Theme E: Consumer participation 2 Flashcards
The tradition view means
Value creation was a firm-centric process. And value was transferred to customers through exchange transactions. (“Value-in-exchange).
Normative implications for G-D logic
Relationship management (through communication, satisfaction, etc.) to maximize CLV.
Limitation of firm-centric view are …
- Only concentrate on the attributes of firm’s offering.
- Cannot represent the benefits/value of customers.
- Neglect the active role of consumers in generating value.
The shift from a firm’s offerings (goods and services) towards value proposition (services) implied that …
The value is not embedded in the resources but inferred in the usage. So, the offering is to facilitate that benefits.
Service-dominant logic
Vargo and Lusch, 2004
shifts toward the view that value creation is mainly customer-centric, involving participation and engagement.
Value proposition definition
a set of benefits that firms promise to customers to satisfy their needs.
Value outcomes are
determined by individual customers, so they are unique, differentiated, and subjective.
Value processes
- involve interaction between customers using their own resources, and firm’s resource.
- be involved in the process (from supplier to disposal) to deliver service.
- when the network of actors and resources gets bigger, customers integrate them to generate the value they want.
Changing perspective on relationships from G-D logic
- Dyadic bonds represented by trust and commitment
- Long-term patronage – repetitive transactions
Changing perspective on relationships to S-D logic
- Complex, networked structure of market
- Value co-creation
- Emergent, temporal nature of value creation
- Reciprocal, service-for-service nature of exchange
- Contextual nature of value determination
Normative implications for S-D logic
- Collaborate with customers to develop mutually beneficial value propositions.
- Co-create value through service-for-service exchange
4 participative roles for consumers
- as a productive resource
- as a partial employee
- as a co-producer
- as a value co-creator
Customer as a productive resource
- It cope with the decreased availability of HR using the help of technology. ex: ATM, self-checkout
- Benefit: reduce cost and increase business productivity.
Customer as a partial employee
- Customer socialization (ex: build appreciation of roles/scripts and organization’s value and norms).
- Applied theories of HRM to find ways to improve interaction effectiveness and reduce transaction costs.
- Benefit: Improve service quality and satisfaction.
Customer as a co-producer
- Consumers involve in the production process and collaborate with firms by their own creativity and resources.
- It may involve collaboration with other customers (share ideas) or actors (voluntary organizations) in the network.
- Benefits: augment personalized value to customers. It enables customization and sense of control.
Consumer as a value co-creator
- Understand consumers’ life and think about the way how firm can fit into their life.
- Firms involve in the usage/consumption stage by integrating their resources into consumer processes previously considered to be autonomous. (Ex: Waitrose app)
- Benefits: augment personalized value to customers
- Consumers indirectly interact with firms when they use, access or combine resources.
Five forms of co-production in innovation
Russo-Sena and Mele, 2012
- Co-design: Draw, learn, teach, discuss
- Co-evaluation: Evaluate, vote, connect
- Co-ideation: Share ideas, knowledge and practices, comment, discuss
- Co-launch: Elicit votes, review
- Co-test: Identify risks, trial
In-role behaviour
mandatory activities in joint or consumer sphere that enable successful service outcome. Ex: taking medication, choosing food, answering service-provider questions.
Extra-role behaviour
voluntary activities beyond role expectations of customers, that benefit the firm and other customers. Ex: helping other customers, positive WOM
What encourages consumers to participate?
- Consumer: Goals, Involvement, Role clarity, Ability (Resources: knowledge, skills, physical/material, social connections)
- Provider: Trust, Perceived expertise, Commitment
Key characteristics of high (vs. low) level of participation:
- Number of roles (over a series of activities)
- Complexity of roles
- Standardization of service
- The resources consumers contribute to perform roles to create value for themselves and others
Customer engagement may be manifest:
- Behaviourally – repeat purchase, cross-buying, using
- Cognitively – goal progress, trust, goodwill, commitment
- Emotionally – love, passion
- Socially – connecting with others, interacting, giving social support (e.g. blogging, advising)
Engagement is… (Hollebeek et al., 2016)
a customer’s motivationally driven, volitional investment of focal operant resources (including cognitive, emotional, behavioral, and social knowledge and skills), and operand resources (ex: equipment) into brand interactions in service systems.
Benefit of customer engagement
- affords a richer view of interactions among firms, existing and potential customers (and networks).
- critical to the iterative process of relationship development by reflecting the intensity of an individual’s participation in and connection with an organization or brand.
Consumers as collaborative innovators
- providing new product ideas and suggestions
- “co-producers” providing input on product features and design trade-offs
- “product testers” assisting in the identification of product design flaws
- “product users”
The key to participation
Customer goals, resources and their cognitive aspects of their relationship with brands/organizations
Types of contributors in C2C collaboration
- Information providers: pure contributors (motivated by learning and reputation), reciprocal contributors (motivated by others’ contribution).
- Information seekers: pure askers (need answers), lurkers (do nothing).
Motives in C2C collaboration
advice-seeking concern for other consumers economic benefits helping the company platform assistance self-enhancement (to become intelligent shopper) social benefits venting negative feelings
CE foundational processes (Tom Chen et al., 2016)
- Customer resource integration: combine, assimilate and apply new focal operant/operand resources.
- Customer knowledge sharing: share information or experience-based with others.
- Customer learning: process and acquire new knowledge
CE benefits (Tom Chen et al., 2016)
- Customer individual operant resource development: through brand interaction
- Customer interpersonal operant resource development: through initiating or receiving knowledge sharing with others.
- Customer co-creation: interactive, joint, collaborative or personalized activities.
