Exploring Customer Value Formation: A Customer Dominant Logic Perspective

This paper extends current discussions about value creation and proposes a customer dominant value perspective. A customer-dominant marketing logic positions the customer in the center, rather than the service provider/producer or the interaction or the system. The focus is shifted from the company´s service processes involving the customer, to the customer´s multi-contextual value formation, involving the company. It is argued that value is not always an active process of creation; instead value is embedded and formed in the highly dynamic and multi-contextual reality and life of the customer. This leads to a need to look beyond the current line of visibility where visible customer-company interactions are focused to the invisible and mental life of the customer. From this follows a need to extend the temporal scope, from exchange and use even further to accumulated experiences in the customer´s life. The aim of this paper is to explore value formation from a customer dominant logic perspective. This is done in three steps: first, value formation is contrasted to earlier views on the company’s role in value creation by using a broad ontologically driven framework discussing what, how, when, where and who. Next, implications of the proposed characteristics of value formation compared to earlier approaches are put forward. Finally, some tentative suggestions of how this perspective would affect marketing in service companies are presented. As value formation in a CDL perspective has a different focus and scope than earlier views on value it leads to posing questions about the customer that reveals earlier hidden aspects of the role of a service for the customer. This insight might be used in service development and innovation.

Perceived Value of Mobile Service Use and its Consequences

The thesis is positioned in the services marketing field. Previous mobile service research has identified perceived value or relative advantage as a stable predictor of use of services. However, a more detailed view of what customers value in mobile services is needed for marketing diverse types of mobile content and attracting committed customers. The direct relationships between multidimensional value and loyalty constructs have received limited attention in the previous literature, although a multidimensional view is needed for differentiating services. This thesis studies how perceived value of mobile service use affects customer commitment, repurchase intentions, word-of-mouth and willingness to pay. The doctoral thesis consists of three journal articles and one working paper. The four papers have different sub-aims and comprise individual empirical studies. Mixed methods including both personal interviews and survey data collected from end-users of different types of mobile content services are used. The conceptual mobile perceived value model that results from the first explorative empirical study supports a six- dimensional value view. The six dimensions are further categorized into two higher order constructs: content-related perceived value (emotional, social, convenience and monetary value) and context-related (epistemic and conditional value) perceived value. Structural equation modeling is used in the other three studies to validate this framework by analyzing the relationships between context- and content-related value, and how the individual perceived value dimensions affect commitment and behavioral outcomes. Analyzing the direct relationships revealed differences in the effect of perceived value dimensions between information and entertainment mobile service user groups, between effects on commitment, repurchase intentions and word-of-mouth intentions, as well as between effects on commitment to the provider and to the mobile channel as such. This thesis contributes to earlier perceived value literature by structuring the value dimensions into two groups. Most importantly, the thesis contributes to the value and loyalty literature by increasing understanding of how the different dimensions of perceived value directly affect commitment and post-purchase intentions. The results have implications for further theory development in the electronic services field using multidimensional latent constructs, and practical implications for enhancing commitment to content provider and for differentiated marketing strategies in the mobile field. The general conclusion of this thesis is that differentiated value-based marketing of mobile services is essential for attracting committed customers who will use the same providers’ content also in the future. Minna Pihlström is associated with the Centre for Relationship Marketing and Service Management (CERS) at Hanken.

