Ảnh hưởng của tiêu chuẩn hoá và khác biệt hoá tới chất lượng dịch vụ, giá trị cảm nhận và sự trung thành của khách hàng

Nội dung text: Ảnh hưởng của tiêu chuẩn hoá và khác biệt hoá tới chất lượng dịch vụ, giá trị cảm nhận và sự trung thành của khách hàng

1. THE EFFECTS OF STANDARDISATION AND DIFFERENTIATION ON SERVICE QUALITY, PERCEIVED VALUE AND CUSTOMERS LOYATY ẢNH HƯỞNG CỦA TIÊU CHUẨN HOÁ VÀ KHÁC BIỆT HOÁ TỚI CHẤT LƯỢNG DỊCH VỤ, GIÁ TRỊ CẢM NHẬN VÀ SỰ TRUNG THÀNH CỦA KHÁCH HÀNG Cheng-Po Lai, Ph.D - Nanhua University, Taiwan Yu-Min Chen - Nanhua University, Taiwan Chi-Wen Shih - National Cheng Kung University, Taiwan Abstract Since the tremendous growth of service industry in recent years, many researchers have emphasized on their studies on how to deliver an effective service strategy to the customers. Service firms are squeezed between standardization and customization because these two strategies seem to be a dilemma in service development. It provides service firms challenges that how to balance standardization and customization. In this study, we’ll try to investigate the effect of these two strategies on customers’ perception toward services. The first purpose of this study is to integrate relevant literature and develop a comprehensive research model to identify the influence of standardization and customization on the perception of customers. The second purpose of this study is to empirically test the research model through conducting survey research in the service industry. A 88-item survey questionnaire was developed to conduct a survey on internet with 380 subjects in order to identify the interrelationships among standardization, customization, service quality, perceived value, and loyalty. Through a series of questionnaire survey, the results of this study indicated that the comprehensive model is valued and that the degree of standardization and customization tend to significantly impact on service quality and perceived value, which eventually influence on loyalty. Furthermore, the influence of standardization on service quality and perceived value is stronger than that of customization. When considering service strategies of standardization and customization, managers should think about the effects on customers. Keywords: Service, Standardization, Customization, Service Quality, Perceived Value, Loyalty. Tóm tắt Từ khi ngành công nghiệp dịch vụ có những bước phát triển ấn tượng trong những năm gần đây, nhiều nhà nghiên cứu đã tập trung nghiên cứu cách thức để có được chiến lược dịch vụ hiệu quả đến khách hàng. Các doanh nghiệp dịch vụ mắc kẹt giữa hai chiến lược tiêu chuẩn hoá và điều chỉnh theo khách hàng bởi cả hai chiến lược này dường như đều đưa họ vào thế tiến thoái lưỡng nan trong quá trình phát triển dịch vụ. Thách thức đối với các doanh nghiệp dịch vụ là làm thế nào để cân bằng giữa tiêu chuẩn và điều chỉnh 454
2. cho phù hợp. Trong nghiên cứu này, chúng tôi sẽ tìm hiểu ảnh hưởng của hai chiến lược này đối với cảm nhận của khách hàng về dịch vụ. Mục tiêu đầu tiên của nghiên cứu này là kết nối giữa cơ sở lý thuyết và phát triển một mô hình nghiên cứu toàn diện để xác định ảnh hưởng của chiến lược tiêu chuẩn hoá và chiến lược điều chỉnh đối với cảm nhận của khách hàng. Mục tiêu thứ hai là kiểm định thực tế mô hình nghiên cứu thông qua việc tiến hành khảo sát trong lĩnh vực dịch vụ. Bảng hỏi gồm 88 mục hỏi được thiết kế cho một khảo sát trên Internet với 380 đối tượng nhằm xác định mối quan hệ tương hỗ giữa tiêu chuẩn hoá, điều chỉnh, chất lượng dịch vụ, giá trị cảm nhận và sự trung thành của khách hàng. Thông qua khảo sát bằng bảng hỏi, kết quả nghiên cứu cho thấy mô hình toàn diện này có giá trị và mức độ tiêu chuẩn hoá và mức độ điều chỉnh có tác động đáng kể tới chất lượng dịch vụ và giá trị cảm nhận, từ đó có tác động tới mức độ trung thành. Bên cạnh đó, mức độ ảnh hưởng của chiến lược tiêu chuẩn hoá tới chất lượng dịch vụ và giá trị cảm nhận là cao hơn so với mức độ ảnh hưởng của chiến lược điều chỉnh. Do đó khi xem xét giữa chiến lược dịch vụ tiêu chuẩn hoá và điều chỉnh, các nhà quản trị nên cân nhắc về ảnh hưởng này tới khách hàng. Từ khoá: dịch vụ, chiến lược tiêu chuẩn hoá, chiến lược điều chỉnh, chất lượng dịch vụ, giá trị cảm nhận, sự trung thành 1. Introduction Service firms always have perplexity between standardization, which the globalization emphasizes, and customization, which marketing and service management emphasizes. Standardization represents decreasing costs and thus lowering prices and increasing productivity. However, service firms have difficulties in finding ways of standardization because of the individual or customized character. In a market perspective, standardization could give service firms competitive advantages in mass markets which dominated by strong price competition. Nevertheless, customization, especially to service production, still has its own advantages because markets are not only dominated by prices. The customer encounter, special to service production, is still an advantage in quality markets (markets not completely dominated by price competition on standard products). It could even give the single firm a competitive advantage in mass markets (dominated by standard products and strong price competition). However, this development also creates difficulties for service firms. It is problematic for them to both control and manage individual employees’ behavior, and it is difficult to have a profitable product innovation process when the products can not be reproduced as mass services (Sundbo, 2002). There seems to be a difficult dilemma to service firms. Standardization as well as customization has been discussed in the service literature. The tendency towards customization has been emphasized within the service management and marketing approach (Engelstätter & Sarbu, 2013). This approach stresses the customer encounter and the customer’s participation in service production, thus customization becomes a natural core of the interpretation of the service production. 455
