Chapter 8
CO-CREATION
OF
QUALITY SERVICE
INTRODUCTION
This chapter discusses
>The common concept of service- oriented
business transactions involves the fi rm on
one end providing the resources and
workforce to deliver the services and, on
the other end, the customer availing and
receiving the promised service.
This chapter dwells on the concepts of
value co -creation and service delivery.
Likewise, the self-service technology
concept will be discussed. Further, the
chapter identifi es the diff erent strategies
used in value co -creation and productivity
LEARNING OBJECTIVES
At the end of this chapter, the students should be able
to:
01 Understand the role of customers in service
delivery and co-creation of Service Experiences
Differentiate and learn the concept of self-
02 service technology and customer
Participation in the delivery of service
03 Identify the different strategies
involving customers to increase
satisfaction, quality, value, and
productivity.
REALITY BITES
Dampa is a popular restaurant complex with a wet and
dry market, rows of restaurants, parking spaces, and
other amenities. Diners purchase fresh produce from
the market, including seafood, meat, poultry, and
vegetables. Restaurant crews cook the goods for a fee,
ensuring the produce is immediately prepared and
served.
This concept has evolved into high-end restaurants
offering prized seafood catch. Strategies to increase
customer satisfaction and service value can be applied
to other businesses.
REALITY BITES
• Based on this case, what were the roles played
by an organization and by customers what led
to the success of this type of business model?
• What are the strategies that can be applied to
further increase customer satisfaction and
service value?
• Is it possible that this can be applied in other
businesses? How?
CUSTOMER’S ROLE IN
VALUE CO-CREATION
CUSTOMER’S ROLE IN
VALUE CO-CREATION
Customer involvement in service innovation provides benefits for
firms through the co-creation of value. For example, value co-creation
(e.g., meet customers' needs and help customers to get more value)
is critical for enhancing firm value, and it also provides competitive
advantages (Wu, Lin, &Yu, 2019).
Customers' role in co-creation of value is a partnership that benefits
both organizations and customers. It involves sourcing inputs from all
stakeholders, fostering a mutually beneficial process that meets client
needs and preferences.
CUSTOMERS AS EXTENDED
EMPLOYEES
3 MAJOR PLAYED
BY CUSTOMER IN
SERVICE CO- CUSTOMERS AS
CREATION AND PROPONENTS TO QUALITY
DELIVERY SERVICE
CUSTOMERS AS
COMPETITORS
MAJOR PLAYED BY COSTOMER IN SERVICE
CO-CREATION AND DELIVERY
Among service-
oriented
CUSTOMERS AS
EXTENDED organizations,
EMPLOYEES
customers are
significant part of the
organization's ability
to deliver service..
MAJOR PLAYED BY COSTOMER IN SERVICE
CO-CREATION AND DELIVERY
Customer involvement in service
creation significantly impacts
organizational success, ensuring
CUSTOMERS AS needs are met and benefits are
PROPONENTS TO
achieved. Customer responses,
QUALITY SERVICE
such as raising questions and
expressing accountability,
contribute to quality service
delivery.
MAJOR PLAYED BY COSTOMER IN SERVICE
CO-CREATION AND DELIVERY
Organizations can hire
outsourced or in-house teams to
perform service tasks
CUSTOMERS
AS
independently, considering
COMPETITORS factors like expertise, resource
availability, timely production,
financial costs, psychological
rewards, and process control.
SELF-SERVICE
TECHNOLOGY (SST)
SELF-SERVICE TECHNOLOGY (SST)
Self-service technology (SST) enables
customers to create services without
employee involvement, enhancing customer
experience and cost control, leading to
increased operational performance and
reduced costs.
LIST OF SELF-SERVICE TECHNOLOGIES
1. Automated teller machines of banks
2. Automated and interactive voice response phone
systems
3. Airline reservation and check-in
4.Airport reception and information kiosks
5.Automated and online gambling or betting machines
6. Food ordering and delivery
7. Hotel reservation, check-in, and checkout
LIST OF SELF-SERVICE TECHNOLOGIES
8.Electronic blood pressure machines
9.Smart watches and gadgets monitoring health
conditions
10. Self-scanning (price scanner) at groceries and retail
stores
11. Internet banking
12. Package and money transfer tracking
13. Online shopping
14. Online training and education
15. Online applications
SST’s
ADVANTAGE
DISADVANTAGES
Less Cost
Convenienc
e
Advantage of Efficiency
Using SST’s
Control
Disadvantage Breakdowns
of Using SST’s
Poor Design
Limited
Options
Guest Involvement
and Customer
Participation
Guest Involvement and Customer
Participation
• Customer participation enhances organizational
productivity, service quality, satisfaction, and
competitiveness. Factors like return on
investment, service excellence, aesthetic value,
and playfulness significantly influence customer
participation.
Determine the
Role of the
Customer Service-oriented organizations should consider
customer participation in strategy formulation, as
different services require different levels of
involuement. For instance, food may require minimal
involvement, while airline tickets or hotel bookings
may require more involvement. Organizations
01 determine customer participation in service delivery
and can adjust it to enhance co-creation effectiveness.
The organization can outline customer participation
levels and roles, with customers often providing
previously performed information or resources.
3 levels of customer participation
1. Low
2. Medium
3. High
Determine the
Role of the
After the level of participation of customer has been
Customer determined, the Organization may outline the tasks
and roles of the customers.
The most common task performed by customers is to
provide information or resources formerly performed
by employees. Customers perform tasks in the
02 organization not only for themselves, but also for
other customers. These tasks happen when fellow
customers help out or assist others who are not yet
familiar with the system. New clubhouse members
are oriented by experienced members, while theme
park customers share experiences, enhancing
satisfaction and loyalty. Customers also perform
promotional activities, sharing recommendations and
reviews, and seeking referrals or word-of-mouth
endorsements to make decisions in restaurants,
Find, Inform, and Reward the
Right Customers
The customers would be considered as partial
employees of the organization, and at some
point, the organization must come up with
strategies to make their efforts worthwhile.
Find, Inform, and Reward the Right
Customers
• First, the • Second, • And finally,
organization customers customers
must be able need to be would perform
to attract the informed or tasks
right educated so effectively
customers to that they and actively if
perform their they are
fill the roles.
rewarded for
roles properly
Manag
e The
Customer
Segment
Manage the
Customer Segment
These segments have
different types of needs and
characters.
Supermarket and groceries
answer to shoppers of
different types;
• some are buying for personal
consumption;
• others are for families;
• and some for groups or
-- With these, checkout counters are
establishments
provided for small quantity shoppers,
separate from the bulk buyers to avoid long
queues for both types of customers and
avoid long waiting time for express
shoppers.
Compatibili
ty Management
• it is the Process of managing the encounters or
interactions and space requirements of several market
segments in order to maintain customer satisfaction and
avoid customer flight'
• An organization can target Particular groups of customers
by positioning itself and segmenting the Particular group
of customers' another strategy is to group together
compatible market segments in order to avoid conflict
Compatibili
ty Management
• Some hotels target corporate functions and business people
events in one place and separate the areas for functions that
include banquets or Parties'
• Some organizations may opt to impose Proper customer
decorum such as dress code or code of conducts to minimize
customer dissent'
• Lastly, organizations may deploy employees that are trained
to observe customer interactions and anticipate potential
