieve: functionality (e.g.customization across devices), reliability (e.g.availability of content and services), convenience (e.g.ease of use), and visibility (e.g.design of screens).
Development of the mobile devices and related technologies as a new type of communication service created new opportunities in various digital contents of mobile commerce.Although popularity of mobile commerce cannot be only explained by popularity of mobile devices cover the research gap to this matter, this research aims to identify critical factors affecting customer satisfaction and loyalty in m-commerce.Firstly, the paper gives an overview of theoretical foundations for the key attributes of m-commerce, by focusing on those which have a great influence on mobile commerce satisfaction and loyalty according to AMONG YOUNG RETAIL CUSTOMERS IN CROATIA Dužević, Ines et al 1 1461 Revista Eletrônica Gestão & Sociedade, v.10, n.27, p. 1459-1476 Setembro/Dezembro -2016 previous research in the literature defined mobile commerce as "all activities related to a (potential) commercial transaction conducted through communications networks that interface with wireless (or mobile) devices".Many business organizations target to invest in mobile applications development for various purposes in coming years.Therefore, recognizing the potential value of running business in electronic format (e.g.mobile commerce) is essential to retailers.& Sociedade, v.10, n.27, p. 1459-1476 Setembro/Dezembro -2016 factor influencing m-satisfaction and indirectly m-loyalty.Dai and Palvia (2009) identified nine factors affecting mobile commerce adoption: studied consumers' mobile internet service satisfaction and their continuance intentions, and investigated the relationship between satisfaction and new technology adoption.They used four different factors influencing overall satisfaction: (1)information quality, (2) connection quality, (3) ease of use and (4) service charge.According toChen and Hitt (2002) and Plouffe et al. (2001) high cost is the one of essential factors considered by consumers when free environment as the breakpoints for mobile commerce popularity.In their research model they adopted the extended technology acceptance model (TAM2), integrated with the innovation diffusion theory (IDT), perceived risk, and cost.The main attractive factors for the customer, according to Kabir and Hasin (2011) research, are the trust and mobility factors.In addition, content quality, system quality, use, support, personalization factors are also important.Zhao et al. (2012) explored customer satisfaction in mobile services using multiple dimensions.In their study, service quality includedand (3) outcome quality.They confirmed positive effect on satisfaction for all three service quality dimensions.Other studies also explored service quality dimensions and their influence on customer satisfaction.Özer et al. (2013) developed customer satisfaction model with five antecedents, namely: (1) compatibility, (2) entertainment, (3) ease of use, (4) availability, and (5) perceived risk.They found that availability and ease of use were the most influencing dimensions.Kuo et al. (2009) revealed that service quality positively affects perceived value and customer satisfaction in mobile services.They analyzed four service quality dimensions: ((2005), Choi (2008), Chong and Marthandan (2008), Clarke, Flaherty, 2003, Kim et al. (2005), Dai, Palvia (2009), Ofori et al. (2016), Özer et al. (2013), Wu, Wang (2005, Choi (2008), Ghinea, Angelides (2004), Mallat (2007), Mao et al. (2005), Dai, Palvia (2009), Wu, Wang (2005) Reliability Perceived system quality Compatibility Product Perceived content quality Cheong, Park (2005), Choi (2008), Kim et al. (2005), Kuo et al. (2009), Lin and Wang (2006), Wu, Wang (2005) Visibility Size of image/text Readability of information Bruner, Kumar (2003), Choi (2008), Kim et al. (2005), Kuo et al. (2009) This paper adopted five essential factors for mobile satisfaction and loyalty from previous research, which are categorized into (1) convenience, (2) functionality, (3) price, (4) reliability and (5) visibility.Convenience refers to the degree to which customer considers navigating through m-commerce transactions free of effort.Functionality represents the simplicity and frequency of using mobile technologies regardless time and place.Price factor refers to the degree of perceived level of possible expenses to m-commerce adoption.Reliability represents the degree to which customer perceives the quality of goods and services purchased through m-commerce channels, while visibility shows the perceived customers satisfaction to visual information and site design.Sub-factors and previous researchers of each driver are shown in Table 1.Based on the derived important factors listed in Table 1 and features of m-commerce, an msatisfaction model that applies SEM and hypothesizing relationships is developed.The m-satisfaction model obtains information about relationships among listed factors and the customer satisfaction consequences as well as the degree of their effects on customer loyalty.Customer satisfaction refers to the overall satisfaction and perceived value of m-CUSTOMER SATISFACTION AND LOYALTY FACTORS OF MOBILE COMMERCE AMONG YOUNG RETAIL CUSTOMERS IN CROATIA Dužević, Ines et al 1 1464 Revista Eletrônica Gestão & Sociedade, v.10, n.27, p. 1459-1476 Setembro/Dezembro -2016 commerce usage.Oliver (1999) defines satisfaction as pleasantness and fulfillment, which is customers' post-purchase evaluation and affective response to the overall product and service experience.In the mobile-service context, the extent of customers' assessment derived from their current m-commerce usage experience affecting their satisfaction level is examined in this study.Customer loyalty as the final variable in m-satisfaction model represents the degree of relationship between the service provider and consumer.The existing literature contains several researches which confirmed positive relationship between customer satisfaction and loyalty ) Smartphone and mobile technologies usage, and (3) Customers attitude towards mobile commerce adoption.All questionnaire items were measured by fivepoint Likert scale.The questionnaire constructs and descriptions of each section are shown in Table 2. Male and female respondents aged between 18 and 35 were surveyed.According to the Pew Research Centre's Internet & American Life Project (2011) about mobile technologies adoption, the working group aged between 25 and 34 is the highest Smartphone adoption group with 58%, followed by the young generation aged between 18 and 24 with 37%.With a similar adoption trend within the Croatian market, the target group of the questionnaire focuses on the Smartphone customers aged between 18 and 35.A large sample size provides more data for analysis.To ensure high explanatory power of result, the target respondents of this survey is 303.