3. Customization means that the single customer receives individual service. The standardization and industrialization tendency has been emphasized by Levitt (1976), Joha & Janssen (2014), who states that services will move towards standardization and mass production. This was an early and innovative observation of the fact that services can develop the same way as manufacturing, including Tayloristic personnel management, standard products, and price competition based on productivity increase. As the marketplace becomes more competitive, a strategy that has been related to success in the concept of service quality is important. Service quality is really a significant differentiator and powerful weapon which the leading service firms have (Berry et al. 1988; Khan & Fasih, 2014). Since the quality of service is regarded as the key influential factors, a more detailed evaluation of perceived quality using the conception model of service quality may become a necessity. As previously noted, the construct of service quality has traditionally been based upon the perspective of the service receiver. This has produced a number of classifications of services – all of which emphasize only the service receiver’s perspective of the service offer in service encounters (Olorunniwo, Hsu, and Udo, 2006). However, the construct of service quality is multidimensional. Several models described in the literature have taken this into account and have conceptualized the construct of service quality in multidimensional terms. Consequently, various researchers have explored the construct of service quality in different empirical contexts, and have developed various multiple-item measures of the construct. Parasuraman et al. (1988) developed a generic multi-item measurement of service quality (SERVQUAL) for service encounters. Others refined SERVQUAL to be applicable in different contexts – including physical distribution and retailing. Parasuraman et al. (1988) identified five dimensions of service quality to measure the consumer’s judgment of a company’s service offers. These dimensions were tangibility, reliability, responsiveness, assurance, and empathy. Dabholkar, Thorpe and Rentz (1996) also identified five dimensions of retail service quality for assessing levels of service quality and detecting changes required in the services provided. Their five dimensions were somewhat different – physical aspects, reliability, personal interaction, problem solving, and policy. Bienstock, Mentzer and Bird (1997) identified three dimensions to measure industrial customer perceptions of the physical distribution of service quality received from suppliers. Their dimensions were timeliness, availability, and condition. We tried to use the constructs which operationalized by Parasuraman, Zeithaml and Berry (1988) in this study, including reliability, responsiveness, assurance, empathy and tangible. The leading service firms make many efforts to uphold superior quality of service in order to acquire customer loyalty, therefore, service firms get their long-term success through the ability to maintain and expand a large loyal customer base (Wong & Sohal, 2003). The customer loyalty is really essential for the survival of service firms, the relationship between perceived quality of service and customer loyalty is developed by Bell, Auh and Smalley (2005). Service quality is found to play an important role in determining clients' loyalty toward the firm in financial services industry. Encouraging and enabling service personnel to engage with clients in a friendly manner, to communicate 456
4. openly, and to retain a sense of empathy for clients' situations is likely to lead to increased loyalty and patronage. Customer value is widely discussed in the practitioner literature and is often a part of organizations’ mission statements and objectives. It is seen as the key long-term success by many commentators. Sirdeshmukh, Singh, and Sabol (2002) found that perceived value is another major determinant of customer loyalty in retailing services. It has also been found in mobile services (Pura, 2005; Wang, 2015) that companies can differentiate from competitors by adding value to customers, thus they can keep their truly loyal customers in current customer base. Customers patronize only when there is a high customer value. In this logic, Sirdeshmukh et al. (2002) and Flint et al. (2011) proposed that customer value is a superordinate goal and customer loyalty is the subordinate one. When talking about customer loyalty, perceived value is indeed an inseparable part. Customer orientation significantly influences the performance of firms (Brady & Cronin, 2001; Frambach et al. 2016). We tend to examine the strategy in a way of customers’ perspective instead of using financial data. To put all together, we combine standardization and customization, which seem to present perspective of firms, with service quality, perceived value, and loyalty, which measure performance in view of customers, in this research to discuss how the customers perceive the strategy of standardization and customization which firms use. 2. Literature Review Researchers have shown that there are important conceptual differences between person-to person (i.e. salesperson loyalty) and person-to-firm (i.e. store loyalty). Indeed, Beatty et al. (1996) found that a customer's primary loyalty was to the sales associate, which positively influences a customer's loyalty to the store. In yet another study conducted, it was found that positive feelings towards the contact employee often carry over to feelings towards the firm (Goff & Fick, 1997). Besides, a positive relationship between salesperson loyalty and store loyalty has been demonstrated, and the former is an antecedent to the latter (Macintosh & Lockshin, 1997). Hence, following the research findings put forth by Macintosh and Lockshin (1997), when a customer is highly loyal to his/her salesperson, he/she will also be highly loyal to the company that employs that salesperson. This view is reinforced by a study which found out that positive feelings about the salesperson do translate into positive feelings about the company (Reynolds & Beatty, 1999), as a customer's loyalty to the company will be manifested through his/her loyalty to the contact employee. 