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The Way Forward. Customer Co-production Behaviour
Available online at www.sciencedirect.com
ScienceDirect Procedia - Social and Behavioral Sciences 224 (2016) 238 – 245
6th International Research Symposium in Service Management, IRSSM-6 2015, 11-15 August 2015, UiTM Sarawak, Kuching, Malaysia
The Way Forward. Customer Co-production Behaviour Norsiah Ahmad* Centre for Marketing and Entrepreneurship Studies (CfMES), Faculty of Business and Management, Universiti Teknologi MARA, Puncak Alam , Selangor
Abstract The area of customer co-production behaviour has an impressive body of research devoted to comprehending a range of perspectives and theories related to this area. However, relatively little research have examined through the perspective of service dominant logic and underpinned self-determination theory to understand the customer co-production behaviour. The customer’s role is active and participative because as an individual, a customer has the potential to act and influence the productivity and the outcome of service. Customer co-production behaviour is defined as the determination and willingness of a customer to participate actively in terms of his time and effort with the service provider in the service inception and production stages. This study applies the self-determination theory and an adapted version of the co-production model by Etgar (2008) to explain coproduction behaviour in service provision. For the research, the context of building projects is appropriate to investigate this phenomenon because it is complex and time-related, hence requires customers' perseverance to engage in the co-production process. A pre-study exploratory research, television progr amme analysis, interviews with the council officer and informants who have experience in building projects were conducted prior to determining the research model. Online and mail surveys were administered to a group of 275 participants who were willing to share their personal experiences in building projects. A customer’s openness to experience, agreement and emotional stability traits has a positive effect on feeling competent about the activities that he/she wants to participate in, and he/she feels the self-efficacy to co-produce with the providers. The conscientiousness trait is relevant to susceptibility to control. The value anticipation construct has a relationship with agreement and conscientiousness. However, extraversion traits do not show any significant relationship with the customer autonomous motivation to participate actively in service provision. Next, autonomous motivation was shown to be a valid predictor to customer co-production behaviour. Finally, the findings also showed intrinsic rewards had a positive relationship as the outcome of customer co-production behavior. This study concluded that the self-determination theory and perspective of service dominant logic are useful in explaining the primary role of customers’ co-production behaviour in core product offering. © Published by Elsevier Ltd. Ltd. This is an open access article under the CC BY-NC-ND license ©2016 2016The TheAuthors. Authors. Published by Elsevier (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under the responsibility of Universiti Teknologi M ARA Sarawak. Peer-review under responsibility of the Universiti Teknologi MARA Sarawak Keywords: co-production; self determination; service dominant logic
* Corresponding author. Tel.: +6-018-397-3149; office: +6-033-258-7021. E-mail address: [email protected]
1877-0428 © 2016 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under responsibility of the Universiti Teknologi MARA Sarawak doi:10.1016/j.sbspro.2016.05.455
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1. Background of the study Customers are the key fundamental resources to service production. Hence, their engagement in core offering production as learned and active customers was examined by researchers through several understandings such as customer part icipation, cooperation and co-creation. Many had also called for an understanding of customer co production behaviour (Auh, Bell, McLeod & Sh ih, 2007; Bendapudi & Leone, 2003; Bettencourt, Ostrom, Brown & Roundtree, 2002; Chen, Tsou & Ching, 2011; Etgar, 2008; Groth, 2001; Lim & Moufahim, 2011). Ho wever, this research aimed to contribute to a growing body of literature focusing on a new p erspective of service market ing concepts introduced by Vargo and Lusch (2004). Vargo and Lusch (2004) established a new dominant logic for market ing, known as service-do minant logic (SD-Logic), which emphasised the cus tomer as an operant resource and held that all businesses are basically service businesses. Despite considerable interest in the nature and role of customer co-production behaviour, and utilising a basic marketing perspective, very little research attempted to employ the SD-Logic paradigm as the perspective for observing customer behaviour (Etgar, 2008; Morelli, 2009). 2. Customers as part of service provision The most important solution in service provision is based on value, service and experience; all the intangible benefits customers experience through their engagement in service (Ojasalo, 2010). Customer participation represents the behavioural manifestation of customers to directly contribute to service production; as a result, it will reduce the need for service recovery (Dong, Evans & Zou, 2008). In other words, customers could influence the attribution of service outcomes and service failures (Bendapudi & Leone, 2003; Wikströ m, 1996). Recognising the importance of customer normat ive expectation in value and service quality, in service delivery and active participation in service production may drive positive service outcomes , such as satisfaction to customers; indirectly increasing service provider performance (Chan, Yim & Lam, 2010). Arguably, part of participation behaviour is to be active and engaged with service providers and activit ies, wh ich may be a voluntary performance equipped with a bundle of favourable actions shown by customers to other customers (Rosenbaum & Massiah, 2007), or to service emp loyees (An-Tien, Chang-Hua & Ko-Ch ien, 2004) o r acceptance of a new p roduct (Bettencourt, 1997). In contrast with other researchers, customer participation behaviour may be generated through motivational drivers in which customers obtain value through experience by integrating resourc es in the service process (Etgar, 2008). Th is behaviour that is initiated could be part of the service which may reduce amb iguity of the outcome and increase economical value with expected