Use of Customer Information: An Ethnography in Service Development

Service researchers have repeatedly claimed that firms should acquire customer information in order to develop services that fit customer needs. Despite this, studies that would concentrate on the actual use of customer information in service development are lacking. The present study fulfils this research gap by investigating information use during a service development process. It demonstrates that use is not a straightforward task that automatically follows the acquisition of customer information. In fact, out of the six identified types of use, four represent non usage of customer information. Hence, the study demonstrates that the acquisition of customer information does not guarantee that the information will actually be used in development. The current study used an ethnographic approach. Consequently, the study was conducted in the field in real time over an extensive period of 13 months. Participant observation allowed direct access to the investigated phenomenon, i.e. the different types of use by the observed development project members were captured while they emerged. In addition, interviews, informal discussions and internal documents were used to gather data. A development process of a bank’s website constituted the empirical context of the investigation. This ethnography brings novel insights to both academia and practice. It critically questions the traditional focus on the firm’s acquisition of customer information and suggests that this focus ought to be expanded to the actual use of customer information. What is the point in acquiring costly customer information if it is not used in the development? Based on the findings of this study, a holistic view on customer information, “information in use” is generated. This view extends the traditional view of customer information in three ways: the source, timing and form of data collection. First, the study showed that the customer information can come explicitly from the customer, from speculation among the developers or it can already exist implicitly. Prior research has mainly focused on the customer as the information provider and the explicit source to turn to for information. Second, the study identified that the used and non-used customer information was acquired both previously, and currently within the time frame of the focal development process, as well as potentially in the future. Prior research has primarily focused on the currently acquired customer information, i.e. within the timeframe of the development process. Third, the used and non-used customer information was both formally and informally acquired. In prior research a large number of sophisticated formal methods have been suggested for the acquisition of customer information to be used in development. By focusing on “information in use”, new knowledge on types of customer information that are actually used was generated. For example, the findings show that the formal customer information acquired during the development process is used less than customer information already existent within the firm. With this knowledge at hand, better methods to capture this more usable customer information can be developed. Moreover, the thesis suggests that by focusing stronger on use of customer information, service development processes can be restructured in order to facilitate the information that is actually used.

Rethinking Service Companies’ Business Logic: Do We Need a Customer-Dominant Logic as a Guideline?

Purpose –This paper explores and expands the roles of customers and companies in creating value by introducing a new a customer-based approach to service. The customer’s logic is examined as being the foundation of a customer-based marketing and business logic. Design/methodology/approach – The authors argue that both goods-dominant logics and service-dominant logics are provider-dominant. Contrasting the customer-dominant logic with provider-dominant logics, the paper examines the creation of service value from the perspectives of value-in-use, the customer’s own context, and the customer’s experience of service. Findings –Moving from a provider-dominant logic to a customer-dominant logic uncovered five major challenges to service marketers: Company involvement, company control in co-creation, visibility of value creation, locus of customer experience, and character of customer experience. Research limitations/implications – The paper is exploratory. It presents and discusses a conceptual model and suggests implications for research and practice. Practical implications –Awareness of the mechanisms of customer logic will provide businesses with new perspectives on the role of the company in their customer’s lives. We propose that understanding the customer’s logic should represent the starting-point for the marketer’s business logic. Originality/value – The paper increases the understanding of how the customer’s logic underpins the customer-dominant business logic. By exploring consequences of applying a customer-dominant logic, we suggest further directions for theoretical and empirical research.

Making Sense of Value and Value Co-Creation in Service Logic

In order to further develop the logic of service, value creation, value co-creation and value have to be formally and rigorously defined, so that the nature, content and locus of value and the roles of service providers and customers in value creation can be unambiguously assessed. In the present article, following the underpinning logic of value-in-use, it is demonstrated that in order to achieve this, value creation is best defined as the customer’s creation of value-in-use. The analysis shows that the firm’s and customer’s processes and activities can be divided into a provider sphere, closed for the customer, and a customer sphere, closed for the firm. Value creation occurs in the customer sphere, whereas firms in the provider sphere facilitate value creation by producing resources and processes which represent potential value or expected value-in use for their customers. By getting access to the closed customer sphere, firms can create a joint value sphere and engage in customers’ value creation as co-creators of value with them. This approach establishes a theoretically sound foundation for understanding value creation in service logic, and enables meaningful managerial implications, for example as to what is required for co-creation of value, and also further theoretical elaborations.