2.1 Interrelationships among Standardization, Perceived Service Quality, and Perceived Customer Value Standardization is the situation where the service product is the same every time (like a McDonald’s hamburger). The standardization and industrialization tendency has been emphasized and stated that services will move towards standardization and mass production. This was an early and innovative observation of the fact that services can 457
5. develop the same way as manufacturing, including Tayloristic personnel management, standard products, and price competition based on productivity increase. Standardization can be explained in terms of classic economic logic, which may be characterized as an economy of productivity. Within this logic, only prices and quantities exist and consumers are supposed to assess the quality of a product and compare the price of it with the price of similar products. Individual customer care is useless because the customer himself has the knowledge to classify the product according to type and quality, and when he has done so, only price counts. Standardized services can be included. The argument in the literature for stating that it cannot be included has been that a service can not be assessed by buyer before consumption, because it did not exist before, and when it is consumed it is too late. I will state that a standard service product can be assessed by the consumer just as a standard good. The consumer can see all the previous deliveries of the same standard service and the service that might be delivered to him will be the same. That requires that he has some information which he must procure from other consumers who have got the service, or from the service provider, who can show him how they deliver to other consumers. There are several advantages to the service firms of standardization, such as quality assurance as zero failure, which can improve the quality of service. Standardization also benefits customer satisfaction, because they get the same cheap product every time, thus they get what they expect. Standardization can be explained in terms of classic economic logic, which may be characterized as an economy of productivity. Within this logic, only prices and quantities exist and consumers are supposed to assess the quality of a product and compare the price of it with the price of similar products. Lower price is an advantage relatively. Value perceptions are considered to be the result of a cost-benefit trade-off, a trade- off that is often operationalized as a price-quality trade-off. According to prospect theory, "losses loom larger than gains" for consumers (Varki & Colgate, 2001). That is, consumers exhibit loss aversion; an effect that has been found across several disciplines of marketing including services. In Mittal, Ross, and Baldasare (1998), prospect theory is used to explain why consumers react more strongly when services underperform on an attribute (a loss) than when services over perform on some attribute (a gain). In Anderson and Sullivan (1993), prospect theory is used to explain why negative disconfirmation (loss) has a stronger influence on customer satisfaction than positive disconfirmation (gain). In Bolton and Lemon (1999), prospect theory is used to explain the asymmetric effect of service failures (loss) and service recovery efforts (gain) on consumers' ongoing assessment of the service provided. Thus, considering that price is a monetary sacrifice (or loss) incurred for service, the tenets of prospect theory would indicate that price paid would be salient in consumers' evaluation of services (Bolton and Lemon, 1999). 2.2 Interrelationships among Customization, Perceived Service Quality, and Perceived Customer Value Customization takes place within another economic logic, namely, the service management and marketing logic, which has created a special logic for service production. 458
6. This logic is based on the axiom that a service product cannot be stored and therefore it must be consumed in the moment of production and the customer must be a co-producer. This tradition has emphasized the solving of single customer’s individual problem, and thus customization. The customization tendency is thus driven by this logic of service marketing, which economically is the logic of old-fashioned servants. This was not a rational productivity logic, but a logic of luxury – servants did not produce much that was useful, but they were nice to have and nobleman could afford this luxury. In other words, services are a luxury. Contemporary western economies are luxury economies; there are large surpluses over what is needed just to survive. Therefore, buyers of services can afford, and will look for, quality and kind of service over price. (Sundbo, 2002) There are concrete advantages of customization to the service firm, including ensures quality as perceived service quality, which is because the customer feels he has been treated well. Customer satisfaction is also one of