Linköping University | Department of Management and Engineering Master’s Thesis, 30 credits| MSc Business Administration – Strategy and Management in International Organizations Spring 2020 | ISRN-number: LIU-IEI-FIL-A--20/03419--SE
Linköping University SE-581 83 Linkoping, Sweden +46 013 28 10 00, www.liu.se
Aleko Ivaylov Popov
Yashaswini Ravi
Supervisor: Hans Andersson
Conceptualization of service loyalty
in access-based services in
micromobility
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English Title:
Conceptualization of service loyalty in access-based services in micromobility – A case of e-scooter sharing services
Authors:
Aleko Ivaylov Popov and Yashaswini Ravi
Advisor:
Hans Andersson
Publication type:
Master’s Thesis in Business Administration
Strategy and Management in International Organizations Advanced level, 30 credits
Spring semester 2020
ISRN-number: LIU-IEI-FIL-A--20/03419--SE
Linköping University
Department of Management and Engineering (IEI) www.liu.se
ii
Abstract
Title
Authors
Supervisor
Date
Background
Aim
Findings
Keywords
Conceptualization of service loyalty in access-based services in micromobility –
A case of e-scooter sharing services.
Aleko Ivaylov Popov and Yashaswini Ravi
Hans Andersson
May 25, 2020
Provide insights on the potential drivers of service loyalty in access-based
services, especially when the consumers have the option to switch between
owning a product or accessing a product through a service. By examining
service loyalty in access-based services in the context of e-scooter sharing
services, the researchers contribute to the service research field.
Conceptualize service loyalty by considering the ownership dilemma in
access-based services in micromobility. More specifically, the study aims to
find what are potential drivers of service loyalty, what effects does ownership
advantage have on service loyalty and what variables mediate the customer
satisfaction – service loyalty relationship in said services.
.
A quantitative study, in which a survey method is chosen to gather empirical
data. The survey was distributed as an online questionnaire via online
platforms. In addition, an e-scooter sharing service company, Helbiz, shared
the survey on their official Twitter and Facebook handles. A total of 249
responses was received.
Methodology
PLS-SEM was used as a statistical analysis tool to analyse the gathered data.
Data suggests that customer satisfaction, service image, affective
commitment and relative advantage are drivers of service loyalty in
access-based services in micromobility. Furthermore, the effect of ownership
advantage on service loyalty proved to be inconclusive as the result was not
statistically significant. Finally, data indicates that service image, affective
commitment and relative advantage mediate the customer satisfaction –
service loyalty relationship.
Service loyalty • Access-based services • E-scooter sharing services •
Ownership advantage • Mediating constructs
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Acknowledgements
We want to express our utmost gratitude to our thesis supervisor, Hans Andersson. He has
provided us with valuable insights through his constructive suggestions and timely useful
critiques for this research work. We would also like to offer special thanks to Hugo Guyader for
his willingness to review our survey questionnaire and data analysis. We wish to thank our fellow
students, Julia Gernert, Lorin Schenk, Sarah Verry, and Ugur Mersinlioglu, for their support and
valuable feedback in our thesis group sessions. Furthermore, we appreciate the feedback
received by Philipp Kaiser, Susi Lintner, during the pre-final seminar.
We want to extend our thanks to all the survey respondents, who took out their valuable time to
take part in the survey during a critical pandemic situation. Without their responses, this thesis
would be deficient.
Lastly, we would like to thank our families and Yuliia Zhuravel for supporting us during our
studies. Extended appreciation to Netflix and Amazon Prime for entertaining us throughout.
We hope you find this thesis is interesting and worthy of your time.
Linköping, 25
thMay 2020
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“Joy comes not through possession or ownership but through a wise and loving heart.”
