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.

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.

Locant: A nature inspired location service for ad hoc networks

An efficient location service is a prerequisite to any robust, effective and precise location information aided Mobile Ad Hoc Network (MANET) routing protocol. Locant, presented in this paper is a nature inspired location service which derives inspiration from the insect colony framework, and it is designed to work with a host of location information aided MANET routing protocols. Using an extensive set of simulation experiments, we have compared the performance of Locant with RLS, SLS and DLS, and found that it has comparable or better performance compared to the above three location services on most metrics and has the least overhead in terms of number of bytes transmitted per location query answered.

What is A Virtual Service?- Broadening the Perspective on Technology-Based Services

This article expands the discussion of the impact of technology on services and contributes to a broader comprehension of the nature of virtual services. This is done by discovering dimensions that distinguish physical services from virtual services, i.e. services that are distributed by electronic means and where the customer has no direct human interaction with the service provider. Differences in the core characteristics of services, servicescape and service delivery are discussed. Moreover, dimensions that differentiate between virtual services are analysed. A classification scheme for virtual services is proposed, including the origin of the service, the element of the service offering, the customisation process, stage of the service process performed, and the degree of mobility of the service.

Activityscape Mapping: Consumer Activity Systems as Service Context

Activity systems are the cognitively linked groups of activities that consumers carry out as a part of their daily life. The aim of this paper is to investigate how consumers experience value through their activities, and how services fit into the context of activity systems. A new technique for illustrating consumers’ activity systems is introduced. The technique consists of identifying a consumer’s activities through an interview, then quantitatively measuring how the consumer evaluates the identified activities on three dimensions: Experienced benefits, sacrifices and frequency. This information is used to create a graphical representation of the consumer’s activity system, an “activityscape map”. Activity systems work as infrastructure for the individual consumer’s value experience. The paper contributes to value and service literature, where there currently are no clearly described standardized techniques for visually mapping out individual consumer activity. Existing approaches are service- or relationship focused, and are mostly used to identify activities, not to understand them. The activityscape representation provides an overview of consumers’ perceptions of their activity patterns and the position of one or several services in this pattern. Comparing different consumers’ activityscapes, it shows the differences between consumers' activity structures, and provides insight into how services are used to create value within them. The paper is conceptual; an empirical illustration is used to indicate the potential in further empirical studies. The technique can be used by businesses to understand contexts for service use, which may uncover potential for business reconfiguration and customer segmentation.

Service Productivity: Toward a Conceptualisation of the Transformation of inputs

The productivity of a process is related to how effectively input resources are transformed into value for customers. For the needs of manufacturers of physical products there are widely used productivity concepts and measurements instruments. However, in service processes the underlying assumptions of these concepts and models do not hold. For example, manufacturing-based productivity models assume that an altered configuration of input resources in the production process does not lead to quality changes in outputs (the constant-quality assumption). However, in a service context changes in the production resources and productions systems do affect the perceived quality of services. Therefore, using manufacturing-oriented productivity models in service contexts are likely to give managers wrong directions for action. Research into the productivity of services is still scarce, because of the lack of viable models. The purpose of the present article is to analyse the requirements for the development of a productivity concept for service operations. Based on the analysis, a service productivity model is developed. According to this model, service productivity is a function of 1) how effectively input resources into the service (production) process are transformed to outputs in the form of services (internal or cost efficiency), 2) how well the quality of the service process and its outcome is perceived (external or revenue efficiency), and 3) how effectively the capacity of the service process is utilised (capacity efficiency). In addition, directions for developing measurement models for service productivity are discussed.

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.

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.

Re-Conceptualizing Value-Creation From Industrial Business Logic to Service Business Logic

There is an urgent interest in marketing to move away from neo-classical value definitions suggesting that value creation is a process of exchanging goods for money. In the present paper, value creation is conceptualized as an integration of two distinct, yet closely coupled processes. First, actors co-create what this paper calls an underlying basis of value. This is done by interactively re-configuring resources. By relating and combining resources, activity sets, and risks across actor boundaries in novel ways actors create joint productivity gains – a concept very similar to density (Normann, 2001). Second, actors engage in a process of signification and evaluation. Signification implies co-constructing the meaning and worth of joint productivity gains co-created through interactive resource re-configuration, as well as sharing those gains through a pricing mechanism as value to involved actors. The conceptual framework highlights an all-important dynamics associated with ´value creation´ and ´value´ - a dynamics the paper claims has eluded past marketing research. The paper argues that the framework presented here is appropriate for the interactive service perspective, where value and value creation are not objectively given, but depend on the power of involved actors´ socially constructed frames to mobilize resources across actor boundaries in ways that ´enhance system well-being´ (Vargo et al., 2008). The paper contributes to research on Service Logic, Service-Dominant Logic, and Service Science.

Towards Service Logic: The Unique Contribution of Value Co-Creation

The underpinning logic of value co-creation in service logic is analysed. It is observed that three of the ten foundational premises of the so-called service-dominant logic are problematic and do not support an understanding of value-co-creation and creation that is meaningful for theoretical development and decision making in business and marketing practice. Without a thorough understanding of the interaction concept, the locus and nature of value co-creation cannot be identified. Based on the analysis in the present article it is observed that a unique contribution of a service perspective on business (service logic) is not that customers always are co-creators of value, but that under certain circumstances the service provider gets opportunities to co-create value together with its customers. Finally, the three problematic premises are reformulated accordingly.

What Can A Service Logic Offer Marketing Theory

The goods-dominated marketing model has major shortcomings as a guiding marketing theory. Its marketing mix approach is mainly geared towards buying and does not include consumption as an integral part of marketing theory. Although it is during the process of consuming goods and services that value is generated for customers and the foundation for repeat purchasing and customer relationships are laid, this process is left outside the scope of marketing. The focus in service marketing is not on a product but on interactions in service encounters. Consumption has become an integral part of a holistic marketing model. Other than standardized goods-based value propositions can be better understood when taking a servicebased approach. It is concluded that marketing based on a goods logic is but a special case of marketing based on a service logic and applicable only in certain contexts with standardized products.

Value of Image in Service

Purpose This paper takes a customer view on corporate image and value, and discusses the value of image in service. We propose a model depicting how the customer’s corporate brand image affects the customer’s value-in-use. Methodology/approach The paper represents conceptual development on customers’ value and image construction processes. By integrating ideas and elements from the current service and branding literature a model is proposed that extends current views on how value-in-use emerges. Findings From a current service perspective it is the customer who makes value assessments when experiencing service. Similarly, if branding is a concept used to denote the service provider’s intentions and attempts to create a corporate brand, image construction is the corresponding process where the customer constructs the corporate image. This image construction process is always present both in service interactions and in communication and has an effect on the customer’s value-in-use. We argue that two interrelated concepts are needed to capture corporate image construction and dynamics and value-in-use – the image-in-use and image heritage. Research implications The model integrates two different streams of research pointing to the need to consider traditional marketing communication and service interactions as inherently related to each other from the customer’s point of view. Additionally the model gives a platform for understanding how value-in-use emerges over time. New methodological approaches and techniques to capture image-in-use and image heritage and their interplay with value-in-use are needed. Practical implications The company may not be able to control the emergence of value-in-use but may influence it, not only in interactions with the customer but also with pure communication. Branding activities should therefore be considered related to service operations and service development. Additionally, practitioners would need to apply qualitative methods to understand the customer’s view on image and value-in-use. Originality/value The paper presents a novel approach for understanding and studying that the customer’s image of a company influences emergence of value-in-use. The model implies that the customer’s corporate image has a crucial role for experienced value-in-use.