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Customer satisfaction: review of

literature and application to the


product-service systems

Final report to the Society for Non-Traditional Technology,


Japan

Oksana Mont
Andrius Plepys

Research Associates
International Institute for Industrial Environmental Economics
at Lund University <http://www.iiiee.lu.se/>
P. O. Box 196 Tegnersplatsen 4
SE- 221 00 Lund Sweden
Phone: +46 46 222 0200
Fax: +46 46 222 0230
oksana.mont@iiiee.lu.se
andrius.plepys@iiiee.lu.se

Lund, February 28 2003

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Acknowledgments

The authors would like to thank the National Institute for Advanced Industrial Science
and Technology in Japan and the Ministry of Economy, Trade and Industry (METI) of
Japan for financially supporting this study and for useful comments on the drafts.

We would like to thank our supervisor, Prof. Thomas Lindhqvist for valuable
guidance and challenging comments.

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Executive summary
This feasibility study commissioned by the National Institute for Advanced Industrial Science
and Technology in Japan (AIST) and supported by the Sustainable Consumption Unit
(UNEP) provided an overview of approaches used in different disciplines for evaluating
consumer behaviour. The study analysed the applicability of existing research concepts,
theories, and tools for evaluating consumer satisfaction with product-service systems (PSS).
It included a discussion of their strengths/weaknesses.
BACKGROUND
It has been recognised that eco-efficiency improvements at production and product design
level can be significantly reduced or totally negated by rebound effect from increased
consumption levels. In line with this problem factor 10 to 20 material and energy efficiency
improvements have been suggested (Factor 10 Club 1994; Schmidt-Bleek 1996; Bolund,
Johansson et al. 1998; Ryan 1998). The improvements, however, if not carefully done, may
still lead to rebound effects through changes in resource prices.
As a potential solution to the factor 10/20 vision, system level improvements have to be
made, contrary to redesigning individual products or processes (Weterings and Opschoor
1992; Vergragt and Jansen 1993; von Weizsäcker, Lovins et al. 1997; Ryan 1998; Manzini
1999; Brezet, Bijma et al. 2001; Ehrenfeld and Brezet 2001).
The product service system (PSS) concept has been suggested as a way to contribute to this
system level improvement (Goedkoop, van Halen et al. 1999; Mont 2000). Here the
environmental impacts of products and associated services could be addressed already at the
product and service design stage. Special focus should be given to the use phase by providing
alternative system solutions to owning products.
A number of examples in the business-to-business (B2B) area exist that confirm the potential
of PSS for reducing life cycle environmental impact. It is, however, increasingly evident that
business examples are difficult to directly apply to the private consumer market. Private
consumers, contrary to businesses, prefer product ownership to service substitutes (Schrader
1996; Littig 1998). Even if accepted, the environmental impacts of “servicised products”
offers depend to a large extent on consumer behaviour.
To address this problem, either behavioural or service system design changes are needed.
Changing human behaviour and existing lifestyles contributes to the vision of sustainable
development, but at the same time, it is an extremely difficult and time-consuming process. A
potentially easier way is changing the design of the product-service system to reduce
behavioural pitfalls. In order to change system design, it is necessary to understand how
consumer acceptance of more sustainable solutions is formed, influenced or changed, what
are the influencing factors and what are the leverage points for best results with lowest costs.
Understanding consumer perceptions and behaviour in this context is crucial.
CONSUMER RESEARCH IN DIFFERENT DISCIPLINES
A considerable body of literature in a range of different discip lines exists on consumption,
consumer behaviour, and consumer decision- making process. Research in economics,
business, marketing, psychology and sociology domains studies consumer behaviour from
different theoretical premises: “for economists, consumption is used to produce utility; for
sociologists, it is a means of stratification; for anthropologists – a matter of ritual and symbol;

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for psychologists – the means to satisfy or express physiological and emotional needs; and for
business, it is a way of making money”(Fine 1997).
For more than a decade now, a range of studies that address environmentally sound consumer
behaviour, e.g. car use, waste sorting, minimisation and recycling practices, have been
conducted. However, few studies evaluated consumer acceptance of the PSS concept – a
consumption based on non-ownership of physical products, see, for example, studies on car
sharing schemes (Schrader 1999; Meijkamp 2000), ski rental and washing services (Hirschl,
Konrad et al. 2001).
One reason explaining the lack of studies in the area could be that, there are still not many
PSS schemes in place to serve as test grounds. Another reason could be uniformity of
research focus. Most of consumer research focused on adopter categories, habits, attitudes
and intentions, rather than on actually measuring the satisfaction level with the service. The
reason is probably that PSS ideas have been promoted by researchers from the environmental
management, marketing, design, and engineering fields, and to a lesser extent by sociologists,
who hold the banner of research in customer satisfaction.
CONSUMER SATISFACTION PROCESS
The paramount goal of marketing is to understand the consumer and to influence buying
behaviour. One of the main perspectives of the consume r behaviour research analyses buying
behaviour from the so-called “information processing perspective" (Holbrook and Hirschman
1982). According to the model, customer decision-making process comprises a need-
satisfying behaviour and a wide range of motivating and influencing factors. The process can
be depicted in the following steps (Engel, Blackwell et al. 1995):
• Need recognition – realisation of the difference between desired situation and the current
situation that serves as a trigger for the entire consumption process.
• Search for information - search for data relevant for the purchasing decision, both from
internal sources (one's memory) and/or external sources.
• Pre-purchase alternative evaluation - assessment of available choices that can fulfil the
realised need by evaluating benefits they may deliver and reduction of the number of
options to the one (or several) preferred.
• Purchase - acquirement of the chosen option of product or service.
• Consumption - utilisation of the procured option.
• Post-purchase alternative re-evaluation - assessment of whether or not and to what degree
the consumption of the alternative produced satisfaction.
• Divestment - disposal of the unconsumed product or its remnants.
Besides the information processing perspective, marketing analyses consumer behaviour by
employing a psychologically grounded concept of attitudes (Balderjahn 1988; Ronis, Yates et
al. 1989; Luzar and Cosse 1998). It is consumer attitudes that are usually named as the major
factor in shaping consumer behaviour and a wealth of studies is available on the topic of how
attitudes can predict behaviour.
INTER -DISCIPLINARITY OF CONSUMER RESEARCH
Different research disciplines diverge in their presuppositions about human nature, factors
influencing consumer behaviour, market response, etc. Therefore, they naturally employ
different research approaches. However, despite that seemingly insurmountable abyss
between disciplines, we see that many research topics and methods overlap, and that there is

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no clear-cut line between different domains of consumer research. Many consumption-related
issues are being increasingly addressed from interdisciplinary or multidisciplinary
perspectives.
Many interdisciplinary concepts and factors are of interest for research on consumer
satisfaction with eco-efficient services and PSS. Contrary to the suggestions from many
traditional neoclassical theories, consumption patterns are very flexible and prone to various
influences. Today consumer behaviour is increasingly dynamic as the choice of alternatives
increases with the growth of global markets. The complexity of the decision- making process
and a large number of influencing factors suggest that changing consumer behaviour towards
more sustainable consumption is a challenging process, which requires coordination at
individual and societal level.
The area of PSS and eco-efficient services is still developing. Further efforts are required in
order to understand relations between the functional and emotional needs of customers.
DIFFERENT LEVELS OF COMPLEXITY
When evaluating satisfaction with a product, customers initially assess tangible features of
the product. In the service context, the features, though observable, are considerably less
tangible and are thus more difficult to assess. A product service system comprises four
components (products, services, infrastructures, and networks), rendering the evaluation
process of consumer satisfaction even more complex (Mont 2000). Here the part of the
system, with which the customer comes into direct contact, is larger than in the case of a pure
product or service, which has implications for customer evaluation process. In the case of
PSS or eco-services, customers are exposed to both dimensions: product and service. In
addition, due to closer relations with the service provider, customers can even become
exposed to infrastructure and networks that support PSS delivery. Therefore, in the PSS
context, an evaluation of all four PSS components becomes relevant:
• Product evaluation is conducted by assessment of products or technologies.
• Person-based or other types of services (technical, information and knowledge services)
that are included into PSS may be evaluated.
• Infrastructure can be evaluated when the customer comes into contact with enabling
supporting technology, or by evaluation of ambient conditions, spatial layout or by
evaluating signs and artefacts of the PSS.
• Networks, are not usually exposed to the customer, but in some cases may be evaluated
when they come into contact with customers.
RESEARCH FRAMEWORKS AND METHODS
A great variety of methods and frameworks for understanding and evaluating consumer
acceptance and satisfaction are used in different disciplines. The study has discussed the
following frameworks: Kano model of customer satisfaction, the Innovation diffusion of
Rogers, the service quality model of Grönsroos, and SERVQUAL model by Parasuraman.
The study has also surveyed a range of tools used for evaluating and measuring consumer
satisfaction. These included surveys, in-depth interviews, focus group interviews,
observations, mystery shopping, and psychographic portrait of customers. A number of
drawbacks and benefits pertaining to the tools have been pointed out and discussed. Both the
research models and the tools, while diverse to a different extent, were found to be useful for
application in the PSS research area.
CONCLUSIONS

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The environmental impacts of ever increasing consumption throughout the world have been
recently recognised. Many solutions have been proposed to combat the rising levels of
consumption. One of the concepts suggested as a potential solution to reduce consumption
levels is the concept of product-service systems (PSS).
The concept proved to be viable in the business-to-business context. However, in the private
consumer markets, it has been less successful, both in terms of economic viability and
environmental impact reduction. User behaviour has been named as the primary reason for
this situation.
To address this problem, either behavioural or service system design changes are needed.
Changing human behaviour and existing lifestyles contribute to the vision of sustainable
development, but it proves to be an insurmountable task over a short period of time.
Alternatively, changing the design of product-service system to reduce the behavioural
pitfalls could be a potentially easier way towards sustainable development. Changing system
design requires understanding how consumer acceptance of more sustainable solutions is
formed, influenced or changed, what are the influencing factors and what are the leverage
points for the best results with lowest costs. Understanding consumer perceptions and
behaviour in this context is crucial.
However, the consumer decision-making process is much more complex and intricate than
just a simple decision about shifting from owning a product towards paying per use of it.
Throughout this study we demonstrated that products are not seen purely for their functional
features, but rather products are complex combinations of various attributes, which, together
with functionality, also bring status, serve as a key to a certain social class, reinforce self-
esteem, and much- much more.
Therefore, the goal of this study was to take a step towards a better understanding of the
complexity of the phenomena we are aiming to change. We did that by looking at how
different disciplines perceive the consumption process in general and the consumer decision-
making process in particular. We saw the wealth of theories and frameworks being developed
trying to solve this puzzle. We then looked closer at the potentially most promising models,
which could prove useful in understanding the consumer decision- making process in the
context of ownerless consumption.
We also found some useful tools, which can be employed for collecting information about
and from consumers. Ident ified frameworks and tools were then evaluated for suitability in
the PSS context. We also provided some suggestions and examples for how several presented
models could be operationalised in the PSS context.
Some important lessons were learned from this study:
• The consumer is a moody creature – swinging between rationality and emotional
behaviour.
• All disciplines we looked at addressed consumption from some perspective. This
perspective may be unique to this discipline, or may share common premises with other
disciplines. Cross- fertilisation and learning is the key to success.
• The challenge is not in the availability of analysis tools, but in analysis frameworks,
which would allow us to speak the same language as our system and understand it better.
• We can probably employ just one tool to measure customer satisfaction with our system.
But it is multifaceted and thus a combination of tools is more promising.

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• PSS is a system, comprised of products, services, infrastructures, and networks. The
criteria we want to evaluate this system against should include attributes of each
dimension.
• PSS is a multi-disciplinary area and initiating system level change will require system
level effort. Researchers with various backgrounds need to be involved in developing
ideas and methods for measuring customer satisfaction with PSS. “Non-social” PSS
practitioners should learn methods of social sciences.

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Table of content
EXECUTIVE SUMMARY .....................................................................................................3
1 BACKGROUND..............................................................................................................10
2 METHODOLOGICAL FRAMEWORK AND GOAL OF THE STUDY.................12
2.1 GOAL...........................................................................................................................12
2.2 METHODOLOGY ...........................................................................................................12
2.3 LIMITATIONS ...............................................................................................................12
2.4 OUTLINE OF THE REPORT .............................................................................................13
3 CONSUMER RESEARCH IN DIFFERENT DISCIPLINES ....................................14
3.1 BUSINESS AND MARKETING DOMAIN............................................................................14
3.2 ECONOMICS DOMAIN ...................................................................................................19
3.3 SOCIAL STUDIES DOMAIN .............................................................................................21
3.4 PSYCHOLOGY DOMAIN.................................................................................................22
3.5 ENVIRONMENTAL STUDIES ...........................................................................................24
4 FRAMEWORKS AND TOOLS FOR EVALUATING CUSTOMER
SATISFACTION.............................................................................................................27
4.1 FRAMEWORKS FOR EVALUATING CUSTOMER SATISFACTION WITH PRODUCTS .............27
4.1.1 Kano Model of Customer Satisfaction .................................................................27
4.1.2 Innovation framework..........................................................................................28
4.2 FRAMEWORKS FOR EVALUATING CUSTOMER SATISFACTION WITH SERVICES ...............29
4.2.1 Why measure services with different measures? .................................................29
4.2.2 Service Quality Model..........................................................................................30
4.2.3 The SERVQUAL model ........................................................................................31
4.3 TOOLBOX FOR MEASURING CUSTOMER SATISFACTION .................................................32
4.3.1 Surveys .................................................................................................................33
4.3.2 In-depth interviews...............................................................................................34
4.3.3 Focus group interviews........................................................................................35
4.3.4 Observations ........................................................................................................35
4.3.5 Mystery shopping .................................................................................................36
4.3.6 Psychographic portrait of customers...................................................................36
5 ANALYSIS OF FRAMEWORKS AND THEIR APPLICABILITY FOR PSS .......38
5.1 USEFULNESS OF FRAMEWORKS FOR PSS......................................................................38
5.1.1 Marketing model for creating customer satisfaction...........................................38
5.1.2 Kano Model of Customer Satisfaction .................................................................39
5.1.3 Innovation framework of Rogers .........................................................................40
5.1.4 Service Quality Model..........................................................................................40
5.1.5 SERQUAL model..................................................................................................41
5.2 TOWARDS A FRAMEWORK FOR EVALUATING CUSTOMER SATISFACTION WITH PSS......41
5.2.1 Identifying PSS attributes ....................................................................................42
5.2.2 What tools to use for evaluating PSS?.................................................................45
6 CONCLUSIONS..............................................................................................................47
7 SUGGESTIONS FOR FURTHER WORK ..................................................................49
8 APPENDIX ......................................................................................................................51
9 REFERENCES ................................................................................................................52