cost reduction in the production process. As an individual, the customer actively participates in service production to reflect personal latent needs, which would be the projection of their o wn init iative to produce and maintain the production process as precisely as possible so as to achieve expected results. The idea of the customer as part of the value creator indicated that the formation of value is stimu lated by customers in the process directed towards the production of the core offering itself (Wikström, 1996). Furthermore, customers may offer input into their own consumption in the sequential process, as early as the design and development stage, or production, marketing or even during consumption (Wikström, 1996). Using the cognitive approach, customers embed their perceived value through cognitive involvement in the service production (Payne, Storbacka & Frow, 2008). According to this stance, customers who perceive or judge themselves to have the ability through their skills and knowledge will be directly involved in service production. Emphasis of user involvement in building up service wou ld vary on the level of co mpetency demonstrated b y the individual. The most important reason for customers as active participants is merely to ensure that value is created according to the specification of needs (Brodie, Siren & Pels, 2011). Interactions between customers and providers are the way value is created (Grönroos, 2011). In other words, this activity also induces collaborative learn ing among customers and providers (Ordaini & Parasuraman, 2011). These observations further provide a foundation for the notion of customers as partial emp loyees. Grönroos (2011) suggested that value creation is the usage of resources by both the customer and provider in an interactive process. According to the traditional approach, value creation is only based on the core offering itself; however, in a new perspective of the marketing process, value creation encapsulates the whole p rocess of the transaction itself (Wagner, Eggert & Lindemann, 2010). Grönroos (2011) exp lained that extended service offerings would make providers extend their market offering to customers. In other words, value creation is not a one-time occurrence or the result of any business transaction; it reflects the expression of the entire process of development up to the delivery of service (Grönroos, 2011). The entire p rocess of
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value creation includes the customer as one of the resources (Chan, Yim & Lam, 2010). Distinguishing between value creation and customers as value co-creators in the entire process involves two different scenarios, since value creation is a process involving both customers and providers or firms; however, “co-creator” is the cognitive behavioural function of customer involvement with providers in service productio n (Prahalad & Ramasamy, 2004). The value creation role primarily depends on customers; thus, providers propose value according to customer specifications (Lusch & Vargo, 2006). However, fro m the production point to the final process, mu ltiple interactions occur between customers and providers; hence, during this time, the opportunity for customers to co-produce is prevalent (Grönroos, 2011). The exchange of informat ion, and the efficiency of using one’s own ability, are important resources in the value creation process and are dynamic operant resources in the network. This suggests that customers can be value contributors in order to integrate and use value during consumption (Chen et al., 2011). Customers, by pursuing value creation, can benefit in several ways. Value creation is assumed to be correlated with innovation outcomes (Chen et al., 2011). An effective contributor would achieve the precise quality requested, and thus, reduce the need for service recovery (Dong, Evans & Zou, 2006). Determination of value is dictated by customers and supported by providers; as a result, customers’ cognitive abilit ies are perceived as crucial to the achievement of real benefits of value creation. In sum, the locus of value creation is the cognitive interactions between customers and providers (Prahalad & Ven kat, 2004). During this activity, both customers and providers play impo rtant roles. Based on this, there is marginal differentiation regarding the importance of either part icipant’s role; hence, customers will be treated as partial emp loyees or partners and through their co mbined efforts, both parties will achieve their objectives. In the process, the reflection of customers’ behaviour in service interactions varies; it is driven by motivational effort aroused from the support reflected by service providers. 3. Co-production behaviour There are several definit ions of customer co-production behaviour which can be discerned fro m p revious studies and which also reveal the affin ity of the construct with involvement, co llaboration (Bettencourt et al., 2002), cooperation and participation (An-Tien et al., 2004; Rodie & Kline, 2000). Co-production is defined as a process of mass customisation in which customers are act ively involved in solution development and participate in service production (Morelli, 2009). The firm that perceives customers as co-producers does not consider them to be recipients of the product; instead, customers are perceived as active partners who shape service production (Bendapudi & Leone, 2003; Bettencourt, 1997). Co -production entails a high level of customer involvement in service creation (Clayco mb, Lengnick-Hall and Lawrence, 2001). Consumption is a p roductive process because it produces value and identit ies for customers. All of these concepts reveal the role of customers as co nnected, active, involved and empowered participants (Prahalad & Ramasamy, 2004). Customer participation in the service production process consists of the actions and resources provided by customers for service production and service delivery (An-Tien et al., 2004; Dong et al., 2006). Participatory behaviour can be seen as ranging from customer attendance and informat ion provision to voluntary contributions . Customers can merely attend events or service encounters and provide informat ion to the company (for examp le, by giving feedback or suggestions), or they can voluntarily provide information to other customers; by indicating the location of products to other customers (Rosenbaum & Massiah, 2007). Customer part icipation behaviour typically requires a low level of effort (HsiuJu Rebecca, Kev in & Wanru, 2004) co mpared to co-production behaviour. Customers would normally participate in simp le o r routine tasks, wh ile co -producers deal with co mplex, continuously evolving tasks. Participation can be used for a single encounter, whereas, co -production refers to extensive, novel projects which require continuous interactions (Ng, Maull & Yip, 2009a). Customer co-production behaviour is a self-initiated behaviour displayed by customers to receive anticipated value. 