Managing operations in customer-intensive services with forward-looking customers

Kybernetes ◽  
2018 ◽  
Vol 47 (10) ◽  
pp. 1941-1955 ◽  
Author(s):  
Chengzhang Li ◽  
Minghui Jiang ◽  
Xuchuan Yuan
Keyword(s):  
Decision Making ◽  
Service Providers ◽  
Service Operations ◽  
Purchase Decision ◽  
Service Rate ◽  
Optimal Price ◽  
Content Type ◽  
Reservation Utility ◽  
The Impact ◽  
Forward Looking

Purpose This paper aims to investigate the optimal price and service rate decisions in a customer-intensive service, where customers’ perceived service quality decreases in the service speed. Customers are assumed to be forward-looking in purchase decision-making and heterogeneous in their reservation utilities. The purpose of this paper is to study the impact of customers’ forward-looking behavior and the heterogeneity on the operational decisions in a customer-intensive context. Design/methodology/approach The service is delivered through an M/M/1 queue system with unobservable queues. Customers are forward-looking in queue joining decisions, where the purchase decisions are made when the expected utility is greater than the reservation utility. The optimal price and service rate decisions are analyzed with both homogeneous and heterogeneous customers, where homogenous customers have the same reservation utility in purchase decision-making, while heterogeneous customers have different reservation utilities, which are captured by a random variable. Findings The optimal price and service rate decisions with forward-looking customers depend on the customer intensity, potential market size and customers’ reservation utility distribution. The results suggest that customers’ heterogeneity in terms of their reservation utilities affects the optimal decisions, market coverage and the expected revenue. Service providers need to take customers’ heterogeneity and the forward-looking behavior into operational decision-making. Originality/value This paper extends previous studies in customer-intensive service and contribute to the service operations management area by explicitly incorporating customers’ forward-looking behavior and heterogeneity in purchase decision-making. Assuming customers are forward-looking and heterogeneous is more realistic and practical. The results highlight that knowing customers’ behavioral characteristics can better improve decision-making in service operations, which is critical for enhancing customers’ satisfaction and loyalty, thus critical to a firm’s success in the market with intensive competition.

Consumer empowerment in insurance

2018 ◽  
Vol 36 (6) ◽  
pp. 1073-1097 ◽  
Author(s):  
Pascal Buehler ◽  
Peter Maas
Keyword(s):  
Decision Making ◽  
Self Efficacy ◽  
Service Providers ◽  
Time Lag ◽  
Decision Making Process ◽  
Consumer Empowerment ◽  
Content Type ◽  
Perceived Performance ◽  
Performance Risk ◽  
The Impact

Purpose The purpose of this paper is to enhance the understanding of consumer empowerment in the relationship between consumers and service providers. It draws on self-efficacy theory to conceptualize consumer empowerment and explain the impact on perceived performance risk in insurance decision making. Design/methodology/approach This study employs data collected from an online survey involving 487 consumers in Switzerland, who recently decided on an insurance service. A structural equation model quantifies both the psychological effects on consumers’ perception of insurance services and behavioral effects on their decision-making process. Findings Perceived consumer empowerment is conceptualized by perceived self-efficacy and perceived controllability. Both have a significant impact on perceived performance risk, while the former is partially mediated by the preference to delegate the decision to a surrogate. Moreover, customers’ involvement in the purchase process moderates both the direct and indirect effect of perceived self-efficacy on perceived performance risk. Research limitations/implications The results are based on consumers’ perceptions from a single country. Furthermore, consumers’ perceptions were surveyed with a time lag after the decision-making process. To increase rigor, perceptions should be collected during decision making. Practical implications Results show that consumer empowerment can be employed as a risk reduction strategy. Consumers with self-efficacy and controllability beliefs perceive significantly less performance risk; however, practitioners should consider that consumers are also motivated to make decisions independently rather than delegating their decisions. Furthermore, consumer empowerment depends on consumer will. For largely indifferent consumers, empowerment does not affect risk or decision delegation preference. Originality/value The study is among the few empirical works to examine the effects of consumer empowerment on the consumer-service provider relationship on an individual level. Furthermore, applying consumer empowerment in relationship marketing implies a shift in research focus to the question of how consumers construe decision-making situations rather than objectively measuring the state of consumer relationship.