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List of abbreviations

B2B Business-to-business
B2C Business-to-customer
PSS Product-service system
TRA Theory of Reasoned Action
TPB Theory of Planned Behaviour
SERVQUAL Service Quality model
QFD Quality Function Deployment

List of Figures
Figure 1 Three levels of approaches for evaluating consumer acceptance of products...........12
Figure 2 Disciplines that study consumption and consumer behaviour ..................................14
Figure 3 Customer satisfaction process (adopted from (Engel, Blackwell et al. 1995), p. 143-
154, 177) ..........................................................................................................................15
Figure 4 The hierarchy of effects models ................................................................................18
Figure 5 The Kano model (Kano, Seraku et al. 1996) .............................................................27
Figure 6 Adopter categorisation on the basis of relative time of adoption of innovations
(Rogers 1995)...................................................................................................................29
Figure 7 The Service Quality Model (Grönroos 1982)............................................................30
Figure 8 The Total Perceived Quality (Grönroos 1988)..........................................................31
Figure 9 Service Quality model (Parasuraman, Berry et al. 1985)..........................................32
Figure 10 Different data collection methods for different type of attributes (Edvardsson,
Gustafsson et al. 2000).....................................................................................................40
Figure 11 PSS dimensions that can be exposed to customer judgement .................................43
Figure 12 Service Attribute Dual Importance Grid (Jacobs 1999) ..........................................46

List of Tables
Table 1 Some attributes for tool library...................................................................................44
Table 2 Customer satisfaction measures for new products in financial services (Edgett and
Snow 1997) ......................................................................................................................51

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A dissatisfied customer will tell seven to 20 people about their
negative experience. A satisfied customer will only tell three
to five people about their positive experience (Kan 1995).

1 Background
It has been recognised that eco-efficiency improvements at production and product design
level can be significantly reduced by ever increasing consumption levels (Khazzoom 1980),
(Brookes 2000; Binswanger 2001; Haake and Jolivet 2001; OCSC 2001). While companies
are struggling to reduce material intensity of each production unit and each product, the total
environmental impact of the economy is growing. In order to address this problem, some
authors suggest that for long-term sustainability, we need a factor of 10 or even 20 in
materials and energy efficiency use improvements (Factor 10 Club 1994; Schmidt-Bleek
1996; Bolund, Johansson et al. 1998; Ryan 1998). As a potentia l solution to the factor 10/20
vision, some authors propose that system level improvements have to be made, instead of
just having products redesigned (Weterings and Opschoor 1992; Vergragt and Jansen 1993;
von Weizsäcker, Lovins et al. 1997; Ryan 1998; Manzini 1999; Brezet, Bijma et al. 2001;
Ehrenfeld and Brezet 2001).
Sustainable consumption has been highlighted as an important constituent of sustainable
development in Rio de Janeiro, 1992 at the United Nation Conference for Environment and
Development and by the World Summit on Sustainable Development in Johannesburg, ten
years later in 2002. One of the generally accepted definitions of sustainable consumption is
the following: “sustainable consumption is the use of goods and services that satisfy basic
needs and improve quality of life while minimizing the usage of irreplaceable natural
resources and the by-products of toxic materials, waste, and pollution” (Sierra Club 2002). It
highlights the need to provide value to people, while reducing the environmental impact
associated with producing and delivering this value. In other words, there is a need to de- link
consumption of goods and services from material consumption. Many authors call for
simplifying lifestyles and reducing consumption, associating the management of consumption
with the so-called sufficiency revolution1 , which considers how much is enough for a good
life. Our comprehension of this approach is still in its initial stage (Sachs 1999), but what is
clear already is that it is a challenging task to reduce consumption levels, as the entire
economic system is based on presumption of economic growth linked to the increased use of
material resources and products. What is needed instead is consumption that is based on
economic growth, which is decoupled from material resources. We propose the fo llowing
definition of sustainable consumption: sustainable consumption is consumption that provides
value by decoupling material-based growth from economic growth and environmental
impact. Following this definition, more value needs to be provided with fewer materials
involved and less environmental impact associated with the production and total delivery of
that value.
The product service system (PSS) concept has been suggested as a way to contribute to the
system level improvement that tries to de- link economic and environmental growth
(Goedkoop, van Halen et al. 1999; Mont 2000). The concept proposes that the environmental

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Sufficiency solutions refer to organising activities in more intelligent ways, in which the need for product is
eliminated (see Heiskanen, Eva and Mikko Jalas. (2000) Dematerialization Through Services - A Review and
Evaluation of the Debate. Ministry of Environment: Helsinki, no. 436, p. 12)

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impacts of products and associated services should be addressed already at the product and
service design stage, with special focus on the use phase by providing alternative system
solutions to owning products.
A number of examples (mainly from the business-to-business area) exist that confirm the
potential of PSS for reducing life cycle environmental impact. It is, however, increasingly
evident that these examples are difficult to directly apply to the market of private consumers,
mainly because business customers often prefer services to product ownership (Alexander
1997), while according to some studies it is a formidable challenge for private customers to
adopt “ownerless consumption” (Schrader 1996; Littig 1998). In addition, the environmental
impacts of such offers depend to a large extent on user behaviour. To address this problem,
changes are needed in consumption behaviour; consumption patterns and levels; and
ultimately a change in lifestyles towards more sustainable patterns. Many authors recognise
that “the health of our planet is inextricably dependent upon human behaviour” (Geller 1995),
and therefore changing human behaviour may foster and maintain sustainability (Gudgion
and Thomas 1991; McKenzie-Mohr, Nemiroff et al. 1995; Oskamp 2000). An increasing
number of studies have been conducted in search for instruments that can potentially help
facilitate the shift toward more sustainable patterns of consumption, e.g., (Goodwin,
Ackerman et al. 1997); (OECD 1997); (Stern, Dietz et al. 1997); (Thøgersen and Ölander
2002).
In order to initiate the change process, it is necessary to understand how consumer acceptance
of more sustainable solutions is formed, influenced, or changed, what the influencing factors
are and what the leverage points for best results with lowest costs are. A considerable body of
literature exists on consumption, consumer behaviour, and consumer decision-making
process. The range of disciplines that address these questions from different points of view is
quite broad - economics, business and marketing, social, and psychological studies of
consumer behaviour, to name just the major ones. According to Fine (1997), “for economists,
consumption is used to produce utility; for sociologists, it is a means of stratification; for
anthropologists, it is a matter of ritual and symbol; for psychologists, it is the means by which
to satisfy or express physiological and emotional needs; and for business, it is a way of
making money”(Fine 1997).
There is a range of studies that address consumer acceptance and attitudes towards more
environmentally sound consumer behaviour, mostly coming from studies of car use, waste
sorting and minimisation practices, recycling and other similar industries, see for example
Steg, et al (1995), Aragón-Correa and Llorens-Montes (1996), and Guerin (2001) (Steg, Vlek
et al. 1995; Aragón-Correa and Llorens-Montes 1996; Guerin 2001). For more than a decade
now, this wealth of literature has also been applied to studies of consumer acceptance of
environmentally sound products and services, e.g. Gatersleben (2001) and Rowlands, et al
(2002) (Gatersleben 2001), (Rowlands, Parker et al. 2002).
However, very few studies evaluated consumer acceptance of the concept of product service
systems, i.e. consumption that is not based on ownership of goods, see, for example, studies
that investigated consumer acceptance of car sharing schemes (Schrader 1999; Meijkamp
2000), ski rental and washing services (Hirschl, Konrad et al. 2001). The lack of studies that
measure customer acceptance of PSS depends on two main reasons. First, there are still not
many PSS schemes being developed that could serve as test grounds. Second, some of the
research that studied consumer acceptance, focused on adopter categories, habits, attitudes
and intentions, rather than on actually measuring the satisfaction level with the service. The
reason is probably that eco-services and PSS ideas have been promoted by environmental

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management researchers, engineers and designers, environmental marketing researchers, and
to a lesser extent by sociologists, who hold the banner of research in customer satisfaction.
This report is a result of the feasibility study that is a part of the project on Life-Cycle
Approach to Sustainable Consumption, initiated and funded by the National Institute for
Advanced Industrial Science and Technology in Japan (AIST) and supported by UNEP,
Sustainable Consumption Unit.

2 Methodological framework and goal of the study

2.1 Goal
The goal of the study is to provide ideas and suggestions for how customer satisfaction with
PSS can be evaluated. This goal will be reached in a number of steps. We will first provide an
overview of existing concepts and schools of thought from different disciplines that try to
explain consumer behaviour and consumption patterns. The overview will be followed by the
presentation of frameworks and tools that are used for understanding consumer satisfaction
with products and services. These frameworks will then be evaluated as to whether they
could be used for estimating customer satisfaction with PSSs and what kinds of adjustments
are necessary. Some elaboration on how these tools could be used in the PSS context will be
provided. The study results should be treated as indicative for future more in-depth studies in
proposed areas.

2.2 Methodology
Based on the presented perspectives that are of importance for understanding and evaluating
consumer behaviour, the following framework for this study is suggested.

Attitudes
Disciplines Behaviours Methods
Acceptance Techniques

Figure 1 Three levels of approaches for evaluating consumer acceptance of products

This feasibility study is a desk-top study that includes analysis of academic journals with the
use of several databases ELIN, Lovisa, Science Direct, Emerald, ABI Inform available at
Lund University and through national Swedish library database LIBRIS. A number of
interviews with experts in academic circles and in European and Swedish research
institutions were conducted with regard to the questions about consumer behaviour and
consumer acceptance of eco-efficient services and latest updates in the PSS area.

2.3 Limitations
The study is limited by time and no deep analysis of consumer behaviour from a specific
discipline point of view has been performed, as the goal of the study is to evaluate
applicability of the most often used methods for understanding and measuring consumer
acceptance and satisfaction.
No sensory and taste ratings and preferences that do not directly translate into the purchase,
consumption, or market success of a product were included into this study.

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The overview of tools for measuring customer satisfaction excluded practical advice on how
to develop these tools and how to analyse collected data, due to the general nature of these
tools and availability of sources, which can provide help in these respects.

2.4 Outline of the report


An overview of the sections of the report is presented below.
Section 1 provides the background and the rationale for engaging in the research of consumer
behaviour. Section 2 provides the methodological framework for carrying out the study.
Section 3 provides an overview of some concepts and theoretical groundings from different
disciplines that study consumer behaviour, such as economics, business and marketing
studies, social studies, psychological research, and the environmental field. The section
identified differences in studying consumer behaviour and consumption. It also highlights the
linkages between the disciplines in their approach towards understanding consumer related
decision- making processes and draws attention to the relevant current contributions to the
discussion from each discipline.
Section 4 provides an overview of the major frameworks and techniques for understanding
and evaluating consumer acceptance and satisfaction, which are used in many different
disciplines. The described frameworks are Kano Model of Customer Satisfaction, Innovation
framework of Rogers, Service Quality Model of Grönsroos, and SERVQUAL model by
Parasuraman. The specific tools for evaluating and measuring consumer satisfaction include
surveys, in-depth interviews, focus group interviews, observations, mystery shopping, and
psychographic portrait of customers.
Section 5 analyses presented frameworks and tools for their usefulness for the area of eco-
efficient services and PSS. Some suggestions are provided as to how to choose the salient
attributes on offer, how to blueprint the service process and provides some hints on how to
evaluate customer satisfaction by operationalising the Kano Model of Customer Satisfaction.
A relevant example of tool library service attributes is presented. The section discusses
whether new tools are needed for evaluating the acceptance of PSS or what kind of
adjustments need to be done to suit existing techniques for the new application area.
Conclusions are drawn and directions for future research are discussed in section 6.

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3 Consumer research in different disciplines
The study of consumption is increasingly enriched by a growing number of contributions.
The purpose of this section is to provide a selective sampling of literature that deals with
issues or methods, which might be applicable for studying the field of product-service
systems. It is far from an overview of how consumption has been studied by different
disciplines. Instead, the intention is to select useful sources and draw methodological and
theoretical lessons, rather than to provide a thorough literature analysis.
This section provides a selective presentation of how consumption and consumer behaviour is
studied and explained by economics, business and marketing studies, social, and
psychological research. The disciplines differ in their presuppositions about the human
nature, influencing factors of consumer behaviour, and market response. They also employ
different research methods, some of which will be described in the following sections.
Despite that seemingly insurmountable abyss between disciplines, we will see that many
research topics overlap, and that obviously there is no clear-cut line between different
domains of consumer research. In addition, a lot of consumption related issues have been
addressed from an interdisciplinary or multidisciplinary perspective. As Ackerman puts it, “a
new interdisciplinary area of research on consumption has emerged in the last 10-15 years,
drawing contributions and participants from sociology, anthropology, history, philosophy,
literature, and marketing - even, on occasion, from economics” (Ackerman 1997).