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Table of Contents
Abstract ... ii
Acknowledgements ... iii
Table of Figures ... viii
Table of Tables ... ix
1. Introduction ... 1
1.1 Access-Based Services ... 1
1.2 Motives and Research Purpose ... 1
1.3 Contribution to the Field ... 3
1.3.1 Theoretical Contribution ... 3
1.3.2 Practical Contribution ... 4
1.4 Thesis Scope ... 4
1.5 Structure ... 4
2. Theoretical Framework ... 6
2.1 PART I: Breaking It Down ... 6
2.1.1 Circular Economy ... 6
2.1.2 The Sharing Economy ... 7
2.1.3 Access-Based Services ... 7
2.1.4 E-scooters under Shared Micromobility ... 9
2.2 PART II: History Matters ... 10
2.2.1 Evolution of Customer Satisfaction Indexes* ... 10
2.2.2 Dynamics and Issues in the Satisfaction-Loyalty Relationship ... 14
2.3 Part III: It’s time to start building ... 16
2.3.1 Service Loyalty ... 17 2.3.2 Customer Satisfaction ... 19 2.3.3 Service Quality ... 20 2.3.4 Perceived Price ... 22 2.3.5. Relative Advantage ... 24 2.3.6 Affective Commitment ... 26 2.3.7 Service Image ... 28 2.4 Ownership ... 30
vi
2.4.1 Ownership and Possession Throughout History* ... 31
2.4.2 Ownership and Possession Literature ... 32
2.4.3 Ownership Advantage in Literature ... 33
2.5 Ownership Advantage as Part of the Model ... 35
2.6 Proposed Model ... 38
3. Methodology ... 39
3.1 Marketing Research on Services ... 39
3.2 Ontological and Epistemological Dimensions of the Research ... 39
3.3 Research Approach ... 41 3.4 Research Design ... 41 3.5 Research Strategy ... 42 3.6 Operationalisation of Theory ... 43 3.7 Sample ... 44 3.8 Data Collection ... 45 3.9 Data Analysis ... 46 3.10 Methodological Limitations ... 47 3.11 Ethical Considerations ... 49 4. Results ... 50 4.1 Sample ... 50
4.2 Assessing the Results ... 51
4.2.1 Data Examination ... 51
4.2.2 Assessing the Reflective Measurement Model ... 52
4.2.3 Assessing the Structural Model... 55
4.3 Hypotheses Testing ... 58
4.3.1 Direct Effects ... 60
4.3.2 Mediating Effects ... 61
4.4 Additional Findings: Importance-performance Map ... 63
5. Discussion ... 67
5.1 Summary of Findings ... 67
5.2 What are potential drivers of service loyalty? ... 68
5.2.1 The Customer Satisfaction, Service Quality and Perceived Price Trio ... 68
5.2.2 Service Image ... 69
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5.2.4 Relative Advantage ... 71
5.3 What is the effect of ownership advantage on service loyalty? ... 72
5.4 What variables mediate the customer satisfaction - service loyalty relationship? ... 74
6. Conclusion ... 75
6.1 Managerial Implications ... 76
6.2 Limitations and Future Research ... 78
References ... 80
Appendix A: Questionnaire ... 97
Appendix B: Example of Survey Posts ... 99
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Table of Figures
Figure 1: Inter-relation between Circular Economy, Sharing Economy and Access-Based Services ... 7
Figure 2: E-scooter sharing services firms and the countries they operate in (Source: Ajao, 2019) ... 9
Figure 3: The original SCSB (Swedish Customer Satisfaction Barometer) model (Source: Johnson, et al., 2001) ... 11
Figure 4: The American Customer Satisfaction Index (ASCI) Model (Source: Johnson, et al., 2001): ... 12
Figure 5: Revised ASCI Model (Source: Johnson, et al., 2001) ... 13
Figure 6: The target construct of the proposed model... 18
Figure 7: Hypothesis 1 ... 20
Figure 8: Hypothesis 2 & Hypothesis 3 ... 21
Figure 9: Hypothesis 4 ... 23
Figure 10: Hypothesis 5 & Hypothesis 6 ... 26
Figure 11: Hypothesis 7 & Hypothesis 8 ... 28
Figure 12: Hypothesis 9 & Hypothesis 10 ... 30
Figure 13: Hypothesis 11 & Hypothesis 12 ... 37
Figure 14: The proposed model ... 38
Figure 15: Age structure... 50
Figure 16: Ownership structure ... 50
Figure 17: Indicated insignificant paths in the proposed model ... 60
Figure 18: The model with path coefficients and R2 values ... 61
Figure 19: Indirect effects ... 63
Figure 20: I-P map for customer satisfaction ... 64
Figure 21: I-P map for service loyalty ... 65
Figure 23: Screenshot of the survey on Twitter ... 99
Figure 22: Screenshot of the survey on Facebook ... 99
Figure 24: Place of residence ... 100
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Table of Tables
Table 1: Summary of hypotheses ... 38
Table 2: Constructs and their respective questions ... 44
Table 3: Organisation of Statistical Methods (Source: Hair, et al. 2017) ... 46
Table 4: Reflective indicators and internal consistency reliability ... 53
Table 5: Convergent and discriminant validity ... 54
Table 6: R2 and Q2 values ... 57
Table 7: Support for hypotheses ... 59
Table 8: Summary of hypotheses ... 67
Table 9: Fornell-Lacker Criterion ... 101
Table 10: Heterotrait-Monotrait Ratio (HTMT) ... 101
Table 11: Inner VIF values ... 101
Table 12: Effect sizes ... 101
Table 13: Total indirect effects ... 102
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1. Introduction
1.1 Access-Based Services
Many aspects of the economy are different from what they used to be, and some aspects keep changing. One such change taking place is a transition from a linear economy to a circular economy (Entrepreneurship Campus, 2019). The former represents a traditional method of producing, consuming, and disposing of a product while the latter includes new links to that relationship – sharing, leasing, reusing, recycling, etc. Sustainability has been at the forefront of economic discussions due to increased talk on the future depletion of fossil fuels (United States Environmental Protection Agency). Within this economic shift, a new business model emerged: access-based services that focus on the sharing aspect of the circular economy. The model is defined as economic transactions in which multiple consumers successively gain temporary, short-term access to a good, while legal ownership remains with the service provider (e.g. car sharing, Airbnb, etc.) (Bardhi & Eckhardt, 2012). Thus, Bardhi and Eckhardt (2012) argue that the service combines the concept of ownership from the point of view of the service provider and possession from the user’s point of view.