Implementation of 3D printing and the effect on decision making in logistics management

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Stefan Hecker
Keyword(s):  
Decision Making ◽  
3D Printing ◽  
Service Providers ◽  
Logistics Management ◽  
Service Development ◽  
Content Type ◽  
Disruptive Technologies ◽  
Logistics Service ◽  
Service Portfolio ◽  
The Impact

PurposeFrom a synthesis of literature, the purpose of this paper is to present a conceptual service development methodology showing the impact of 3D printing as a disruptive technology to the service portfolio. The methodology is designed to support practitioners and academics in better understanding the impact of disruptive technologies may have to the service portfolio and participate in the technology.Design/methodology/approachA literature review is conducted and based on these findings a conceptual framework has been developed.FindingsThe design of a methodology for the development of 3D printing services is used to evaluate the disruption potential of 3D printing and to implement the technology in the service portfolio of a logistics service provider. The disruption potential of 3D printing influences a logistics manager by make to order decisions. In addition, it could be proven the service portfolio was diversified.Research limitations/implicationsLiterature directly dealing with technology-based service development for decision making in logistics management is rare and thus the methodology is built on insights, compiled from the distinct research areas. Further research should be performed on this nascent topic.Practical implicationsLogistics service providers may use the developed methodology to revise their service portfolio by the consideration of disruptive technologies, in order to reduce strategic misdecisions regarding the range of services.Originality/valueThis paper looks specifically at decision making for implementing disruptive technologies to the service portfolio.

A Study on Decision Paralysis in Customers with Special Reference to Placing Order in Restaurant

2021 ◽  
Vol 9 (2) ◽  
pp. 253-266
Author(s):  
Viknesh R ◽  
Kavitha R Gowda ◽  
Jayanta Banerjee
Keyword(s):  
Decision Making ◽  
Service Providers ◽  
Purchase Decision ◽  
Final Decision ◽  
Purchase Decisions ◽  
Food Sector ◽  
Vast Number ◽  
Wide Range ◽  
Survey Responses ◽  
The Impact

Owing to the vast number of choices open to customers, they can often feel paralysed in their decision-making. Offering a wide range of options can activate the effect of Decision Paralysis, which delays the client's final decision. The impact of Decision Paralysis can prevail in restaurants. This study reveals the existence of decision paralysis among customers in restaurants when placing an order. The aim is to investigate the prevalence of Decision Paralysis among customers, with particular reference to placing an order in a restaurant and the influence on consumers’ purchase decisions. A survey questionnaire was rolled out using Google forms to customers who have experienced dining in a restaurant. A total of 416 survey responses were collected for data analysis through the convenience sampling method. It was found that, customer purchase decision has been affected by the decision paralysis effect. It was also found that customers experience a dilemma due to tremendous options or choices in the food sector by the service providers. This study was limited to restaurants and in terms of cuisine, with hotels not being considered. Hence, the main limitation is not being able to generalise the findings of this study to the whole of the food catering sector. The study will benefit both scholars and marketing practitioners in understanding the difficulty a customer faces during purchase decision-making.

The service strategy of customer-intensive services under advertising effects

Kybernetes ◽  
2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Wentao Zhan ◽  
Minghui Jiang ◽  
Chengzhang Li
Keyword(s):  
Service Provider ◽  
Optimal Strategies ◽  
Development Stage ◽  
Service Rate ◽  
Optimal Price ◽  
Service Market ◽  
Content Type ◽  
Development Stages ◽  
Advertising Effects ◽  
The Impact