Consumer
behaviour

Business Social
management Economics Psychology
studies
& marketing

Environmental
studies

Figure 2 Disciplines that study consumption and consumer behaviour

3.1 Business and marketing domain


This section provides a summary of the current understanding of consumer behaviour based
on the overview of the existing body of business literature on the subject. Special focus is
given to the formation of consumer needs and attitudes, information processing and the
decision- making process within the purchasing decision. The ultimate goal of this decision-
making process is satisfaction of consumer needs. This section helps the reader understand
different stages in the consumer decision process and distinguish between the notions of
customer acceptance and customer satisfaction. It provides background to the following
sections, which analyse consumption and consumer behaviour from the point of view of
different disciplines.
Business management and marketing are concerned with ways of satisfying and retaining
customers for the purpose of generating profits, improving companies’ competitiveness and
securing market share. Some of the major themes in the business management domain
include studies of customer relationship marketing, which analyses how customer satisfaction

14
relates to competitiveness and profits, methods for measuring customer satisfaction
(Thomson 1995), and approaches that can help transfer customer satisfaction data into
strategies for improvement of customer relations and their retention (Reidenbach and
McClung 1998), (Johnson and Gustafsson 2000), (Schellhase, Hardock et al. 2000).
The paramount goal of the marketing domain is to understand the consumer and to influence
buying behaviour. One of the main perspectives of the consumer behaviour research analyses
buying behaviour from the so-called “information processing perspective” (Holbrook and
Hirschman 1982). The basic concept is derived from the model of the consumer’s decision-
making process, suggested by Dewey (1910) and adapted by Simon (1955), that includes the
following major steps: problem recognition, search, alternative evaluation, choice and
outcomes (Dewey 1910), (Simon 1955). Later this model was expanded to include other steps
and add more details. One of the models, which will be used in this study as a basis for
understanding the consumer buying behaviour, is the model suggested by Engel et al. (1995),
because it combines the consumer decision process with the influencing factors (Figure 3).

The need recognition process

Desired state Actual state

Degree of discrepancy

Below threshold At or above threshold

No need
Need
recognition Variables
recognition

Environmental
Internal Information influences
Exposure search search • Culture
• Social class
• Personal influence
Attention • Family
Stimuli Pre-purchase • Situation
• Marketer alternative
dominated Comprehension Memory evaluation Individual differences
• Other • Consumer resources:
Acceptance time, money,
Purchase
information
processing
Retention • Motivation
Consumption
• Knowledge
External • Attitudes
search Post-purchase • Personality, values,

alternative and lifestyle


evaluation

Dissatisfaction Satisfaction

Divestment

Figure 3 Customer satisfaction process (adopted from (Engel, Blackwell et al. 1995), p. 143-154, 177)

According to the model, the customer decision-making process comprises a need-satisfying


behaviour and a wide range of motivating and influencing factors. Consumer decision-
making process has the following steps:
1. Need recognition – realisation of the difference between desired situation and the current
situation that serves as a trigger for the entire consumption process.

15
This process depends on the difference between the desired and the current state of affairs.
Several factors can influence this process: changed circumstances, time, new product
purchase, and consumption that trigger the need for other products. Once a certain threshold
of this discrepancy is exceeded, the need is recognised. However, to trigger the action, the
need should be considered as important and the need satisfaction should be within a person’s
resources (e.g. time, money, etc.).
2. Search for information - search for data relevant for the decision, both from internal
sources (one’s memory) and/or external sources.
The search for information usually begins with the internal search for any sort of information,
memory, or experience with a product or service. The outcomes of this stage depend on the
actual existence of internal knowledge about the subject and on the ability of the individual to
retrieve this information. If the internal search does not produce expected results, the
individual turns toward external information sources. The external searches differ in scale
(how comprehensive the search for information is), in the direction (advertising, brands, in-
store information, information received from sales people, or social contacts) and in the
sequence of the research (brand or attribute processing). The major determinants that
influence a search are product determinants, situational determinants, retail, and consumer
determinants. The consumer determinants comprise knowledge, involvement, attitudes,
beliefs, and demographic features.
The extent of the informa tion search depends on the degree of importance of the purchasing
decision to the customer. For example, people seek information more actively than in cases of
more expensive products (Engel, Blackwell et al. 1995). The relevance of product
information presented to consumers also affects the purchasing decision. It has been shown
that irrelevant information weakens consumers’ beliefs in the product’s ability to deliver the
outcome and satisfy the need (Meyvis and Janiszewski 2002).
3. Pre-purchase alternative evaluation - assessment of available choices that can fulfil the
realised need by evaluating benefits they may deliver and reduction of the number of options
to the one (or several) preferred.
In this step, a number of alternatives are evaluated and the final option, which is believed to
be able to satisfy consumer need, better than the other options, is chosen. A number of
evaluative criteria, which represent product or service attributes or particular dimensions of
their delivery, are used for the evaluation. The criteria can be functional or expressive in
nature, for example, price, brand name, colour, smell, environmental attributes, etc., which
have different importance to various individuals (Mittal, Ratchford et al. 1990). Ratchford
(1975) posits that consumers may often choose products for the status and image attributes
and less for their functional features (Ratchford 1975).
Differences in product attributes are also reflected in the way the consumer knowledge about
a product can be measured. Functional attributes are more likely to be measured objectively,
while expressive /status/ and image attributes can primarily be measured through subjective
experiences of consumers with products (Park, Mothersbaugh et al. 1994). It has been
demonstrated that these image or intangible attributes are important in customer evaluations,
especially when their tangible features are difficult to evaluate (Olson 1977).
In addition to the choice of criteria, consumers also choose which alternatives they will
evaluate. The set of alternatives for the evaluations process is called the consideration or
evoked set. Research on the evoked set (number of alternatives that are considered in the
evaluation process) has focused on both explaining the process in which close substitutes -
alternatives sharing the same attributes (usually within the same product category, but of

16
different brands) – are being evaluated and on the choice of alternatives from different
product categories - noncomparables, so called across-category choice alternatives (Johnson
1989), (Park and Smith 1989). The difference in the choice process between close substitutes
and alternatives from different product categories has been shown. The choice process
between close substitutes is a top-down process, in which consumers start from comparing
general information about product categories, narrowing it down to concrete choices among
brands of products (Park and Smith 1989), (Johnson 1988). The choice process between
alternatives from different product categories is the opposite. It starts from concrete features
of alternatives and widens the comparison to more abstract characteristics, based on which
the alternatives are being compared (Johnson 1989). Knowledge from these studies is useful
for analysing consumer acceptance of PSS, because in the PSS context, the consumers have
to compare service alternatives to products, which resembles comparing non-comparables
from different product and service categories. Following Johnson’s logic, the evaluation in
this case will also be a bottom- up process.
The information processing capabilities about product characteristics are shown to depend on
how well individuals are informed about a product, brand and entire product category
(Beattie 1982), (Bettman 1979). It is demonstrated that well- informed customers focus more
on objective information and particular product attributes, while less informed customers rely
on general information about the entire product category (Bettman and Sujan 1987) and use
more subjective information and recommendations of social contacts (King and
Balasubramanian 1994). Furthermore, studies report that well- informed customers are willing
to pay more for the quality brand than were lower-knowledge customers (Cordell 1997).
An important part of the pre-purchase alternative evaluation is acceptance - whether the
consumer accepts and believes the information provided and trusts the sources of that
information.
4. Purchase - acquirement of the chosen option of product or service.
The purchase step is associated with a number of decisions that individuals have to make.
Even if the alternative is already chosen, the purchasing may still not be made, because
motivations and circumstances can change, new information can become available, or there
could be no such alternatives available at that particular place. The decision also depends on
when and where to buy, and/or how to pay for the purchase. Thus, at the purchasing stage,
the final decision can be fully planned, partially planned, or totally unplanned.
5. Consumption - utilisation of the procured option.
After the product or service is bought, consumers can use it directly, in a period of time or
could even abort the consumption process all together. Research distinguishes between sacred
and profane consumption, as well as impulsive consumption.
6. Post-purchase alternative evaluation - assessment of whether or not and to what degree
the consumption of the alternative produced satisfaction.
The result of this step can be either satisfaction or dissatisfaction. Satisfaction is the result of
a post-consumption evaluation if a chosen alternative met or exceeded expectations of the
customer.
According to Oliver’s expectation-disconfirmation model, consumers have three levels of
expectations about the product or service performance: equitable performance (what the
customer has to receive in return for money and effort spent), expected performance, and
ideal performance (Oliver 1980). The model states that individual’s expectations are either
confirmed if a product performs as expected, negatively disconfirmed when the product

17
performs more poorly than expected, or positively disconfirmed if a product performs better
than expected. A negative disconfirmation results in dis satisfaction, and consumption of the
product is likely to be discontinued. Confirmation or positive disconfirmation results in
satisfaction and the continued use of the product or service.
7. Divestment - disposal of the unconsumed product or its remnants.
Divestment became a focus of customer research relatively recently because of growing
environmental concerns. Most of the research has been focusing on final disposal and
recycling, but recently the secondary use of a product, such as reuse and remarketing, is
gaining more and more attention.
Besides “information processing perspective” presented above, marketing analyses buyer
behaviour by employing a psychologically grounded concept of attitudes. Attitudes are
usually named as the major factor in shaping consumer behaviour and a wealth of studies is
available on the topic of how attitudes can be used to predict consumer behaviour (Balderjahn
1988; Ronis, Yates et al. 1989; Luzar and Cosse 1998). Katz’ functional theory of attitudes
explains the role of attitudes in shaping social behaviour (Katz 1960). People form attitudes
toward products, brands, advertisements, stores, themselves, and other people based on four
underlying reasons: utilitarian function (based on rewards and punishments), value-
expressive function (consumer’s central values or self- concept), ego-defensive function
(serves to protect the person from internal feelings of threat), and knowledge function (need
for order, meaning, and structure). Underlying dimensions of attitude include: affect
(feelings), behaviour (do), and cognitions (learning and beliefs). These dimensions can be
combined into three hierarchies of effects models, which try to explain a different kind of
consumer decision-making process.
• The Standard Hierarchy or High Involvement Hierarchy perceives the consumer as a
rational problem solver and suggests the following order of consumer responses:
cognition, affect, and behaviour (learn- feel-do).
• The Low-Involvement Hierarchy applies to low- involvement purchase situations where
both motivation and risk are low e.g. trial purchases and suggests the following order of
consumer responses: cognition, behaviour, and affect (learn-do-feel).
• The Experiential Hierarchy highlights the importance of consumers’ emotions (impulse
purchases) and situations in which consumer are highly involved with outcome and
suggests the following order of consumer responses: affect, behaviour, and cognition
(feel-do-learn).
Inputs Outputs
High involvement
Attitude based
Environmental factors

Customer satisfaction
Positive word-of-mouth

on cognitive
Beliefs Affect Behaviour information
Matrix mix

or knowledge

Low involvement
Marketing

Sales

Attitude based
on behavioural
Beliefs Behaviour Affect learning

Experiential
Attitude based
on hedonic
Affect Behaviour Beliefs expereince
experience

Figure 4 The hierarchy of effects models

18
These models suggest that there are three ways to change attitude: via changing belief, affect
or via behavioural change. Theoretical frameworks dealing with beliefs are described in
section 3.4.
This section described the step-by-step model of the customer satisfaction process stemming
from the “information processing perspective” and the hierarchy of effects models, which are
based on a psychologically construct of attitudes. These two models in a way provide
opposite views of the consumer decision- making process.
The next section will explore the economic theory of consumer behaviour in the last decades.

3.2 Economics domain


“There was once a man who lived in a Scarcity. After many
adventures and the long voyage in the Science of Economics,
he encountered the Society of Affluence. They were married
and had many needs” (Baudrillard 1988), p. 35.
Consumption plays a central role in economic theory. The most popular theories and models
in economic consumer research portray consumers as somewhat passive rational decision-
makers and assume that well-defined and insatiable desires for goods and services drive
consumer behaviour in the market. Traditional neoclassical economists posit that these
desires are not affected by culture, institutional frameworks, social interactions, or the
consumption choices and lifestyles of their social contacts. Furthermore, these desires or
preferences for certain goods are stable by nature and consumers maximise their own utility
in the world of perfect information and market competition. They identify three major
influencing factors that affect consumption - prices, incomes, and personal tastes. As personal
tastes fall outside the realm of economics, most often, traditional economists restrict
themselves to the role of income and prices in determining consumption choices.
Other presuppositions of economic theory of consumer demand are that desires are not
diminishing as mo re of them are satisfied and that the origin of desires is in the consumers
themselves. In response to these traditional views, Galbraith argued that we need to realise
that there are limits to desires and that expressions of these desires in specific want s are
created by industrial systems, implying that consumer sovereignty is an empty concept
(Galbraith 1958). Here he implies that only physiological needs have limits. He critiques the
present consumer societies, which exploit the fact that psychological needs are insatiable, and
which employ great amount of resources to discover and create urge for more and more
desires, all in order to sustain the growth drive of indus try.
After Galbraith, the narrow scenario of reality drawn by neoclassical economists has been
heavily criticised on several grounds and a shift towards new foundations in microeconomics
has taken place (Lancaster 1966), (Lancaster 1966), (Lancaster 1971), (Michael and Becker
1973). A modern consumer theory regards consumers as full members of the market who
create their utility in the context of the household. The fundamental prerequisite of this
approach is that goods and services are simply inputs to the consumption process, and their
utility is being extracted by consumers, who spend time and other resources, in the
household. The notion that needs and outcomes is really what consumers want is at the centre
of this new approach. Needs ma y be fulfilled by putting market-provided goods through
consumption process, in which time and skills of the consumers are employed. The end result
could be a great variety of ways consumers can produce utility. This vast amount of
alternatives makes the consumer decision process a complex task, which consumers face
every day. Taking into account the concept of bounded rationality with lack of information
and cognitive limitations, it is clear that consumers cannot be efficient in their choices and