the advantages of customization because they get their individual wants satisfied. By nature, services are intangible and characterized by an inability to separate production from consumption. As a result, in a service setting, a customer-oriented culture is identified by the behaviors of its employees above all else (Cran, 1994; Mahajan et al., 1994; Webster, 1990). Good service is often described as a willingness to go "above and beyond" or to "go the extra mile." Service firms with renowned customer orientation reputations have developed corporate cultures that demand these behaviors of their personnel. It is in this context that we view the customer orientation variable. That is, customer orientation defines employee behaviors that are indicative of a customer-oriented culture. The research reported here investigates the effects of being customer oriented across a set of diverse service providers to assess the relative importance of this aspect of organizational service culture. The theory discussed above reveals that the culture of a customer-oriented organization positions the firm to better understand the needs and wants of its customers (i.e., to exhibit a high level of organizational learning as a result of its customer orientation). This alone is envisioned to lead to more favorable customer- organization outcomes simply because the organization is better able to create and maintain superior customer value strategies. Marketers have long recognized that all product evaluations involve physical good and service dimensions (Rathmell, 1996). As a result, a thorough investigation of the effect of a customer orientation on a service firm's execution of its marketing strategies must also recognize that such effects are also composed of multiple dimensions (i.e., physical good, service, and environmental strategies). Specifically, an increase in the customer orientation of a business is theorized to result in the identification of strategies that lead to customers having higher perceptions of the quality of an organization's physical goods, environment, and services. 2.3 Interrelationships between Perceived Service Quality and Perceived Customer Value Perceived value is conceptualized as the consumer’s evaluation of the utility of perceived benefits and perceived sacrifices (Zeithaml, 2000). That is, consumers may cognitively integrate their perceptions of what they get (i.e., benefits) and what they have to give up (i.e., sacrifices) in order to receive services. In service industry, benefits are 459
7. largely the results of good quality service in both outcome and process domains. Although superiority of service performance is the major component of perceived benefits, customers may consider other factors such as prestige or reputation as benefits (Choi et al., 2004). Like service quality, value is also a cognitive construct. However, unlike quality assessment, perceived value requires a trade-off between benefits and sacrifices. 2.4 Interrelationships between Perceived Service Quality and Loyalty Customer behavioral intentions can be viewed as indicators that signal whether customers will remain with or defect from a company (Zeithaml, 2000), and behavioral intentions can be split broadly into favorable and unfavorable behavioral intentions. When customers praise the firm, express preference over another company, increase the volume of their purchases, say positive things about the firm, recommend the firm to their friends or relatives, they are indicating behaviorally that they are bonding with the company (Zeithaml, 2000). While customer behavioral intentions represent the broader aspect of indicators, customer loyalty is just a single dimension within the whole range of customer behavioral intentions. For example, Zeithaml et al. (1988) propose that customer behavioral intentions consist of five dimensions, namely loyalty to company, propensity to switch, willingness to pay more, external response to problem, and internal response to problem. Recent research offers some evidence that perceived service quality has an impact on customer satisfaction, which in turn leads to later behaviors towards the service firm (Andreassen & Lindestad, 1998; Hameed, 2012). Therefore, service quality appears to be a causal antecedent of consumer satisfaction, which mediates the relationship between service quality judgments and behavioral intentions (Taylor & Baker, 1994; Hameed, 2012). Furthermore, in a study conducted in five different service industries, a positive relationship was found between perceived service quality and service loyalty (de Ruyter, Wetzels, and Bloemer, 1998). This view is further exemplified by a study which found that favorable perceptions of service quality increased the likelihood of customers engaging in behaviors beneficial to the strategic health of the firm (Athanassopoulos, 2000). In another study conducted in the hospitality industry (Wong, Dean, and White, 1999; Segoro, 2013), a positive relationship was found between the dimensions of service quality and customer loyalty. 2.5 Interrelationship between Perceived Customer Value and Loyalty Perceived value has its root in equity theory, which considers the ratio of the consumer’s outcome/input to that of the service provider’s outcome/input (Oliver, 1993). The equity concept refers to customer evaluation of what is fair, right, or deserved for the perceived cost of the offering (Bolton & Lemon, 1999). Perceived costs include monetary payments and non-monetary sacrifices such as time consumption, energy consumption, and stress experienced by consumers. In turn, customer-perceived value results from an evaluation of the relative rewards and sacrifices associated with the offering. Customers are inclined to feel equitably treated if they perceive that the ratio of their outcome to inputs is comparable to the ratio of outcome to inputs experienced by the company (Oliver, 1999). And customers often measure a company’s ratio of outcome to inputs by making comparisons with its competitors’ offerings. 460
