Chatura Ranaweera

A model of online customer behavior during the initial transaction: Moderating effects of customer characteristics

Recent research shows that observations based on overall online consumer behavior can lead to erroneous conclusions since behavior can be substantially different among groups of individuals. This article proposes a theoretical model, which captures the main characteristics of the website and explains how the user reaction to the website, determined by a set of user characteristics, could moderate consumer perceptions of websites as well as subsequent behaviors especially in a B2C context. A comprehensive understanding of these user characteristics will enable researchers to further the understanding of online consumer behavior during the crucial initial transaction, which often raises the biggest challenge for service providers. An understanding of user characteristics will assist service providers in designing customized websites for competitive advantage.

Web site satisfaction and purchase intentions: Impact of personality characteristics during initial web site visit

Purpose – A main focus in recent online consumer research has been on context specific trust, risk, and online buying experience. Despite the importance, their individual level “equivalents” – trust disposition, risk aversion, and technology readiness – have received limited attention. This research attempts to fill that gap by focussing on these crucial personality traits.Design/methodology/approach – This research employs a survey‐based method to test a theoretically grounded set of hypotheses. The measurement model is tested using SEM and the hypotheses are tested using regression techniques.Findings – The personality characteristics are found to have significant moderating effects on online purchase intentions. Interestingly, provided the consumers are satisfied, risk aversion is found to increase the likelihood of purchase. Moreover, while technology readiness increases the likelihood of online purchase, dispositional trust is found not to have a similar effect.Research limitations/implications – Sig...

For Better or for Worse? Adverse Effects of Relationship Age and Continuance Commitment on Positive and Negative Word of Mouth

The authors aim to study the direct and moderating effects of relationship age, continuance commitment and satisfaction on the generation of positive and negative word of mouth (P/NWOM). Hypotheses based on the notion of liability of adolescence and the motivation to generate P/NWOM were tested with data collected through a survey of a random sample of customers of fixed-line telephone users. Relationship age adversely impacts PWOM and the effect of satisfaction on both P/NWOM. Continuance commitment increases NWOM and causes dissatisfied customers to generate greater NWOM while not affecting the PWOM of satisfied customers. Satisfaction shows a significant non-linear effect on WOM. Results offer strong evidence of a dark side to long-term customer relationships. Recommendations focus on managing long-term relationships and perceptions of continuance commitment to minimise adverse effects. As far as the authors know, this research is the first to offer a theoretically grounded explanation of the direct and moderating effects of relationship age on P/NWOM behaviour. Results challenge the premise of long-term customers being a panacea for numerous problems faced by firms. Findings also help explain the contradictory results in prior research on the effects of continuous commitment on WOM.

The Impact of Word of Mouth on Service Purchase Decisions: Examining Risk and the Interaction of Tie Strength and Involvement

Purpose – Primarily, the purpose of this paper is to investigate the interaction and direct effects of tie strength between sender and receiver of word of mouth (WOM) and the receiver’s service purchase decision involvement on WOM influence. A secondary aim is to investigate how a distinctive conceptualization of perceived risk, consisting of two types (outcome risk and psychosocial risk), affects service purchase decision involvement. A conceptual model incorporating these constructs and associated hypotheses is developed and tested. Design/Methodology/Approach – In a survey of actual service consumers, respondents were asked to recall a recent instance where they had received service purchase information via WOM, and relate their responses to this instance. Established scales were used to measure the constructs. The hypothesized model was tested using structural equation modeling. Findings – Principally, findings demonstrate a strong interaction effect between service purchase decision involvement and tie strength. Also, results highlight the complexity of the perceived risk construct, suggesting that it is appropriately modeled as two types: outcome risk, and psycho-social risk. Research limitations/Implications – This research has contributed to the service marketing literature by testing a model that predicts WOM influence. Evidence confirmed that the effect of service purchase decision involvement on WOM influence is moderated by tie strength. Additionally, a conceptualization of two different types of risk associated with purchase decisions was suggested, together with empirical confirmation of their hypothesized antecedent effects on service purchase decision involvement. Findings have special implications for the literatures of persuasion, social and interpersonal influence, as well as consumer behavior in general. Practical Implications – To harness the power of WOM, managers should understand who their target audience is and how consumers are related to each other (tie strength) and to the service purchase decision (service purchase decision involvement). Recommendations are made with specific illustrations of how firms can leverage tie strength under conditions of low service purchase decision involvement to enhance WOM influence. Originality/Value – The formidable power of WOM wields substantial influence on consumers, particularly within a service (vs goods) purchase context, typically characterized by higher perceived risk and lower search qualities. The significant interaction between tie strength and service purchase decision involvement is a unique contribution to the service WOM literature.