19
that neoclassical economics failed to provide sufficient explanation of consumption
processes.
A different approach to the consumer decision process comes from the studies by prominent
economists who explored the effects of tastes and preferences on consumption choices
(Scitovsky 1992), (Becker 1996). It is been argued that life would be impossibly complex if
we were to go through the entire decision- making process every time we are faced with a
choice. It is suggested instead that our lives are deeply routinised and the decisions about
familiar daily situations are made automatically, as a matter of habit. Habits are formed based
on changes in tastes, and our preferences depend on experiences in past consumption. This
discussion stems from the psychological learning theory, according to which habits are
formed in the process of continuous reinforcement of influencing factors. Once people are
satisfied with their choice and situation, their behaviour becomes routinised and they do not
tend to search for new solutions, until new signals and influences come that can trigger the
search for better alternative.
These ideas built the foundation for an extensive debate on economic implications of habits
(Pollak 1970), (von Weizsäcker 1971). Economists suggested looking at individual costs as
an explanation of the habitual behaviour. Stigler and Becker (1977) explain stability of habits
with a certain capital, consisting of skills, information and experiences, that was acquired
during consumption of a particular object or service. Triggers for change reduce this
accumulated capital (Stigler and Becker 1977). This discussion is interesting from
environmental point of view as well, as routines and habits often offset sustainable patterns of
consumption.
Another interesting reason for habit stability comes from Leibenstein (1950), who suggested
taking into consideration the desire of people to consume certain goods in order to be
accepted by a social group. As a result, people can be trapped by the desire to adopt to the
most accepted or prestigious way of living (Leibenstein 1950). This mechanism implies that
if the prestigious way of living is unsustainable, it might be difficult to change it, as non-
members will always struggle for being accepted into the prestigious circle. The contrary is
also true: if it is possible to make prestigious life style more sustainable, then it will be easier
to solicit more followers into it.
The work of Sen brings us closer to the area of product-service systems in that Sen argued
that in order to evaluate a person’s well-being it is not sufficient to look at one’s possessions
and at the characteristics of these possessions, but at what functioning these possessions
provide (Sen 1985). Sen defines functioning as “an achievement of a person: what he or she
manages to do or to be. It reflects, as it were, a part of the ‘state’ of that person. It has to be
distinguished from the commodities, which are used to achieve those functionings. It has to
be distinguished also from the happiness generated by the functioning” (p.10). Later he
summarised the conceptualisation of the processes of how utility is realised (Sen 1997):
goods (e.g., a bike)àcharacteristics (e.g., transport)àfunctioning (e.g., moving)àutility
(e.g., pleasure) (p.10). This conceptualisation reminds very muc h the direction of the current
discussion in the environmental filed about product ownership versus buying functions of
products.
Examples of economic research provided here demonstrate clear links between
psychological, social and marketing research. There is a lot to learn from economic research
in terms of knowledge and methods, for example, for evaluating consumer willingness-to-pay
and willingness-to-accept. Incorporation of economic methods into customer acceptance and
satisfaction techniques could greatly contribute to this line of research.

20
In the next section, the explanation and construct of consumer behaviour will be built on
social and sociological studies.

3.3 Social studies domain


Social institutions, collective behaviour, and constraints of cons umption environments enable
and affect consumer behaviour. Social studies focus on identifying and studying parameters
of external environments that influence consumption patterns. The major themes that are
studied by sociologists with regard to consumption behaviour are culture, social class,
personal influence, ethnic influence, family and household, and situational influences. Engel
(1995) shows the scope of individual and environmental influences and this distinction is
used in this study for the narrowing down and distinguishing between the two research areas:
sociology and psychology.
There is a substantial body of literature on consumer culture that analyses cultural differences
and looks into reasons for consumption in a cultural context (Featherstone 1991); (Cross
1993); (Lury 1998). Culture affects the entire structure of consumption. Sociology studies
why people buy products and find various answers to that simple question: products provide
function; products should comply with people preferences about the form in which product
function could be delivered; products become symbols of meaning in society (Solomon
1983). The importance of values is described by a theory of consumption values (Sheth,
Newman et al. 1991). The authors propose that consumer choice is influenced by functional
value, conditional value, social value, emotional value, and epistemic value. Changes of
values are usually explained from a life-cycle perspective (people grow older and their values
change) or from a generational perspective, suggesting that values of all generations are being
replaced by values of the “leading” generation.
Another line of sociological research on consumption analyses institutional influences on
consumption patterns. The main institutions in focus are family, religion, and the education
system. Consumption patterns to a large degree are also affected by social class, because
people who belong to the same class share similar values, lifestyles, and interests.
Sociologists study the role different goods play in distinguishing between different classes
and reinforcing identity within a certain class. Marketing segmentation is also often based on
marketing products to a specific social class by using special language, symbols, and appeal,
which triggers associations of a particular social class (see for example, (Williams 2002), or
(Henry 2002).
At the heart of the sociological view is the role played by goods in marking the distinction
between different social groups and classes and strengthening identity within the group.
Several sociologists investigated how people belonging to the same class use the construct of
taste to choose particular goods. For example, Pierre Bourdieu (1984) maintains that
consumption patterns develop based on taste that is specified by a certain cultural location
(habitus), and that people consume in order to distinguish themselves in the social arena. He
analysed how consumers classify goods in accordance with their taste and how the taste
indicates belonging to a certain social class (Bourdieu 1984).
Personal influence on the consumption patterns is studied by investigating the meanings that
consumers attach to the process of consumption, as part of the dimension of identify
construction. Consumers create themselves and are created by products, services, and
experiences. Four different types of meanings can be distinguished: utilitarian meaning
(perceived usefulness of a product in its ability to perform functional tasks), hedonic meaning
(specific feelings the products evoke or facilitate), sacred products that are very important to
people, and social meanings (products and services are seen as “media for interpersonal

21
communication” and for statements about people’s positions and statuses in social groups)
(Engel, Blackwell et al. 1995).
Status is considered as one of the constructs of conspicuous consumption and was studied
among many by Torsten Veblen, who pointed out that achieving a certain status in a social
group stimulates consumption of so-called “status goods” (Veblen 1902). Baudrillard notes
an interesting phenomena – on the one hand, marketing tells us to buy goods to be different,
on the other hand, we need to buy because everyone else has already bought it (Baudrillard
1998). There is an important status element in this: we want to be different, but not too
different from our social group.
The discussion on the formation of habits in section 3.1, can also be enriched by the
sociological studies on the topic. The major question raised was how habits are formed and
how they can be changed to stimulate habitualisation of more sustainable consumption
patterns. Sociology provides several insights about that. First of all, behavioural stability is
explained by social interdependence of consumption. Consumers are seen as being embedded
into, influenced and enabled by institutions (North 1981), (Hodgson 1988). Secondly,
consumers are also part of social groups, from which they can learn through interaction.
Again, status and the desire to be accepted and treated as part of the group is an important
need (see next section of Maslow’s hierarchy).
Social institutions, social groups, ideologies, and behaviours mutually reinforce each other
and shape the development of society. Economic instruments and technological innovation
alone will not provide desired change. Equally important are accepted norms and moral
principles that should go together with cha nging techno-economic framework and should
provide new grounds that would shape and determine more sustainable consumer choices.
As it will be shown later, sociologists can directly contribute to the development of eco-
efficient services and PSS with their knowledge of socio-technical frameworks and processes
that shape household and individual consumption.
The next section will provide some insights into consumer behaviour from a psychological
perspective.

3.4 Psychology domain


The major part of psychological research, besides social psychology, studies individual
processes. The domain of psychology research on consumer behaviour focuses on identifying
and studying personal human qualities that influence consumer behaviour. Another line of
research focuses on studying how various stimuli from the surrounding world affect
consumer behaviour.
Psychology is interested in learning how the urge of need is created, how different
stimulators influence the personal decision- making process, and how the satisfaction
sensation is created and confirmed. It seems that the focus is given to four major topics:
consumer resources (time, money), motivation, knowledge, attitudes, personality, values, and
lifestyle (Figure 3). Alongside these, three major processes are being studied by
psychologists: information processing, influencing attitudes and behaviour, and learning
processes (Engel, Blackwell et al. 1995).
Several schools of thoughts can be distinguished in psychology. Representatives of the
operant conditioning view of consumer learning investigate the role of rewards and
punishment in consumer decision- making process. Behaviourists are concerned with the role
surrounding conditions have on learning and the decision- making process. Behaviourists that
support a classical conditioning view study how consumers respond to brand names, scents,

22
colour, and other stimuli when making purchasing decisions based on knowledge they have
gained over time. On the other hand, cognitive learning theorists are concerned with studying
internal brain processes.
Psychological studies analyse the influence of the emotional state of consumers on
purchasing decision (see for example (Gardner 1985)). Psychological processes such as
attention, comprehension, memory, and cognitive and behavioural theories of learning,
persuasion, and behaviour modification constitute an integral part of marketing studies on
consumer behaviour and have been outlined in section 3.1. Needs for social appreciation and
status that were discussed before are well grounded in the psychological theory of Maslow
(1954), who postulates that human behaviour could be explained by the universal motivation
to satisfy a hierarchy of needs, and that self-realisation and social acceptance are as important
as the basic needs of food and shelter (Maslow 1954). Some needs are pre-potent and need to
be satisfied before higher order needs. He argues for a development of a society, which
would encourage higher order needs and in such way create a more liberal society that allows
its members to reach full potential. He argues that the system of needs must be protected
from powerful social forces, as higher order needs may totally disappear as a result of such
forces, such as unemployment for instance.
The lifestyle concept comprises a formal process of integration of social practices, through
which actors express their individual identity. Practices of our society are closely linked to an
economic and market system based on the notion of consumption. Therefore, in Bauman’s
opinion, “lifestyles boil down almost entirely to styles of consumption” (Bauman 1990).
According to him, people’s individual identity expressed in their lifestyles can be read almost
entirely from the package of goods and services people surround themselves with.
Recently a new field of “psychology of sustainability” or “new ecological psychology” was
launched to address theoretical and empirical studies that strive to better understand the
psychological processes underlying and triggering the development of environmental
awareness and concerns with sustainability issues (Jones 1996), (Bonnes and Bonaiuto 2001).
The emphasis of this field is on emotional bonds with our planet, application of
environmental issues to psychotherapy, even search for an environmentally acceptable
standard of mental health.
In the context of sustainable consumption and lifestyles, it is worth looking at what kind of
theories the psychology provides to aid in making the shift towards more sustainable
consumption patters. At the individual level, the psychology has to offer two theories that aim
at explaining cognitive processes behind individual decision making, connecting such
constructs as intentions, attitudes, subjective norms, and perceived behavioural control. These
theories provide some input to the discussion held above about social relevant actors and the
importance of belonging to a group.
The Theory of Reasoned Action (TRA) suggests that behaviour depends on the intention to
perform the behaviour – the most important determinant of a person’s behaviour is
behavioural intent. It is a linear correlation between the strength of a person’s intention, a
person’s willingness to try to act accordingly, and the likelihood that such behaviour is
actually being performed (Fishbein and Ajzen 1975). The theory defines two independent
determinants of intention. The first determinant is the personal factor named “attitude
towards the behaviour”, which refers to the individual beliefs that there will be outcomes and
evaluation of these outcomes. The second determinant is the so-called subjective norms,
which comprise an individual belief that relevant social actors think she should or should not
perform a behaviour and an individual’s intention to comply with this behaviour (Ajzen and
Fishbein 1980). To conclude, according to the theory, the behaviour is performed as a

23
rational decision by the individual, which is in a position to make a decision. It then depends
on the situation whether the attitude or the subjective norms takes over in shaping the
intention.
The Theory of Planned Behaviour is an extension of the Theory of Reasoned Action (Ajzen
1988), (Ajzen 1991). It includes the concept of perceived behavioural control, which is the
person’s belief about feasibility of using the provided opportunity. Individual abilities and
opportunities can affect control over the intended behaviour. The main idea is that the greater
the perceived behavioural control, the stronger a person’s intention is to try to perform the
relevant behaviour. However, the perceived behavioural control can also affect behaviour by
making it impossible to perform a certain behaviour despite one’s positive intentions towards
it.
The literature search on psychology, consumption and environment revealed many
psychological studies on the general environmental behaviour of people (see for example(von
Borgstede and Biel 2002), (Iwata 1996)), social and ethical norms that affect it (von
Borgstede, Dahlstrand et al. 1999), or on studying particular behavioural patterns and
behaviours, for example recycling behaviour (Guagnano, Stern et al. 1995), waste sorting
behaviour, or energy-saving behaviour (Poortinga, Steg et al. 2003). An important line of
psychological research is the formation of habits and the environmental consequences of
changing everyday behaviours.
Summing up the previous sections of chapter 3
Overall, the preceding sections showed that consumption patterns are first of all much more
flexible and prone to various influences than was suggested by traditional neoclassical theory.
Further, it was shown that current consumption behaviour is not a stable preference of
consumers but rather one choice of a great number of alternatives generated by the industrial
machine. Economists and psychologists tend to assume and subsequently study consumer
behaviour in isolation from other consumers, while sociologists perceive consumption as
being socially grounded. The importance of the social context is also recognised and widely
used by businesses in their marketing strategies.
The complexity of the decision-making process and a large number of influencing factors
suggest that changing consumer behaviour towards more sustainable consumption is a
challenging process, which requires coordination at individual and societal level. The
strength and range of forces that seduce and urge consumers into conspicuous consumption
might appear discouraging for sustainability pursuit. Luckily, there are also other
considerations that might help to divorce happiness from commodities. Some studies showed
that the most valuable things for people have low economic, but high emotional value, such
as family photos, memorable events, souvenirs, etc (Grafton 1993). Furthermore, it was also
shown that people attach sacred meanings to different products and objects, such as cars,
flags, stars, collections, etc. (Belk, Wallendorf et al. 1989).
The previous chapters provided a selective overview of concepts and factors of consumer
behaviour that are of interest for the following sections, in which an overview of the studies
about eco-efficient services and PSS and consumer attitudes towards these schemes will be
provided.

