Today we identify service articles published in Marketing, Management, Operations, Productions, Information Systems & Practioner-oriented Journals in February 2017.
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Hogreve, J., A. Iseke, K. Derfuss and T. Eller (2017): The Service-Profit Chain: A Meta-Analytic Test of a Comprehensive Theoretical Framework, Journal of Marketing, 81(3), pp.41-61
The service–profit chain (SPC) has served as a prominent guidepost for service managers and researchers alike. This meta-analysis provides the first comprehensive test of the SPC, showing that all the proposed links are statistically significant and substantial. However, the effect sizes vary considerably, partly according to the type of service provided. Meta-analytic structural equation models show that internal service quality translates into service performance through various mechanisms beyond employee satisfaction, and they highlight the importance of the service encounter and customer relationship characteristics for customer responses. The findings not only indicate the need to integrate complementary paths in the SPC framework but also challenge the implicit SPC rationale that firms should always maximize employee satisfaction and external service quality to optimize firm performance.
Link: http://dx.doi.org/10.1509/jm.15.0395 [Google]
Cachon, G. P. and P. Feldman (2017): Is Advance Selling Desirable with Competition?, Marketing Science, 36(2), pp.214-231
It has been shown that a monopolist can use advance selling to increase profits. This paper documents that this may not hold when a firm faces competition. With advance selling a firm offers its service in an advance period, before consumers know their valuations for the firms’ services, or later on in a spot period, when consumers know their valuations. We identify two ways in which competition limits the effectiveness of advance selling. First, while a monopolist can sell to consumers with homogeneous preferences at a high price, this homogeneity intensifies price competition, which lowers profits. However, the firms may nevertheless find themselves in an equilibrium with advance selling. In this sense, advance selling is better described as a competitive necessity rather than as an advantageous tool to raise profits. Second, competition in the spot period is likely to lower spot period prices, thereby forcing firms to lower advance period prices, which is also not favorable to profits. Rational firms anticipate this and curtail or eliminate the use of advance selling. Thus, even though a monopolist fully exploits the practice of advance selling, rational firms facing competition either mitigate it or avoid it completely. The online appendix is available at .
Link: http://dx.doi.org/10.1287/mksc.2016.1006 [Google]
Mehta, N., J. Ni, K. Srinivasan and B. Sun (2017): A Dynamic Model of Health Insurance Choices and Healthcare Consumption Decisions, Marketing Science, 36(3), pp.338-360
Chronic diseases, which account for 75% of healthcare expenditure, are of particular importance in trying to understand the rapid growth of healthcare costs over the last few decades. Individuals suffering from chronic diseases can consume three types of services: secondary preventive care, which includes diagnostic tests; primary preventive care, which consists of drugs that help prevent the illness from getting worse; and curative care, which includes surgeries and expensive drugs that provide a quantum boost to the patient’s health. Although the majority of cases can be managed by preventive care, most consumers opt for more expensive curative care that leads to a substantial increase in overall costs. To examine these inefficiencies, we build a model of consumers’ annual medical insurance plan decisions and periodic consumption decisions and apply it to a panel data set. Our results indicate that there exists a sizable segment of consumers who purchase more comprehensive plans than needed because of high uncertainty vis–vis their health status, and that once in the plan, they opt for curative care even when their illness could be managed through preventive care. We examine how changing cost-sharing characteristics of insurance plans and providing more accurate information to consumers via secondary preventive care can reduce these inefficiencies. Data and the Web appendix are available at .
