ajm v 2 2 2017 - amity university 6.pdf · of empirical support for service dominant logic, the...

Volume 2 Issue 2 2017AJM

98 Amity Journal of MarketingADMAA

IntroductionIn today’s highly competitive business world, the customers focus on their end to end

encounter with a particular brand (Rawson et al, 2013). The purchase decisions of customers today have become service quality dominated. In order to keep pace with demands of customers, organisations have to focus on high quality service delivery (Taylor et al, 1994). Also, service dominant orientation immensely benefits the firms in the long run because of its performance outcomes. Service dominant orientation positively impacts all spheres of performance outcomes for a firm including financial, market performance and customer related performance. The benefits of customer related performance are encashed in the form of higher satisfaction levels, commitment and loyalty, trust, positive word of mouth and hence positive impact on repurchase

Amity Journal of Marketing2 (2), (98–107)

©2017 ADMAA

Factor Psychoanalysis on Service Dominant Orientation of Two Wheeler Industry in India: An Empirical Study

Agrim Verma & Monica BediPanjab University, Chandigarh, India

AbstractService dominant orientation has witnessed significant theoretical turns over the years. Due to rising

competition in business landscape, the role of service dominant orientation has increased manifold. The roots of value co-creation lie in service dominant orientation where the customer acts as the value co-creator. The study aimed to measure service dominant orientation in two wheeler industry in India, to analyse the factors contributing to service dominant orientation in two wheeler industry in India and to study the perception about service dominant orientation in two wheeler industry across gender. The study was descriptive in nature and service dominant orientation scale was used which includes six distinct dimensions, namely, relational interaction, ethical interaction, individuated interaction, empowered interaction, concerted interaction and developmental interaction. The tests used for analysis include factor analysis and independent t test. The results indicated that service dominant orientation has a quintessential role in enhancing economic exchange process and also helps a business firm to ensure continued relations with the customers. The fundamental premises of service dominant orientation are also in synchronisation with relationship marketing. Considering the ever evolving and dynamic nature of two wheeler industry in India, service dominant orientation acts as a source of competitive advantage.

Keywords: Service Dominant Orientation, Value Co-Creation, Service Dominant Logic, Two Wheeler Industry, IndiaJEL Classification: L99, M39Paper Classification: Research Paper

Volume 2 Issue 2 2017 AJM

99Amity Journal of Marketing ADMAA

intentions (Karpen et al, 2012). Adopting service dominant orientation has strategic implications because customers act as partners in the process of value co-creation with a firm by directly utilising firm resources in the shape of employees, firm interface, products and services offered, websites (Vargo et al, 2004). The traditional goods dominant logic of economic exchange focused on manufacturing and distribution activities only with not much value accorded to the intangible component of services. But lately, there have been transitional changes in this approach. The goods dominant logic was taken over by service dominant logic. The service dominant logic focused on the concept of creating experiences as compared to goods dominant logic which only considered the concept of products. Further, the goods dominant logic emphasises on features/attributes of a product whereas the service dominant logic works on providing a solution to the customers’ needs and requirements. The present focus has shifted from value added concept offered by goods dominant logic to the co-creation of value concept as explained by service dominant logic. In line with these contrasts, service dominant orientation is a concept of value proposition whereas goods dominant logic is a concept of price (Lusch et al, 2006).With the adoption of service dominant logic, the degree of exchange has moved from transactional to relational (Lusch et al, 2008). There is heavy reliance of goods dominant logic on operand resources. The terms operand resources refers to those resources which are tangible by nature and need help of other resources to be acted upon in order to convert them into their most useful form. Whereas, service dominant logic is based on operant resources. Operant resources are those resources which are often intangible by nature and can be used for acting upon operand resources to convert them for value creation purposes (Lusch, 2008), (Vargo et al, 2010). But, due to lack of empirical support for service dominant logic, the service dominant orientation construct was conceptualised (Karpen et al, 2015). In short, old ways of marketing subsequently die and make way for new means for economic exchanges to happen. Thus, application of service dominant logic is challenging but essential in today’s highly turbulent and competitive business landscape.