8. Customer value is “the fundamental basis for all marketing activity” (Holbrook, 2006; Urde et al. 2013). And high value is one primary motivation for customer patronage. In this regard, Sirdeshmukh, Singh, and Sabol (2002) argue that customer value is a superordinate goal and customer loyalty is a subordinate goal, as it is a behavioral intention. According to goal and action identity theories, a superordinate goal is likely to regulate subordinate goals. Thus, customer value regulates “behavioral intentions of loyalty toward the service provider as long as such relational exchanges provide superior value” (Sirdeshmukh et al., 2002). Prior empirical research has identified perceived value as a major determinant of customer loyalty in such settings as telephone services (Bolton and Drew, 1991), airline travel, and retailing services (Sirdeshmukh et al., 2002). Chang and Wildt (1994) report that customer-perceived value has been found to be a major contributor to purchase intention. 2.6 Comparisons of Research Factors among Respondents with Different Levels of Experiential Perception and Perceived Customer Value Previous studies including Sundbo (2002), Varki and Colgate (2001), and Brady and Cronin (2001) have indicated that standardization and customization is crucial to create service quality, perceived value and loyalty. Sundbo (2002) proposed that standardization can improve the quality of service. Houge, Loughran, Suchanek and Yan (2001) postulated that reducing uncertainty between customers and service buyers in the service sphere should increase perceived experiences of service quality. Customers perceive higher quality of service if there’s higher level of standardization. Varki and Colgate (2001) indicated that price have a strong influence on customer value perception. Standardization can be explained as an economy of productivity which means only prices and quantities exist and consumers are supposed to assess the quality of a product and compare the price of it with the price of similar products. Thus, when consumers can get an equal service with lower price, they perceive higher value. Sundbo (2002) proposed the advantages of customization to the service firm, including ensures quality as perceived service quality, which is because the customer feels he has been treated well. The customers perceive higher service quality when there’s higher customization. Customization also means to solve customers’ problem in individual ways. Employee customization is an important dimension. Through personal contact and interaction, customization makes them feel they are different from others. Therefore, customers feel there’s higher value if there’s higher level of customization. 3. Research design and methodology 3.1 The Conceptual Model and Hypotheses The purposes of this study are firstly to integrate relevant literature and develop a comprehensive research model to identify the interrelationships among relevant research constructs. Secondarily, the study will also empirically test the research model through conducting survey research in the area of service experience. The research model of this study is shown in Figure 1. 461
9. Figure 1 - The Research Model of this Research For the purposes of this study, the following six major constructs are operationalized in this study: (1) standardization, (2) customization, (3) perceived service quality, (4) perceived customer value, and (6) loyalty. Development of items/scales to measure all the constructs was guided by prior researches. 3.3 Questionnaire Design A 88-item survey questionnaire was developed to obtain the responses from consumers about their opinions on various research variables. The questionnaire of this study is consisted of six constructs: “standardization (15 items),” “Customization (15 items),” “perceived service quality (22 items),” “perceived customer value (17 items),” and “loyalty (13 items).” The questionnaire was pretested through a pilot study by the MBA students of a major university in Taiwan. Questionnaire items were revised based upon the results of the pilot study before being put into the final form. 3.4 Sample Plan Twelve kinds of service were included in this study, including transportation service, health care service, hotels and restaurants, hair and beauty treatment service, freight transport service, facility maintaining and repair service, copy and printing service, laundry service, banking service, education, insurance service, and consulting service. These 12 kinds of service were extended in four types of service mentioned by Lovelock and Wirtz (2004), orderly people-processing services, possession-processing services, and information-based services. People-processing services involve tangible actions to customers in person. These services require that customers themselves become part of the production process, which tends to be simultaneous with consumption. In businesses such as passenger transportation, health care, food service, and lodging services, the customer needs to enter the "service factory" (although we know it by such names as an airliner and air terminal, a hospital, a restaurant, or a hotel) and remain there 462