1.2 Motives and Research Purpose
A particularly good example of how access-based services have entered people’s lives is the case of the most recent phenomenon in micromobility – that of e-scooter sharing services (Thorpe, 2019). They are so widely present in urban centres around the globe that one can hardly walk along the pavement without stumbling over an e-scooter in cities like San Francisco and Paris. Micromobility data reveals that there were 20 million trips made in more than 50 cities world-wide, where 83% of trips were made exclusively on shared e-scooters (Clewlow, 2019). Thus, the popularity of the service can hardly be ignored. Usually a popularity of a service is caused by high customer satisfaction which results in customer loyalty (Mittal, 2016). However, there is a place for concern in the industry (Podgayetsky, 2019). Although the service is enjoyed by many as its popularity suggests, “[loyalty] is the best-kept secret of micromobility sector for a reason: while it was expected that a lot of people will use scooters for commuting, they actually did this. They did it once, they did it twice, three times … and then their personal scooter arrived from Amazon, ending the stream of recurring revenue flowing to the scooter company” (para. 8). Therefore, the authors argue that the decision of the customer to own the vehicle instead of accessing it, arising from advantages that come with ownership, might disrupt loyalty to the service. This type of loyalty is regarded as service
2 loyalty in order to differentiate it from loyalty related solely to a brand. Thus, from a practical standpoint, it is important to include ownership advantages when measuring service loyalty in access-based services in transportation, similar to e-scooter sharing services. This includes services where it is relatively easy and inexpensive for the customer to acquire the vehicle and where the purchase does not include much deliberation, in contrast to the case of a car purchase, for instance. Nevertheless, there are also advantages that come with non-ownership (access-based) consumption. For instance, among the discussed drivers of non-ownership-based consumption are sustainability, social utility of sharing, cost savings, functional utility of sharing among others (Akbar, et al., 2016). This can pose a dilemma for a user of access-based services in micromobility, where advantages related to ownership and non-ownership might influence their loyalty to the service to a different degree.
The previous paragraph has discussed how ownership advantages might negatively influence service loyalty in micromobility services and how some non-ownership advantages might influence it positively. In addition, it is also important to examine another important factor that influences loyalty, namely customer satisfaction. The relationship between the two has been widely present in academic literature and it has been proved that a positive correlation does exist (Mittal, 2016). Since the 1990’s, there has been too much focus on the direct relationship between satisfaction and loyalty and companies have focused their efforts on improving customer satisfaction, believing that it would improve loyalty substantially (Kamakura, et al., 2002; Rust, et al., 1995). However, improving satisfaction cannot be a panacea for business success because customer satisfaction is only partially responsible for loyalty (Szymanski & Henard, 2001). Many models that measure loyalty do not include important mediating factors that could better explain the satisfaction-loyalty relationship. In the particular context of access-based services in micromobility, such mediating factors ought to include constructs that measure non-ownership related advantages due to their importance in driving non-non-ownership-based consumption and consequently loyalty, as discussed in the previous paragraph. Therefore, it is important to fill that gap and create a relevant model to measure service loyalty for access-based services that includes relevant mediating constructs while still preserving the direct satisfaction-loyalty relationship which is proven to exist throughout different industries and service sectors.
To conclude, little is known on what drives service loyalty in access-based services when customers have the option to easily switch between access and ownership. Thereby, from a theoretical perspective the purpose of this research study is to examine service loyalty in access-based services in micromobility by considering the ownership dilemma. The authors argue that this perspective is relevant for such business
3 models and has not been thoroughly examined in literature. Examining service loyalty could be achieved by designing a causal model. It will incorporate the new construct of ownership advantage and other mediating constructs, some of which aim to capture non-ownership related advantages. Moreover, the authors intend to study the issue through the context of e-scooter sharing services which being a fairly recent phenomenon, is interesting and has not been well examined from a consumer behaviour perspective. In addition, it can bring important insights for similar access-based business models that currently exist or might appear in the future. Therefore, the purpose of this thesis is to conceptualize service loyalty by considering the ownership dilemma in access-based services in micromobility. This purpose is achieved by conducting a study that attempts to answer the following questions in the context of e-scooter sharing services:
- What are potential drivers of service loyalty?
- What is the effect of ownership advantage on service loyalty?
- What variables mediate the customer satisfaction - service loyalty relationship?
1.3 Contribution to the Field
1.3.1 Theoretical Contribution
Measuring service loyalty is by no means something new to the field of consumer behaviour, in fact it has been on the forefront of marketing literature since the introduction of the first customer satisfaction index developed in 1989 (Fornell, 1992). Nevertheless, the authors argue that it continues to be relevant because, according to Reichheld and Sasser (1990), it is directly linked to profitability and therefore, responsible for the long-term survival of a business. However, service loyalty continues not to be understood in its entirety and its relationship with its most prominent predecessor customer satisfaction is highly dependent on context, industry and multiple other factors that might be in place (Kumar, et al., 2013). One such important factor in access-based services in micromobility, seems to be ownership advantage. Literature has so far discussed burdens of ownership which include the risks and responsibilities that are usually related to owning a product (Moeller & Wittkowski, 2010) or in other words, the opposite of ownership advantages. Nevertheless, the opposite relationship has not yet been empirically examined, namely on whether perceived benefits of ownership negatively influence the usage of access-based services. Therefore, the new concept was introduced in a marketing context. Furthermore, it is incorporated in the proposed model in order to demonstrate its importance in influencing service loyalty in the discussed context.