Effect of waiting time on health outcomes and service utilization : A prospective randomized study on patients admitted to hospital for hip or knee replacement

Although the principle of equal access to medically justified treatment has been promoted by official health policies in many Western health care systems, practices do not completely meet policy targets. Waiting times for elective surgery vary between patient groups and regions, and growing problems in the availability of services threaten equal access to treatment. Waiting times have come to the attention of decision-makers, and several policy initiatives have been introduced to ensure the availability of care within a reasonable time. In Finland, for example, the treatment guarantee came into force in 2005. However, no consensus exists on optimal waiting time for different patient groups. The purpose of this multi-centre randomized controlled trial was to analyse health-related quality of life, pain and physical function in total hip or knee replacement patients during the waiting time and to evaluate whether the waiting time is associated with patients health outcomes at admission. This study also assessed whether the length of waiting time is associated with social and health services utilization in patients awaiting total hip or knee replacement. In addition, patients health-related quality of life was compared with that of the general population. Consecutive patients with a need for a primary total hip or knee replacement due to osteoarthritis were placed on the waiting list between August 2002 and November 2003. Patients were randomly assigned to a short waiting time (maximum 3 months) or a non-fixed waiting time (waiting time not fixed in advance, instead the patient followed the hospitals routine practice). Patients health-related quality of life was measured upon being placed on the waiting list and again at hospital admission using the generic 15D instrument. Pain and physical function were evaluated using the self-report Harris Hip Score for hip patients and a scale modified from the Knee Society Clinical Rating System for knee patients. Utilization measures were the use of home health care, rehabilitation and social services, physician visits and inpatient care. Health and social services use was low in both waiting time groups. The most common services used while waiting were rehabilitation services and informal care, including unpaid care provided by relatives, neighbours and volunteers. Although patients suffered from clear restrictions in usual activities and physical functioning, they seemed primarily to lean on informal care and personal networks instead of professional care. While longer waiting time did not result in poorer health-related quality of life at admission and use of services during the waiting time was similar to that at the time of placement on the list, there is likely to be higher costs of waiting by people who wait longer simply because they are using services for a longer period. In economic terms, this would represent a negative impact of waiting. Only a few reports have been published of the health-related quality of life of patients awaiting total hip or knee replacement. These findings demonstrate that, in addition to physical dimensions of health, patients suffered from restrictions in psychological well-being such as depression, distress and reduced vitality. This raises the question of how to support patients who suffer from psychological distress during the waiting time and how to develop strategies to improve patients initiatives to reduce symptoms and the burden of waiting. Key words: waiting time, total hip replacement, total knee replacement, health-related quality of life, randomized controlled trial, outcome assessment, social service, utilization of health services

IP Mobility in Wireless Operator Networks

Wireless network access is gaining increased heterogeneity in terms of the types of IP capable access technologies. The access network heterogeneity is an outcome of incremental and evolutionary approach of building new infrastructure. The recent success of multi-radio terminals drives both building a new infrastructure and implicit deployment of heterogeneous access networks. Typically there is no economical reason to replace the existing infrastructure when building a new one. The gradual migration phase usually takes several years. IP-based mobility across different access networks may involve both horizontal and vertical handovers. Depending on the networking environment, the mobile terminal may be attached to the network through multiple access technologies. Consequently, the terminal may send and receive packets through multiple networks simultaneously. This dissertation addresses the introduction of IP Mobility paradigm into the existing mobile operator network infrastructure that have not originally been designed for multi-access and IP Mobility. We propose a model for the future wireless networking and roaming architecture that does not require revolutionary technology changes and can be deployed without unnecessary complexity. The model proposes a clear separation of operator roles: (i) access operator, (ii) service operator, and (iii) inter-connection and roaming provider. The separation allows each type of an operator to have their own development path and business models without artificial bindings with each other. We also propose minimum requirements for the new model. We present the state of the art of IP Mobility. We also present results of standardization efforts in IP-based wireless architectures. Finally, we present experimentation results of IP-level mobility in various wireless operator deployments.