10. during service delivery. Possession-processing services involve tangible actions to physical objects to improve their value to customers. Examples include freight transport, warehousing, equipment installation and maintenance, car repair, laundry, and disposal. Information-based services are, perhaps, the most interesting category from the standpoint of global strategy development because they depend on collecting, manipulating, interpreting, and transmitting data to create value. Examples include accounting, banking, consulting, education, insurance, legal services, and news. Respondents could choose the most experienced service from the service list to best answer items. The study is conducted in the Internet by posting the message in the Bulletin Board System and asks the Internet consumers to fill in the Internet questionnaire. We monitored the questionnaire websites everyday and ensure that the questionnaire have not been changed dramatically during the experiments. 4. Resutls and Discussion 4.1 Descriptive Analysis Table 1 shows the basic attributes of the respondents, including eight major items in this study: (1) gender, (2) marriage, (3) age, (4) monthly income, (5) occupation, and (6) Frequency of using the service. It is shown that more than 61% of respondents are male. More than 94% of the respondents are single. More than 69% of the respondents are less than 25 years old. More than 65% of the respondents earn less than 10 thousands per month. About 70.5% of the respondents are students. More than 33% of the respondents use the service more than one time in a week. About 41% of the respondents use the service one time in 2~3 months. Table 1 Characteristics of the Respondents (n=380) 463
11. 4.2 Structural Equation Model (SEM) The purpose of this study is to find out the relationships among standardization, customization, service quality, perceived value, and loyalty. For such an objective, structure equation model is employed to test the interrelationships of all the variables in the entire model. The proposed structural equation model is shown in Figure 2. Before evaluating the structural or measurement models, the overall fit of the model to ensure that the model should be evaluated. In this study, five indices were used to test the fit of the model. The first one was the chi-square test, the essential for the nested model comparison. The chi-square value of 147.9 with 67 degrees of freedom is statistically significant at the 0.000 significance level. Thus, the research must conclude that significant differences exist between the design model (as shown in Figure 2) and the actual model. However, we must also note that the chi-square test becomes more sensitive as the number of indicators rise. With this in mind, other measures were also examined. The rest of the fit indices adopted in this study were the root mean square residual (RMR), the goodness of fit index (GFI), and the adjusted goodness of fit index (AGFI). The smaller the RMR is, the better the fit of the model. A value of 0.05 is suggested as a close fit (Arbuckle & Wothke, 1999). GFI and AGFI will not be influenced by the sample size explicitly and they were adopted to test how much better the model fits than no model at all. A very good fit of research model would require GFI and AGFI to be higher than 0.9 (Arbuckle & Wothke, 1999). The quality of the apriority alternative models should rely on the fit indices. However, it does not necessarily mean that one model is superior or the corrected causal model. Another important criterion for the quality of the model is the plausibility criterion (Joreskog & Sorbom, 1994). It means that the path coefficients in the model adhere to the general theoretical conception and to the hypotheses. Therefore, a model that fits the data well, but with many unsupported hypothesized paths, cannot be defined as correct. Hence, the fit indices and the theoretical predictions should be taken into consideration. Figure 2 Structural Equation Model of this Study 464
12. According to the criterion above, the best model (see Figure 2) is tested in this study. Table 2 estimates the fit indices of the model. It shows a somewhat big, significant GFI is 0.958, AGFI is 0.904 with quite high chi-square number (147.9), the GFI and AGFI indices indicate moderate fit of this model. As the overall goodness of fit is promising, it is encouraged to further identify the magnitudes and significance of the path structural coefficients of the model. As shown in Table 2, it indicates that standardization have significantly impact on service quality and perceived value (β=0.775, β=0.419). Also, customization have significant impact on service quality (β=0.212). On the other hand, there is no significant relationship between customization and perceived value (β=0.007). A further evaluation of the model indicates that the level of service quality has significant impact on perceived value of customer and loyalty (β=1.387, β=1.392). The level of perceived value has significant impact on loyalty that perceived by consumers (β=2.345). These results seem to indicate that the interrelationships among service quality, perceived value, and loyalty are significant specifically. These results are in conformity with the research model as described in this study. 