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1.3.2 Practical Contribution
From a practical standpoint, designing a working model to measure service loyalty for access-based services in micromobility could be a useful tool for managers to better understand what drives consumers to keep coming back to their service. This would allow them to target specific aspects of the service that would have the strongest positive effect on service loyalty. Furthermore, it would allow them to see which aspects of the service do not perform sufficiently well and consequently focus on improving their performance.
1.4 Thesis Scope
The thesis focuses on empirical examination of consumer behaviour in access-based services in micromobility. The specific context is e-scooter sharing services as it is the most recent phenomenon in micromobility and as such has not yet been examined by literature from a consumer behaviour perspective, which makes it interesting to explore. In addition, although the focus is on e-scooter sharing services, discussion could also be applicable to other micromobility services that include similar vehicles such as bikes, electronic skateboards and other pedal assisted or electronic vehicles.
As the purpose of the study is to conceptualize service loyalty through designing a model, a quantitative method of study was selected. It was carried out by designing a questionnaire to be spread out to target audiences. The result analysis and discussion parts of the thesis are based on the responses of customers who have used e-scooter sharing services.
1.5 Structure
The thesis is outlined as follows: This chapter is followed by a theoretical framework that is intended first, to provide the background of this thesis and second, to build the basis for a successful analysis of the gathered data. More concretely, the first part of the theoretical framework includes the context of the thesis starting from the more general to the more concrete. This is followed by a discussion on analysing consumer behaviour through measuring customer satisfaction and customer loyalty and how this method developed throughout the years through the evolution of customer satisfaction indexes. This leads to the introduction of the different elements that are to be included in the proposed model and their relationships. Then, the second chapter presents the concept of ownership from a theoretical perspective which leads to the introduction of the term ownership advantage and the rationale behind its incorporation into the model. The second chapter ends with a final proposed model that is to be tested.
5 The third chapter of the thesis discusses the methodological rationale behind the chosen methods to conduct the study. It discusses mainly the research design and strategy and how the data was collected and analysed. The fourth chapter presents the results from the survey through an analysis of the data via the proposed model. It assesses both the measurement and structural models and discusses whether the proposed hypotheses based on the model are supported by the collected data. In addition, it presents the results from the mediation analysis. Finally, it brings forward additional findings, such as an importance-performance map analysis, upon which managerial implications are based. In the fifth chapter the authors discuss the main findings, their rationale and implications, and their relation to theory, more specifically whether the findings support what earlier theory had suggested. In addition, in this section the authors elaborate whether ownership advantage plays an important role in influencing service loyalty in access-based services in micromobility. The sixth chapter concludes the thesis. It also includes a discussion on managerial implications, limitations and suggestions for future research. In addition, it is important to mention, that the authors have looked at certain topics from a historical perspective to bring forth awareness to the readers and to provide a holistic understanding on the premise of the research. However, if the readers are aware or not interested in such information, they could skip such sub-sections of this thesis. Such sections or subsections are indicated with an asterisk. By skipping such sections, it would not affect or hinder the readers from comprehending the main points of this study. Finally, the term “authors” will be used to designate the thesis authors.
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2. Theoretical Framework
2.1 PART I: Breaking It Down
This section will provide information about the concept of circular economy, sharing economy, and access-based services to bring out the inter-relation between them. The main aim of bringing out the interrelation between the concepts is for the readers to understand the notion of causality that is associated with the discussed concepts and present them with the context of this study. The section also discusses the concept of e-scooters under shared micromobility services.
2.1.1 Circular Economy
The Industrial Revolution brought forth a period of economic development (Allen, 2007). The fundamental driver of the Industrial Revolution was fossil energy that still plays a significant role in global energy systems (Ritchie & Roser, 2020). The onset of the Industrial Revolution made marketable goods cheap, abundantly available and easily accessible (Diacono, 2016). Consequently, mass production made sense and agreeably raised individuals’ standards of living that increased the global consumption of fossil energy (Diacono, 2016; Ritchie & Roser, 2020). However, overexploitation of fossil fuels has contributed to climate change extensively resulting in a damaging effect on the environment (Elliott, 2015). According to a McKinsey report, it is predicted that in approximately 30 years around 3 billion new consumers will enter the market from the emerging economies, and this could deplete the available fossil energy faster than they could replenish (Diacono, 2016). At the same time, people are heading towards an end of an era of cheap oil and materials, where using less is just not enough (Diacono, 2016). As a result, the idea of adopting the circular economy as a way to progress and innovate in the 21st century, evolved to restore
the damaged ecosystem (Diacono, 2016).