3.5 Environmental studies


Environmental studies on consumer acceptance build upon results of aforementioned
disciplines in their research on consumption. They apply existing knowledge to a particular
case of environmental problems stemming from consumption. The studies are concerned with

24
what the environmental consequences of consumer purchasing decision could be, how they
can be influenced to reduce the associated impact with economic methods, or by changing
social and psychological contexts, technological solutions and political frameworks.
Beside individual- level research of environmental behaviour, problems with and solutions to
environmentally damaging consumption patterns are also studied at a more aggregate level.
This field is broadly called sustainable consumption and is an interdisciplinary area that
builds upon economic research, socio-technical and socio-psychological explanations, and
policy studies. Consumer behaviour models are being developed (Hansen and Schrader 1997)
and the environmental impacts of various scenarios of consumption have been modelled
(Jager 2000). Material- and energy- intensive consumption patterns have been analysed and
suggestions for addressing over-consumption have been provided (Røpke 1998), (Røpke
1999), (Brown and Cameron 2000).
An important part of the sustainability discourse focuses on the ways of involving various
stakeholders in the process towards more sustainable lifestyles, including consumers, see for
example Jenkinson (1997) (Jenkinson 1997). The role of raising environmental awareness of
consumers and the importance of streamlining environmental communication and
information provision has also been addressed by a vast number of studies (Zimmer, Stafford
et al. 1994), (Palm and Windahl 1998), (Björner, Gårn Hansen et al. 2002), (Palm and
Windahl 1998), (Niva, Heiskanen et al. 1997), (Imkamp 2000). Another important
development step towards sustainable consumption is the recent acceleration of work on
product-related environmental policies (Niva and Timonen 2001), including extensive work
on Integrated Product Policy, and especially the application of life-cycle thinking to product
policies (Dalhammar 2002).
One of the approaches for dealing with ever increasing consumption is the so-called
dematerialised consumption that is based on the utilisation value of products. Consumers can
extract the utilisation value during the product use and do not necessarily have to own the
material product. However, studies in the area of eco-efficient service and PSS conducted so
far, show that this utilitaristic idea is not that simple to implement in practice, as consumer
behaviour is a much more complex process.
One of the first studies that analysed acceptance of car sharing and apartment launderettes
was conducted by Schrader (1999) (Schrader 1999). Schrader applied the innovation
diffusion concept of Rogers to evaluate relative advantage of the services. He also created a
portrait of potential users of these services, looking particularly at the level of education,
gender influences, apartment size, and household size. As a result, the study provided insights
into potential factors that can stimulate acceptance of eco-efficient services. As crucial
success factors he identified: increase knowledge about the services; guarantee and
communicate the advantages, avoid or reduce disadvantages, and address the target group of
customers. Following the preliminary study, a comprehensive research into customer
acceptance of eco-efficient services was conducted, which resulted in comprehensive
empirical work and theoretical developments (Schrader 2001).
The research of Rens Meijkamp offers a comprehensive analysis of reasons for people to
become members of car-sharing organisations, provided potential user profile, and
investigated factors that stimulate decision- making process towards adoption of the new
service (Meijkamp 2000). He used the innovation diffusion framework of Rogers (1995) for
conceptualising and structuring the research and specifically for identifying the main steps of
car-sharing adoption. The purpose of the study was to test the feasibility of the eco-efficient
services with regards to acceptance by customers, employment by producers and

25
environmental potential. He concludes the eco-efficient services have a potential to directly
and in a more passive way stimulate consumer behaviour change.
Hirschl, et.al. studied acceptance of ski rental services and washing services with the help of
a questionnaire with two major themes: extension of product use and consumption without
ownership (Hirschl, Konrad et al. 2001). The majority of respondents replied that they do not
replace functioning products by new ones. Also, the majority of respondents expressed that
they knew where repair facilities were, but noted that they would prefer buying a new product
if the cost of repair is as high as the price of the new product. The study revealed that fashion
and comfort were important determinants of the behaviour, but not as important as the
economic factor. Comfort was seen as the amount of time spent on renting/sharing and
bringing back the product, but loss of flexibility was perceived as even more problematic.
The study revealed that consumption through renting or sharing is not a deeply rooted
practice, but no direct rejection to the idea was reported either. Therefore, opportunities for
renting or sharing were seen for seldom- used produc ts and for products with high
maintenance costs. Against renting or sharing, were concerns about improper use and
revealed emotional attachments to some material objects. The study classified the
respondents into four different groups depending on their stances toward ownership and
renting/sharing. Two of these groups are potential customers of such services. These results
have implications for the marketing of eco-efficient services, which have to be segment
specific.
Littig (2000) criticises the validity of the basic premise of eco-efficient services and PSS that
customers need product or service utility, not as much ownership of the material object
(Littig 2000). She stresses the symbolic and social functions of purchase and ownership, and
the strong connection to the idea of property. The author further suggests looking at the
studies of collective use as opposed to commercial leasing and renting. The article provides
the results of a household survey that investigated why people prefer to buy a product instead
of leasing it or sharing. The mains reasons to this behaviour are the desire to own things and
to have the possibility to use them anytime. When it comes to reasons for collective use, two
main rationales are offered: financial reasons and the frequency of product use. In conclusion,
Littig calls for appropriate attention to the sociological pillar of sustainability in studies of
eco-efficient services.
All these examples show the importance of psychological and individual factors, as well as
social frameworks for accepting eco-efficient services in private markets. The area of PSS
and eco-efficient services still lacks theoretical groundings. As the importance of social
factors in PSS design and delivery has been realised, it is therefore important to develop PSS
models, which would allow and ensure economic viability, environmental superiority, and
social acceptance of the new approaches to sustainable consumption.
The first step for developing PSS models that would ensure social acceptability, is to learn
from other domains and analyse what can be applied directly, what needs to be adjusted, and
what new approaches are required because of the specifics of PSS. The first selective
overview of the existing models and tools will be done in the following section.

26
4 Frameworks and tools for evaluating customer satisfaction
As the previous section showed, different disciplines approach consumer research from
different standpoints, however they are all interested in identifying how an innovation - a new
product or a service - is accepted by the consumers. Some disciplines use techniques for
evaluating market response, others measure social influences on creating market acceptance,
while yet others study personal characteristics of consumers and how these affect purchasing
decision of each individual consumer. Each discipline also develops and uses specific
methods as well. However, there are also general tools that are employed in many disciplines.

4.1 Frameworks for evaluating customer satisfaction with products

4.1.1 Kano Model of Customer Satisfaction


The Kano et al. (1996) model of customer satisfaction classifies product attrib utes based on
how they are perceived by customers and their effect on customer satisfaction (Kano, Seraku
et al. 1996). According to the model, there are three types of product attributes that fulfil
customer satisfaction to a different degree: 1) basic or expected attributes, 2) performance or
spoken attributes, and 3) surprise and delight attributes.
A competitive product meets basic expected attributes, maximises performances attributes,
and includes as many “excitement” attributes as financially feasible. In the model, the
customer strives to move away from having unfulfilled requirements and being dissatisfied
(Figure 5).

Customer satisfaction

Very satisfied

Surprise and Performance or


delight spoken
attributes attributes

(unspoken)

Degree of
Not at all Fully achievement

Basic or
expected
attributes
(unspoken)

Very dissatisfied

Figure 5 The Kano model (Kano, Seraku et al. 1996)

The performance or spoken attributes (the central line of the model) are those expressed by
customers when asked what they want from the product. Depending on the level of their
fulfilment by a product or a service these requirements can satisfy or dissatisfy consumers.
The basic or expected attributes (lower curve in the model) are basic attributes, which
customers take for granted and they are so obvious that they are not worth mentioning. While
the presence of these attributes is not taken into account, their absence is very dissatisfying.

27
The surprise and delight attributes (upper curve in the model) lay beyond customer’s
expectations. If they are present they excite the customer, but their absence does not
dissatisfy, as customers do not expect them.
A successful combination of expected and exciting attributes provides a company with an
opportunity to achieve competitive advantage. A successful company will correctly identify
the requirements and attributes and use them to document raw data, user characteristics, and
important service or product attributes.
To make information about the identified requirements about attributes understandable and
useful for designers, a so-called Quality Function Deployment (QFD) approach is often being
used. The goal of QFD is to assure that the product development process meets and exceeds
customer needs and wants and that customer requirements are propagated throughout the life
cycle of the product. The approach uses a number of matrices, which help translating
customer requirements into engineering or design parameters, specifying product features,
manufacturing operations and specific instructions and cont rols. QFD allows for the
minimising of errors and the maximising of product quality for customers. The approach is
probably the only existing quality system with such strong orientation to customer
satisfaction.

4.1.2 Innovation framework


The process of adopting new products has also been studied within innovation adoption
literature, and in particular the Rogers’ (1995) innovation framework. The framework
suggests five steps, through which an adopter goes to the adoption of a new product or a
service (Rogers 1995: 36):
first knowledge of an innovation à forming an attitude toward the innovation à
decision to adopt or reject à implementation of the new idea à confirmation of this decision
Rogers’ model closely resembles the customer satisfaction model by Engel et al. (1995), see
(Figure 3). The first knowledge is acquired when an individual is provided with the
information about the innovation. The attitude is formed evaluating the features of innovation
and a resolution on accepting or rejecting the product follows. Implementation corresponds to
the consumption and confirmation refers to the need to reaffirm the decision about the
innovation adoption.
Rogers also maintained that people accept innovation differently, depending on their
personality, their innovativeness, and interpersonal communication, and according to this
could be classified into innovators, early adopters, early majority, late majority, and laggards
(Figure 6). Innovators seek newness and value the time period that is passed since the product
launch. Laggards seek reassurance and confirmation about product or service qualities
through interpersonal communication and word-of-mouth.
A large number of studies have analysed the differences between earlier and later adopters
based on socio-economic, demographic, cultural, or psychological criteria (Tornatsky,
Eveland et al. 1983), (Gatignon and Robertson 1985), (Frank, Sundqvist et al. 2001),
(McMeekin and Tomlinson 1998), (Cestre and Darmon 1998).

28
% of adopters

34% Early
majority
34% Late
13,5 % Early majority
2% adopters 16 %
innovators laggards

Time of adoption of innovation

Figure 6 Adopter categorisation on the basis of relative time of adoption of innovations (Rogers 1995)

Economists, for example, suggest that for social innovation to take place, innovators should
first accept innovation and then create institutional framework that would trigger the
acceptance of new practices. For the laggards to join in another mechanism – the desire not to
be left out of the group – can be used to speed up dissemination of more sustainable practices.
Besides adopter categories, Rogers also identified a range of factors affecting the rate of
adoption:
• Perceived attributes of the innovation • Type of innovation-decision
• Relative advantage • Communication channels
• Compatibility • Nature of the social system
• Trialability • Extent of change agents’ promotion
• Complexity efforts
• Observability
These factors are often used in many innovation studies as evaluation criteria, based on which
questionnaires for consumer surveys are developed.

4.2 Frameworks for evaluating customer satisfaction with services

4.2.1 Why measure services with different measures?


Many studies suggest that there is a fundamental difference between products and services,
namely it is the way they are produced and consumed (Grönroos 1990; Grönroos 1998),
(Edvardsson 1997; Edvardsson 2000), (Bateson and Hoffman 1999). The time period
between service production and consumption is considerably shorter than for products. Most
of the services are produced “on a spot” in an interactive process, in which customers and
company employees meet.
Satisfaction with service quality depends on a large number of dimensions - both tangible and
intangible attributes of the product-service offer. The impact of intangible dimensions on
consumer satisfaction is of particular interest at this point.
Many psychological studies even show that non-verbal behaviour by the service provider
greatly affects service evaluation (Gabbott Mark 2000). For example, the quality of
interaction between customer and service provider influences customers’ perception of
service quality. In services, a single employee may affect service efficiency and consequent
customer satisfaction with the service (Barnard 2002). Even customers own involvement and
participation in the service delivery affect customer satisfaction (Kelly, Skinner et al. 1982).
Due to the differences in production and provision of products and services, customers
evaluate quality and attributes of material goods and services in different ways (Mathe and

29
Shapiro 1993). This realisation has initiated a discussion on the need for special tools for
evaluating more diverse and less tangible services (de Brentani 1989). Responding to the
growing demands for developing specific and reliable ways to measure customer satisfaction
in service industries, a number of studies have been conducted that suggested methodological
frameworks for measuring customer satisfaction (Markovic and Horvat 1999).
Other studies looked at what measures are used by service companies for measuring customer
satisfaction. Studying how financial sector measures customer satisfaction Edgett and Snow
(1997) showed that even though it is mostly traditional (financial) measures that are being
used by the sector, they do not provide a sufficient basis for innovation in services and
multidimensional approaches need to be devised.
The two most often used types of measures in service companies are the increase in the
number of customers and increase in portfolio dollars. However, the most useful types were
direct personal interviews with customers and measure of customer expectations and
perceptions. Surprisingly, companies use traditional quantitative measures, but perceive
qualitative measures as the most useful. Authors concluded that financial institutions are not
satisfied that the traditional accounting-type measures are presenting the full performance
picture for new products (Edgett and Snow 1997).

4.2.2 Service Quality Model


According to Grönroos (1982), the quality of a service perceived by customers will differ
depending on what strategy the company chooses to deliver and promote that service. The
service quality model by Grönroos holds that the quality of a service, as it is perceived by the
customer, can be divided into technical quality and functional quality dimensions (see Figure
7). The former denotes what the customer receives as the output of a service production
process and the latter how the technical quality is produced and transferred to the customer
during buyer-seller interactions.

Expected Perceived service quality Perceived


service service

Traditional Corporate image


Marketing
Activities

Technical Attitudes International


solutions relations

Mashines Customer Behavior


Technical Technical contacts Functional
solutions quality quality
Computerised Accessibility Service-
systems mindedness
Employees’ Appearance
technical
ability

WHAT? HOW?