3.1. Self determination theory Self-determination theory is a motivational theory that relates to humans who develop volitional behaviour to develop their fullest potential, wh ich is autonomous and self-related (Franke & Schreier, 2010). Autonomy in an individual has been described as a condition of being motivated by self-initiated behaviour, as well as, feeling a sense of volition to make one’s own choices to engage in any activity or process (Edward L. Deci, 1992). It could also be called intrinsically-mot ivated activity; the experience is one of spontaneous willingness and interest. According to the self-determination theory (SD Theory), contexts that enhance autonomous motivation activ ities are
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those that afford autonomy and pro mote co mpetence to achieve optimal abilit ies to carry out any type of behaviour. When these circumstances arise in conjunction with a customer’s perceived competence to deal with the activ ity, the conditions will be optimal for pro moting autonomous motivation. Thus, customer motivation co mprises of both behavioural and psychological activities that do not require external reinforcement. 4. Autonomous motivation as the antecedent to co-producti on behaviour The conceptualisation of customer autonomous motivation to co -produce was adopted from Sung and Nam (2009), who described it as the inclination of customers’ inner resources developed for s elf-regulated behaviour. The inner resources prompt the individual to engage in behaviour that will support the achievement of rewards related to his or her interests, and which represents a source of enjoyment and enthusiasm to customers. In the self determination theory, self-related or autonomous motivation is a natural tendency towards a strong motivation to achieve an excellent result in any task (Ed ward L. Deci & Ryan, 1991; Sung & Nam, 2009). When considering the theoretical background of co-production based on the self-determination theory, there are a nu mber of variables which may influence customer co-production behaviour when engaging in service provision activities. Customers feel sufficiently autonomous to co-produce according to several different factors which reflect the extrinsic or intrinsic rewards. Numerous previous studies correlated customers as primary resources with factors that induce them to actively participate in the service process (for examp le, co mpetency, need to control and value anticipation), which are appropriate as the antecedents of co -production behaviour (Cheung & To, 2010; Etgar, 2008; Morelli, 2009; Troye & Supphellen, 2012; Yi, Nataraajan & Gong, 2010). Customer co mpetency in service provision has been associated with acts of co-production behaviour (Prahalad & Ramaswamy, 2004). In the cocreation behaviour literature, certain elements of competency such as personal interaction, sharing new ideas, informat ional materials and decision-making in new product development, are crucial to imp lement collaborative acts (Dong et al., 2008). Customers with active engagement in service provision do not limit their participation to the physical, they also need to utilise cognitive skills to collaborate with service providers (Chen et al., 2011). The customer acts as a partner who has a range of skills and knowledge that can be leveraged to enhance the value of the service (Chen et al., 2011). Lunardo and Mbengue (2009) recognised the role of control in customer shopping behaviour, which was also the do minant construct in understanding customers’ motivational behaviour. W ith reference to co-production behaviour, a number of studies has drawn a link between control and affin ity of coproduction behaviour; such as participation and co -creation (Bendapudi & Leone, 2003). In addition to customers’ autonomous motivation to co -produce in service provision, existing studies also highlighted that the customer’s value anticipation is a very important intrinsic influence on the customer to co produce. Kelley, Skinner and Donnelly (1992) suggested that value is reflected in the quality determined by the customer to incorporate individual preferences. Customers are primarily interested in the value received and will collaborate with providers (Grönroos, 2008). In previous research, value anticipation and creation are the key characteristics required for customers to in itiate close cooperation with suppliers or providers (Gu mmerus, 2013). In addition, the understanding of customer value remains an issue, but it is vital to address the customers’ perspective; particularly in comp lex and intensive services. The SD Logic perspective proposed that customers are the pr imary resources to develop core offerings , it was suggested that customer value and the self-in itiat ive to control the process and value received may have a negative impact on providers (Yi et al., 2010). The customer as co-producer is, instead, likely to have a positive effect on individuals by causing the feelings of productivity and satisfaction (Zhengxin & Yannik, 2004). There are several reasons for a person to be willing to spend time and make an effort to obtain value in the consumption of a service. Additional support for customer motivation in this context of predicting the act of co-production is reflected in several recognised studies such as (Bendapudi & Leone, 2003). Indeed, the feeling of co mpetence may enhance the results in self-created items, and this orientation may subsequently result in intrinsic rewards to the individual regardless of the success of the activities. The research framework in Figure 1 provided a detailed view o f the proposed relationships between self-efficacy, control and value anticipation and customer co-production behaviour. It was also wo rth exp lain ing the total process of coproduction behaviour with outcomes that intrinsically occur and make the indiv idual feel proud; the feeling of having learnt something useful and the desire to participate in a similar act ivity if there is an opportunity to do so in the future (Edward L. Deci & Ryan, 2000).
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Self-efficacy
H1
Susceptibility to Control
H2
COPRODUCT ION
H3 Value anticipation
Fig. 1. Conceptual model for customer co-production behaviour.