Purpose Customer-intensive services refer to the service that a provider needs to invest in customers with high patience and experience. Within a certain rate range, the slower service rate and the longer service time, the higher customer’s utility; however, this may cause queue congestion. And the advertising of service provider will affect the revenue. The purpose of this paper is to investigate the effects of advertising on the optimal price, service rate and the optimal revenue of such service provider at different development stages. Design/methodology/approach This paper investigates the service strategies of service provider based on advertising effects. The authors first divide service provider into insufficient customers or sufficient customers according to the development stage, then analyze the impact of advertising at different stages. The authors focus on the formulation of the optimal price, service rate and the optimal revenue of service provider at different stages. Findings This paper finds that in the insufficient customers stage, the service provider’s strategy of “small profits but quick turnover” is conducive to quickly accumulating customers. With the development of service provider, the advertising indirectly increases the revenue of service provider by maintaining popularity. The result also shows that with the development of service provider, the initiative of such service market has gradually been mastered by service provider, from “buyer market” to “seller market.” Originality/value The finding provides an alternative explanation for the impact of advertising on service provider’s optimal strategies; it also solves the settings of service price and rate of customer-intensive service provider at different development stages. This study is essential to create the optimal revenue and solve supply–demand conflicts (such as doctor–patient conflict) between service provider and customers.

scholarly journals The impact of positive valence and negative valence on social commerce purchase intention

2019 ◽  
Vol 33 (2) ◽  
pp. 774-791 ◽  
Author(s):  
Nick Hajli
Keyword(s):  
Decision Making ◽  
Purchase Intention ◽  
Purchase Intentions ◽  
Purchase Decision ◽  
Least Squares Regression ◽  
Social Commerce ◽  
Data Set ◽  
Content Type ◽  
Consumer Feedback ◽  
The Impact

Purpose New research emphasizes the importance of social communications in e-commerce purchase decision-making processes but there are many technical and social challenges such as multi-faceted trust concerns. How consumers view and value referent’s online testimonials, ratings, rants and raves, and product usage experiences remain an important factor that needs to be better understood. Social commerce as a relatively new stream in e-commerce yet is growing fast and gaining the attention of scholars and practitioners, especially due to recent revenue developments. Consistent with e-commerce websites that do not enable consumer feedback, trust is a challenging matter for consumers to consider when they visit social commerce websites. Researching trust models and influences is increasingly important especially with the proliferation of online word of mouth (WOM) strongly effecting many consumers at many different phases of social commerce purchase decision making and transacting. The paper aims to discuss this issue. Design/methodology/approach This study examines the effects and importance of institution-based trust and WOM within a model of consumer behaviour on social commerce websites. This research examines how trust and consumer feedback may affect consumers’ purchase intentions. This study collects data from the little-understood market of urban Iran and develops a research model to examine consumers’ purchase intentions on social commerce websites. A robust data set from urban Iran (n=512) is analyzed using partial least squares regression to analyze the proposed model. Findings The results of the analysis show that institution-based trust influences social media communication, leading to elevated purchase intention on social commerce websites. This research adds to the prior literature that espouses on the importance of consumers developing strong beliefs of vendor trust in social commerce platforms. Originality/value Explaining how consumer purchase decision making is effected by using institution-based trust and electronic WOM in a little understood Middle Eastern context an important contribution of this research. Suggestions on practical and theoretical developments of this research in the sharing commerce research stream conclude this paper.

Country-of-origin effects on industrial purchase decision making: a systematic review of research

2019 ◽  
Vol 34 (2) ◽  
pp. 401-411 ◽  
Author(s):  
Birce Dobrucalı
Keyword(s):  
Systematic Review ◽  
Decision Making ◽  
Country Of Origin ◽  
Future Research ◽  
Purchase Decision ◽  
Research Directions ◽  
Content Type ◽  
Future Research Directions ◽  
The Subject ◽  
The Impact