Figure 7 The Service Quality Model (Grönroos 1982)

Grönroos posits that the technical quality is the “basic condition for a positively perceived
total quality, but the functional quality is the one that adds competitive edge” (Gummesson
and Grönroos 1987). Furthermore, in the relationship marketing, the growth of the

30
importance of functional quality in comparison to technical quality become a strategic one
(Grönroos 1993).
The distinction is also made in the model between perceived and expected service quality and
it is suggested that the quality is perceived subjectively. Grönroos (1988) further develops the
model by positing that in the case of a company, which extends product offer with services, it
is more appropriate to talk about total perceived quality. According to him, a high perceived
quality is obtained when the experienced quality meets customer expectations, i.e. the
expected quality. However, if the expectations are unrealistic, the total perceived quality will
be low, even if high quality was experienced (Grönroos 1988).
Expected quality Total Perceived Quality Experienced quality

Image

Market
communication
Image
Functional Technical
Word-of-mouth
quality quality
Customer needs

Figure 8 The Total Perceived Quality (Grönroos 1988)

The expected quality is heavily influenced by market communication (advertising, sales


campaigns, PR and direct mail), word-of- mouth, company image, and customers needs.
While a company directly controls market communication, the word-of- mouth and company
image are outside its immediate reach. Grönroos conclusion is that the total perceived quality
is not only defined by the level of technical and functional dimensions, but also by the gap
between the expected and the experienced quality.

4.2.3 The SERVQUAL model


Given the growth of services in the last decades, many researchers have recognised the need
to develop measures of service quality. One of the most often used measures is the
SERVQUAL based on extensive research in generic determinants of perceived service
quality (Parasuraman, Berry et al. 1985; Parasuraman, Berry et al. 1988; Zeithaml,
Parasuraman et al. 1990; Parasuraman, Berry et al. 1991; Parasuraman, Berry et al. 1993;
Parasuraman, Berry et al. 1994).
The model measures the difference between customers’ expectations about general quality of
a certain group of service providers and their perceptions about the actual performance of a
service provider from that group. It uses a set of service quality determinants (explained in
Box 1) measured by a 22- item scale. The model defines customer satisfaction as perceived
service quality, which is the gap between expected service and perception of service actually
received (Figure 9).
Many studies in different service industries use the model as a basis for developing surveys to
evaluate customer satisfaction, which was the ambition of the authors.

31
Word of Personal Past
Determinants of mouth needs experiences
service quality:
• Access
• Communication
• Competence
• Courtesy Expected
• Credibility service
• Reliability Perceived
• Responsiveness service
• Security quality
• Tangibles Perceived
• Understanding service
the customer

Figure 9 Service Quality model (Parasuraman, Berry et al. 1985)

Box 1. The determinants of service quality used in the model.


• Access means approachability and ease of contact;
• Communication means informing the customers in an understandable way and listening to
them. It may imply that companies need to use different languages to talk to different
customer groups (i.e. professional and private customers) in i.e. explaining what the
service comprises, how much various service elements and offers cost, and other features
of the service;
• Competence means possession of required skills (i.e. organisational and personal) and
knowledge to perform the service;
• Courtesy comprises politeness, respect, friendliness of the service provider personnel;
• Credibility includes trustworthiness and honesty;
• Reliability means that the service is performed with high accuracy and thoroughness
every time;
• Responsiveness concerns the willingness of employees to provide the service and how fast
the service is provided.
• Security comprises physical and financial safety and confidentiality;
• Tangibles include all physical products that are involved in service delivery, and even
other customers;
• Understanding the customer means taking steps to know customer better, learning their
specific requirements, providing individual attention, recognising regular customers.
While being widely applied, the SERVQUAL model has also received criticism for not
including prices in the assessment or for the inclusion of expectations as a variable in
measuring service quality (Boulding, Kalra et al. 1993). Perhaps the most often heard
criticism pertains to the lack of a clear link between satisfaction and perceived service quality
identified by some research (Duffy and Ketchard 1998). An alternative model (SERVPERF)
was later developed for these reasons, based on the findings that service quality does not
depend on expectations and can be directly measured by simple performance based measures
of service quality (Cronin and Taylor 1994).

4.3 Toolbox for measuring customer satisfaction


In spite of various standpoints and theories of consumerism, different disciplines generally
employ similar sets of approaches and tools for studying consumer satisfaction. The
approaches can be exploratory, descriptive, comparative or interpretative, and the most
common tools are consumer surveys/polls, intervie ws and focus group discussions.

32
• Exploratory and descriptive approaches are usually employed for evaluating attitudes,
opinions, and public understanding of various issues, i.e. health and environment,
consumer attitudes towards specific instruments or coercive measures.
• Comparative and explanatory approaches are involved in studying particular consumer
behaviours, i.e. recycling; and for development of predictions of specific factors that may
affect values and attitudes, which in their turn may lead to cha nges in behaviour.
• Interpretative methods and envisioning are used for predicting the consequences of
particular consumption patterns, i.e. dematerialised lifestyles.

4.3.1 Surveys
Customer satisfaction surveys are a questionnaire based information collection tool to
determine the level of satisfaction with various product or service features. Developing a
good questionnaire is the key to collecting good quality information. Questions must be short
and concise, well formulated, easy to interpret and answer, and facilitate unbiased responses.
Survey techniques and questionnaire designs are well known to research community and
multiple guidance from different disciplines exist (see, for example, (Hayes 1998), (Kessler
1996), (Chakrapani 1998), (Gerson 1994), (Hill, Brierley et al. 1999), (Reidenbach and
McClung 1998)).
Many methods are being used for gathering survey information. Telephone surveys are
generally used to collect data from a large group of customers and to target segment markets.
They are more effective in obtaining data than mail or e-mail questionnaires and can
potentially provide a higher depth of data (Fetz 1996). Online surveys offer an economical
and fast alternative form of surveying. They can be utilised with current customers, or the
entire on-line population to provide fast feedback on satisfaction and allow quick automatic
information processing.
Mail surveys are the least expensive approach, but they often have a low response rate (20-
30%), which becomes problematic for the statistical reliability of the data. These surveys also
do not permit follow-up questions and do not offer the depth of a telephone survey (Dickey
1998). Return cards allow getting customer response and certain possibility for measuring
customer satisfaction. They proved to be especially useful if they are used in after-sale
interaction with consumers, e.g. repair or service activity or warranty registration (Dickey
1998).
Customer intercepts and exit surveys are two types of in-store information collection
methods. They are especially useful in probing customer in their shopping environment.
These surveys aim to intercept consumers in retail places and deliver a short structured
questionnaire on their satisfaction with the delivered service, preferences, or behaviour. The
intercept surveys can also incorporate limited product testing, which provides opportunity to
appraise consumer opinion immediately after sampling a product.
Consumer intercepts are usually employed to gain a fast or first overview of the phenomena
studied. They are relatively cheap and can result in a considerable sample. Their major
disadvantage is that samples may not randomly chosen leading to stratified sampling and
reducing the representativeness of the results.
Measurement scales in surveys
Along with the development of consumer research, the number of measurement scales used
in customer satisfaction surveys is growing (Devlin, Dong et al. 1993), which complicates

33
data analysis. Some studies, for example, may list over 40 different scales (Haddrell 1994).
Two broad types of scales, however, could be distinguished: single- and multi-item scales.
The single- item scales are simple, for example, many studies have used simple single- item
scales such as “very dissatisfied” to “very satisfied” responses. The problem is that these
scales are hardly able to capture different nuances related to products and services, which
reduces their reliability and the only possibility for assessment is a test-retest format (Yi
1989).
The multi- item measures in this case a much offer a better capture of customer satisfaction.
Here survey respondents are asked not only to provide an overall evaluation of their
satisfaction with the product or service, but are also required to evaluate the key components
or dimensions of the offer. The reliability of the result, therefore, is higher than when using
single- item scales. The multi- item scales can be presented in a number of different ways:
Likert 2 , verbal, graphic, semantic differential3 , and inferential scales. Some authors suggest
that the semantic differentia l scale is probably most reliable (Westbrook and Oliver 1981).
Even though the survey techniques are well developed and have a long history, they have
benefits and drawbacks. The main ones are outlined below:
Benefits:
• Access to many customers - broad sample;

• Opportunity to see and describe variations and distributions of variables in population;

• Possibility to gain general information about consumers’ attitudes, intentions, and


perceptions;
• Amount of collected data allows use of statistical analysis for explaining and predicting
certain behaviours.
Drawbacks:
• Problematic to make consumers understand and interpret questions in the same way;

• People tend to provide socially acceptable answers;

• Reliance on consumer self- reporting and some argue that it is inconsistent with actual
behaviour of people (Zelezny 1999);
• Time consuming and difficult to develop good questionnaire;

• Difficult to get access to needed population/sample;

• Questionnaires require testing, but once at use corrections are difficult to make.

4.3.2 In-depth interviews


Sometimes, companies complement surveys with in-depth personal interviews. Such
interviews can serve as a test bed for questionnaires and be an effective when the number of
respondent is small. Personal interviews are often used when companies are creating specific
“customer profiles” or “satisfaction improvement plans” (Dickey 1998). The participants in

2
The Likert technique presents a set of attitude statements. Respondents are asked to express agreement or
disagreement on a multi-point scale. Thus, a total numerical value can be calculated from all the responses.
3
Charles E. Osgood developed the “semantic differential” method Osgood, C. E., G. Suci, et al. (1957). The
Measurement of Meaning. Urbana, University of Illinois Press.. He devised a method to plot the differences
between individuals' associations with words and in that way map the psychological distance between words.
Osgood's method is a development of the Likert scale in that Osgood adds in three major factors or dimensions
of judgement: evaluative factor (good - bad), potency factor (strong - weak), and activity factor (active -
passive).

34
in-depth interviews are chosen based on their willingness to participate, their value as a
customer, and their ability to articulate issues (Kessler 1996).
The strength of in-depth interviews is that they provide possibilities to get access to consumer
perceptions of the offer, discover new variables and new needs of consumers and test and
correct instrument. However, several weaknesses could be noted. For example, when
interviewees are not randomly chosen, the conclusions need be confirmed with a broad,
stratified random sampling. It is also difficult to have a large number of interviews and thus
the sample is rarely representative. The personal interviews also require certain flexibility and
interpersonal communication skills, which may not be always at hand.

4.3.3 Focus group interviews


Focus groups interviews is a direct questioning of a group of usually 8-12 people that
provides fast feedback on service issues and customer satisfaction. It is a qualitative data
gathering technique, in which the interviewer directs the interaction and inquiry in a very
structured or unstructured manner, depending on the interview’s purpose (Denzin and
Lincoln 1994).
In consumer research, this method is used extensively for eliciting opinions, which explain
consumer behaviour in shopping centres. It is also applied to pre-test and post-test
advertisements and commercials. Focus groups may be the most cost-effective means of
measuring product acceptance and may help define how the product should be adapted to a
particular market or group of customers.
Depending on the researched area, groups are recruited based on specified and varied criteria,
such as age, gender, or other important characteristics. The respondents are recruited among
the customers of a given shopping centre or supermarket.
The strengths of the focus groups interviews are the possibility to assess how people
themselves perceive or conceptualise issues and the possibility to test new issues or new
dimensions of customer satisfaction. The weakness is that it is difficult to distinguish between
personal and group perceptions. Group dynamics can also prevent certain issues or
perceptions from being tackled. In addition, the size of a sample is rarely representative.

4.3.4 Observations
Participant observation is “research that involves social interaction between the researcher
and informants in the milieu of the latter, during which data are systematically and
unobtrusively collected” (Taylor and Bogdan 1984). Observations provide the possibility to
observe product or service at a system level – during interaction with the user and during
interaction with the environment.
A source of data in the observation is everything that goes around the setting. This includes
the physical environment and activities as well as social environment, such as patterns of
interaction, frequency of interactions, direction of communication patterns, decision-making
patterns, verbal and non-verbal communication patterns.
Observations are unobtrusive and do not require direct interaction with participants, thus,
observation can be conducted inconspicuously. It will always have an advantage whenever it
is necessary to observe behaviour in their natural context.
However, observa tions are topically limited to a small sample of activities with the focus on
only external behaviour. The danger for the ‘complete observer’ is to fail to understand the
perspective of participants. Conclusions have to be inferred from what can be observed

35
without any possibility of checking these interpretations against what participants say in
response. Hence, with a less engaged research role there is a greater risk of missing out on an
important aspect, or more seriously completely misunderstanding the behaviour (Hammersley
and Atkinson 1995).
One of the main criticisms of observation research is that it lacks reliability. Since data is
collected in a non-standardised way, it is not generally useful for statistical treatment.
Without a statistical analysis to confirm the significance of observation patterns or trends,
researchers often find it hard to ensure that their findings are real and not merely the effects
of chance.

4.3.5 Mystery shopping


This type of research is based on the information collected at points-of sale. Mystery
shopping consists of natural observation conducted by specially trained persons sent by a
company, who pretend to be customers or bus iness partners. These persons visit selected
retail points to gather information and observations about staff responsiveness, attitudes
towards customers or products, staff quality and competence, their appearance (and other
related behavioural attributes), the aesthetics and functionality of inspected site, i.e. overall
perception of the shopping experience. Some researchers use SERQUAL model for
identifying attributes of the service to be evaluated by mystery shopping (Lowndes 2000).
Mystery shopping helps to raise customer service standards and identify weak points from the
customer perspective. It allows evaluation of services from the customer side and unbiased
representation of the weak point of the service. The direct involvement in the process allows
a better understanding of customer and service provider behaviour and the important
moments of their interaction that in the end might affect customers’ perception of the service.
Mystery shopping is, however, a time consuming procedure and requires significant effort to
find and train mystery shoppers. Hiring professional mystery shoppers can be also costly.

4.3.6 Psychographic portrait of customers


A psychographic portrait of customers is part of psychographic research, which analyses the
consumer’s activities, interests, and opinions about products, services, and shopping
experiences. The method is a descriptive research method identifying the detailed
characteristics of potential or existing clients. It combines sociological methods of gathering
consumer information (social and demographic characteristic, information on consumption
patterns, etc.) with the methods originating from personality psychology.
The development of an exhaustive and accurate customer portrait requires extensive
quantitative research. For example, the portrait of the shopping centre’s customer will entail a
description of the “lifestyle” of the surveyed population. The typical variables included here
are: type of work, income, size of family, place of residence, interests and hobbies,
identification with cultural or behavioural patterns, expectations and requirements regarding
the quality/brand of merchandise, quality of service, etc.
Customers’ purchasing habits would include such issues as: who do they usually go shopping
with, how often, how long do they spend in a shop, etc. Psychographic portraits of many
customers allow customer segmentation in terms of purchase frequency, respondents’
experience of various shopping centres or service organisations, as well as benchmarking
against competitors.
The strength of a psychographic portrait is that by collecting information about consumption
patterns and perceptions it combines both qualitative and quantitative data and thus provides

36
extensive background information for market segmentation and potential customisation of
products or services.
The weaknesses are that the method is time consuming and relies on very extensive
information. The reliability is likely to be medium as it relies on self-reporting of customers.
An extensive experience is required to create a reliable psychographic portrait of customers.