4.1. Effect of self-efficacy on co-production behaviour Co-production behaviour does not have only one meaning in the market ing landscape; hence, the factors determining this behaviour may vary according to the context and situation (Etgar, 2008). Ho wever, the main elements that contribute to this behaviour are likely to be knowledge and expert ise (R. F. Lusch, Vargo & O'Brien, 2007). Customer co-production behaviour with in firms was found to be effective and valuable if it was accompanied by customers’ knowledge and expertise (Ottesen, Ranes & Gronhaug, 2005; Vargo & Lusch, 2008). However, as co-producers, the perception of customers' capabilities and skills would only be based on the customers' own judgement, which is termed ‘self-efficacy’ in the context of th is present research. Self-efficacy is the perception of one’s own capabilities, knowledge and skills in a particular service production (Ford & Dickson, 2012). These could be acquired through one's own research by reading and, somet imes, through experience. It could be a personal qualification gained through formal education or observational learning. A customer who is perceived as having a high degree of self-efficacy tends to co-produce (Auh et al., 2007). Although the level of self-efficacy is very subjective, a customer believes that with the appropriate information, he or she can interact with service providers with a certain standard of knowledge in the area. According to the basic p rinciple of customers as operant resources, a certain intellectual base may encourage orientation towards co-production behaviour (Chen et al., 2011; Fuller, 2010), and this aspect will pro mpt a co-producer to make choices and initiate his or her own actions; finally attaining the desired outcomes. Therefore: H1 : Customer self-efficacy has a positive effect on customer co-production behaviour. 4.2. Effect of customer susceptibility to control on co-production behaviour Customer research has long argued that customers are motivated to co -produce as the means of controlling the process to achieve the desired outcome (Lunardo & Mbengue, 2009). Susceptibility to control is a behavioural characteristic of a co-producer which leads him or her to organise activit ies. This is vital to the concept of the coproducers taking the primary role in the transaction and interaction procedures in order to attempt to facilitate the process and lead it towards the achievement of good results. Susceptibility to control is defined as the determination of the customer to demonstrate mastery over the environ ment of the process in order to have the feeling of being influential and in control. This scenario does not possess a negative impact on the process; rather, it will lead to better interactions with providers and greater enjoyment of the experience for the customer (Lunardo & Mbengue, 2009). Moreover, the absence of external constraints and the presence of volit ion have been shown to increase autonomous motivation and self-regulation needed to address the activity (Ryan, 1982). However, almost all normative research had concentrated on customer behaviour; the fundamental concept of control was separated into behavioural, decisional and cognitive control (Namasivayam, 2004). Susceptibility to control occurs during the involvement of customers in the whole process; it starts before the service production and continues until the end of the process (Cheung & To, 2010). Customer involvement is positively related to co-production and affects the efficiency of the service process (White & Badinelli, 2012). Cermak, File & Prince (1994) h ighlighted that
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involvement happens as a pre-purchase process, and supporting the contention of the involvement positively reinforces customer behaviour to actively perform during the transaction. Therefore, a customer who needs to be involved in service production has a certain element of control in the activity of service production. Control refers to a customer’s ability to exert power over the process. When customers feel in control of a certain situation, they are eager to co-produce because they feel that they have the capabilities to perform the required task or become involved in the process of building the project. Customers fulfil their needs of customised services and products when they co-produce. As customers become increasingly in control, they co -produce; which, in turn, allows them to manage their consumption experience. As such, co-producers’ susceptibility to control, which reflects an individual’s willingness to become involved in the production of the core offering and attempt to make the best result out of it, leads to the next hypothesis: H2 : Customer susceptibility to control has a positive effect on customer co -production behaviour. 4.3. Effect of value anticipation on co-production behaviour Value anticipation is the establishment of customer expectation of the outcome of service which direct ly imp lies to the quality and indirectly refers to the intangible benefits gained. The impact of customer and service provider interactions would make co-producers anticipate their own value required fro m providers. The motivation to co produce according to value may be recip rocal. Exp licitly, for a co -producer, the exchange is not precise economic value; rather, it is mo re o f an experiential value to the co-producer (Lunardo & Mbengue, 2009). Value anticipation is relevant in the context of service production, as relat ively self -determined customers are likely to experience heightened anticipation to obtain the best value from the service. Therefore: H3 : Customer value anticipation has a positive effect on customer co -production behaviour. 5. Summary Forward hypothesis in this research may add to the growing literature on the concept of customer co-production behaviour. First, the process of derivation of the constructs began with the literature review, to exp lore the basic concept of customer co-production behaviour fro m the perspective of SD Logic and SD Theory. Given this orientation, the customers' ro le fro m the perspective of SD Logic was that of both operand and operant resources involved in creat ing value in various activities and who may d irectly affect the efficiency of providers (Ng, Maull & Yip, 2009b). Then, a major contribution was also obtained fro m the SD Theory literature, which explained the autonomous orientation of customers to display willingness and to promote intrinsic rewards (Black & Deci, 2000). Finally, the application of SD Theory also suggested that co-producers should display a willingness and engage in self-initiated behaviour in service production (Dholakia, 2006). References An-T ien, H., Chang-Hua, Y., & Ko-Chien, C. (2004). Participative customers as partial employees and service provider workload. International Journal of Service Industry Management, 15(2), 187. Auh, S., Bell, S. J., McLeod, C. S., & Shih, E. (2007). Co -production and customer loyalty in financial services. Journal of Retailing, 83(3), 359370. Bendapudi, N., & Leone, R. P. (2003). Psychological Implications of Customer Participation in Co-Production. Journal of marketing, 67(1), 1428. doi: 1547-7185 Bettencourt, L. A. (1997). Customer voluntary performance: Customers as partners in service delivery. Journal of Retailing, 73(3), 383-406. Bettencourt, L. A., Ostrom, A., L., Brown, S., W., & Roundtree, R., I. (2002). Client co -production in knowledge-intensive business service. California management review, 44(4), 100-128. Black, A. E., & Deci, E. L. (2000). The effects of instructors' autonomy support and students' autonomous motivation on learning organic chemistry: A self-determination theory perspective. Science education, 84(6), 740-756. Brodie, R. J., Siren, M., & Pels, J. (2011). Theorizing about the service dominant logic: T he bridging role of middle range theory. Marketing theory, 11(1). Cermak, D. S. P., File, K. M., & Prince, R. A. (1994). Customer participation in service specification and delivery. Journal of Applied Business Research, 10(2), 90. Chan, K., Yim, C., & Lam, S. (2010). Is Customer Participation in Value Creation a Double-Edged Sword? Evidence from Professional Financial Services Across Cultures. Journal of Marketing, 74(3), 48. Chen, J.-S., T sou, H.-T., & Ching, R. K. H. (2011). Co-production and its effects on service innovation. Industrial Marketing Management, In Press, Corrected Proof. doi: 10.1016/j.indmarman.2011.03.001 Cheung, M. F. Y., & T o, W. M. (2010). Customer involvement and perceptions: The moderating role of customer co -production. Journal of
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Norsiah Ahmad / Procedia - Social and Behavioral Sciences 224 (2016) 238 – 245 White, S. W., & Badinelli, R. D. (2012). A model for efficiency-based resource integration in services. European Journal of Operational Research, 217(2), 439-447. Wikström, S. (1996). T he customer as co-producer. [DOI: 10.1108/03090569610118803]. European Journal of Marketing, 30(4), 6-19. Yi, Y., Nataraajan, R., & Gong, T. (2010). Customer participation and citizenship behavioral influences on employee performance, satisfaction, commitment, and turnover intention. Journal of Business Research, In Press, Corrected Proof. Zhengxin, S., & Yannik, S.-J. (2004). Managing customers as "partial employees": Customer participation performance in a service setting. American Marketing Association. Conference Proceedings, 15, 264.
