Impact of Self-Designed Products on Customer Satisfaction

Transcription

1 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS VOL 3, NO 5 Impact of Self-Designed Products on Customer Satisfaction Amna Anwar, Research Scholar, Foundation University Islamabad Amir Gulzar, (Corresponding Author) Assistant Professor, Foundation University Islamabad Ayesha Anwar, Research Scholar, Foundation University Islamabad Abstract This study explored the impact of self-designed products on customer satisfaction. Three independent variables i.e. perceived preference-fit, perceived process effort and perceived process enjoyment were tested against one dependent variable i.e. customer satisfaction. The study is cross sectional and casual in nature and the data was collected through 200 female students of four different universities by using quota sampling process. The result showed that perceived process effort has negative relationship with customer satisfaction whereas perceived preference-fit and perceived process enjoyment found positively effecting the customer satisfaction. Key Words: Self-Designed Products, Preference-Fit, Process Efforts, Process Enjoyment, Mass Customization, Customer Satisfaction 1. Introduction Every marketing effort is to ensure the maximum customer satisfaction that leads to customer loyalty and continuation of the long-term relationship of the firm with the satisfied customers (Rust & Chung 2006) that leads towards the an increase in market share and high firm performance (Morgan et al. 2005). Moreover an increase in customer satisfaction also leads to an increase in word of mouth (Guo et al. 2009). According to Zeithmal et al. (1990) product quality is one of the most important factor to determine the customer satisfaction whereas the outcome of an evaluation process where the consumer compares his expectations with the service he has received (Gronroos 1982). A positive attitude and high customer retention is possible by creating a strong bond could be created with customers by providing them the products those are preference-fit (Lovelock & Wirtz, 2004). Customization also increases the involvement of the customers and employees and creating more intellecutual input thus creating competitive edge (Safizadeh et al. 2008). So it can easily be concluded that without proper knowledge of the customer expectations it is almost impossible to create satisfaction of the customers. Personalization and customization of products/services for individual customers at mass production price is known as mass production (Joseph Pine, 1993: Stan Davis, 1996). The concept of mass customization is directly linked with the low costs, variety and wide range of customization at the expense of uniqueness whereas customization is the process of individualization of the products known as products of designer and craftsman. Both of the concepts i.e. mass customization and customization provide a strategic advantage to the firm/organization/business along with the economic value (Chase, Jacobs & Aquilano 2006). Advancement in technologies like manufacturing and communication allowed the companies to not only get connected with the customers on individual basis but also to provide them products on individualized basis (Pine, Victor, and Boyten, 1993) which definitely increases the customer satisfaction. The adoption of such technologies enabled the organizations to develop the learning relationship with the customers to predict their demands on individual basis and the changing conditions and its effects on the demand of the products. Major beneficiary organizations/firms of customization includes individual customization particularly of the products that people wear i.e. clothing, shoes, glasses, suiting etc. though because of the customization firms are more focused on niche market but its helps a lot to get the growth from the company. However the benefits of customization are not just focused on such firms but on every firms which wished to get the benefit by making effective and efficient decisions along with the following the standardization process. 1.1 Problem Statement This study is intended to investigate whether and to what extent self-designed products has an impact on satisfaction of Pakistani customers specifically females. COPY RIGHT 2011 Institute of Interdisciplinary Business Research 546