37
5 Analysis of frameworks and their applicability for PSS
This section analyses what concepts and methods that were described in the previous two
sections can potentially be employed for evaluating consumer acceptance of product service
systems. The important contributions from different disciplines are applied to the PSS
concept, most commonly used methods analysing consumer acceptance are evaluated and
their potential is discussed here.
The section also discusses whether new tools are needed for evaluating PSS acceptance or
what kind of adjustments of the existing techniques may be need.

5.1 Usefulness of frameworks for PSS

5.1.1 Marketing model for creating customer satisfaction


The basic model for creating customer satisfaction, which was described in section 4.1, is not
always very useful when it comes to service customers. These customers do not often go
through the process in a linear manner and a lot of services happen after the encounter with
the service organisation takes place. In these cases, much of the evaluation process occurs
after service purchase and during or even after its consumption. It was shown, that when
evaluating service alternatives before purchase, consumers seek and rely more on information
from personal sources than from non-personal sources (advertising), which is the case with
products (Murray and Schlacter 1990). Thus, an external stimulus is not so often the
marketer, but can be a family member, a neighbour, or a friend.
The basic model is often criticised for reflecting consumer decision and satisfaction as a very
extensive processes when buying products. In reality people are often faced with situations
when they do not have time for extensive information seeking (Erasmus, Boshoff et al. 2001).
However, it was demonstrated that when buying services customers perceive greater risks
than when buying goods and, therefore, they are usually engaged in an extensive decision-
making process. This is even more likely in the case of PSS, since here customers, who are
used to buying and owning products, are offered a new way of consuming, which involves
closer relation with providers or sometimes less comfort than owning a product. Thus in this
respect the model is useful for PSS context.
The basic model is sometimes also criticised for being built on quantitative information and
more qualitative approaches are suggested as a source of deeper knowledge of processes
leading to customer satisfaction (Rassuli and Harrel 1990). That is why quantitative and
qualitative measures are described here section 4.3.
It was noted that the consumer’s evoked set of alternatives is smaller with services than with
goods. In case of some services, the only alternative can be self-service (Zeithaml and Bitner
1996). In case of PSS, the evoked set comprises a combination of goods and services and,
therefore, the number of alternative increases, which affects consumer decision-making
process. Therefore, additional aid is needed at the point of service provision or sale.
Services are based on the interactions of service provider employees with customers and
therefore, customer’s satisfaction with services is more influenced by moods and emotions
than in case of purchasing a product. This issue is confirmed by a number of researchers who
criticise the model for being too pragmatic and depicting customers as totally rational beings
(Rassuli and Harrel 1990). It is suggested that the model should allow for non-rational

38
consumer behaviour and to include data from qualitative studies, which focus on emotional
and psychological determinants of human behaviour (Lofman 1991).
To sum up, the model of the satisfaction formation process based on the decision-making
flow of consumers can serve as a starting point for understanding how decisions are made for
PSS options. Availability of information about weaknesses of the model provides potential
possibility for its improvement and adjustment for specific features of PSS.

5.1.2 Kano Model of Customer Satisfaction


The Kano model measures product satisfaction against consumer perceptions of attribute
performance. Although originally developed for product attributes, the model can be adopted
for services too (see for example, (Edvardsson, Gustafsson et al. 2000)). Kano’s model is
useful for understanding how PSS evaluations can be organised and it also affirms the
important role of attributes in creating a satisfied customer. The combination of product and
services in the PSS could also be classified into the three types of customer requirements or
product-service attributes.
To demonstrate the applicability of Kano model for PSS, let us take an example of a so-called
“tool library” idea based on PSS concept. The tool library is a hobby tool renting service for
households, which provides reliable access to professional quality tools at a moderate price.
Consumer expectations about product attribute are that the rented tools should function well
(product attribute) and that customers should have a possibility to rent them for various
periods of time (service attribute). Both attributes are essential for the performance of such a
tool library – something that customers expect. Neither of them however offers any real
opportunity for product differentiation, they are part of the very basic attributes of the service,
without which customers would be very dissatisfied, complain and most probably leave to
another provider.
The performance or spoken requirements have a linear relationship between perceptions of
attribute performance and customer satisfaction, meaning that the strong position of these
attributes enhances satisfaction with the product or service, while weak performance reduces
it. In the case of PSS, these attributes would, for example, be the duration of the battery life
of a cordless drill and extended opening hours of the tool library. Extending, improving, or
adding more similar attributes to the product-service system will also raise customer
satisfaction.
The surprise characteristics are unexpected attributes, which, when provided, generate very
high levels of customer satisfaction. Examples of these include the possibility to rent a tool
for a longer period of time for the standard rate (service) or the existence of a possibility to
rent multifunctional products. When these attributes are not available, this does not lead to
customer dissatisfaction, because the customer does not expect them.
The model can also be used as a background for identifying what data collection methods can
be used for compiling data about each type of the attributes of a product or a service
(Edvardsson, Gustafsson et al. 2000).

39
Dissatisfies Delighters
• Fundamental national • User groups
Unspoken
factors • Customer
• Critical incident partnerships
techniques • Comparing the non-
• Defection studies comparables

Core Benefits Differentiators


• Interviews • Interviews
Spoken • Focus groups • Focus groups
• Benchmarking
• Surveys

Basic Performance/Delight

Figure 10 Different data collection methods for different type of attributes (Edvardsson, Gustafsson et
al. 2000).

5.1.3 Innovation framework of Rogers


The innovation framework is a useful construction, since it identifies factors influencing the
adoption of innovation. It suggests that the perceived relative advantage of an innovation is
one of the best predictors of the rate of its adoption. The perceived innovation compatibility
with existing values, past experiences and needs of potential adopters is positively related to
adoption (Tornatzky and Klein 1982).
The perceived observability and trialability of an innovation also positively affects its
adoption. The interaction between social actors can also positively affect the speed of
adoption, while perceived complexity of the innovation affects it negatively (Cooper and
Zmud 1990).
The innovation framework proved to be useful in the study that explored success factors for
car sharing in Europe (Jakobsson 2002). Adopter categories provided by Rogers were helpful
when classifying customers of eco-services or PSS, especially the special characteristics or
portraits of innovators, earlier adopters, and laggards. This provides hints at who potential
customers might be and what strategies need to be developed to solicit them. The framework
may also help identifying dimensions of PSS, based on which further development of specific
tools for measuring consumer satisfaction could be based.

5.1.4 Service Quality Model


The depiction of service quality as a combination of technical and functional qualities is
appealing to the PSS context, where technical quality is comprised of products,
infrastructures, and the functional quality – of services and networks of service providers.
The model becomes even more appealing in the context of the above example of a tool
library. In this context, the technical component – products and infrastructure - can hardly
become the influencing factor on the competitiveness. Instead, functional quality – the

40
intangibles that accompany material part of the system – gains vital importance, which
confirms the suggestion of Grönroos (1993).
The model has been criticised for being static, looking at quality perceptions at a given point
in time (Stiernstrand 1997). However, other authors argue that the image part of the model
makes it more dynamic, because it captures the relationship between corporate image and
service delivery (Anselmsson 2001).
An important consideration for the topic of this study is the actual relationships between
satisfaction and service quality. Grönroos did not specifically distinguish between the two
concepts. The current understanding is that satisfaction and service quality are two different,
although very closely related concepts (Taylor and Baker 1994). It is worthwhile looking at
these differences:
• the dimensions underlying quality judgements are rather specific, whereas satisfaction can
result from any dimension;
• expectations of quality are based on ideas or perceptions of excellence, while a number of
non-quality issues can help form satisfaction judgements;
• quality perceptions do not require experience with the service or provider, but satisfaction
judgements do;
• quality is believed to have fewer conceptual antecedents than does satisfaction (Taylor &
Baker, 1994: 165).
Overall, both the Service Quality model and the Total Perceived Quality model may be of
value for further research on customer satisfaction and perceived quality of PSS as they
combine both tangible and intangible attributes and can be developed to represent the quality
model of PSS as a first step in evaluating customer satisfaction.

5.1.5 SERQUAL model


The SERQUAL model of Parasuraman, described in section 4.2.3, was criticised for being
too general and many studies that used the model adjusted it to specific requirements of a
particular service sector. The same could be said about applicability of the SERQUAL model
to PSS – service components in various PSSs are different and, therefore, the basic model
will need to be customised for each case.
The model customised for a particular PSS example could employ case-specific evaluation
tools. The main focus of the SERQUAL model is on capturing the competence or behaviour
of personnel (17 out of 22 items), and only 2 address products. The performance of products
is not addressed, only visual and aesthetic aspects are noted.
The model presents a good classification of service attribute that could be part of a PSS. As
was shown before in section 4.2.3, the model needs adjustment even if applied in different
service sectors. It might as well be possible to follow the logic of the model and to add
product attributes. The model has already been successfully used, for example, developing
questionnaires for evaluating acceptance of car-sharing services and proved to be useful after
certain adjustments (Schrader 2003).

5.2 Towards a framework for evaluating customer satisfaction with PSS


The evaluation of eco-efficient services can be performed based on described frameworks
and with existing approaches of consumer research that were presented in this study. The
presented approaches are not perfect, and the main problems and difficulties with measuring

41
customer satisfaction were outlined. Also, recommendations from academicians for how
these tools and frameworks could be made more useful or closer to reality were provided.
The overview of contributions from different disciplines should allow for a better
understanding of the processes behind the formation of customer satisfaction. This is a
sufficient starting point for developing specific instruments to measure customer satisfaction
with PSS. Using this as a starting point, some suggestions for PSS attributes that correspond
to customer requirements will be provided. These are the attrib utes, based on which the PSS
can be evaluated by consumers.

5.2.1 Identifying PSS attributes


The main components of any PSS or eco-services are products, services, infrastructures, and
networks (Mont 2000). Here the part of the system, with which customer comes into direct
contact, is larger than in the case of a pure product or service, which has implications for
customer evaluation process.
In the case of evaluating customer satisfaction with a product, customers are usually asked to
assess mainly tangible features of the product and here the delivery of the product - shop visit
and product purchase experience is done by other actors than the producer. In the service
context, however, consumers are exposed to service purchasing and service delivery
processes. They either observe the actual service process (e.g. cleaning services), or actively
participate in the consumption of the service (e.g. tourism).
The main focus in service evaluation is on intangible dimensions. In the case of PSS or eco-
services, customers are exposed to both dimensions: product and service. In addition, due to
closer relations with the service provider customers can even become exposed to
infrastructure and networks that support PSS delivery. Therefore, in the PSS context an
evaluation of all four PSS components becomes relevant (Figure 11):
§ Product evaluation is conducted by assessment of products or technologies.
§ Person-based or other types of services (technical, information and knowledge
services) that are included into PSS may be evaluated.
§ Infrastructure can be evaluated when the customer comes into contact with enabling
supporting technology, or by the evaluation of ambient conditions, spatial layout and
functionality or by evaluating signs and artefacts of the PSS.
§ Networks, are not usually exposed to the eyes of the customer, but in some cases may
be evaluated when they come into contact with the customers.
Customers can evaluate how effectively the provider is managing suppliers and partners. For
example, if additional tools are needed in a tool library, customer will know how long it takes
the provider to get additional items delivered. This possibility is appreciated by the customers
of tool rental companies at times of high season, when tools are being heavily used and
rented. At the time of low season, absence of required tools is considered unacceptable and
becomes the reason for dissatisfaction.
Thus, perceptions about each dimension of this system can potentially affect customer
satisfaction with the total offer. This should be taken into consideration when mapping the
process of delivering the eco-service or PSS.