The automobile industry is a very vibrant sector in India. The automotive industry which includes commercial vehicles, passenger vehicles, three wheelers, two wheelers and automotive components is a crucial sector for the growth of Indian economy due to its immense contribution. The automotive industry accounts for 7.1% portion of India’s GDP, 27% share of India’s industrial GDP, 4.3% share of total exports, 13% portion of excise revenues and marginal employment generation in excess of 19 million since financial year 2006 (Ministry of Heavy Industries and Public Enterprises, 2016). The two wheeler industry in India has shown a compound annual growth rate of 10.5% during the Automotive Mission Plan (AMP) 2006-16 (Ministry of Heavy Industries and Public Enterprises, 2016). Over the past few years, India has also emerged as the most preferred location for manufacturing of vehicles and other automotive components. India is the second largest country in terms of manufacturing output as per global rankings (Automotive Mission Plan, 2016). AMP 2026 aims to drive Make in India campaign and Skill India programme (Automotive Mission Plan, 2016). Moreover, according to the domestic market share statistics of 2015-16, the auto industry is largely composed of two wheeler segment with 80% share followed by passenger vehicles segment with 14% share, commercial vehicles segment and three wheelers segment with 3% share each. Today, India happens to be the second largest manufacturer of two-wheeler, the largest manufacturer of motorcycles and the fifth largest manufacturer of commercial vehicles in the world. The production of two wheeler vehicles is expected to be at 50.6 million units annually by 2026 and in future, India will make it to the spot of being the third largest automotive market in the world in terms of volume by 2026 (Make in India, 2014). The two wheeler industry is continuously expanding with rising domestic demand. The demand for two wheelers from rural areas and tier III cities could provide an impetus to industry in future.



Conceptual Framework The traditional model of marketing was based on goods dominant logic of value creation

which only focused on production of units (Lusch et al., 2008). As a result, the value of services was generally ignored. Recently, there has been a dominance of service dominant logic in the marketing world. The service dominant logic refers to a perspective which regards service as the underlying and fundamental basis for effecting economic exchange and enabling value co creation practices. Progressing with these views, the literature on marketing has lately witnessed a shift in perspective from service dominant logic to service dominant orientation. According to this orientation, there is a specific emphasis on understanding and learning the needs of customers better and then devising products and services and thereby, outperforming competitors in the process. This also enables higher levels of customer satisfaction and higher value addition (Sinkula et al., 1997). The focus of service dominant logic with respect to economic exchange is on “value in use” and not only on “value in exchange”. The concept of “value in use” emphasises on value being co-created with customers, rather than manufactured and then distributed by the sellers (Vargo et al., 2010). This iterates the increasing importance of services in our economic exchange systems. The marketing literature has picked a focus on exchange of goods as the means for effecting a transaction from the field of Economics. The focus then was on exchange of tangible goods and resources holding a certain value. Over a stretch of time, new perspectives emerged and the focus was shifted towards a focus on intangible resources, creating value with customers and building continued relationships for the long run. This slowly became the logic dominating the field of marketing. The emphasis was thus on provision of service along with an exchange of tangible resources (Vargo et al., 2004). Further, Vargo et a.l, 2008 in their study have introduced the modifications and additions in service dominant logic. The modifications added to the existing literature and termed the customer as a co-creator of value and not just a co-producer implying that value creation practices are interactional. The relevance of customer orientation is grounded in the concept of service dominant orientation which in today’s date is the new dominant logic in marketing. According to (Lusch et al., 2006), the definition of the term ‘service’ includes the use of specialised skills and knowledge applied in the form of deeds, processes, and performances in order to benefit both, another entity and itself. The service dominant orientation also suggests that “producing” should be transformed to “resourcing”. Resourcing refers to the process of creating value through collaboration and includes every party involved in the value creation network.

Objectives of the StudyFollowing are the research objectives of study:

1) To measure service dominant orientation in two wheeler industry in India.2) To analyse the factors contributing to service dominant orientation in two wheeler

industry in India.3) To study the perception about service dominant orientation across gender in two wheeler

industry in India.

Research MethodologyThe research study was descriptive in nature and includes a survey of two wheeler

vehicle drivers. Convenience sampling was used for the collection of data from a sample of 77 respondents. A questionnaire was designed for the survey and the level of agreement of respondents was measured on 5 point Likert scale .Service dominant orientation was measured using a scale validated and developed by (Ingo O. Karpen L. L., 2015) called “service dominant



orientation”. The scale comprises of 24 items. The scale is composed of six dimensions, namely, relational interaction, ethical interaction, individuated interaction, empowered interaction, concerted interaction and developmental interaction. In this study (Karpen et al., 2015), the authors have applied the service dominant orientation scale to the automobile industry. But, keeping in mind that the context of scale is industry and country specific by nature, the scale was adapted from the given scale and applied to two wheeler industry in India. The concept of service dominant orientation was first introduced by Karpen et al., 2012 in order to enable organisations to co create value with customers and other partners involved in the process of exchange. Demographic information including gender, age, marital status, monthly household income, educational qualification and profession were also collected. Factor analysis and independent t test were used to analyse data. Analysis was performed using SPSS version 20.