buy via mobile devices.Mobile shoppers within student population usually buy tickets (64.2% mobile shoppers within population).Next product group is "clothing, footwear and fashion accessories" (43.3% online shoppers within population).Around 19% of respondents are buying travel arrangements and products/services for health and beauty.While in the group food and beverages, consumer electronics, books and computer equipment there are less than 10% of mobile shoppers within student population.
this section, Smartphone and mobile technologies usage pattern are discussed in details, including mobile applications for buying products/services.In order to understand customer satisfaction and loyalty a survey has been conducted to ask young Smartphone users about their m-commerce perceptions and experience.The Smartphone customers are asked to rate their experience with mcommerce applications on a scale representing seven latent variables, namely (1) convenience, (2) functionality, (3) loyalty, (4) price, (5) reliability, (6) satisfaction, and (7) visibility, using five point Likert scales.The survey questions asked are presented in Appendix 2 and m-satisfaction model is shown in Figure 1.
& Sociedade, v.10, n.27, p. 1459-1476 Setembro/Dezembro -2016 The results of assessments of the reflective measurement model are presented in Table 4.The Cronbach's alpha and composite reliability measures indicate high levels of internal consistency of the reflectively identified constructs.From Table Figure 2), five latent variables (convenience, reliability, price, visibility, and functionality) moderately explain 60,1% of the variance in Smartphone customer's satisfaction.All five variables and satisfaction together explain 38,4% of the variance of Smartphone customer's loyalty.

Figure 2 -
Figure 2 -M-Internet satisfaction model and results & Sociedade, v.10, n.27, p. 1459-1476 Setembro/Dezembro -2016 services and contents are important indicators of customers' satisfaction.Other studies confirmed that reliability significantly influence customer satisfaction The analysis of inner model shows that convenience, functionality, price, reliability and visibility together can explain 60,1% of the variance in customers' satisfaction, and satisfaction explains only 38,4% of customers' loyalty.It is an important finding because it suggests that there are other factors that mobile commerce providers should consider when exploring customers' loyalty and satisfactions in future research.There are several limitations that should be considered in this study.Firstly, the scope of findings is limited.Majority of respondents were from the young generation aged between 18 and 30, while respondents aged between 31 and 35 accounted for only 3% in the sample.The results cannot be generally applied because higher education students' shopping experiences and perceptions might be different from other Smartphone customers.For example, they mostly use free mobile applications.Secondly, the study was conducted in Croatia and, therefore, it may not be generalized to other countries with different level of Smartphone penetration.Finally, the model in this study explained only 60% of the 1471 Revista Eletrônica Gestão & Sociedade, v.10, n.27, p. 1459-1476 Setembro/Dezembro -2016 variance in satisfaction and 38% of the variance in loyalty.Accordingly, future studies should include additional constructs to explain Smartphone customers' satisfaction and loyalty.In particular, the satisfaction antecedents may include the level of enjoyment or entertainment.1475 Revista Eletrônica Gestão & Sociedade, v.10, n.27, p. 1459-1476 Setembro/Dezembro -2016 Zhao, L., Lu, Y., Zhang, L., Chau, P.Y.K. (2012).Assessing the effects of service quality and justice on customer satisfaction and the continuance intention of mobile value-added services: an empirical test of a multidimensional model.Decision Support Systems, 52 (3), 645-656.

Figure 1 -M-satisfaction model. Tabela 2 -Questionnaire construct and objective Content Objective Section
I Personal information to collect demography informationSection II Smartphone and mobile technologies usage to eliminate non-Smartphone customers  to examine the Smartphone penetration rate in Croatia  to gather mobile applications usage pattern