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1997valuearticle - An executive summary for managers and...

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THE JOURNAL OF SERVICES MARKETING, VOL. 11 NO. 6 1997 pp. 375-391 © MCB UNIVERSITY PRESS 0887-6045 375 Value, of course is what every marketer should be all about. The marketers who figure out how to add value will thrive even in these rough times. The ones who treat value as a jargon of the age may end up wishing they had never heard of value marketing ( Business Week, November 11 1991). Introduction The above quote leaves little doubt that service value has been, and will continue to be, a key construct of interest to marketers. Practitioners have recognized that their customers are increasingly searching for and demanding value in products and services (see the cover story in Business Week , 11 November 1991). Likewise, the academic literature has begun to consider the role of value in consumer decision-making (see Bolton and Drew, 1991a; Dodds et al. , 1991; Heskett et al. , 1990; Sheth et al. , 1991; Zeithaml, 1988). However, to date an empirical investigation of the magnitude of the relationship between service value and consumer decision- making and the form of the process by which consumers develop their perceptions of service value cannot be found in the literature. The current research thus has two major goals. The first objective is to test the proposition that service value is a central construct in consumer decision processes. Specifically, we test the proposition that when added to models of consumers’ decision-making for services, the service value construct increases the ability of such models to explain variance in purchase intentions above that independently accounted for by a consumer’s perception of the quailty of the service and the sacrifice made to acquire it (i.e. the service’s monetary and non-monetary acquisition costs). Our second objective is to determine how best to conceptualize and measure service value. In the next section, the literature is reviewed to provide the conceptual framework for the study and to identify the relevant research hypotheses. The methods used to test the hypotheses are then identified and described. Finally, the research results and the relevant implications of those results are discussed. Service value in the literature Traditionally, explanations of consumers’ services purchases have focussed on the relationship between service quality and purchase intentions (see Babakus and Boller, 1992; Cronin and Taylor, 1992; Parasuraman et al , 1985, 1988, 1994; Rabin, 1983; Rudie and Wansley, 1985; Thompson et al , 1985; Zeithaml et al. , 1993, 1996). However, this poses a dilemma for managers because it is also well known that consumers do not always buy the highest quality service (Olshavsky, 1985). Similarly, although cost factors have been shown to be an important predictor of demand, consumers also do not always purchase the lowest cost service (Onkvist and Shaw, 1987).
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