Link: http://dx.doi.org/10.1287/mksc.2016.1021 [Google]
Gensler, S., S. A. Neslin and P. C. Verhoef (2017): The Showrooming Phenomenon: It’s More than Just About Price, Journal of Interactive Marketing (Mergent, Inc.), 38(), pp.29-43
This paper examines the factors that influence competitive showrooming, whereby consumers visit an offline retail store to gather infonnation but make their purchase online at a competing retailer. We survey 556 respondents to study how the benefits and costs of showrooming influence the consumer’s decision to showroom. Not surprisingly, we find that expected average price savings from showrooming are positively associated with showrooming. In addition, however, the perceived dispersion in online prices is also positively related to showrooming. Moreover, we find that non-price factors play a key role in consumers’ showrooming decisions: perceived gains in the quality of the product purchased when showrooming (measured as the fit with a consumer’s need) and waiting time for service in the brick-and-mortar store are positively associated with showrooming. Online search costs are negatively related to showrooming. Time pressure that consumers face when shopping is negatively associated with their propensity to showroom. We discuss implications for researchers and retail managers. For example, managers of offline retail stores can curtail showrooming by increasing the number of sales personnel available in-store instead of providing currently employed personnel with more training. Tc encourage showrooming, managers of online retailers should make it easier for the customer to search online.
Link: http://dx.doi.org/10.1016/j.intmar.2017.01.003 [Google]
Sugathan, P., K. R. Ranjan and A. G. Mulky (2017): Atypical Shifts Post-failure: Influence of Co-creation on Attribution and Future Motivation to Co-create, Journal of Interactive Marketing (Mergent, Inc.), 38(), pp.64-81
This study investigates how the effect of the failure of co-created products or services influences: (a) internal attribution (i.e. the self) and external attribution (i.e. the firm), (b) customers’ expectancies of success, and (c) customers’ future motivation to co-create and contribute to recovery from failure. We use attribution theory and the attribution-expectancy framework to explain the theoretical relationships we advance and test our hypotheses in two independent experiments that stimulate co-creation through role-play and vignettes. The results show that customer cocreation shifts the attribution for failure to the self, resulting in atypical shifts in expectancy (increasing customers’ expectancy of future success and motivation to continue co-creating in the future). Our results suggest that utilizing customers’ efforts and skills in the co-creation of products and services can help Anns to manage failure effectively. The implications of our findings on co-creation research and product and service failures are discussed, specific applications within the digital context are considered, and suggestions are offered for future research.
Link: http://dx.doi.org/10.1016/j.intmar.2017.01.002 [Google]
Yeolib, K. and R. A. Peterson (2017): A Meta-analysis of Online Trust Relationships in E-commerce, Journal of Interactive Marketing (Mergent, Inc.), 38(), pp.44-54
A meta-analysis examined the role of online trust in business-to-consumer e-commerce. The analysis of 16 pairwise relationships derived from 150 empirical studies involving online trust revealed that online trust exhibits significant relationships with selected antecedents (e.g., perceived privacy, perceived service quality) and consequences (e.g., loyalty, repeat purchase intention). Even so, additional analyses demonstrated that methodological characteristics such as study design, website type, and type of items used to measure the trust construct moderated certain online trust relationships. These additional analyses indicated that the relationships between online trust and its respective antecedents and consequences are simultaneously more idiosyncratic, complex, and subtle than previously envisioned. Implications of the analyses for theory, practice, and future research are discussed.
Link: http://dx.doi.org/10.1016/j.intmar.2017.01.001 [Google]
Hakanen, T., N. Helander and K. Valkokari (2017): Servitization in global business-to-business distribution: The central activities of manufacturers, Industrial Marketing Management, 63(), pp.167-178
Manufacturers’ servitization development is a prevalent trend in the current business world. Companies then aim to increase customer closeness and complement product offerings with services. However, extant literature on distribution and marketing channels literature remains limited in terms of the implications of servitization for global business-to-business distribution. Therefore, this qualitative multiple case study identifies the central activities of servitizing manufacturers in global distribution. The study concludes with the following research propositions: Servitizing manufacturers develop global service portfolios and customize offerings according to local customer characteristics; build global operation models and adjust local service processes; ensure global brand coherency and design the customer experience according to local customer expectations; and create global value propositions and enhance local value co-creation with business customers. The study outlines managerial implications in terms of organizing global distribution. It also discusses new knowledge sharing and capability needs regarding solution sales, service provision and customer relationship management.