Results and DiscussionThis section is divided into four parts which include the profile of respondents, factor analysis,

descriptive statistics of sample, and independent t test.

Profile of sampleTable 1 represents the profile of respondents who had participated in the research study. In

terms of gender, the sample was a fair representation as 57.1% of the sample constituted male respondents and 42.9% of the sample constituted female respondents. 92.2% of the sample size belongs to the age group of 16 to 29 years indicating that it is a youth dominated sample as two wheeler vehicles are a preferred choice of the youth in the country. Almost half of the sample belongs to the monthly income group of more than Rupees 40000. 94.8% of the sample is unmarried and only 5.2% of the sample is married because of the reason that it is a youth dominated sample. The sample mix shows that 41.55% of the sample includes post graduates, 26% graduates and 32.5% high school pass outs. In terms of the profession, the sample constitutes 76.6% students because of the reason of it being a youth dominated sample.

Table 1: Profile of respondents

Particulars n %

Gender Male 44 57.10Female 33 42.90

Age (In years) 16 to 29 71 92.2030 to 49 6 7.79

Monthly Income (In Rupees) Less than 20000 9 11.6820001 to 30000 13 16.9030001 to 40000 16 20.80More than 40000 39 50.60

Marital status Unmarried 73 94.80Married 4 5.20

Educational qualification Class XII 25 32.50Graduate 20 26.00Post Graduate 32 41.55

Profession Service 11 14.30Business and Profession 7 9.09Student 59 76.60



Research Objective 1: To measure service dominant orientation in two wheeler industry in India

Table 2 depicts the descriptive statistics of the sample including mean and standard deviation (S.D.) values of the observed dimensions of service dominant orientation. The descriptive statistics show the pattern of score distribution. The statistics show that the mean value for service dominant orientation construct is 83.3 with a standard deviation of 11.86. In terms of the various dimensions of service dominant orientation, relational interaction has the highest mean value of 14.75 with standard deviation of 2.509 followed by concerted interaction with a mean value of 14.3 and standard deviation of 2.641.

Research Objective 2: To analyse the factors contributing to service dominant orientation in two wheeler industry in India

The next portion of analysis presents the results of factor analysis. Factor analysis was used for reducing the number of variables of service dominant orientation scale. The results are as follows. The measure, Kaiser-Meyer-Olkin measure of sampling adequacy is 0.721 which means that value is high which shows that it gives a better fit for the results. Factor analysis can be applied on the study. Thus, the data was found to be useful for factor analysis. This was confirmed further by the significance of the Bartlett’s Test of Sphericity tests (2 = 725.204, df = 276, sig. = 0.00) indicating that the items were not unrelated and therefore suitable for factor analysis. The results also show that seven factors have been extracted from service dominant orientation scale and explains 68.285% of variance. Therefore, seven factors have been extracted. In short, seven factors can be re-grouped as developmental interaction, ethical interaction, individuated interaction, empowered interaction, cohesive interaction, considerate interaction and privileged interaction.

Table 2: Results of factor analysis, descriptive statistics and Cronbach’s alpha

Sr. No.

Statements Dimension MeanStandard Deviation

Factor loadings

Cronbach’s alpha

1 This automobile dealership and its representatives make me feel at ease during our dealings (RI1)

Relational interaction

3.81 0.874 0.496

0.6462 This automobile dealership and its representatives

try to establish rapport with me (RI2) 3.66 0.94 0.579

3 This automobile dealership and its representatives encourage two-way communication with me (RI3) 3.65 0.855 0.474

4 This automobile dealership and its representatives show genuine interest in engaging me(RI4) 3.64 0.945 0.700

5 This automobile dealership and its representatives do not try to take advantage of me (ETI1)

Ethical interaction

3.14 1.2 0.785


do not pressurise me in any way (ETI2) 3.44 1.106 0.688

7 This automobile dealership and its representatives do not mislead me in any way (ETI3) 3.43 1.129 0.745

8 This automobile dealership and its representatives do not try to manipulate me (ETI4) 3.31 1.067 0.838

Continued...