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6th International Research Symposium in Service Management, IRSSM-6 2015, 11-15 August 2015, UiTM Sarawak, Kuching, Malaysia
The Way Forward. Customer Co-production Behaviour Norsiah Ahmad* Centre for Marketing and Entrepreneurship Studies (CfMES), Faculty of Business and Management, Universiti Teknologi MARA, Puncak Alam , Selangor
Abstract The area of customer co-production behaviour has an impressive body of research devoted to comprehending a range of perspectives and theories related to this area. However, relatively little research have examined through the perspective of service dominant logic and underpinned self-determination theory to understand the customer co-production behaviour. The customer’s role is active and participative because as an individual, a customer has the potential to act and influence the productivity and the outcome of service. Customer co-production behaviour is defined as the determination and willingness of a customer to participate actively in terms of his time and effort with the service provider in the service inception and production stages. This study applies the self-determination theory and an adapted version of the co-production model by Etgar (2008) to explain coproduction behaviour in service provision. For the research, the context of building projects is appropriate to investigate this phenomenon because it is complex and time-related, hence requires customers' perseverance to engage in the co-production process. A pre-study exploratory research, television progr amme analysis, interviews with the council officer and informants who have experience in building projects were conducted prior to determining the research model. Online and mail surveys were administered to a group of 275 participants who were willing to share their personal experiences in building projects. A customer’s openness to experience, agreement and emotional stability traits has a positive effect on feeling competent about the activities that he/she wants to participate in, and he/she feels the self-efficacy to co-produce with the providers. The conscientiousness trait is relevant to susceptibility to control. The value anticipation construct has a relationship with agreement and conscientiousness. However, extraversion traits do not show any significant relationship with the customer autonomous motivation to participate actively in service provision. Next, autonomous motivation was shown to be a valid predictor to customer co-production behaviour. Finally, the findings also showed intrinsic rewards had a positive relationship as the outcome of customer co-production behavior. This study concluded that the self-determination theory and perspective of service dominant logic are useful in explaining the primary role of customers’ co-production behaviour in core product offering. © Published by Elsevier Ltd. Ltd. This is an open access article under the CC BY-NC-ND license ©2016 2016The TheAuthors. Authors. Published by Elsevier (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under the responsibility of Universiti Teknologi M ARA Sarawak. Peer-review under responsibility of the Universiti Teknologi MARA Sarawak Keywords: co-production; self determination; service dominant logic
* Corresponding author. Tel.: +6-018-397-3149; office: +6-033-258-7021. E-mail address: [email protected]
1877-0428 © 2016 The Authors. Published by Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). Peer-review under responsibility of the Universiti Teknologi MARA Sarawak doi:10.1016/j.sbspro.2016.05.455
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1. Background of the study Customers are the key fundamental resources to service production. Hence, their engagement in core offering production as learned and active customers was examined by researchers through several understandings such as customer part icipation, cooperation and co-creation. Many had also called for an understanding of customer co production behaviour (Auh, Bell, McLeod & Sh ih, 2007; Bendapudi & Leone, 2003; Bettencourt, Ostrom, Brown & Roundtree, 2002; Chen, Tsou & Ching, 2011; Etgar, 2008; Groth, 2001; Lim & Moufahim, 2011). Ho wever, this research aimed to contribute to a growing body of literature focusing on a new p erspective of service market ing concepts introduced by Vargo and Lusch (2004). Vargo and Lusch (2004) established a new dominant logic for market ing, known as service-do minant logic (SD-Logic), which emphasised the cus tomer as an operant resource and held that all businesses are basically service businesses. Despite considerable interest in the nature and role of customer co-production behaviour, and utilising a basic marketing perspective, very little research attempted to employ the SD-Logic paradigm as the perspective for observing customer behaviour (Etgar, 2008; Morelli, 2009). 2. Customers as part of service provision The most important solution in service provision is based on value, service and experience; all the intangible benefits customers experience through their engagement in service (Ojasalo, 2010). Customer participation represents the behavioural manifestation of customers to directly contribute to service production; as a result, it will reduce the need for service recovery (Dong, Evans & Zou, 2008). In other words, customers could influence the attribution of service outcomes and service failures (Bendapudi & Leone, 2003; Wikströ m, 1996). Recognising the importance of customer normat ive expectation in value and service quality, in service delivery and active participation in service production may drive positive service outcomes , such as satisfaction to customers; indirectly increasing service provider performance (Chan, Yim & Lam, 2010). Arguably, part of participation behaviour is to be active and engaged with service providers and activit ies, wh ich may be a voluntary performance equipped with a bundle of favourable actions shown by customers to other customers (Rosenbaum & Massiah, 2007), or to service emp loyees (An-Tien, Chang-Hua & Ko-Ch ien, 2004) o r acceptance of a new p roduct (Bettencourt, 1997). In contrast with other researchers, customer participation behaviour may be generated through motivational drivers in which customers obtain value through experience by integrating resourc es in the service process (Etgar, 2008). Th is behaviour that is initiated could be part of the service which may reduce amb iguity of the outcome and increase economical value with expected cost reduction in the production process. As an individual, the customer actively