Customer Value in E-Service: Conceptual Foundation and Empirical Evidence

Customer value has been identified as “the reason” for customers to patronize a firm, and as one of the fundamental blocks that market exchanges build upon. Despite the importance of customer value, it is often poorly defined, or seems to refer to different phenomena. This dissertation contributes to current marketing literature by subjecting the value concept to a critical investigation, and by clarifying its conceptual foundation. Based on the literature review, it is proposed that customer value can be divided into two separate, but interrelated aspects: value creation processes, and value outcome determination. This means that on one hand, it is possible to examine those activities through which value is created, and on the other hand, investigate how customers determine the value outcomes they receive. The results further show that customers may determine value in four different ways: value as a benefit/sacrifice ratio, as experience outcomes, as means-end chains, and value as phenomenological. In value as benefit/sacrifice ratio, customers are expected to calculate the ratio between service benefits (e.g. ease of use) and sacrifices (e.g. price). In value as experience outcomes, customers are suggested to experience multiple value components, such as functional, emotional, or social value. Customer value as means-ends chains in turn models value in terms of the relationships between service characteristics, use value, and desirable ends (e.g. social acceptance). Finally, value as phenomenological proposes that value emerges from lived, holistic experiences. The empirical papers investigate customer value in e-services, including online health care and mobile services, and show how value in e-service stems from the process and content quality, use context, and the service combination that a customer uses. In conclusion, marketers should understand that different value definitions generate different types of understanding of customer value. In addition, it is clear that studying value from several perspectives is useful, as it enables a richer understanding of value for the different actors. Finally, the interconnectedness between value creation and determination is surprisingly little researched, and this dissertation proposes initial steps towards understanding the relationship between the two.

Customer Needing - Conceptualising Industrial Service from a Customer Perspective

Views on industrial service have conceptually progressed from the output of the provider’s production process to the result of an interaction process in which the customer also is involved. Although there are attempts to be customer-oriented, especially when the focus is on solutions, an industrial company’s offering combining goods and services is inherently seller-oriented. There is, however, a need to go beyond the current literature and company practices. We propose that what is needed is a genuinely customer-based parallel concept to offering that takes the customer’s view and put forward a new concept labelled customer needing. A needing is based on the customer’s mental model of their business and strategies which will affect priorities, decisions, and actions. A needing can be modelled as a configuration of three dimensions containing six functions that create realised value for the customer. These dimensions and functions can be used to describe needings which represent starting points for sellers’ creation of successful offerings. When offerings match needings over time the seller should have the potential to form and sustain successful buyer relationships.

Language Influence in Services: Perceived Importance of Native Language Use in Service Encounters

A defining characteristic of most service encounters is that they are strongly influenced by interactions in which both the consumer and the service personnel are playing integral roles. Such is the importance of this interaction that it has even been argued that for the consumer, these encounters are in fact the service. Given this, it is not surprising that interactions involving communication and customer participation in the service encounters have received considerable attention within the field of services marketing. Much of the research on interactions and communication in services, however, appear to have assumed that the consumer and the service personnel by definition are perfectly able to interact and communicate effortlessly with each other. Such communication would require a common language, and in order to be able to take this for granted the market would need to be fairly homogenous. The homogenous country, however, and with it the homogenous market, would appear to be gone. It is estimated that more than half the consumers in the world are already speaking more than one language. For a company entering a new market, language can be a major barrier that firms may underestimate, and understanding language influence across different markets is important for international companies. The service literature has taken a common language between companies and consumers for granted but this is not matched by the realities on the ground in many markets. Owing to the communicational and interaction-oriented nature of services, the lack of a common language between the consumer and the service provider is a situation that could cause problems. A gap exists in the service theory, consisting of a lack of knowledge concerning how language influences consumers in service encounters. By addressing this gap, the thesis contributes to an increased understanding of service theory and provides a better practical understanding for service companies of the importance of native language use for consumers. The thesis consists of four essays. Essay one is conceptual and addresses how sociolinguistic research can be beneficial for understanding consumer language preferences. Essay two empirically shows how the influence of language varies depending on the nature of the service, essay three shows that there is a significant difference in language preferences between female and male consumers while essay four empirically compares consumer language preferences in Canada and Finland, finding strong similarities but also indications of difference in the motives for preferring native language use. The introduction of the thesis outlines the existence of a research gap within the service literature, a gap consisting of the lack of research into how native language use may influence consumers in service encounters. In addition, it is described why this gap is of importance to services and why its importance is growing. Building on this situation, the purpose of the thesis is to establish the existence of language influence in service encounters and to extend the knowledge of how language influences consumers on multilingual markets.

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.

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.