9This automobile dealership and its representatives make an effort to understand my individual needs (II1)

Individuated interaction

3.64 0.945 0.733


are sensitive to my individual situation (II2) 3.32 0.865 0.771

11This automobile dealership and its representatives make an effort to find out what kind of offering is most helpful to me (II3)

3.65 0.885 0.636

12 This automobile dealership and its representatives seek to identify my personal expectations (II4) 3.55 0.882 0.720

13 This automobile dealership and its representatives invite me to provide ideas or suggestions (EMI1)

Empowered interaction

2.94 1.185 0.774

0.538

14 This automobile dealership and its representatives encourage me to shape the service I receive (EMI2) 3.31 1.029 0.726

15This automobile dealership and its representatives provide me with control over my experiences (EMI3)

3.13 0.75 0.836

16This automobile dealership and its representatives let me interact with them in my preferred way (EMI4)

3.69 0.892 0.491

17 This automobile dealership and its representatives work together seamlessly in serving to me (CI1)

Concerted interaction

3.62 0.795 0.594

0.697

18 This automobile dealership and its representatives act as one unit when dealing with me (CI2) 3.56 1.032 0.781

19This automobile dealership and its representatives provide messages to me that are consistent with each other (CI3)

3.52 0.837 0.515

20This automobile dealership and its representatives ensure they have smooth procedures for interacting with me (CI4)

3.6 0.907 0.525

21 This automobile dealership and its representatives share useful information with me (DI1)

Developmental interaction

3.6 1.067 0.807

0.849

22 This automobile dealership and its representatives help me become more knowledgeable (DI2) 3.35 0.957 0.830

23This automobile dealership and its representatives provide me with the advice I need to use their offerings successfully (DI3)

3.56 0.881 0.782

24 This automobile dealership and its representatives offer me expertise that I can learn from (DI4) 3.19 1.039 0.662

Reliability and Validity A measure or a scale is valid to the extent that it measures what it is intended to measure.

There are several different forms of validity which can serve as basis for assessing the psychometric soundness of a scale: face validity, content validity, convergent validity and discriminant validity. As the service dominant orientation construct has been identified from the literature, its selection and application for the study is justified which ensures the face validity of the instrument. Content validity is ensured when the items representing the construct of an instrument are substantiated by a comprehensive review of the relevant literature. Thus, both,



face and content validity are ensured. Convergent validity of an instrument is ensured due to high values of Cronbach’s alpha values as have been shown in Table 2. Thus, convergent validity is also ensured. Because perceived service dominant orientation in the two wheeler sector and the construct of perceived service dominant orientation in general are not sufficiently different, therefore, discriminant validity is ensured. The reliability of scale as measured by coefficient alpha reflects the degree of cohesiveness among the scale items and it therefore acts as an indirect indicator of convergent validity. The Cronbach’s alpha values for all six dimensions were found to be fairly high as is shown in Table 2.

Research objective 3: To study the perception about service dominant orientation across gender in two wheeler industry in India

Independent T-test was used to analyse the service dominant orientation perception across males and females. Table 3 shows the results of the analysis. Table 3 shows that the two samples, males and females for items RI1, RI3, RI4, ETI1, ETI3, II1, II3, II4, EMI2, DI1, DI2 and DI4 are statistically significantly different from each other across gender. Further, in case of ethical interaction, ETI1 and ETI3 respectively stating “This automobile dealership and its representatives do not try to take advantage of me” and “This automobile dealership and its representatives do not mislead me in any way” were found to be statistically significantly different from each other across gender. In terms of individuated interaction, II1, II3 and II4 respectively stating “This automobile dealership and its representatives make an effort to understand my individual needs”, “This automobile dealership and its representatives make an effort to find out what kind of offering is most helpful to me” and “This automobile dealership and its representatives seek to identify my personal expectations” were found to be statistically significantly different from each other across gender. In case of empowered interaction, only EMI2 stating “This automobile dealership and its representatives encourage me to shape the service I receive” was found to be statistically significantly different from each other across gender. In case of concerted interaction, none of the statements was found to be statistically significantly different from each other across gender. In terms of developmental interaction, DI1, DI3 and DI4 respectively stating “This automobile dealership and its representatives share useful information with me”, “This automobile dealership and its representatives provide me with the advice I need to use their offerings successfully” and “This automobile dealership and its representatives offer me expertise that I can learn from” were found to be statistically significantly different from each other across gender.

Table 3: Results of Independent t test

Items/Variables Mean (Male) Mean (Female) Mean difference t-value P value

Automobile dealership and its representatives make me feel at ease during our dealings (RI1) 3.57 4.12 -0.553 -2.876 0.005*

Automobile dealership and its representatives try to establish rapport with me (RI2) 3.55 3.82 -0.273 -1.26 0.212

Automobile dealership and its representatives encourage two-way communication with me (RI3)

3.48 3.88 -0.402 -2.048 0.045*

Automobile dealership and its representatives show genuine interest in engaging me(RI4) 3.39 3.97 -0.583 -2.800 0.007*

Automobile dealership and its representatives do not try to take advantage of me (ETI1) 2.84 3.55 -0.705 -2.718 0.008*