participates in service production to reflect personal latent needs, which would be the projection of their o wn init iative to produce and maintain the production process as precisely as possible so as to achieve expected results. The idea of the customer as part of the value creator indicated that the formation of value is stimu lated by customers in the process directed towards the production of the core offering itself (Wikström, 1996). Furthermore, customers may offer input into their own consumption in the sequential process, as early as the design and development stage, or production, marketing or even during consumption (Wikström, 1996). Using the cognitive approach, customers embed their perceived value through cognitive involvement in the service production (Payne, Storbacka & Frow, 2008). According to this stance, customers who perceive or judge themselves to have the ability through their skills and knowledge will be directly involved in service production. Emphasis of user involvement in building up service wou ld vary on the level of co mpetency demonstrated b y the individual. The most important reason for customers as active participants is merely to ensure that value is created according to the specification of needs (Brodie, Siren & Pels, 2011). Interactions between customers and providers are the way value is created (Grönroos, 2011). In other words, this activity also induces collaborative learn ing among customers and providers (Ordaini & Parasuraman, 2011). These observations further provide a foundation for the notion of customers as partial emp loyees. Grönroos (2011) suggested that value creation is the usage of resources by both the customer and provider in an interactive process. According to the traditional approach, value creation is only based on the core offering itself; however, in a new perspective of the marketing process, value creation encapsulates the whole p rocess of the transaction itself (Wagner, Eggert & Lindemann, 2010). Grönroos (2011) exp lained that extended service offerings would make providers extend their market offering to customers. In other words, value creation is not a one-time occurrence or the result of any business transaction; it reflects the expression of the entire process of development up to the delivery of service (Grönroos, 2011). The entire p rocess of
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value creation includes the customer as one of the resources (Chan, Yim & Lam, 2010). Distinguishing between value creation and customers as value co-creators in the entire process involves two different scenarios, since value creation is a process involving both customers and providers or firms; however, “co-creator” is the cognitive behavioural function of customer involvement with providers in service productio n (Prahalad & Ramasamy, 2004). The value creation role primarily depends on customers; thus, providers propose value according to customer specifications (Lusch & Vargo, 2006). However, fro m the production point to the final process, mu ltiple interactions occur between customers and providers; hence, during this time, the opportunity for customers to co-produce is prevalent (Grönroos, 2011). The exchange of informat ion, and the efficiency of using one’s own ability, are important resources in the value creation process and are dynamic operant resources in the network. This suggests that customers can be value contributors in order to integrate and use value during consumption (Chen et al., 2011). Customers, by pursuing value creation, can benefit in several ways. Value creation is assumed to be correlated with innovation outcomes (Chen et al., 2011). An effective contributor would achieve the precise quality requested, and thus, reduce the need for service recovery (Dong, Evans & Zou, 2006). Determination of value is dictated by customers and supported by providers; as a result, customers’ cognitive abilit ies are perceived as crucial to the achievement of real benefits of value creation. In sum, the locus of value creation is the cognitive interactions between customers and providers (Prahalad & Ven kat, 2004). During this activity, both customers and providers play impo rtant roles. Based on this, there is marginal differentiation regarding the importance of either part icipant’s role; hence, customers will be treated as partial emp loyees or partners and through their co mbined efforts, both parties will achieve their objectives. In the process, the reflection of customers’ behaviour in service interactions varies; it is driven by motivational effort aroused from the support reflected by service providers. 3. Co-production behaviour There are several definit ions of customer co-production behaviour which can be discerned fro m p revious studies and which also reveal the affin ity of the construct with involvement, co llaboration (Bettencourt et al., 2002), cooperation and participation (An-Tien et al., 2004; Rodie & Kline, 2000). Co-production is defined as a process of mass customisation in which customers are act ively involved in solution development and participate in service production (Morelli, 2009). The firm that perceives customers as co-producers does not consider them to be recipients of the product; instead, customers are perceived as active partners who shape service production (Bendapudi & Leone, 2003; Bettencourt, 1997). Co -production entails a high level of customer involvement in service creation (Clayco mb, Lengnick-Hall and Lawrence, 2001). Consumption is a p roductive process because it produces value and identit ies for customers. All of these concepts reveal the role of customers as co nnected, active, involved and empowered participants (Prahalad & Ramasamy, 2004). Customer participation in the service production process consists of the actions and resources provided by customers for service production and service delivery (An-Tien et al., 2004; Dong et al., 2006). Participatory behaviour can be seen as ranging from customer attendance and informat ion provision to voluntary contributions . Customers can merely attend events or service encounters and provide informat ion to the company (for examp le, by giving feedback or suggestions), or they can voluntarily provide information to other customers; by indicating the location of products to other customers (Rosenbaum & Massiah, 2007). Customer part icipation behaviour typically requires a low level of effort (HsiuJu Rebecca, Kev in & Wanru, 2004) co mpared to co-production behaviour. Customers would normally participate in simp le o r routine tasks, wh ile co -producers deal with co mplex, continuously evolving tasks. Participation can be used for a single encounter, whereas, co -production refers to extensive, novel projects which require continuous interactions (Ng, Maull & Yip, 2009a). Customer co-production behaviour is a self-initiated behaviour displayed by customers to receive anticipated value. 