5. conclusions and suggestions 5.1 Research Conclusions The major objectives of this study are to identify the interrelationships among standardization, customization, service quality, perceived value, and loyalty. Based on the results of this study, several conclusions can be drawn. The first conclusion is that there are significant relationships between standardization and service quality. It is indicated that the standardization of service content, process, people, and environment tend to significantly impact on reliability, responsiveness, assurance, empathy, and tangible of service quality. In addition, the results also show that the levels of indicators for standardization tend to significantly influence the levels of perceived value. Several managerial implications can be inferred from this result. First, as Hsieh and Hsieh (2001) mentioned, from customer’s perspective, they evaluate the degree of standardization with respect to a service firm which would influence their perception of service quality. This situation resembles a person lacking service knowledge. In general, nearly all customers believe standardization of a service firm can sustain stability of s service because standardization in a firm could maintain conformity and consistency of quality. The results as shown in this study have indicated that the relationship of standardization to service quality is important because it helps align the firm toward a common goal of superior quality. However, while every company has a standard operating procedure, the manager should set up a management mechanism to cultivate contact- employees and service environment into following the standard operating procedure. Second, from customers with a high degree of service experience, they can compare actual service to prior experience. Consequently, maintaining a consistent service procedure is crucial for service to sustain their competency with other firms. 465
13. The second conclusion that can be drawn in this research is that there are significant relationships among customization, service quality, and perceived value. It is indicated that the customization of service have significantly impact on the levels of service quality and perceived value. Several managerial implications can be inferred from this result. Customers could not be satisfied with totally standardized service procedure. Sundbo (2002) discussed the idea of bounded rationality, where people only have semi-rational choices because they do not have the full information and do not know what goal they have. Will the service consumer get a complete experience where he or she finds that the problem is solved in the way he thinks it should be solved? A premise is that neither the consumer nor the provider knows which solution the consumer finds the best beforehand, because the consumer can not specify it. Often he can make predictions on the basis of earlier solutions to the same problem, but part of this logic is that the concrete situation often changes, so the problem has slightly changed and so must the solution. Therefore, attempting to standardize the solution (the service) is pointless. The truth is, people buy services to maintain existing values, but mostly they want to have their personal problem solved and that may very well be by untraditional means. Service consumer does not buy a ready-made solution, he buys process that he hopes can solve his problem. However, he does not fully know how and when the process can solve the problem. The process may even mean that the service provider and customer realize that the latter have quite another problem. Therefore, the buyer is as much oriented towards the process as the result. As Hsieh and Hsieh (2001) mentioned, the buyer and the seller have to interact in the service buying process and, sometimes, even in the production process. Since service staff is a point in interaction during service process, service firms should make more effort to select and train their employees to interact better with customers. According to Bettencourt and Gwinner (1996), customization on the frontline places a heavy burden on the contact employee. Service firms that encourage adaptive behavior from frontline service providers will require considerable human resource investments in areas such as training, recognition, and recruitment. Training and recognition will be essential for enhancing employee proficiency at service delivery customization. Employees should be trained in how to recognize important cues from customers, allowing categorization of customers with varying needs and desires. In addition, based on Gwinner et al. (2005), training sessions should explore various behavioral strategies that employees might use to deal with varying customer needs, personalities and circumstances. A useful approach would be to have more experienced service providers’ help in the training of newcomers. Second, service firms should help customers to define their problems. Only when the service buyer and provider both know where the problem is, the problem could be solved with individual need. Therefore, to grasp customers’ thought beforehand is essential. As mentioned by Pura (2005), companies should choose the customer segments they wish to attract and keep, offering services which particular customer segment finds valuable one. Try hard to understand the key customers and provide consulting before consuming service and collecting prior service experience is the effort firms should put. 466
14. There are two different theories about the development of service quality and perceived value. Should service firms choose standardization or customization to gain their competency? We now introduce modulization, which has been used by Langlois (1999). The logic of modulization is that service firms attempt to combine the advantages of standardization with those of customization. The firm will sell high-priced service and lower the cost and uncertainty of service through standardized service procedure. The aim is that the customer should feel that he receives individual attention. The logic discussed here can also be found in the idea of flexible specialization, which has been observed within manufacturing for many years. We can also apply it on service production. Information and communication technology is particularly suitable for flexibility and modulization. It has the standardization logic in its algorithmic nature yet is flexible, because one can create one’s personal file (or, for example, web site). The third conclusion that