Service-based Requirements for Future Mobile Networks

The mobile phone has, as a device, taken the world by storm in the past decade; from only 136 million phones globally in 1996, it is now estimated that by the end of 2008 roughly half of the worlds population will own a mobile phone. Over the years, the capabilities of the phones as well as the networks have increased tremendously, reaching the point where the devices are better called miniature computers rather than simply mobile phones. The mobile industry is currently undertaking several initiatives of developing new generations of mobile network technologies; technologies that to a large extent focus at offering ever-increasing data rates. This thesis seeks to answer the question of whether the future mobile networks in development and the future mobile services are in sync; taking a forward-looking timeframe of five to eight years into the future, will there be services that will need the high-performance new networks being planned? The question is seen to be especially pertinent in light of slower-than-expected takeoff of 3G data services. Current and future mobile services are analyzed from two viewpoints; first, looking at the gradual, evolutionary development of the services and second, through seeking to identify potential revolutionary new mobile services. With information on both current and future mobile networks as well as services, a network capability - service requirements mapping is performed to identify which services will work in which networks. Based on the analysis, it is far from certain whether the new mobile networks, especially those planned for deployment after HSPA, will be needed as soon as they are being currently roadmapped. The true service-based demand for the "beyond HSPA" technologies may be many years into the future - or, indeed, may never materialize thanks to the increasing deployment of local area wireless broadband technologies.

A Floor Control Server in a Distributed Conference Service

The conferencing systems in IP Multimedia (IM) networks are going through restructuring, accomplished in the near future. One of the changes introduced is the concept of floors and floor control in its current form with matching entity roles. The Binary Floor Control Protocol (BFCP) is a novelty to be exploited in distributed tightly coupled conferencing services. The protocol defines the floor control server (FCS), which implements floor control giving access to shared resources. As the newest tendency is to distribute the conferencing services, the locations of different functionality units play an important role in developing the standards. The floor control server location is not yet single-mindedly fixed in different standardization bodies, and the debate goes on where to place it within the media server, providing the conferencing service. The thesis main objective is to evaluate two distinctive alternatives in respect the Mp interface protocol between the respective nodes, as the interface in relation to floor control is under standardization work at the moment. The thesis gives a straightforward preamble in IMS network, nodes of interest including floor control server and conferencing. Knowledge on several protocols – BFCP, SDP, SIP and H.248 provides an important background for understanding the functionality changes introduced in the Mp interface and therefore introductions on those protocols and how they are connected to the full picture is given. The actual analysis on the impact of the floor control server into the Mp reference point is concluded in relation to the locations, giving basic flows, requirements analysis including a limited implementation proposal on supporting protocol parameters. The overall conclusion of the thesis is that even if both choices are seemingly useful, not one of the locations is clearly the most suitable in the light of this work. The thesis suggests a solution having both possibilities available to be chosen from in separate circumstances, realized with consistent standardization. It is evident, that if the preliminary assumption for the analysis is kept regarding to only one right place for the floor control server, more work is to be done in connected areas to discover the one most appropriate location.

Service Composition on a Mobile Phone

With the recent increase in interest in service-oriented architectures (SOA) and Web services, developing applications with the Web services paradigm has become feasible. Web services are self-describing, platform-independent computational elements. New applications can be assembled from a set of previously created Web services, which are composed together to make a service that uses its components to perform a certain task. This is the idea of service composition. To bring service composition to a mobile phone, I have created Interactive Service Composer for mobile phones. With Interactive Service Composer, the user is able to build service compositions on his mobile phone, consisting of Web services or services that are available from the mobile phone itself. The service compositions are reusable and can be saved in the phone's memory. Previously saved compositions can also be used in new compositions. While developing applications for mobile phones has been possible for some time, the usability of the solutions is not the same as when developing for desktop computers. When developing for mobile phones, the developer has to more carefully consider the decisions he is going to make with the program he is developing. With the lack of processing power and memory, the applications cannot function as well as on desktop PCs. On the other hand, this does not remove the appeal of developing applications for mobile devices.