PurposeThis study aims to provide a contemporary, holistic and systematic review regarding the impact of country-of-origin on industrial purchase decision-making by ascertaining, synthesizing and evaluating theoretical, methodological and empirical dimensions of studies on the subject.Design/methodology/approachAfter the collection and refinement of 43 studies that appeared in marketing, business and management literatures during 1970-2017, systematic review was applied to discover the current situation and future research directions on the subject.FindingsThe vast majority of the existing studies obtained data from a single source even though industrial purchase decisions are mainly made by a large group of decision-makers. Moreover, the existing literature contains few over-studied theoretical perspectives while lacking integration of the subject with the more contemporary ones. Additionally, in the literature, combination of developing countries as source countries, and developed ones as target countries, is under-examined, and the differentiation between country-of-design and country-of-assembly is mainly avoided during operationalization. Finally, majority of the studies lack investigation of antecedents and mainly investigated few over-examined constructs as outcomes.Research limitations/implicationsThis study provides a conceptual synthesis of existing studies. A meta-analysis may be applied to empirical studies for providing a further detailed framework.Originality/valueThis study contributes to industrial marketing literature by providing a compiled and synthesized inventory of knowledge for scholars; deriving a comprehensive analysis of research designs, methodologies and findings addressed by researchers in the field; noticing various theoretical, methodological and other gaps to be examined; and providing future research directions.

The key role played by intermediaries in the retail insurance distribution

2018 ◽  
Vol 46 (11/12) ◽  
pp. 1170-1192 ◽  
Author(s):  
Sérgio Dominique-Ferreira
Keyword(s):  
Decision Making ◽  
Customer Satisfaction ◽  
Structural Equation ◽  
Ad Hoc ◽  
Structural Equation Models ◽  
Purchase Decision ◽  
Decision Making Process ◽  
Content Type ◽  
The Impact ◽  
Claims Management

PurposeThe insurance market has high churn rates because customers’ purchase decision-making process and claims management rely heavily on intermediaries. The purpose of this paper is to investigate the role played by insurers and intermediaries in customer satisfaction, as well as in the preferences of customers regarding the purchase decision-making process.Design/methodology/approachThe first step was to select the most important attributes for Portuguese insurance customers. Three focus groups were conducted (using B2C and B2B markets), and data from Portuguese car insurance customers were gathered through anad hocquestionnaire. Structural equation models and the multidimensional scaling unfolding model were applied.FindingsIntermediaries play a key role in the retail insurance distribution channels by influencing customer satisfaction, claims management and the purchasing process (premium acceptance).Practical implicationsBecause of the influence that intermediaries have on customer satisfaction, insurers should improve their partnerships (back office support) with intermediaries.Originality/valueThe study contributes to the retail distribution literature of the insurance sector by providing empirical evidence of the impact of intermediaries on customers’ satisfaction.

Understanding how the contextual variables influence political behaviour in strategic decision-making

2014 ◽  
Vol 7 (3) ◽  
pp. 226-250 ◽  
Author(s):  
Said Elbanna ◽  
Ioannis C. Thanos ◽  
Vassilis M. Papadakis
Keyword(s):  
Decision Making ◽  
Strategic Decision ◽  
Strategic Decision Making ◽  
Strategic Decisions ◽  
Empirical Examination ◽  
Content Type ◽  
Political Behaviour ◽  
Practitioner Education ◽  
The Impact ◽  
Practical Implications

Purpose – The purpose of this paper is to enhance the knowledge of the antecedents of political behaviour. Whereas political behaviour in strategic decision-making (SDM) has received sustained interest in the literature, empirical examination of its antecedents has been meagre. Design/methodology/approach – The authors conducted a constructive replication to examine the impact of three layers of context, namely, decision, firm and environment, on political behaviour. In Study 1, Greece, we gathered data on 143 strategic decisions, while in Study 2, Egypt, we collected data on 169 strategic decisions. Findings – The evidence suggests that both decision-specific and firm factors act as antecedents to political behaviour, while environmental factors do not. Practical implications – The findings support enhanced practitioner education regarding political behaviour and provide practitioners with a place from which to start by identifying the factors which might influence the occurrence of political behaviour in SDM. Originality/value – The paper fills important gaps in the existing research on the influence of context on political behaviour and delineates interesting areas for further research.