Link: http://dx.doi.org/10.1016/j.indmarman.2016.10.011 [Google]
Pohlmann, A. and V. Kaartemo (2017): Research trajectories of Service-Dominant Logic: Emergent themes of a unifying paradigm in business and management, Industrial Marketing Management, 63(), pp.53-68
We describe the research trajectories associated with S-D Logic and the scholarly activity it encompasses across a breadth of disciplines by conducting a bibliometric analysis of a body of literature citing two fundamental S-D Logic publications between 2004–2014. The bibliometric analysis reveals four pertinent research trajectories: Value co-creation, Resources (incl. integration), Brands, and Innovation. These empirical findings are supported by qualitative insights and projections obtained from structured interviews with S-D Logic scholars using the Delphi method, which identifies ten research trajectories: Actors, Context, Innovation, Institutions, Markets, Resources, Service, Systems, Value co-creation, and Value propositions. The main tenets, relevant literature, and syntheses of research questions for the aforementioned research trajectories are provided. Results indicate that the scientific community is evaluating fundamental ontological and epistemological questions of S-D Logic. Emergent themes (complex and fractal phenomena, generic conceptualizations, technological innovation and democratization processes, and institutionalization practices) are discussed. The results provide insight into the development of paradigms in the managerial sciences. The delineation of the paradigm’s thematic boundaries, its emergent themes, and identification of central research trajectories informs an advanced understanding of the nature of economic exchange and value creation for both practitioners and the managerial sciences, thus aiding the transdisciplinary production of knowledge.
Link: http://dx.doi.org/10.1016/j.indmarman.2017.01.001 [Google]
Shi, V. G., T. Baines, J. Baldwin, K. Ridgway, P. Petridis, A. Z. Bigdeli, V. Uren and D. Andrews (2017): Using gamification to transform the adoption of servitization, Industrial Marketing Management, 63(), pp.82-91
Increasingly, manufacturing organizations compete by developing product-service systems rather than offering products alone. To transform themselves into providers of advanced services, however, product-centric manufacturing firms need to overcome a range of barriers. While previous studies have highlighted the teaching/learning potential of ‘gamification’ (the use of ideas and techniques found in game-playing), the opportunities to harness this approach to help tackle such barriers have yet to be fully realized. Our study extends the debate by integrating established frameworks relating to emotional mechanics of gamification with the adoption of advanced services, arguing that such mechanics can facilitate and strengthen companies’ transformation into advanced-service providers. Based on a systematic analysis of nearly 90 selected publications, we develop six conceptual propositions to explore how gamification can aid the transformation process. Our findings will help both practitioners and researchers apply emotional mechanics of gamification when seeking to address different hurdles hindering the development and provision of advanced services.
Link: http://dx.doi.org/10.1016/j.indmarman.2016.12.005 [Google]
Tsarenko, Y. and D. Simpson (2017): Relationship governance for very different partners: The corporation-nonprofit case, Industrial Marketing Management, 63(), pp.31-41
Organizations increasingly form relationships with partners that have goals, values or operating cultures different to their own. These relationships have significant potential to generate innovative products or services and increase opportunities for service delivery. While they can provide greater access to resources, infrastructure or stakeholders, they can struggle with collaboration. Such partnerships may also encounter differences in the role of governance mechanisms such as trust and commitment. Only limited research however has addressed the governance implications of such relationships. We compared managers’ perspectives on relationship governance mechanisms for 267 nonprofits and 276 corporations involved in corporate-nonprofit relationships. We found that ‘fit’ – compatibility and complementarity – was important to performance in such relationships. We found also however that nonprofits valued the role of trust in these relationships significantly more than corporations. Our findings suggest potential for significant success in these types of relationships but also possible complications from differences of opinion as to how they should be governed. While relationships between very different partners can succeed, they should remain cognizant of differences in each partner’s expectations for relationship governance and its role in relationship performance.