The existence of the term circular economy dates back to the 1970s and was introduced by Pearce & Turner (1990) in an academic literature, analysing the linkages between the economic activities and the environment (Okorie, et al., 2018). The most acclaimed definition of circular economy is framed by the Ellen MacArthur Foundation, where circular economy is introduced as, “an industrial economy that is restorative or regenerative by intention and design” (EMF, 2013, p. 14). Consequently, it is evident that in a circular economy, a company’s growth does not depend on the continuous use of natural resources. Rather it is through the use of innovative, disruptive technology and business models which form a basis to efficiently use and re-use resources. A way of achieving this is through sharing and dematerialization
7 (Diacono, 2016). Particularly, Diacono (2016) argues that a part of the solution depends on shifting from owning objects to using sharing services and thus, accelerating the trend towards adaption of the sharing economy. Therefore, one can observe that there is an increasing importance of the ownership dilemma in the shared micromobility services.
2.1.2 The Sharing Economy
The sharing economy, a widely known expression which refers “to the sharing activity of underutilized assets within the help of IT-based technology” (Georgina, 2018, p. 183). A report from EMF (2013) claims that the sharing economy is a reinvention of traditional market consumption behaviour, where it is based on the principle of maximising the utility of tangible assets through technology that facilitates renting, lending, swapping, bartering and giving. In addition, the sharing economy propels three primary benefits that is economic, environmental, and communal benefits that together contribute to the benefit of circular economy (EMF, 2013). As a result, the sharing economy contributes to the circular economy (Sposato, et al., 2017). Sharing represents “the act and process of distributing what is ours to others for their use, and/or the act and process of receiving or taking something from others for our own use” (Belk, 2007, p. 126). Furthermore, there is an increase in the trend to opt out for other alternatives to ownership which consequently dives into the concept of access (Bardhi & Eckhardt, 2012). In this paradigm, the concept of access-based service models emerged within the sharing economy. Figure 1 is a pictorial representation of the inter-relation of sharing economy to circular economy and access-based services.
2.1.3 Access-Based Services
Access-based services are defined as “transactions in which multiple consumers successively gain temporal, short-term access to a good, while legal ownership remains with the service provider (e.g. Rentals, car-sharing)” (Schaefers, et al., 2015, p. 1). The concept of access is temporary in nature which is
8 quite similar and lies within the concept of sharing as there is no transfer of ownership of the objects in both concepts (Bardhi & Eckhardt, 2012). Nevertheless, there is a slight difference between the concepts of sharing and access. The difference between access and sharing lies with respect to the perceived or shared sense of ownership (Bardhi & Eckhardt, 2012), where sharing is considered to be more altruistic and prosocial in nature (Belk, 2010). In other words, sharing is not necessarily market oriented but rather focuses only on sharing without monetary transactions taking place. On the other hand, access is not considered altruistic but, rather it deviates towards having an economic value and reciprocity in nature (Bardhi & Eckhardt, 2012). In market-mediated access models, the concept of sharing of an object takes place when company owns the object of consumption (Bardhi & Eckhardt, 2012) unlike sharing of the object of personal properties among consumers (Belk, 2007). In effect, consumers gain access to the use the object (Bardhi & Eckhardt, 2012). Thereby, access-based services, provided by market-mediated service providers, form part of the sharing economy (see Figure 1).
Today, there are numerous ways in which a product or service can be acquired and used, where companies are offering opportunities for consumers to experience access-based products and services without transferring ownership to them (Pichierri, et al., 2018). According to Holbrook and Hirschman (1982), consumer behaviour has experiential influence where the consumer is pleased to pay for an experience rather than ownership (Zhuo, 2015) and, they prefer experiences over brand (Lobaugh, et al., 2019). Moreover, attitude is considered as a dominant determinant of behaviour and it reasonably develops from the beliefs that the individual holds regarding certain attributes of the object (Ajzen, 1991). Access-based acquisition modalities, especially renting, has given access to the objects that consumers would have not possessed otherwise, due to various reasons such as space constraints, environmental concerns, duration of use of the goods, burdens of ownership such as total cost of owning an object, responsibilities and risks and affordability (Lawson, et al., 2016; Schaefers, et al., 2016; Belk, 2014; Bardy & Eckhardt, 2012; Moore & Taylor, 2009). Thereby, it makes consumers enjoy and live on what they can access rather than own (Belk , 2014). However, Moeller and Wittkowski (2010) assert that consumers overvalue ownership and abstain from moving from owning an object to accessing it, presumably because they value the idea of symbolic consumption (Richins , 1994). In addition, a factor that affects individuals’ willingness to share is when they perceive the object as theirs with a strong feeling of attachment to the possessions (Belk, 2010). Consequently, possessiveness and its control indicate object attachment and materialism which threatens sharing (Belk, 2010). Certainly, in the context of access-based services within sharing economy, there is dearth in the understanding of consumers decision and attitudes when there are preferential modes of acquiring objects in terms of renting or buying (Moore & Taylor, 2009).