Reducing transportation emissions

2016 ◽  
Vol 23 (3) ◽  
pp. 674-703 ◽  
Author(s):  
Henrik Pålsson ◽  
Ola Johansson
Keyword(s):  
Service Providers ◽  
Freight Transportation ◽  
Industrial Sector ◽  
Content Type ◽  
Logistics Service Providers ◽  
Minor Influence ◽  
Transportation Emissions ◽  
Reduce Emissions ◽  
The Impact ◽  
Practical Implications

Purpose – The purpose of this paper is to examine the intention of companies to reduce transportation emissions by 2020 and the barriers and the discriminating factors that affect the reduction. Design/methodology/approach – A literature review identified potential logistical and technical actions and their barriers, and discriminating factors for reducing transportation emissions. A survey of freight transport-intensive industries in Sweden examined the effects of, intention for implementation of and barriers to 12 actions to reduce CO2 emissions from freight transportation. In total, 172 logistics managers responded, representing a response rate of 40.3 per cent. Findings – Logistics service providers (LSPs) and freight owners are likely to reduce a considerable amount of CO2 emissions from freight transportation by 2020 using a combination of actions. The lowest level of confidence was for reducing CO2 emissions by changing logistics structures, while there was greater confidence by means of operational changes. The actions have few barriers, but there is often a combination of barriers to overcome. Three discriminating factors influence the intention of a firm to reduce transportation emissions: perceived potential, company size and LSP/freight owner. The industrial sector of a freight owner has minor influence. Companies that are particularly likely to reduce emissions are LSPs, large companies, and those that perceive a large reduction potential. Research limitations/implications – Logistical and technical barriers appear to hinder companies from implementing actions, while organisational barriers and external prerequisites do not. Barriers cannot be used to predict companies’ intentions to reduce transportation emissions. The authors examined the impact of three discriminating factors on reduction of transportation emissions. The research is based on perceptions of well-informed managers and on companies in Sweden. Practical implications – The findings can be used by managers to identify firms for benchmarking initiatives and emissions-reducing strategies. Originality/value – The study provides insights into intended CO2 reductions in transportation by 2020. It presents new knowledge regarding barriers and discriminating factors for implementing actions to reduce transportation emissions.

Decision rules, escalation of commitment and sensitivity to framing in group decision-making

2016 ◽  
Vol 54 (7) ◽  
pp. 1649-1668 ◽  
Author(s):  
Petru Lucian Curseu ◽  
Sandra G. L. Schruijer ◽  
Oana Catalina Fodor
Keyword(s):  
Decision Making ◽  
Decision Rule ◽  
Group Decision Making ◽  
Group Decision ◽  
Decision Rules ◽  
Escalation Of Commitment ◽  
Group Level ◽  
Content Type ◽  
The Impact ◽  
Collaborative Decision

Purpose – The purpose of this paper is to test the influence of collaborative and consultative decision rules on groups’ sensitivity to framing effect (FE) and escalation of commitment (EOC). Design/methodology/approach – In an experimental study (using a sample of 233 professionals with project management experience), the authors test the effects of collaborative and consultative decision rules on groups’ sensitivity to EOC and FE. The authors use four group decision-making tasks to evaluate decision consistency across gain/loss framed decision situations and six decision tasks to evaluate EOC for money as well as time as resources previously invested in the initial decisions. Findings – The results show that the collaborative decision rule increases sensitivity to EOC when financial resources are involved and decreases sensitivity to EOC when time is of essence. Moreover, the authors show that the collaborative decision rule decreases sensitivity to FE in group decision making. Research limitations/implications – The results have important implications for group rationality as an emergent group level competence by extending the insights concerning the impact of decision rules on emergent group level cognitive competencies. Due to the experimental nature of the design, the authors can probe the causal relations between the investigated variables, yet the authors cannot generalize the results to other settings. Practical implications – Managers can use the insights of this study in order to optimize the functioning of decision-making groups and to reduce their sensitivity to FEs and EOC. Originality/value – The study extends the research on group rationality and it is one of the few experimental attempts used to understand the role of decision rules on emergent group level rationality.

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