Link: http://dx.doi.org/10.1016/j.indmarman.2017.01.004 [Google]
Raddats, C., J. Zolkiewski, V. M. Story, J. Burton, T. Baines and A. Ziaee Bigdeli (2017): Interactively developed capabilities: evidence from dyadic servitization relationships, International Journal of Operations & Production Management, 37(3), pp.382-400
Purpose The purpose of this paper is to challenge the focal firm perspective of much resource/capability research, identifying how a dyadic perspective facilitates identification of capabilities required for servitization.Design/methodology/approach Exploratory study consisting of seven dyadic relationships in five sectors.Findings An additional dimension of capabilities should be recognised; whether they are developed independently or interactively (with another actor). The following examples of interactively developed capabilities are identified: knowledge development, where partners interactively communicate to understand capabilities; service enablement, manufacturers work with suppliers and customers to support delivery of new services; service development, partners interact to optimise performance of existing services; risk management, customers work with manufacturers to manage risks of product acquisition/operation. Six propositions were developed to articulate these findings.Research limitations/implications Interactively developed capabilities are created when two or more actors interact to create value. Interactively developed capabilities do not just reside within one firm and, therefore, cannot be a source of competitive advantage for one firm alone. Many of the capabilities required for servitization are interactive, yet have received little research attention. The study does not provide an exhaustive list of interactively developed capabilities, but demonstrates their existence in manufacturer/supplier and manufacturer/customer dyads.Practical implications Manufacturers need to understand how to develop capabilities interactively to create competitive advantage and value and identify other actors with whom these capabilities can be developed.Originality/value Previous research has focussed on relational capabilities within a focal firm. This study extends existing theories to include interactively developed capabilities. The paper proposes that interactivity is a key dimension of actors’ complementary capabilities.
Link: http://dx.doi.org/10.1108/IJOPM-08-2015-0512 [Google]
Rouquet, A., K. Goudarzi and T. Henriquez (2017): The company-customer transfer of logistics activities, International Journal of Operations & Production Management, 37(3), pp.321-342
Purpose The starting point of the paper is the fact that customers participate in the logistics activities of the supply chain (SC) (Johnston, 1989; Granzin and Bahn, 1989). Having established that customers can and do participate in logistics, firms can consider transferring some of their logistics activities to/from their customer. The transfer can take two contrasting forms: outsourcing by the company of some logistics activities to its customers or insourcing by the company of some logistics activities from its customers. The purpose of this paper is to contribute to a theoretical understanding of these company/customer transfers.Design/methodology/approach To address this emerging issue, the authors build on the service management literature and on the study of two contrasting cases of transfer. The first (IKEA) examines the outsourcing of some logistics activities to the consumer. The second (AuchanDrive) examines the reverse process of insourcing.Findings Based on the service management literature and the two case studies, the authors develop a theoretical model for the transfer of logistics activities between a firm and its customers. The findings confirm several elements, such as the importance of managing customer participation and adapting service production during a transfer. Most importantly, the findings show that a key issue for a firm during a transfer is the need to redesign its SC in terms of transport, warehousing and production. The main contribution of the research therefore is showing that customer participation in logistics is a key variable in SC design.Research limitations/implications This research is based on the analysis of two cases. To generalise these results, further research needs to be conducted.Practical implications This research proposes recommendations to help managers and organisations to transfer some logistics activities to or from their customers.Originality/value The originality of the framework is that it considers both the company and its customers. This comprehensive approach establishes a link between supply chain management research and marketing.
Link: http://dx.doi.org/10.1108/IJOPM-01-2015-0049 [Google]
Rudran, R. and A. Kumar J (2017): Measurement scales for technology-generated customer contact, International Journal of Operations & Production Management, 37(5), pp.534-556
Purpose The purpose of this paper is to develop measurement scales for customer contact in a technology-generated context.Design/methodology/approach The authors adapted the scales of Froehle and Roth (2004), by following a systematic scale adaptation and development process. The adapted scales were tested for psychometric properties and refined by building measurement models using partial least squares structural equation modeling.Findings The authors found it necessary to revise Froehle and Roth’s (2004) original items in most of the scales. After testing, the “attitude towards the episode” scale was dropped and remaining nine scales were retained.Research limitations/implications The scales will be useful to future researchers on online shopping to advance their research. The scales can be tested and validated with data from multiple empirical contexts and adapted to those contexts as necessary. Future studies must examine path relationships between belief, attitude, and intention constructs.Practical implications The adapted scales can be useful to practitioners in the domain of online shopping to measure the beliefs, attitudes, and intentions of their customers. Potential beneficiaries include service providers, service designers, industry associations as well as regulators in the government.Originality/value The overarching contribution of this paper lies in developing scales pertaining to the online shopping context of technology-generated customer contact. The paper has simultaneously addressed two relatively less attended areas of research on service operations – the role of technology in customer contact and measurement of customer contact.