Puunoston kehittäminen Stora Enso Metsän Helsingin palvelupisteessä

The operation environment in the roundwood trade in Finland in the 1990’s include several changes. They are changes in the structure of non-industrial private forest (NIPF) ownership, forest taxation, in forest legislation, in price recommendation agreement, diminishing resources of forestry extension services, etc. At the same time, the roundwood demand has been rising. All these developments cause uncertainty in wood procurement organisations, and call for research to find out how to adapt into the changing environment. The objective of this study is to produce information for roundwood purchasing planning and cus-tomer satisfaction management to be used by Stora Enso Metsä Customer Service, Helsinki. For this pur-pose, data needs to be gathered about the urban NIPFs and their forest estates, behaviour related to forestry and timber-selling, customer satisfaction in their latest timber selling transaction, and their opinions about Enso’s new customer service office and its service concept. To fulfil the objective of the study, a NIPF -owner -survey (N=1064, response rate 39,7%) was con-ducted in October 1998-January 1999. The sample was made on the basis of the marketing database of Stora Enso Oyj Forest Customer Service in Helsinki. In planning the frame of reference of the empirical study, the model of service quality by Grönroos was applied. The following aspects were included in the 7-page questionnaire: demographic, sosio-economic and forest estate background, relation to the forest service supply, behaviour related to forestry, timber-selling motives and behaviour, last contact organisation and its image in forestry business, expectations and percep-tions in the latest timber-selling transactions, and behavioural intentions. The results revealed that the share of women, pensioners and academically educated people among forest owners was quite high. The majority of the forest estates of the metropolitan forest owners were situ-ated in the provinces of South Finland and East Finland. The average forest estate area was considerably smaller than in a previous study. Economic and recreational objectives were most important in the use of forests. Forest Associations were involved in half of the roundwood sales transactions of the respondents in the metropolitan area. The wood quantity of transactions was considerably higher than the average in the whole country. Bank-organised forest-related activities, taxation infos and trips to the forest were the most popular activities. Among the services, silvicultural advices were needed mostly and stub treatment least. Brochure material related to stumpage timber sales and taxation were considered most important compared to material related to delivery sales. The service expectations were at highest for women and they were less satisfied with the service than men. 2nd and 3rd generation residents of the metropolitan area thought about the new customer service concept more positively than the 1st generation residents. Internet users under 60 years thought more positively about new satellite picture-based woodlot search concept. Cross-tabulation of factor scores against background variables indicated that women with relatively low education level a greater need to sell roundwood than entrepreneurs, white-collar workers and directors, and Internet users. Suspiciousness towards timber procurement organisations was relatively strong among women and those whose forest income share of the total income was either null or over 20 %. The average customer satisfaction score was negative in all nine questions. Statistical differences be-tween different companies did not exist in the average satisfaction scores. Stora Enso’s Helsinki forest cus-tomer service could choose the ability to purchase all timber grades as its competitive advantage. Out of nine service dimension included in the questionnaire, in this particular service dimension, Enso’s Helsinki forest customer service’s score exceeded most all organisations’ average customer satisfaction score. On the basis of importance – performance matrix, advice and quidance could have been provided more to the forest owners in their latest timber–selling transaction.

Kynnyskysymyksiä : Huono-osaisimmat huumeiden käyttäjät ja matala kynnys

The study examines the term "low threshold" from the point of view of the most marginalized drug users. While using illicit drugs is criminalised and morally judged in Finland, users have special barriers to seek for care. Low threshold services aim at reaching drug users who themselves don t seek for help. "Low threshold" is a metaphor describing easy access to services. The theoretical frame of reference of the study consists of processing the term analytically and critically. The research work sets out to test the rhetoric of low threshold by making use of a qualitative multi-case study to find out, if the threshold of so called low threshold services always appears low for the most marginalized drug users. The cases are: the mobile unite offering health counselling, the day service centre for marginalized substance abusers and the low threshold project of the outpatient clinic for drug users in Helsinki and the health counselling service trial in Vyborg, Russia. The case study answer following questions: 1) How do the method of low threshold work out in the studied cases from the point of view of the most marginalized drug users? 2) How do potential thresholds appear and how did they develop? 3) How do the most marginalized drug users get into the care system through low threshold? The data consists of interviews of drug users, workers and other specialists having been accomplished in the years 2001 - 2006, patient documents and customer registers. The dissertation includes four articles published in the years 2006 - 2008 and the summary article. The study manifests that even low threshold is not always low enough for the most marginalized drug users. That expresses a highly multiproblematised and underpriviledged group of drug users, whose life and utilization of services are framed by deep marginalisation, homelessness, multi-substance use, mental and somatic illnesses and being repeatedly imprisoned. Using services is rendered difficult by many factors arising from the care system, drug users themselves and the action environment. In Finland thresholds are generally due to the execution of practical services and procedures not considering the fear of control and labelling as a drug user. When striving for further rehabilitating substance abuse care by means of low threshold services the marginalized drug users meet the biggest difficulties. They are due to inelastic structures, procedures and division of labour in the established care system and also to poor chances of drug users to be in action in the way expected by the care system. Multiproblematic multisubstance users become "wrong" customers by high expectations of care motivation and specializing in the care system. In Russia the thresholds are primarily caused by rigid control politics directed to drug users by the society and by the scantiness of care system. The ideology of reducing drug related harm is not approved and the care system is unwilling to commit to it. Low threshold turnes out to be relative as a term. The rhetoric of the care system is not enough to unilaterally define lowness of the threshold. The experiences of drug users and the actual activity to search for care determine the threshold. It does not appear the same for everybody either. Access of certain customer group to a service unit may even raise the threshold for some other group. The low threshold system also is surprisingly realized: you could not always tell in advance, what kind of customers and how many of them could be reached. Keywords: low threshold, marginalized drug users, harm reduction, barriers to services, outreach