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2.1.4 E-scooters under Shared Micromobility
This research addresses the phenomenon of access-based services through e-scooter sharing services, which is one of the categories of modes of transportation under shared micromobility. Shared micromobility is defined by McKenzie (2019)as, “those services that provide short term electric rental vehicles to the general public for a fee” (p. 1). E-scooter transportation services are an exemplar of a smart accessibility and mobility, where individuals can move through urban streets, solving the mobility problem such as first and last mile, and congestions (Glasco, 2018). E-scooters are considered as the latest transportation tool in the ever-evolving sharing economy (Elser & Manfredi, 2018). The rise in the usage and adoption rate of e-scooters sharing services addresses the untapped demand for urban mobility innovation indicating another disruptive force in transportation services (Glasco, 2018). According to a report from Populus, most companies who are currently operating in the shared e-scooter market carry out similar business models (Glasco, 2018). For instance, Figure 2indicates the list of the most popular e-scooter sharing companies and the countries they operate in. Same business models are adopted by different e-scooter service providers as the service is similar between different brands. Thereby, this research provides insights not based on any particular e-scooter brand but rather based on the service as a whole. Furthermore, it would allow the authors to shift the focus from the brand to the service and subsequently understand what drives loyalty to the service.
Figure 2: E-scooter sharing services firms and the countries they operate in (Source: Ajao, 2019)
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2.2 PART II: History Matters
This section provides background information on the evolution on the customer satisfaction indexes which is important as the attempt to answer the research questions is through a model that is in a way inspired and finds its basis in such indexes. Furthermore, it provides an unexperienced reader with the necessary information to familiarise themselves with the satisfaction-loyalty relationship from a historical perspective.
2.2.1 Evolution of Customer Satisfaction Indexes*
As the main purpose of the thesis is to conceptualize service loyalty through designing a model with service loyalty as the main target construct, it is important to discuss how such models came into existence and how they developed throughout the years. It is important to note that the main construct in the models that are discussed is customer satisfaction, which is defined as a customer’s overall experience to date with a product or service provider (Johnson & Fornell, 1991). It is traditionally regarded as the main driver of customer loyalty (Mittal, 2016) and as such, the relationship between the two constructs has always been present in the discussed models.
The concept of customer loyalty was explained in Hirschman’s (1970) exit-voice theory. It can be applied to different organisational bodies such as firms, political institutions and on a grander scale, even states. Nevertheless, considering the nature of the topic, the point of interest here concerns companies. The theory suggests that some customers might stop purchasing a company’s products because they are dissatisfied. This is called the exit option. Furthermore, they can express such dissatisfaction via different channels: complaint, protest, etc. This is called the voice option. Finally, in order to contribute to the knowledge on these two concepts, Hirschman introduced the concept of loyalty whose presence makes exit less likely to happen. This early discussion on loyalty serves as an important basis for the later formation of the relationship between customer satisfaction and customer loyalty with the former being the latter’s predecessor (Fornell & Wernerfelt, 1987). Therefore, customer satisfaction is an important predecessor of customer loyalty in a sense that increased customer satisfaction leads to increased customer loyalty. In addition, according to Reichheld and Sasser (1990) the latter is the ultimate dependent variable in customer satisfaction models as it is directly linked to profitability.
11 The next stage in the relationship between customer satisfaction and customer loyalty comes with the introduction of the first national customer satisfaction index – the Swedish Customer Satisfaction Barometer (SCSB) which was developed in 1989 (see Figure 3) (Fornell, 1992). It initially included perceived value (quality compared to price and price compared to quality) and a single measure of customer expectations as antecedents of customer satisfaction.
When the American Customer Satisfaction Index (ASCI) was first introduced in 1994 (Fornell, et al., 1996), Claes Fornell and his colleagues were talking about a changing economy. They were discussing a shift from the “old economy” where mass production and consumption of goods was at the forefront of the economic cycle to the “modern economy” characterised by production and consumption of increasingly differentiated products and services. Thus, they were concerned about how to measure economic performance in this new economic era. Therefore, the Fornell and his colleagues introduced a what they argued to be a comprehensive customer-based measurement system for evaluating the performance of “firms, industries, economic sectors and national economies” (Fornell, et al., 1996, p. 7) (see Figure 4). They argued that the model was representative for what was the American and to extend the world economy at the time. The ASCI model’s main constructs are customer satisfaction and customer loyalty which are directly related – the same as with the earlier SCSB model. However, a new construct of perceived quality was added (see Figure 4), that was distinct from perceived value. The perceived quality component is defined as the perceived performance or quality of a product or service by the customer based on a recent consumption experience. The other two antecedents of customer satisfaction in the model are perceived value and customer expectations and are identical to the original model. Perceived value is the perceived quality of a product or service relative to the price paid. Finally, perceived
Figure 3: The original SCSB (Swedish Customer Satisfaction Barometer) model (Source: Johnson, et al., 2001)
12 expectations is a backward- and forward-looking concept as it represents the past customer experience combined with an expectation for the product/service provider to deliver quality in the future. Fornell, et al. (1996) argued that the immediate consequences of customer satisfaction are customer complaints and customer loyalty, again the same as in the original SCSB model. When the former is high this should have a positive effect on the latter two with customer complaints decreasing and customer loyalty increasing (Reichheld & Sasser, 1990).