Link: http://dx.doi.org/10.1108/IJOPM-02-2016-0079 [Google]
He, L., H.-Y. Mak, Y. Rong and Z.-J. M. Shen (2017): Service Region Design for Urban Electric Vehicle Sharing Systems, Manufacturing & Service Operations Management, 19(2), pp.309-327
Emerging collaborative consumption business models have shown promise in terms of both generating business opportunities and enhancing the efficient use of resources. In the transportation domain, car-sharing models are being adopted on a mass scale in major metropolitan areas worldwide. This mode of servicized mobility bridges the resource efficiency of public transit and the flexibility of personal transportation. Beyond the significant potential to reduce car ownership, car sharing shows promise in supporting the adoption of fuel-efficient vehicles, such as electric vehicles (EVs), because of these vehicles’ special cost structure with high purchase but low operating costs. Recently, key players in the car-sharing business, such as Autolib’, car2go, and DriveNow, have begun to employ EVs in an operations model that accommodates one-way trips. On the one hand (and particularly in free-floating car sharing), the one-way model results in significant improvements in coverage of travel needs and therefore in adoption potential compared with the conventional round-trip-only model (advocated by Zipcar, for example). On the other hand, this model poses tremendous planning and operational challenges. In this work, we study the planning problem faced by service providers in designing a geographical service region in which to operate the service. This decision entails trade-offs between maximizing customer catchment by covering travel needs and controlling fleet operation costs. We develop a mathematical programming model that incorporates details of both customer adoption behavior and fleet management (including EV repositioning and charging) under imbalanced travel patterns. To address inherent planning uncertainty with regard to adoption patterns, we employ a distributionally robust optimization framework that informs robust decisions to overcome possible ambiguity (or lacking) of data. Mathematically, the problem can be approximated by a mixed integer second-order cone program, which is computationally tractable with practical scale data. Applying this approach to the case of car2go’s service with real operations data, we address a number of planning questions and suggest that there is potential for the future development of this service. The online appendix is available at .
Link: http://dx.doi.org/10.1287/msom.2016.0611 [Google]
Kostami, V., D. Kostamis and S. Ziya (2017): Pricing and Capacity Allocation for Shared Services, Manufacturing & Service Operations Management, 19(2), pp.230-245
We study the pricing and capacity allocation problem of a service provider who serves two distinct customer classes. Customers in each class are inherently heterogeneous in their willingness to pay for service, but their utilities are also affected by the presence of other customers in the system. Specifically, customer utilities depend on how many customers are in the system at the time of service as well as who these other customers are. We find that if the service provider can price discriminate between customer classes, pricing out a class, i.e., operating an exclusive system, can sometimes be optimal and depends only on classes’ perceptions of each other. If the provider must charge a single price, an exclusive system is even more likely. We extend our analysis to a service provider who can prevent class interaction by allocating separate capacity segments to the two customer classes. Under price discrimination, allocating capacity is optimal if the ‘net appreciation’ between classes, as defined in the paper, is negative. However, under a single-price policy, allocating capacity can be optimal even if this net appreciation is positive. We describe in detail how the nature of asymmetry in classes’ perception of each other determines the optimal strategy. The online appendix is available at .