2 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS 1.2 Objectives VOL 3, NO 5 1. To study the element of enjoyment in self designed products 2. To study how process effort and dissatisfaction are interrelated 3. To study whether preference fit increase satisfaction or not 3. To explore if there is any relationship between mass customization and customer satisfaction 2. Review of Literature Developing products according to customer needs, on extreme basis known as customization, is becoming the major requirement and trend of the industry so getting important place in the firm s strategy (Mitchell M. Tseng and Xuehong Du, 1996). Design by Customers is taken as an approach for companies to communicate to customers about what the company can offer to them, to find out customer needs and wants, to help out customers in making choices and to negotiate for agreements (Mitchell M. Tseng and Xuehong Du, 1996). Customers preference not only varies in both in different markets and even in the same markets. To cater the demand of the customers individualized attention is becoming imperative that is contradictory to the concept of the industrialization. Normally manufacturers have two choices: General Approach- meet the general needs and avoid the specific ones thus leaving number of customers dissatisfy Specific Approach- develop the customer made products that increases the price of the products. Modern technologies specifically computer aided manufacturing, anyhow, is reducing the cost of customer-made products significantly (Tseng and Piller, 2003; Wind and Rangaswamy, 2001). 2.1 Preference-fit and satisfaction Nikolaus Franke, Peter Keinz, Christoph J. Steger (2009) argued that more satisfaction is identified in the customized products due to better preference fit as compared to standardized products. They, however, further doubt on the knowledge of customers and their understanding of knowing their own preferences. Customer are often unclear about their preferences and it is common that their preferences are often influenced by irrelevant factors making them failed to recognize the customized offers presenting a preference-fit (Bettman, Luce, and Payne 1998).) also argued that customer is willing to pay high with good purchase intentions if they expect higher benefits in the customized products as compared to standardized products (Nikolaus et al., 2009; Franke and Piller, 2004; Schreier, 2006) subject to the conditions i) if customers know their preferences ii) ability to express those preferences to the marketers and iii) their own involvement in the design and making of the products (Nikolaus et al., 2009). So it could be concluded that customization would be great marketing strategy if handled properly. "Perceived preference fit is defined as the customer's subjective evaluation of the extent to which the product's features correspond to her preference system (Dellaert and Stremersch 2005). As product features are designed by customers themselves so it s a common assumption that they may fit according to the customer preferences and thus creating greater value that definitely increasing the customer satisfaction (Franke and von Hippel 2003). Moverover customer also feel the pride to have its own designed product (Franke et al. 2010). So we may infer the following hypothesis: H1: Higher perceived preference fit results in increased satisfaction for self designed products. 2.2 Process Efforts and Satisfaction Peppers and Rogers (1997) identified a learning relationship between products and customers and described it as follows: 1. Process of communication and feedback enables the firms about the preferences of the customers on the individualized basis 2. Firms produce the design according to the specification identified by the customers to meet their preferences 3. With a proper system of feedback customers are involved more with the firms to design the products according to their own preferences by sharing their ideas, spending their time and energy 4. To make other firms competitor these customers have to re-teach the firms what they taught to this firm "Perceived process effort as the subjective perception of the time and mental energy invested in designing the product (Dellaert and Stremersch 2005). Efforts are required from customer side to design own products requiring customers active involvement which are time and energy consuming may lead the customers towards the dissatisfaction (Huffman and Kahn, 1998). Due to the number of cognitive steps in decision making while choosing among the alternatives increases the complexity of decision making (Bettman et al. COPY RIGHT 2011 Institute of Interdisciplinary Business Research 547

3 1990) thus require extra consumer efforts in terms of energy and time (Johnson and Payne 1985) and may yield in less customer satisfaction (Wright 1975). So it can be concluded: H2: Higher perceived process effort results in dissatisfaction for self-designed product to customers. 2.3 Process Enjoyment and Satisfaction Active involvement where leads to dissatisfaction, quite contradictory could be the motivator for the customers to design their own products as it creates fun (Huffman and Kahn, 1998). If involved voluntarily and deriving benefits from the overall process involve fun that shows the positive attitude of the customers and thus increase the satisfaction (Hertel et al. 2003; Franke and Shah 2003). Designing own products requires the active involvement of the customers in the process. According to Huffman and Kahn (1998) customer take it as fun while learning their own preferences in the process and also experience positive emotions. Customer enjoys the overall process of the customization (Dallaert and Stremersch (2005). Process enjoyment has a significant impact on the customer satisfaction and amplified by the preference fit (Nikolaus Franke, Martin Schreier, 2010). Franke and Shreier (2010) found that regardless of the outcome of the process customer gives higher value to the process if they enjoyed it. Thus following hypothesis may be concluded: H3: Higher perceived process enjoyment results in higher satisfaction for self-designed product to customers. A graphical presentation of the interaction of the variables is shown below: Independent variables dependent variable Perceived Preference-fit Perceived Process Efforts Customer Satisfaction Perceived Process enjoyment 3. Research Methodology The study was a casual and cross-sectional in nature examining the impact of self-designed products on customer satisfaction in clothing. Survey method was done by keeping in view its nature and requirements to see the impact of self-designed products on customer satisfaction specifically on Pakistani female students. Data is collected through both primary and secondary sources. The primary information was collected through questionnaire while secondary information through books, journals and internet. The sample selected for this survey was 200 Pakistani female students from our four universities of twin cities i.e. Rawalpindi and Islamabad as they are more into designing specifically cloths. Selected universities for data collection were FOUNDATION UNIVERSITY, BAHRIA UNIVERSITY, National University of Modern Languages and UET Taxila. The questionnaires for sample is prepared after studying the concerning literature. After collection of data, it was analyzed through SPSS (statistical package for social sciences). 3.1 Reliability Analysis of the Questionnaire Questionnaire was measuring the four variables out of which three were independent and one were dependent. Reliability of questionnaire was checked through the application of the alpha which should be minimum of 0.7 before final distribution of the questionnaire. Results are shown below: Table 3.1 Reliability of Preference-Fit Alpha N of Items COPY RIGHT 2011 Institute of Interdisciplinary Business Research 548