3.1. Self determination theory Self-determination theory is a motivational theory that relates to humans who develop volitional behaviour to develop their fullest potential, wh ich is autonomous and self-related (Franke & Schreier, 2010). Autonomy in an individual has been described as a condition of being motivated by self-initiated behaviour, as well as, feeling a sense of volition to make one’s own choices to engage in any activity or process (Edward L. Deci, 1992). It could also be called intrinsically-mot ivated activity; the experience is one of spontaneous willingness and interest. According to the self-determination theory (SD Theory), contexts that enhance autonomous motivation activ ities are
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those that afford autonomy and pro mote co mpetence to achieve optimal abilit ies to carry out any type of behaviour. When these circumstances arise in conjunction with a customer’s perceived competence to deal with the activ ity, the conditions will be optimal for pro moting autonomous motivation. Thus, customer motivation co mprises of both behavioural and psychological activities that do not require external reinforcement. 4. Autonomous motivation as the antecedent to co-producti on behaviour The conceptualisation of customer autonomous motivation to co -produce was adopted from Sung and Nam (2009), who described it as the inclination of customers’ inner resources developed for s elf-regulated behaviour. The inner resources prompt the individual to engage in behaviour that will support the achievement of rewards related to his or her interests, and which represents a source of enjoyment and enthusiasm to customers. In the self determination theory, self-related or autonomous motivation is a natural tendency towards a strong motivation to achieve an excellent result in any task (Ed ward L. Deci & Ryan, 1991; Sung & Nam, 2009). When considering the theoretical background of co-production based on the self-determination theory, there are a nu mber of variables which may influence customer co-production behaviour when engaging in service provision activities. Customers feel sufficiently autonomous to co-produce according to several different factors which reflect the extrinsic or intrinsic rewards. Numerous previous studies correlated customers as primary resources with factors that induce them to actively participate in the service process (for examp le, co mpetency, need to control and value anticipation), which are appropriate as the antecedents of co -production behaviour (Cheung & To, 2010; Etgar, 2008; Morelli, 2009; Troye & Supphellen, 2012; Yi, Nataraajan & Gong, 2010). Customer co mpetency in service provision has been associated with acts of co-production behaviour (Prahalad & Ramaswamy, 2004). In the cocreation behaviour literature, certain elements of competency such as personal interaction, sharing new ideas, informat ional materials and decision-making in new product development, are crucial to imp lement collaborative acts (Dong et al., 2008). Customers with active engagement in service provision do not limit their participation to the physical, they also need to utilise cognitive skills to collaborate with service providers (Chen et al., 2011). The customer acts as a partner who has a range of skills and knowledge that can be leveraged to enhance the value of the service (Chen et al., 2011). Lunardo and Mbengue (2009) recognised the role of control in customer shopping behaviour, which was also the do minant construct in understanding customers’ motivational behaviour. W ith reference to co-production behaviour, a number of studies has drawn a link between control and affin ity of coproduction behaviour; such as participation and co -creation (Bendapudi & Leone, 2003). In addition to customers’ autonomous motivation to co -produce in service provision, existing studies also highlighted that the customer’s value anticipation is a very important intrinsic influence on the customer to co produce. Kelley, Skinner and Donnelly (1992) suggested that value is reflected in the quality determined by the customer to incorporate individual preferences. Customers are primarily interested in the value received and will collaborate with providers (Grönroos, 2008). In previous research, value anticipation and creation are the key characteristics required for customers to in itiate close cooperation with suppliers or providers (Gu mmerus, 2013). In addition, the understanding of customer value remains an issue, but it is vital to address the customers’ perspective; particularly in comp lex and intensive services. The SD Logic perspective proposed that customers are the pr imary resources to develop core offerings , it was suggested that customer value and the self-in itiat ive to control the process and value received may have a negative impact on providers (Yi et al., 2010). The customer as co-producer is, instead, likely to have a positive effect on individuals by causing the feelings of productivity and satisfaction (Zhengxin & Yannik, 2004). There are several reasons for a person to be willing to spend time and make an effort to obtain value in the consumption of a service. Additional support for customer motivation in this context of predicting the act of co-production is reflected in several recognised studies such as (Bendapudi & Leone, 2003). Indeed, the feeling of co mpetence may enhance the results in self-created items, and this orientation may subsequently result in intrinsic rewards to the individual regardless of the success of the activities. The research framework in Figure 1 provided a detailed view o f the proposed relationships between self-efficacy, control and value anticipation and customer co-production behaviour. It was also wo rth exp lain ing the total process of coproduction behaviour with outcomes that intrinsically occur and make the indiv idual feel proud; the feeling of having learnt something useful and the desire to participate in a similar act ivity if there is an opportunity to do so in the future (Edward L. Deci & Ryan, 2000).
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Self-efficacy
H1
Susceptibility to Control
H2
COPRODUCT ION
H3 Value anticipation
Fig. 1. Conceptual model for customer co-production behaviour.