Link: http://dx.doi.org/10.1287/msom.2016.0606 [Google]
Chen, Y., R. Levi and C. Shi (2017): Revenue Management of Reusable Resources with Advanced Reservations, Production & Operations Management, 26(5), pp.836-859
We consider a revenue management problem wherein the seller is endowed with a single type resource with a finite capacity and the resource can be repeatedly used to serve customers. There are multiple classes of customers arriving according to a multi-class Poisson process. Each customer, upon arrival, submits a service request that specifies his service start time and end time. Our model allows customer advanced reservation times and services times in each class to be arbitrarily distributed and correlated. Upon arrival of each customer, the seller must instantaneously decide whether to accept this customer’s service request. A customer whose request is denied leaves the system. A customer whose request is accepted is allocated with a specific item of the resource at his service start time. The resource unit occupied by a customer becomes available to other customers after serving this customer. The seller aims to design an admission control policy that maximizes her expected long-run average revenue. We propose a policy called the ε- perturbation class selection policy ( ε-CSP), based on the optimal solution in the fluid setting wherein customers are infinitesimal and customer arrival processes are deterministic, under the restriction that the seller can utilize at most (1 − ε) of her capacity for any ε ∈ (0, 1). We prove that the ε-CSP is near-optimal. More precisely, we develop an upper bound of the performance loss of the ε-CSP relative to the seller’s optimal revenue, and show that it converges to zero with a square-root convergence rate in the asymptotic regime wherein the arrival rates and the capacity grow up proportionally and the capacity buffer level ε decays to zero.
Link: http://dx.doi.org/10.1111/poms.12672 [Google]
Dixon, M. J., L. Victorino, R. J. Kwortnik and R. Verma (2017): Surprise, Anticipation, and Sequence Effects in the Design of Experiential Services, Production & Operations Management, 26(5), pp.945-960
The most salient or peak aspect of a service experience often defines customer perceptions of the service. Across two studies, using the same novel form of a scenario-based experiment, we investigate the design of peak events in a service sequence by testing how anticipated and surprised peaks influence customer perceptions. Study 1 captures the immediate reactions of participants and Study 2 surveys participants a week later. In both studies, we find a main effect for the temporal peak placement, confirming the positive influence of a strong peak ending. When assessing the peak design strategies of surprise and anticipation, we find in Study 1 that surprise and anticipation moderate the temporal peak placement (e.g., early peak vs. late peak) on overall customer perceptions, with the surprise peak at the end of an experience yielding the strongest effect. In Study 2 we see that the remembered experience of a surprise peak positively affects customer perceptions compared to an anticipated peak regardless of the temporal placement of the peak. We also find that the infusion of a surprise peak ending has a lasting effect that amplifies the peak-end effect of remembered experiences. Drawing on these findings, we discuss the role of surprise, anticipation, and sequence effects in experience design strategy.
Link: http://dx.doi.org/10.1111/poms.12675 [Google]
Schulte, B. and R. Pibernik (2017): Profitability of Service-Level-Based Price Differentiation with Inventory Rationing, Production & Operations Management, 26(5), pp.903-923
In this paper, we study the profitability of service-level-based price differentiation (SLBPD) in an inventory-rationing context. SLBPD implies that a company offers several combinations of prices and guaranteed service levels, from which customers self-select; different customers choose different offerings because they incur different shortage costs if an order is not fulfilled immediately. We develop an analytical model for SLBPD and explore if and when such a service differentiation strategy yields higher profits than a single undifferentiated offering. The results of our analyses suggest that SLBPD is profitable only if a company faces pricing restrictions, e.g., because of competitive pressure or regulatory restrictions. We develop necessary and sufficient conditions under which a specific and relevant form of SLBPD (called ‘service-level-based upselling’) is profitable, and provide an algorithm to compute the optimal parameters of such a policy. Based on this algorithm we carry out numerical analyses that allow us to characterize the profit increment of service-level-based upselling. We derive managerial insights into the attractiveness of SLBPD and explain how our basic analytical framework can be extended to account for more complex practical features.
Link: http://dx.doi.org/10.1111/poms.12677 [Google]