can be drawn in this research is that there are significant relationships between service quality and perceived customer value. It is indicated that the level of quality of service has significantly impact on the levels of perceived value. Several managerial implications can be inferred from this result. Knowing and understanding which aspects of the service quality that consumers value the most gives valuable input to effectively allocate resource. According to Walker, Johnson, and Leonard (2006) the relationship between service quality and perceived customer value may reside in the design and maintenance of the place and facilities of service provision. Since most service providers place much emphasis on service environment and facilities (tangible dimension of SVEQUAL), they should consider other dimensions more. For instance, trying to furnish customer with accurate information and suggestion maybe would support to strong the reliability. Giving service guarantee may sustain the assurance of service performance, thus strengthen perceived value. The fourth conclusion that can be drawn in this research is that there are significant relationships between service quality and loyalty. It is indicated that the service quality has significantly impact on the levels of loyalty. The fifth conclusion that can be drawn in this research is that there are significant relationships between perceived value and loyalty. It is indicated that the levels of perceived value have significantly impact on the levels of loyalty. Several managerial implications can be inferred from these results. First, the findings suggest that customer loyalty can be generated through offering high service value. Information on the service quality-customer loyalty link may provide actionable benchmarks that individual firms may use to guide their service policies aimed at securing customer loyalty. Our results have specific indications for the different types of service industries' research and budget allocations and personnel management decisions relating to the improvement of service loyalty on the basis of service quality. Proposed by Choia (2004), Service staffs should have the knowledge and capacity to answer customer questions, to handle problems, and to address their complaints in a friendly manner. Then, it is vital for a firm to perform the service correctly by executing transactions accurately, maintaining customer records without error, and delivering service promptly. Second, 467
15. perceived value is another key driver of customer loyalty. Based on Yang and Peterson (2004), firms should provide value-added services that are in demand to increase their competitive advantage. Customers make comparisons with competitors that provide the same service. Obtaining desired services is, of course, a primary reason for customers to choose your firm. The sixth conclusion that can be drawn in this research is that there are significant influences of age of respondents on perceived value. In the MONOVA test of different age groups, we find there are significant differences of perceived value among different age groups. Due to the sample in this research, the percentage of respondents with age under 25 is 69.2%, exceeding a half of our sample number. As showed in SEM model, the relationship between customization and perceived value is not significant. We deem that large number of respondents with age under 25 is the cause. Several managerial implications can be inferred from these results. First, the findings suggest that perceived value can not be generated through offering high level of customization if most of the customers are young. Service firms with customers younger than age 25 should be careful when using customization strategy. Before conducting customization of service, firms need to investigate the effect of customization to their young customers. Second, service firms with younger customers should try to allocate more resources to standardization because the outcome of customization may not be remarkable. Higher level of effort of customization would be a waste. 5.2 Research Suggestions Although the result of this study is fruitful and these results may contribute to the existing literature for further validation, several suggestions could be made for academicians and business practitioners. First, this study adopted the cross-sectional research design. As a result, directional relationships among research constructs are not clear and must be inferred based on the models or theories as developed from previous studies. Due to the constraints of time and data availability, a longitudinal research is not viable in this study. Second, this study adopted a survey methodology using Internet respondents as our samples. It is extremely difficult to know the characteristics of the Internet population. Because the Internet population is not precisely identified, the extension of research results of this study should be restricted to the scope of samples. Third, though most of hypotheses have been validated through the empirical test, empirical validation for the integrated framework is not well established. The comprehensive model using LISREL test seems to indicate that there are still plenty of room to revise and additional modification of the research model and further validation may be required. Nevertheless, the results of this study do provide significant contributions to management academicians and practitioners to evaluate the standardization, customization, service quality, perceived value, and loyalty. Fourth, since this study collected the data from the Internet, the representativeness of the sample respondents are difficult to identify, the characteristics of 468
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