4 INTERDISCIPLINARY JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS Table 3.2 Reliability of Process Effort Alpha N of Items VOL 3, NO 5 Table 3.3 Reliability of Process Enjoyment Alpha N of Items Table 3.4 Reliability of Customer Satisfaction Alpha N of Items As depicted from all the tables of reliability the value is greater than 0.7 showing the acceptability level of the usage of the questionnaire for the data collection. 4. Data Analysis and Discussion Data was collected through questionnaire from 200 female students by using quota sampling. Table 4.1 shows the number of the students by each university: Table 4.1 Number of Students 01 Foundation University NUML Bahria University UET Taxila Hypothesis Testing The entire hypotheses were tested through the regression analysis. First hypothesis of the study was higher perceived preference-fit results in increased satisfaction for self designed products. The results of regression analysis for the first hypothesis are given below in the tables 4.2 and table 4.3: COPY RIGHT 2011 Institute of Interdisciplinary Business Research 549

5 Table 4.2 Model Summary of the Regression Analysis showing the R and Adjusted R Square of Perceived Preference-Fit on Customer Satisfaction Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate a a. Predictors: (Constant), Preference fit Table 4.3 Regression Analysis of Perceived Preference-Fit on Customer Satisfaction Coefficients a Standardized Unstandardized Coefficients Coefficients Model B Std. Error Beta T Sig. 1 (Constant) Preferencefit a. Dependent Variable: satisfaction According to tables, there is a significant relationship between dependent variable i.e. customer satisfaction and independent variable i.e. preference fit which is.000.the Beta value of preference fit is.650 that means it has 65% impact on customer satisfaction. On the same side t value also showed result of which tells about the significant impact on customer satisfaction and the strength of model is 42.2% (R2). Overall results are supporting the first hypothesis and proving that perceived preference fit has a positive impact on the customer satisfaction that is in line with the study of the Nikolaus Franke, Peter Keinz, Christoph J. Steger (2009) who suggested that more satisfaction was resulted with increased customer preference-fit. The second hypothesis of the study was higher perceived process effort results in dissatisfaction for selfdesigned product to customers. The results of regression analysis for the first hypothesis are given below in the tables 4.4 and table 4.5: Table 4.4 Model Summary of the Regression Analysis showing the R and Adjusted R Square of Perceived Process Efforts on Customer Satisfaction Model Summary Adjusted R Std. Error of the Model R R Square Square Estimate a a. Predictors: (Constant), process effort Table 4.5 Regression Analysis of Perceived Process Efforts on Customer Satisfaction Coefficients a Standardized Unstandardized Coefficients Coefficients Model B Std. Error Beta t Sig. 1 (Constant) processeffort a. Dependent Variable: satisfaction According to tables, there is a significant relationship between dependent variable i.e. customer satisfaction and independent variable i.e. perceived process efforts which is.000.the Beta value and t value of process effort is negative that means negative relationship exist between customer satisfaction and process effort. So COPY RIGHT 2011 Institute of Interdisciplinary Business Research 550

6 overall results proved the second hypothesis that confirms the study of Huffman and Kahn (1998) arguing that process efforts reduces the customer satisfaction. Third hypothesis of the study was higher perceived process enjoyment results in higher satisfaction for selfdesigned product to customers. The results of regression analysis for the first hypothesis are given below in the tables 4.6 and table 4.7: Table 4.6 Model Summary of the Regression Analysis showing the R and Adjusted R Square of Perceived Process Enjoyment on Customer Satisfaction Model Summary Model R R Square Adjusted R Square Std. Error of the Estimate a a. Predictors: (Constant), process enjoyment Table 4.7 Regression Analysis of Perceived Process Efforts on Customer Satisfaction Coefficients a Standardized Unstandardized Coefficients Coefficients Model B Std. Error Beta t Sig. 1 (Constant) Process enjoyment a. Dependent Variable: satisfaction According to tables, there is not a significant relationship between dependent variable i.e. customer satisfaction and independent variable i.e. process enjoyment which is.498.the Beta value of process enjoyment is.048 that means it has 48% impact on customer satisfaction. On the same side t value also showed result of.679 which tells about the impact on customer satisfaction and the strength of model is 20% (R2). So the results proved that the third hypothesis is also true and is in accordance with the study of Nikolaus Franke, Martin Schreier (2010) arguing that the increased enjoyment increases the customer satisfaction. 5 Conclusions The following conclusions have been drawn from this study: 1) The process enjoyment increase the customer satisfaction 2) Preference fit and customer satisfaction has close relationship 3) Higher effort involved in designing clothes causes dissatisfaction 6 Limitations Time limitation was the major constraint during the research. Access to information Access to resources People were not serious about the questionnaire. Some refused to fill, while others did not return. COPY RIGHT 2011 Institute of Interdisciplinary Business Research 551

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