As a consequence of the aforementioned development, at the turn of the 21st century multiple national
and international customer satisfaction models were introduced (Johnson, et al., 2001). However, Johnson, et al. (2001) argued that there were still not enough studies in regard to model development and more specifically on the validity and reliability of the proposed relationships in such customer satisfaction models. Therefore, customer satisfaction models needed to evolve and adapt over time to not only match current economic developments but also to better and more accurately measure customer satisfaction. In their paper the researchers discuss different weaknesses in the existing ASCI model and propose a revised model (see Figure 5) that could answer to the major critiques related to the initial model.
13 The first change recommended by Johnson, et al. (2001) was to replace the customer expectations construct with a corporate image construct. They argued that as customer expectations are virtually collected during post purchase and what is truly being measured is the image of the brand or firm. Thus, the construct acts as a mediator between customer satisfaction and customer loyalty. Another proposed change was to remove the tautology between perceived quality and perceived value as quality is already part of value. Therefore, the perceived value construct was replaced by a perceived price construct that aims to measure not only price compared to quality but also price compared to other companies and expectations. Another two mediating constructs between customer satisfaction and customer loyalty introduced in the model are two relationship commitment constructs that would better explain existing variation in loyalty. The constructs are called affective and calculative commitment. The former is more emotional in a way that it captures the affective components in the relationship between a customer and a firm or brand and the resulting levels of trust and involvement the customer feels. The latter, however, is a rather rational construct that aims to explain more economical aspects, switching costs, for instance. Furthermore, the researchers suggested changing the construct of customer complaints with complaint handling or how well a complaint has been resolved. Finally, they proposed a direct relationship between price and quality in addition with a separation of different quality components that are better suited for the specific industry or type of business.
14 In conclusion, this section discussed how customer satisfaction indexes evolved over time. Throughout this evolution, it is important to stress that the relationship between customer satisfaction and customer loyalty changed as well. In comparison to the earlier models, the revised ASCI model introduced mediating factors in the satisfaction-loyalty relationship that aimed to allow for a better measurement of customer loyalty. Therefore, the relationship between those two constructs became more complex as further variables were added to the mix. The authors argue that this was a step in the right direction and such revised models were intended to be a better managerial tool that would lead to a more in-depth understanding of customer loyalty. However, despite manager’s emphasis on customer loyalty, it still remains to this day one of the biggest challenges that businesses face in an environment of intense competition (Nyadzayo & Khajehzadeh, 2016). This is perhaps due to the fact that existing literature fails to provide consistent explanations regarding what variables influence customer loyalty despite of the increasing attention that has been paid to the antecedents of customer loyalty (Bolton, 1998; Kumar, et al., 2013). Particularly, further research is needed to investigate other mediators and moderators that can play a role in enhancing customer loyalty (Kumar et al., 2013). This is one of the issues the current research is trying to solve. The next section will elaborate on that.
2.2.2 Dynamics and Issues in the Satisfaction-Loyalty Relationship
The decade of the 1990s was a golden age for services marketing research (Mittal, 2016). As mentioned before, a number of national customer satisfaction indexes were created to serve as measurement of customer satisfaction and customer loyalty across numerous industries (Johnson, et al., 2001; Fornell, et al., 1996). Thus, measuring customer satisfaction was becoming an industry of itself and applying higher service quality as a method to retain customers was drawing increasing attention. Due to these developments in marketing research, it has been often assumed that satisfaction necessarily implied loyalty or put more bluntly satisfaction inevitably resulted in loyalty (Mittal, 2016). Existing papers support the simultaneous investigation of the effects that variables measuring service performance such as service quality, customer satisfaction and perceived value have on outcome variables such as loyalty (Cronin, et al., 2000; Ostrom & Iacobucci, 1995). Therefore, the satisfaction-loyalty relationship ought to be preserved in the proposed model as well. However, large part of the research has focused on simply examining the direct effects between these variables and customer loyalty, which might conceal true relationships (Griffin & Babin, 2009). Therefore, this section aims to convince the reader that said relationship, while important to keep, needs to be supplemented by adding mediating variables that will allow for a more comprehensive look on the relationship.
15 Many researchers have advised against focusing solely on improving customer satisfaction in pursuit of increased customer loyalty (Kamakura, et al. 2002; Rust, et al., 1995). Thus, it seems that customer satisfaction and service quality cannot be a panacea for retaining customers and consequently increasing profits. A more striking example of this comes from the meta-analysis of Szymanski and Henard (2001) who found out that satisfaction explains less than 25 percent of the variance in repeated purchase. In addition, they argue that the relationship between customer satisfaction and customer loyalty is highly dependent on the industry, customer segment studied, the nature of the dependent and independent variables, and the presence of numerous factors that serve as mediators, moderators, or both to the relationship (Kumar, et al., 2013). In accordance with the statement about the variance in the relationship between customer satisfaction and customer loyalty, while several studies provide data that there is a significant positive direct relationship between the two constructs, Verhoef (2003) found no significant direct effect in the relationship. Thus, with too much focus on customer satisfaction on the one hand and weaker link between customer satisfaction and loyalty on the other, it might be argued that firms ought not to focus all their efforts on improving customer satisfaction (Anderson, et al., 1994). A good example is given by Grant (1998) where he points out the managers’ frustration with the inability to improve organisational performance through quality improvements.