4.1. Effect of self-efficacy on co-production behaviour Co-production behaviour does not have only one meaning in the market ing landscape; hence, the factors determining this behaviour may vary according to the context and situation (Etgar, 2008). Ho wever, the main elements that contribute to this behaviour are likely to be knowledge and expert ise (R. F. Lusch, Vargo & O'Brien, 2007). Customer co-production behaviour with in firms was found to be effective and valuable if it was accompanied by customers’ knowledge and expertise (Ottesen, Ranes & Gronhaug, 2005; Vargo & Lusch, 2008). However, as co-producers, the perception of customers' capabilities and skills would only be based on the customers' own judgement, which is termed ‘self-efficacy’ in the context of th is present research. Self-efficacy is the perception of one’s own capabilities, knowledge and skills in a particular service production (Ford & Dickson, 2012). These could be acquired through one's own research by reading and, somet imes, through experience. It could be a personal qualification gained through formal education or observational learning. A customer who is perceived as having a high degree of self-efficacy tends to co-produce (Auh et al., 2007). Although the level of self-efficacy is very subjective, a customer believes that with the appropriate information, he or she can interact with service providers with a certain standard of knowledge in the area. According to the basic p rinciple of customers as operant resources, a certain intellectual base may encourage orientation towards co-production behaviour (Chen et al., 2011; Fuller, 2010), and this aspect will pro mpt a co-producer to make choices and initiate his or her own actions; finally attaining the desired outcomes. Therefore: H1 : Customer self-efficacy has a positive effect on customer co-production behaviour. 4.2. Effect of customer susceptibility to control on co-production behaviour Customer research has long argued that customers are motivated to co -produce as the means of controlling the process to achieve the desired outcome (Lunardo & Mbengue, 2009). Susceptibility to control is a behavioural characteristic of a co-producer which leads him or her to organise activit ies. This is vital to the concept of the coproducers taking the primary role in the transaction and interaction procedures in order to attempt to facilitate the process and lead it towards the achievement of good results. Susceptibility to control is defined as the determination of the customer to demonstrate mastery over the environ ment of the process in order to have the feeling of being influential and in control. This scenario does not possess a negative impact on the process; rather, it will lead to better interactions with providers and greater enjoyment of the experience for the customer (Lunardo & Mbengue, 2009). Moreover, the absence of external constraints and the presence of volit ion have been shown to increase autonomous motivation and self-regulation needed to address the activity (Ryan, 1982). However, almost all normative research had concentrated on customer behaviour; the fundamental concept of control was separated into behavioural, decisional and cognitive control (Namasivayam, 2004). Susceptibility to control occurs during the involvement of customers in the whole process; it starts before the service production and continues until the end of the process (Cheung & To, 2010). Customer involvement is positively related to co-production and affects the efficiency of the service process (White & Badinelli, 2012). Cermak, File & Prince (1994) h ighlighted that
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involvement happens as a pre-purchase process, and supporting the contention of the involvement positively reinforces customer behaviour to actively perform during the transaction. Therefore, a customer who needs to be involved in service production has a certain element of control in the activity of service production. Control refers to a customer’s ability to exert power over the process. When customers feel in control of a certain situation, they are eager to co-produce because they feel that they have the capabilities to perform the required task or become involved in the process of building the project. Customers fulfil their needs of customised services and products when they co-produce. As customers become increasingly in control, they co -produce; which, in turn, allows them to manage their consumption experience. As such, co-producers’ susceptibility to control, which reflects an individual’s willingness to become involved in the production of the core offering and attempt to make the best result out of it, leads to the next hypothesis: H2 : Customer susceptibility to control has a positive effect on customer co -production behaviour. 4.3. Effect of value anticipation on co-production behaviour Value anticipation is the establishment of customer expectation of the outcome of service which direct ly imp lies to the quality and indirectly refers to the intangible benefits gained. The impact of customer and service provider interactions would make co-producers anticipate their own value required fro m providers. The motivation to co produce according to value may be recip rocal. Exp licitly, for a co -producer, the exchange is not precise economic value; rather, it is mo re o f an experiential value to the co-producer (Lunardo & Mbengue, 2009). Value anticipation is relevant in the context of service production, as relat ively self -determined customers are likely to experience heightened anticipation to obtain the best value from the service. Therefore: H3 : Customer value anticipation has a positive effect on customer co -production behaviour. 5. Summary Forward hypothesis in this research may add to the growing literature on the concept of customer co-production behaviour. First, the process of derivation of the constructs began with the literature review, to exp lore the basic concept of customer co-production behaviour fro m the perspective of SD Logic and SD Theory. Given this orientation, the customers' ro le fro m the perspective of SD Logic was that of both operand and operant resources involved in creat ing value in various activities and who may d irectly affect the efficiency of providers (Ng, Maull & Yip, 2009b). Then, a major contribution was also obtained fro m the SD Theory literature, which explained the autonomous orientation of customers to display willingness and to promote intrinsic rewards (Black & Deci, 2000). Finally, the application of SD Theory also suggested that co-producers should display a willingness and engage in self-initiated behaviour in service production (Dholakia, 2006). References An-T ien, H., Chang-Hua, Y., & Ko-Chien, C. (2004). Participative customers as partial employees and service provider workload. International Journal of Service Industry Management, 15(2), 187. Auh, S., Bell, S. J., McLeod, C. S., & Shih, E. (2007). Co -production and customer loyalty in financial services. Journal of Retailing, 83(3), 359370. Bendapudi, N., & Leone, R. P. (2003). Psychological Implications of Customer Participation in Co-Production. Journal of marketing, 67(1), 1428. doi: 1547-7185 Bettencourt, L. A. (1997). Customer voluntary performance: Customers as partners in service delivery. Journal of Retailing, 73(3), 383-406. Bettencourt, L. A., Ostrom, A., L., Brown, S., W., & Roundtree, R., I. (2002). Client co -production in knowledge-intensive business service. California management review, 44(4), 100-128. Black, A. E., & Deci, E. L. (2000). The effects of instructors' autonomy support and students' autonomous motivation on learning organic chemistry: A self-determination theory perspective. Science education, 84(6), 740-756. Brodie, R. J., Siren, M., & Pels, J. (2011). Theorizing about the service dominant logic: T he bridging role of middle range theory. Marketing theory, 11(1). Cermak, D. S. P., File, K. M., & Prince, R. A. (1994). Customer participation in service specification and delivery. Journal of Applied Business Research, 10(2), 90. Chan, K., Yim, C., & Lam, S. (2010). Is Customer Participation in Value Creation a Double-Edged Sword? Evidence from Professional Financial Services Across Cultures. Journal of Marketing, 74(3), 48. Chen, J.-S., T sou, H.-T., & Ching, R. K. H. (2011). Co-production and its effects on service innovation. Industrial Marketing Management, In Press, Corrected Proof. doi: 10.1016/j.indmarman.2011.03.001 Cheung, M. F. Y., & T o, W. M. (2010). Customer involvement and perceptions: The moderating role of customer co -production. Journal of
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