An XML Messaging Service for Mobile Devices

In recent years, XML has been accepted as the format of messages for several applications. Prominent examples include SOAP for Web services, XMPP for instant messaging, and RSS and Atom for content syndication. This XML usage is understandable, as the format itself is a well-accepted standard for structured data, and it has excellent support for many popular programming languages, so inventing an application-specific format no longer seems worth the effort. Simultaneously with this XML's rise to prominence there has been an upsurge in the number and capabilities of various mobile devices. These devices are connected through various wireless technologies to larger networks, and a goal of current research is to integrate them seamlessly into these networks. These two developments seem to be at odds with each other. XML as a fully text-based format takes up more processing power and network bandwidth than binary formats would, whereas the battery-powered nature of mobile devices dictates that energy, both in processing and transmitting, be utilized efficiently. This thesis presents the work we have performed to reconcile these two worlds. We present a message transfer service that we have developed to address what we have identified as the three key issues: XML processing at the application level, a more efficient XML serialization format, and the protocol used to transfer messages. Our presentation includes both a high-level architectural view of the whole message transfer service, as well as detailed descriptions of the three new components. These components consist of an API, and an associated data model, for XML processing designed for messaging applications, a binary serialization format for the data model of the API, and a message transfer protocol providing two-way messaging capability with support for client mobility. We also present relevant performance measurements for the service and its components. As a result of this work, we do not consider XML to be inherently incompatible with mobile devices. As the fixed networking world moves toward XML for interoperable data representation, so should the wireless world also do to provide a better-integrated networking infrastructure. However, the problems that XML adoption has touch all of the higher layers of application programming, so instead of concentrating simply on the serialization format we conclude that improvements need to be made in an integrated fashion in all of these layers.

Ammatti, ihminen ja maailmankuva murroksessa : Tutkimus yliopistokirjastoista ja kirjastonhoitajista tietoyhteiskuntakaudella 1970-2005

PROFESSION, PERSON AND WORLDVIEW AT A TURNING POINT A Study of University Libraries and Library Staff in the Information Age 1970 - 2005 The incongruity between commonly held ideas of libraries and librarians and the changes that have occurred in libraries since 2000 provided the impulse for this work. The object is to find out if the changes of the last few decades have penetrated to a deeper level, that is, if they have caused changes in the values and world views of library staff and management. The study focuses on Finnish university libraries and the people who work in them. The theoretical framework is provided by the concepts of world view (values, the concept of time, man and self, the experience of the supernatural and the holy, community and leadership). The viewpoint, framework and methods of the study place it in the area of Comparative Religion by applying the world view framework. The time frame is the information age, which has deeply affected Finnish society and scholarly communication from 1970 to 2005. The source material of the study comprises 30 life stories; somewhat more than half of the stories come from the University of Helsinki, and the rest from the other eight universities. Written sources include library journals, planning documents and historical accounts of libraries. The experiences and research diaries of the research worker are also used as source material. The world view questions are discussed on different levels: 1) recognition of the differences and similarities in the values of the library sphere and the university sphere, 2) examination of the world view elements, community and leadership based on the life stories, and 3) the three phases of the effects of information technology on the university libraries and those who work in them. In comparing the values of the library sphere and the university sphere, the appreciation of creative work and culture as well as the founding principles of science and research are jointly held values. The main difference between the values in the university and library spheres concerns competition and service. Competition is part of the university as an institution of research work. The core value of the library sphere is service, which creates the essential ethos of library work. The ethical principles of the library sphere also include the values of democracy and equality as well as the value of intellectual freedom. There is also a difference between an essential value in the university sphere, the value of autonomy and academic freedom on the one hand, and the global value of the library sphere - organizing operations in a practical and efficient way on the other hand. Implementing this value can also create tension between the research community and the library. Based on the life stories, similarities can be found in the values of the library staff members. The value of service seems to be of primary importance for all who are committed to library work and who find it interesting and rewarding. The service role of the library staff can be extended from information services provider to include the roles of teacher, listener and even therapist, all needed in a competitive research community. The values of democracy and equality also emerge fairly strongly. The information age development has progressed in three phases in the libraries from the 1960s onward. In the third phase beginning in the mid 1990s, the increased usage of electronic resources has set fundamental changes in motion. The changes have affected basic values and the concept of time as well as the hierarchies and valuations within the library community. In addition to and as a replacement for the library possessing a local identity and operational model, a networked, global library is emerging. The changes have brought tension both to the library communities and to the relationship between the university community and the library. Future orientation can be said to be the key concept for change; it affects where the ideals and models for operations are taken from. Future orientation manifests itself as changes in metaphors, changes in the model of a good librarian and as communal valuations. Tension between the libraries and research communities can arise if the research community pictures the library primarily as a traditional library building with a local identity, whereas the 21st century library staff and directors are affected by future orientation and membership in a networked library sphere, working proactively to develop their libraries.