42
Product Service
Person-based
Products services
Technologies technical,
knowledge,
information
services

Infrastructure Networks

Support Partners and


technology suppliers of
Ambient conditions service provider
Spatial layout
Signs, artefacts

Figure 11 PSS dimensions that can be exposed to customer judgement

There are some tools available for mapping out the service process, such as service
blueprinting or service mapping (Norling 1993). A service blueprint is “a picture or map that
accurately portrays the service system so that the different people involved in providing it can
understand and deal with it objectively regardless of their roles or their individual points of
view” (Zeithaml and Bitner 1996). It depicts the process of service delivery, roles of
customers, roles of service employees, and visible elements of service.
Zeithaml and Bitner (1996) call the consumer contact with the service system a “line of
visibility or line of interaction”. According to them the main components of a service
blueprint are:
• line of interaction: customer actions;
• line of visibility: “on-stage” contact and employee actions;
• line of internal interaction: “backstage” contact and employee actions;
• support processes.
The components of the service blueprint can identify and prioritise potential problematic
areas in the service delivery process from the customer point of view. Some ideas from the
tool and equipme nt renting companies are provided below.
Line of interaction: customer actions
Several life cycle stages of the product are evaluated by customers in a PSS. In the
servicing/renting/leasing phase, it is important to learn the decision- making process of
consumers who evaluate products, which they do not need to buy. What are the differences
and similarities with the purchasing situation? Is there any difference in information seeking
behaviour? Could emotions affect the result to the same extent?
Rental companies state that consumers express less interest in brands when choosing a
product, because the service provider ensures the function. Thus, independent service
providers have to rely on other marketing strategies than soliciting consumers by a brand
name.
Line of visibility: “onstage” contact and employee actions

43
The onstage contact occurs when the customer comes to the service provider. Here, the
relationship with the service employee and the first impression of the service facility are
important.
With raising consumer awareness about life cycle cost of ownership, it appears to be
important to provide concrete figures about life cycle cost of product ownership. The
relevance of information is very high in the case of PSS, where the total costs of ownership
presented to consumer is likely to strongly influence the choice of alternatives and the final
decision.
Line of internal interaction: “backstage” contact and employee actions
Backstage contact with the customer is extended in case the provider manages the
consumption phase of a product, as in the case of maintenance and upgrading services. Since
product performance heavily depends on customers to use it, it is important for the
representative of the service provider to learn the actual process of utilising a product. Here it
is important to consider that blue-collar employees perform the maintenance and on-site
upgrading and that the backstage employees suddenly become the front stage contact for
customers, who may judge the service quality and be either satisfied or dissatisfied with it.
Table 1 Some attributes for tool library

Product Financial issues


Significant range of tools Pricelist available at a website
Access to professional tools Cost structure (cleaning costs, deposit fee, use
Availability of tools price)
Ergonomic, silent, amortisation Moment of payment (before the use or after)
Tools are well ma intained (e.g. cleaned, oiled, Choices of payment (cash-credit card, per
charged) hour/per day/included in house rent, discounts for
2nd and 3rd days, or discounts for working days
during summer)
Service conditions Organisation
Convenient opening hours Core business (renting, selling)
List of available tools with accessories handing Type (renting, leasing, sharing)
out Ownership (rental company, tenant association,
Minimum rental time (several hours, 1 day) members of the service, neighbours, users)
Need for reservation (yes/no) Who provides the service (commercial
Reservation period (1 to several days in high organisation, tenant association, independent
season) entrepreneur, neighbours, independent
Booking system (telephone, internet, drop-by) entrepreneur, who is a neighbour, commune)
Neat appearing employees Maintenance of products (rental company, tenant
association, members of the service, outsourced
Prompt and personal service
in case of repair to a third party)
Assistance of service provider with the choice of
tools and use instructions
Location Additional services
How far from household is the service Workshop with all basic tools and stationary
How customers get there facilities
Clean location Home delivery service (on-time delivery)
Space capacity

44
Support processes
Support processes would include organisation of repair and maintenance of tools and their
final disposal at the end of their life. For the example of the tool library, the following
attributes could be suggested in the above context (Table 1).

5.2.2 What tools to use for evaluating PSS?


A combination of approaches for evaluating customer satisfaction with PSS may be
beneficial. All tools presented in section 4.3 can potentially be employed in studying
customer satisfaction.
Questionnaires are used to directly ask customers about their experiences, habits,
preferences, and opinions. It often recommended that dimensions of service or offer should
be identified by customers. This could be done in focus groups, by individual in-depth
interviews or by questioning customers when collecting information for the psychographic
portrait. These tools also allow the development of questionnaires for specific customer
groups, if the demographic data are collected during the communication. A profiling of
potential users was done in a study of eco-services (Behrendt, Jasch et al. 2003), which
confirms potential usefulness of tools similar to the psychographic portrait. Another study
within the PSS area heavily relied on data generated during the focus group interviews
(Vergragt 2000). Observations can provide more information about natural environment, in
which shopping or service encounter occurs without imposition or interference. Mystery
shopping can provide insights about the service or product directly from the customer place.
Contingent valuation can offer useful perspectives into potential future situations regarding
consumer willingness-to-pay. Incorporation of economic evaluation into a customer
satisfaction tool could provide the possibility for correlation analysis between willingness to
pay and different attributes of the system. Thus, each tool can contribute with specific
information to the overall picture about the service or a product. The combination of tools
would provide a more comprehensive picture. The first decision should focus on what do we
want to know and only after we have identified the purpose, should we decide on the most
effective way of obtaining required data.
The first step is to formulate what do we want to know in the consumer research. With the
purpose identified, the most effective ways of obtaining required data can be determined. The
major decision to be taken is about the framework for evaluation: how the satisfaction
formation process suits our context and our products, and what the attributes are of the eco-
service or the PSS (some ideas were presented in section 4.1). The next decision is more
instrumental: how to translate these attributes into tools, which could be used for collection
and analysis of data.
Translating the identified PSS attributes into information collection tools is an important step.
Many researchers, however, have expressed concerns even with the way multi-attribute
scales are being used. Often in consumer satisfaction research the measurement of
quality/performance is done as if these concepts were uni-dimensional, measured either as a
single attribute (e.g. using a single total performance evaluation question) or as summed
scores across several evaluation questions ending up with a single index, which is then
presented as a measure of overall satisfaction.
Some researchers have argued for the need to distinguish the relative significance of specific
product performance attributes, because they have different levels of importance to customers
(see Kano model). Therefore, it is necessary that customers should evaluate the attributes and
weight them (Fetz 1996). This will allow the identification of the most important attributes

45
and the making of adjustments when analysing data to account for different weightings of the
attributes.
Making a thorough analysis of attributes by operationalising the Kano model is possible
(Jacobs 1999). The following steps should be undertaken. Once the attributes are weighted by
their importance (e.g. “very important”=4, “not at all important”=1), the customers could
evaluate the performance of each attribute of a product or a service (4=“excellent”, 1=“poor”)
and evaluate overall satisfaction with the product or service (4=“very satisfied”, 1=“very
dissatisfied”). After that, by correlating the attribute performance ratings with the measure of
overall satisfaction (Pearson correlation) it is possible to measure motivational importance.
The comparison of direct and motivational importance in the Dual Importance Grid provides
a better understanding of what drives customer satisfaction with services (Figure 12). These
parameters could then be plotted onto the Service Attribute Dual Importance Grid and
analysis could result in a typology of the analysed attributes (existing, revealed, or expected)
The expected attributes have high direct importance and low motivational importance. Their
presence does not greatly improve overall satisfaction, because they are expected to be part of
the service in any case, but their absence or poor performance is very dissatisfying for the
customer.
Performance or revealed attributes, high in both direct and motivational importance, can both
satisfy and dissatisfy customer depending on how well they are fulfilled by the product or a
service.
Motivational importance

Surprise and Service reliability Performance


delight Personal
attributes
assistance
attributes

Basic or
Other expected
attributes Billing accuracy attributes
(low influence)

Direct importance

Figure 12 Service Attribute Dual Importance Grid (Jacobs 1999)

Surprise attributes, low in direct importance, but high in motivational importance, excite the
customer when present, but their absence does not dissatisfy.
This example illustrates how abstract models and fr ameworks could be operationalised and,
at the same time, used to interpret the primary data from theoretical perspective. This is
relatively easy technique, which can be employed when evaluating customer satisfaction with
product-service systems.

46
6 Conclusions
The environmental impacts of ever increasing consumption throughout the world have been
recently recognised. Many solutions have been proposed to combat the rising levels of
consumption. One of the concepts suggested as a potential solution to reduce consumption
levels is the concept of product-service systems (PSS).
The concept proved to be viable in the business-to-business context. However, in the private
consumer markets, it has been less successful, both in terms of economic viability and
environmental impact reduction. User behaviour has been named as the primary reason for
this situation.
To address this problem, either behavioural or service system design changes are needed.
Changing human behaviour and existing lifestyles contributes to the vision of sustainable
development, but it proves to be an insurmountable task over a short period of time.
Instead, changing the design of product-service system to reduce the behavioural pitfalls may
potentially be an easier way towards sustainable development. Changing system design
requires understanding how consumer acceptance of more sustainable solutions is formed,
influenced or changed, what the influencing factors are and what the leverage points for best
results with lowest costs are. Understanding consumer perceptions and behaviour in this
context is crucial.
However, the consumer decision-making process is much more complex and intricate than
just a simple decision about shifting from owning a product towards paying per its use.
Throughout this study we demonstrated that products are not seen purely for their functional
features, but rather products are complex combinations of various attributes, which, together
with functionality, also bring status, serve as a key to a certain social class, reinforce one’s
self-esteem, and much-much more.
Therefore, the goal of this study was to make a step toward better understanding the
complexity of the phenomena we intend to change. We looked at how different disciplines
perceive the consumption process in general and consumer decision- making process in
particular. We saw the wealth of theories and frameworks being developed trying to solve
this puzzle. We than looked closer at potentially most promising models, which could prove
valuable for understanding the consumer decision- making process in the context of ownerless
consumption.
We also found some useful tools, which can be employed for collecting information about
consumers. Identified frameworks and tools were then evaluated for suitability for the PSS
context. We also provided some suggestions and examples for how some of the presented
models could be operationalised in the PSS context.
Some important lessons were learned from this study:
• The consumer is a moody creature – swinging between rationality and emotional
behaviour.
• All disciplines we looked at address consumption from some perspective. This
perspective may be unique to this discipline, or may share common premises with
another. Cross- fertilisation and learning is the key to success.

47
• The challenge is not in the availability of analysis tools, but in analysis frameworks,
which would allow us to speak the same language with our system and understand it
better.
• We can probably employ just one tool to measure customer satisfaction with our system.
But it is a multifaceted system and thus a combination of tools is more promising.
• PSS is a system, comprised of products, services, infrastructures, and networks. The
criteria we want to evaluate this system against should include attributes of each
dimension.
• PSS is a multi-disciplinary area and initiating system level change will require system
level effort. Researchers with various backgrounds need to be involved in developing
ideas and methods for measuring customer satisfaction with PSS. “Non-social” PSS
practitioners should learn methods of social sciences.

48
7 Suggestions for further work
The identified gaps in specific tools for evaluating customer satisfaction with PSS and the
existence of a vast amount of methods for evaluating customer satisfaction with products and
services suggests clear direction for adjusting the present techniques to the specificity of PSS.
In order to also improve current techniques of evaluating customer satisfaction, identification
of best practices in measuring customer satisfaction in both manufacturing and service
companies is needed. As the results of the study show, a range of data collecting techniques
exist dominated by surveys and questionnaires employed by both academia and businesses.
What is needed is a guideline for what techniques are better suited for collecting specific data
from customers. As was exemplified with the Kano model, various techniques are suitable for
evaluating the spoken and unspoken attributes of products and services. This direction needs
to be further explored and tested in real case studies.
The overview of the existing company practices of measuring customer satisfaction can be
conducted through a survey and interviews with companies. This will allow evaluation of
business approaches to measure consumer PSS satisfaction in B2B and B2C markets.
Comparing the techniques will provide a good starting point or basis for improving specific
PSS-directed customer evaluation methods.
The indicators, which companies use for measuring customer satisfaction, is another
important area to explore. The study has shown that there is a mismatch between measures
and indicators that are used and the ones companies think are useful. Identification of
methods and indicators that reduce the mismatch would allow for the improvement and
streamlining of the measurements.
As the study concluded, it is the absence of frameworks, tools and data collection methods
tailored for PSS, which is the main concern Developing a framework that would identify
major attributes and elements, based on which a PSS can be evaluated, and linking these
attributes to specific data-collection techniques will greatly simplify and foster measuring
customer satisfaction with PSS and eco-efficient services.
According to the IIIEE definition, PSS is a system of products, services, supporting networks
(actors) and infrastructure that is developed to be: competitive, satisfy customer needs and
have a lower environmental impact than traditional business models. The difference between
eco-efficient services and PSS has not been distinguished in this study. Currently, there is a
tendency that any combination of products and services is automatically called a PSS without
evaluating their environmental profile. A range of services is labelled as eco-efficient without
systematic evaluation of their environmental performance.
In order to foster the development towards sustainable production and consumption systems,
the development of new market offers that would be designed as environmentally sound and
tested for customer acceptance prior to market launch is needed.
Therefore, the support to the pilot projects and attempt to develop new PSS is vital.
Development of new offers is a time consuming matter that requires involvement of a number
of actors, often of those who are usually considered to be outside of the traditional product
chain. The development of scenarios that can be tested with real life actors and evaluated
from environmental and customer acceptance perspective may provide a good illustration of
expected outcomes. Some attempts were already made to develop scenarios of more

49
sustainable consumption practices, such as SUSHOUSE project; however, the scenarios were
the final outcome of the project, and did not lead to new viable offers on the market.
The IIIEE is currently conducting a project that aims to develop a PSS scenario for a so-
called hobby-tool library in close cooperation with the producers, rental and housing
companies, as well as households. The scenarios are planned to be followed by a pilot project
where a PSS will be developed. This could potentially provide a ground for evaluating
customer satisfaction with PSS, which are designed with environmental consideration and
with customer requirements incorporated into the PSS.
To promote sustainable production and consumption, new, behaviour-changing PSS are
needed. It is not enough to learn about existing ways of providing products and services,
because as we see, they are not sustainable. Developing new solutions that are well evalua ted
is the way forward. Existing PSS and eco-services can be evaluated from environmental and
customer acceptance perspectives, but the next step should be to analyse whether expressed
customer requirements could be matched with less environmental harmful solution, while still
be accepted by customers.
Undoubtedly, the efforts of academy and business, should be supported by policy actions,
which should be directed towards involving new actors, disseminating information about
more sustainable ways of living and supported by economic instruments (Mont 2002). As
was already stressed, various instruments (policy, economic, etc.) have different time frames
for implementation. Reducing environmental impact from the consumption side requires
changing the behavioural patterns of people. However, this cannot be achieved by policy
measures alone, since personal values are influenced by institutional frameworks and values
in society. By changing societal values, the best outcomes can be achieved, but this requires a
concerted effort of all layers and players in society - political agendas, market system, and
social frameworks.

50
8 Appendix
Table 2 Customer satisfaction measures for new products in financial services (Edgett and Snow
1997)

Frequency of use Helpfulness of each measure


1. Increase in the number of customers 3
2. Increase in portfolio dollars 9
3. Complaint measurements 8
4. Market share 15
5. Direct personal interview 1
6. Employee attitude measures 12
7. Measure of customer expectations and perceptions 2
8. Reasons why customers discontinue with product or 10
service
9. Focus groups 4
10. Repeat customer rates 6
11. Customer survey – mail 11
12. Comparison of customer attitudes with other companies 13
13. Number of new customer referrals 7
14. Customer survey – telephone 5
15. Refunding of service charges or fee adjustments 20
16. Customer comment cards 19
17. Customer audits 16
18. Frequency of customer interaction 17
19. Customer hotline tracking 14
20. Quality circles 18

51
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