From service quality to service theory and practice

Purpose – The purpose of this editorial paper is to set out the vision for the Journal of Service Theory and Practice (JSTP). Design/methodology/approach – Together with personal reflections of the authors, it is based on a review of literature on the past, the present and the future of service research, an analysis of a broad range of global environmental trends, as well as interviews, communications and feedback from eminent scholars in the field of service research. Findings – The paper sets out the expanded aims and scope for the JSTP. It also explains the rationale for the change in title and elaborates upon expectations for manuscripts submitted to the journal. Research limitations/implications – It identifies a set of research priorities for the journal and the field. Practical implications – It highlights the importance of translating theory into practice by making meaningful recommendations and action plans for firms and managers. Originality/value – This paper is written at a time when the journ...

Ethnic stereotyping in service provision: When do stereotypes affect the performance expectations and evaluation of ethnic service providers?

Purpose The purpose of this paper is to investigate the expectations and evaluations of services provided by members of an ethnic minority using the lens of ethnic stereotypes. The authors also examine how ethnic service providers (ESPs) are evaluated by customers from the majority group vs the same ethnic group as the provider. Design/methodology/approach In Study 1, the authors measure the stereotypes about skills, abilities, and typical professions associated with different ethnic groups (i.e. Chinese, South Asians and white). The authors then measure the effect of these stereotypes on the performance expectations from ESPs in different professional services. In Study 2, the authors manipulate the service domain (stereotypical vs counter-stereotypical) and the level of service performance (good: above average performance vs mediocre: below average) of a Chinese ESP, and subsequently measure the evaluation of the ESP by the same ethnic group (Chinese) vs majority group (white) participants. Findings Performance expectations from ESPs closely match the stereotypes associated with the ethnic group. But the performance of an ESP (especially mediocre-level service) is evaluated differently by the same ethnic group vs majority group customers, depending upon the domain of service. A Chinese ESP providing mediocre service in a stereotypical domain (martial arts instructor) is evaluated more critically by same ethnic group (Chinese) participants as compared to white participants. In contrast, a Chinese ESP providing mediocre service in a counter-stereotypical domain (fitness instructor) is evaluated more favourably by same ethnic group (Chinese) participants as compared to white participants. There is no such difference when performance is good. Research limitations/implications It is a common practice to employ ESPs to serve same ethnic group customers. While this strategy can be effective in a counter-stereotypical domain even if the ESP provides mediocre service, the findings suggest that this strategy can backfire when the performance is mediocre in a stereotypical service domain. Practical implications The results demonstrate the need for emphasizing outcome (vis-a-vis interaction) quality where ESPs are employed to serve same ethnic group customers in a stereotypical service setting. However, when an ESP is offering a counter-stereotypical service, the emphasis needs to be more on the interpersonal processes (vis-a-vis outcome). Firms can gain by taking this into account in their hiring and training practices. Originality/value Prior research has primarily used cultural distance to examine inter-cultural service encounters. The authors show that ethnic stereotypes pertaining to the skills and abilities of an ESP can affect evaluations beyond the role of cultural distance alone.