Automobile dealership and its representatives do not pressurise me in any way (ETI2) 3.32 3.61 -0.288 -1.132 0.261

Automobile dealership and its representatives do not mislead me in any way (ETI3) 3.11 3.85 -0.735 -2.968 0.004*

Automobile dealership and its representatives do not try to manipulate me (ETI4) 3.25 3.39 -0.144 -0.598 0.552

Automobile dealership and its representatives make an effort to understand my individual needs (II1)

3.43 3.91 -0.477 -2.252 0.027*

Automobile dealership and its representatives are sensitive to my individual situation (II2) 3.23 3.45 -0.227 -1.129 0.263

Automobile dealership and its representatives make an effort to find out what kind of offering is most helpful to me (II3)

3.36 4.03 -0.667 -3.406 0.001*

Automobile dealership and its representatives seek to identify my personal expectations (II4) 3.36 3.79 -0.424 -2.141 0.036*

Automobile dealership and its representatives invite me to provide ideas or suggestions (EMI1)

2.73 3.21 -0.485 -1.804 0.076

Automobile dealership and its representatives encourage me to shape the service I receive (EMI2)

3.05 3.67 -0.621 -2.846 0.006*

Automobile dealership and its representatives provide me with control over my experiences (EMI3)

3.14 3.12 0.015 0.086 0.931

Automobile dealership and its representatives let me interact with them in my preferred way (EMI4)

3.61 3.79 -0.174 -0.846 0.400

Automobile dealership and its representatives work together seamlessly in serving me (CI1) 3.61 3.64 -0.023 -0.127 0.899

Automobile dealership and its representatives act as one unit when dealing with me (CI2) 3.41 3.76 -0.348 -1.509 0.136

Automobile dealership and its representatives provide messages to me that are consistent with each other (CI3)

3.52 3.52 0.008 0.040 0.969

Automobile dealership and its representatives ensure they have smooth procedures for interacting with me (CI4)

3.45 3.79 -0.333 -1.665 0.100

Automobile dealership and its representatives share useful information with me (DI1) 3.32 3.97 -0.652 -2.765 0.007*

Automobile dealership and its representatives help me become more knowledgeable (DI2) 3.14 3.64 -0.500 -2.357 0.021*

Automobile dealership and its representatives provide me with the advice I need to use their offerings successfully (DI3)

3.41 3.76 -0.348 -1.799 0.076

Automobile dealership and its representatives offer me expertise that I can learn from (DI4) 2.91 3.58 -0.667 -2.961 0.004*

*Significant at 0.05 level



Conclusion

The field of services science has been ever evolving. Through these years of contribution of services science to marketing literature, the role of service dominant logic has immensely magnified. The two way interaction between buyer and seller acts as a means for creating value co-creation with the customers. The economic exchange process has now become skill oriented which demands the application of specialised skills and knowledge to effect a successful transaction. The service dominant logic also stresses that service centred approach implies customer oriented approach which has become imperative in today’s highly competitive business landscape. Keeping in mind the future high growth potential of two wheeler industry in India, the application of service dominant logic is essential to enhance the customer experience and also ensure continued relationship with the customer. Service as stated in literature is an interactive process of doing something for someone that is valued. Hence, in this context, service becomes the fundamental principle for economic exchange. The foundations of relationship marketing also lie in service marketing where the focus is on attracting, maintaining and enhancing customer relationships.

Limitations and Future ResearchThe research study has tried to apply the concept of service dominant orientation specifically

to the two wheeler industry in India. But some limitations warrant further research. First, there is a focus on customers only as the most important segment in the value chain so the responses of other partners in the value chain including suppliers, intermediaries and employees have not been included in this study. Secondly, the sample size of customers included in the study is small. So, future research in this area could include study being conducted across the country and with a higher sample size. Moreover, often, there are prejudices in the minds of customers in the form of subjective research, the effect of which cannot be nullified. Future research can also be conducted in service dominant orientation in the whole of automobile industry in the country.

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Authors’ Profile

Agrim Verma is Research Scholar, University Business School, Panjab University, Chandigarh, India. She is MBA (Marketing) from University Business School, Panjab University, Chandigarh, India. She is presently working as Guest Faculty at Goswami Ganesh Dutta S.D. College (GGDSD), Chandigarh, India. Her area of interest is consumer behaviour and strategic marketing management.

Monica Bedi, MBA, Ph.D, is working as Assistant Professsor at University Business School, Panjab University, Chandigarh, India. Her area of specialisation is Marketing and International Business. She has 15 years of experience in teaching and research. She has published papers in reputed international & national journals.

ajm v 2 2 2017 - amity university 6.pdf · of empirical support for service dominant logic, the...

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