Taustamusiikki markkinoinnin työvälineenä suomalaisissa tavarataloissa

The main research problem of this study was to explain how and why background music is used in Finnish department stores and how it is related to their marketing. The problem was investigated through the opinions, attitudes, and conceptions of the managers of Anttila, Sokos and Stockmann department stores. The data of study (N = 31) constituted of a www-survey to which the managers were asked to answer. In the first chapter of the study s theoretical section, the relationship between background music and an enterprise was examined. It was found that background music can serve as an aid in seeking competitive advantage. In the second chapter, the service encounter s environment and atmosphere in relation to marketing was examined and it was found that they are a part of customer s product or service experience. In the third chapter, the interaction process between service encounter atmosphere and consumer behaviour was examined and the essential finding was that atmospheric stimuli affects an individual through emotional, cognitive, and physiological processes, in which individual s personal characteristics are also in a great role. In the fourth chapter, the significance of background music s musical features was examined but the research results were found so contradictory that only the complexity of the studied phenomenon became clear. Findings from the study s empirical section showed that all examined department stores play background music and the usage of music is chain-controlled. The respondents considered background music in department stores as a fundamental element and they understood its significance in enterprise s marketing. The respondents also believed that customers consider background music important and pleasant. Respondents views on background music s effects to purchasing behaviour divided opinions more, but the majority however believed that background music has effects to purchasing behaviour. The main conclusion of the study was that background music is an important marketing tool, at least in a department store type service encounter.

Pitfalls in the Treatment of Persons with Dementia

Pitfalls in the treatment of persons with dementia Persons with dementia require high-quality health care, rehabilitation and sufficient social services to support their autonomy and to postpone permanent institutionalization. This study sought to investigate possible pitfalls in the care of patients with dementia: hip fracture rehabilitation, use of inappropriate or antipsychotic medication, social and medicolegal services offered to dementia caregiving families. Three different Finnish samples were used from years 1999-2005, mean age 78 to 86 years. After hip fracture operation, the weight-bearing restriction especially in group of patients with dementia, was associated with a longer rehabilitation period (73.5 days vs. 45.5 days, p=0.03) and the inability to learn to walk after six weeks (p<0.001). Almost half (44%) of the pre-surgery home-dwellers with dementia in our sample required permanent hospitalization after hip fracture. Potentially inappropriate medication was used among 36.2% of nursing home and hospital patients. The most common PIDs in Finland were temazepam over 15 mg/day, oxybutynin, and dipyridamole. However, PID use failed to predict mortality or the use of health services. Nearly half (48.4%) of the nursing home and hospital patients with dementia used antipsychotic medication. The two-year mortality did not differ among the users of conventional or atypical antipsychotics or the non-users (45.3% vs.32.1% vs.49.6%, p=0.195). The mean number of hospital admissions was highest among non-users (p=0.029). A high number of medications (HR 1.12, p<0.001) and the use of physical restraints (HR 1.72, p=0.034) predicted higher mortality at two years, while the use of atypical antipsychotics (HR 0.49, p=0.047) showed a protective effect, if any. The services most often offered to caregiving families of persons with Alzheimer s disease (AD) included financial support from the community (36%), technical devices (33%), physiotherapy (32%), and respite care in nursing homes (31%). Those services most often needed included physiotherapy for the spouse with dementia (56%), financial support (50%), house cleaning (41%), and home respite (40%). Only a third of the caregivers were satisfied with these services, and 69% felt unable to influence the range of services offered. The use of legal guardians was quite rare (only 4.3%), while the use of financial powers of attorney was 37.8%. Almost half (47.9%) of the couples expressed an unmet need for discussion with their doctor about medico-legal issues, while only 9.9% stated that their doctor had informed them of such matters. Although we already have many practical methods to develop the medical and social care of persons with AD, these patients and their families require better planning and tailoring of such services. In this way, society could offer these elderly persons better quality of life while economizing on its financial resources. This study was supported by Social Insurance Institution of Finland and part of it made in cooperation with the The Central Union of the Welfare for the Aged, Finland.