The impact of service bundles on the mechanism through which functional value and price value affect WOM intent

Purpose The purpose of this paper is to contribute toward the current limited understanding of service bundles by investigating how purchasers of combined product-service bundles (bundle customers) differ from those purchasing a product and associated service separately (non-bundle customers). Design/methodology/approach The hypothesized effects were tested on a representative sample of mobile phone subscribers in Finland, through a multi-group moderated analysis using variance-based structural equation modeling. Findings While functional value had a stronger effect on attitude for bundle customers, price value is a stronger determinant of attitude for non-bundle customers. There was no difference between the groups in terms of how attitude determines the word-of-mouth (WOM) intent. The total influence of functional value on positive WOM intent was stronger for bundle customers vs non-bundle customers; in contrast, the total influence of price value on positive WOM was weaker for the bundle customers. Research limitations/implications Two interrelated frameworks, prospect theory and mental accounting theory, are used to analyze customer response to service bundles. The results demonstrate that bundles play a powerful role in determining engagement behaviors critical to firms. Purchasing a service bundle vs a non-bundle influences how price value and functional value determine attitude and WOM intent in fundamentally different ways. Practical implications In devising communication strategies to maximize positive WOM, managers need to emphasize functional benefits for bundle purchasers and price benefits for non-bundle customers. The results also demonstrate that it is more important for firms to track perceived value, as value and not attitude differentiates WOM generation in the two groups. Originality/value This is the first study to demonstrate how bundle and non-bundle customers determine value, and how functional value and price value determine WOM generation and attitude toward service provider in fundamentally different ways. The comparison of the bundle group where the firm acts as the main resource integrator to a non-bundle group where the customer is the main resource integrator in creating value helps demonstrate the need for firms to treat the two groups in distinct ways.

A prototyping analysis of relationship marketing constructs: what constructs to use when

ABSTRACT As relationship marketing research evolved, a number of key constructs emerged. Some scholars have argued that these constructs are not conceptually or empirically distinct. We investigate this phenomenon based on the premise that sustained research effort towards studying conceptually overlapping/redundant constructs, while treating them as independent, can hamper the development of the field. We use prototyping, a method adopted from psychology, to examine consumers’ views of these constructs, and then identify relationship contexts where constructs are distinct or redundant.

Online Product Ratings: Dynamic Trends and Diagnosticity Assessment Explanation

We investigate the dynamic trends of online product ratings and explanations by examining a sample of 2,595 online product ratings of 14 randomly drawn apparel products from landsend.com. Contrary to the predominant declining sequential and/or temporal trends reported in previous studies, we find a predominant increasing sequential trend. We extend the diagnosticity assessment explanation offered by Godes and Silva (2012) by considering how changes of reviewer similarity and review information may affect the diagnostic value of prior reviews in customer decision making, thus explain both the increasing trend in our sample and the declining trend in previous studies. We find support to the idea that diagnostic value of prior reviews is high, leading customers to make good purchase decisions and give higher reviews over time, when reviewer dissimilarity and information noise do not increase; When reviewer dissimilarity and information noise increase overtime, prior reviews may mislead and confuse customers, leading bad purchase decisions and thus a declining review trend.

How Service Bundling Moderates the Formation of Attitudes Towards Service Providers

The authors investigate the role of service bundling in the formation of consumer attitudes toward service providers. Drawing upon theory on service bundling and customers’ perceived risk and value, the authors develop and test the moderating effect of service bundling on attitude and its antecedents based on a sample of 1152 telecommunication subscribers of a Northern European mobile carrier. The research reveals among other things that service bundling moderates the links between perceived risk and price value as well as between functional value and attitude. Specifically, we find that 1) the effect of risk perceptions on price value is less for those who subscribe to bundles, and that 2) the effect of perceived functional value on attitude towards a service provider is also less for those subscribing to a bundle, vis-a-vis those who do not.