In addition, it is important to note that this relationship would be affected by how the constructs are defined. For instance, Seiders et al. (2005) found out that customer satisfaction had significant positive effect on attitudinal loyalty while that was not the case for behavioural loyalty. Moreover, some researchers have pointed out that some mediating factors might be more significant drivers of customer loyalty than customer satisfaction. For instance, Augustin and Singh’s (2005) study on the retail and airline industries indicated that relational trust and value are the strongest determinants of loyalty instead of customer satisfaction. Other researchers have also found variability in the relationship satisfaction-loyalty (Anderson & Mittal, 2000; Ngobo, 1999). Therefore, when trying to understand what drives loyalty in a certain business, it is important to adapt the model to that business, namely having the right constructs and measures.
When it comes to examining the satisfaction-loyalty relationship and what drives loyalty in the context of access-based services in micromobility there is not much research in that area. This is understandable as it is a fairly recent phenomenon. Most of the models that explore this relationship are based on bike sharing services as they are the most popular and widespread (Zhou & Zhang, 2019). However, these models focus on explaining the factors that drive customer satisfaction (Zhou & Zhang, 2019; Wu, et al.,
16 2018; Xin, et al., 2018) and do not consider mediating factors that might interfere in the satisfaction-loyalty relationship. Chen (2016), for instance, discusses drivers of customer satisfaction-loyalty in more detail but on the other hand he does not explore the satisfaction-loyalty relationship at all. Models utilised in similar urban transportation services such as car sharing services (Barbu, et al., 2018; Leckie, et al., 2018; Möhlmann, 2015) have examined multiple factors that influence customer satisfaction or customer loyalty or both, but they have looked at how these drivers affect the constructs separately. In other words, they have not examined how these drivers affect the relationship between those two main constructs. In conclusion, it seems that general national customer satisfaction indexes, designed to incorporate multiple industries in their models, cannot accurately measure customer satisfaction and customer loyalty for all business segments. In addition, many such indexes were created 2-3 decades ago and perhaps cannot capture new tendencies in the economy, such as the widespread appearance of access-based services in micromobility. Nevertheless, such models are important to discuss as they have undoubtedly provided the basis for more accurate models to be developed. The authors argue that the basic relationships in these models, namely value (quality + price) – satisfaction – loyalty, still exist but they ought to be supplemented with context specific relationships that such widely inclusive models failed to discuss. Furthermore, if contemporary models have been adapted to respond to the specifics in an access-based service in micromobility, they continue to focus mainly on customer satisfaction. In addition, models based on similar urban transportation services still employ solely a direct non-interfered relationship between customer satisfaction and customer loyalty and do not include mediating variables in the relationship. Thus, it can be concluded that existing literature has not been able to explain the complexity in the relationship between satisfaction and loyalty in access-based services in micromobility. Therefore, properly conceptualizing service loyalty for such services would be one way to moving closer to closing this gap in consumer marketing literature.
2.3 Part III: It’s time to start building
This section brings forth all the constructs that are to be included in the proposed model. These constructs are the building blocks of the proposed model. The constructs of the model are illustrated step-by-step in the following sub-sections as the hypothesises are developed, and towards the end, the complete proposed model is presented. It introduces each variable and what it represents. In addition, the authors discuss the reasoning behind choosing the specific construct. Finally, after establishing the relationships between the constructs, respective hypotheses are brought forth.
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2.3.1 Service Loyalty
It is mentioned earlier that the focus of this study will not be the traditional concept of customer loyalty but that of service loyalty. Customer loyalty has been the centre of research primarily examining product-related or brand loyalty, while loyalty to service organisations has remained relatively unexplored (Gremler & Brown, 1996). Furthermore, it is important to explore service loyalty as it has been demonstrated that loyalty is more pervasive among service customers than among customers of tangible products (Snyder, 1986). Therefore, the term service loyalty is introduced to distinguish between customer loyalty that might be directed towards a particular brand, company, product or service, for loyalty that is solely concentrated on the service as a whole. The reason for this is that the focus is on access-based services in micromobility as a whole and therefore, discussing brand loyalty would not be of interest. Furthermore, there is not a substantial distinction between the different companies in the specific context of e-scooter sharing services, which would make brand loyalty substantially different across different brands. In addition, due to the fairly recent introduction of this service, the business is currently in the growth phase (Srivastava, 2019) characterised by price wars and buy-outs of the smaller companies by the bigger ones that possess more financial resources. As it is not financially viable to have many firms operating in the same urban conglomeration to make a distinction of loyalty across different brands, especially in this stage of the business, further loses its significance.
However, it should be noted that the hypotheses presented later in the text, about the relationships between the other constructs and service loyalty are based on literature that in most cases uses the term customer loyalty. Nevertheless, this can still be a foundation for explaining the relationships of those constructs and service loyalty as the reviewed literature examines in fact, businesses belonging to the service sector and thus, studies loyalty for those services. As proof of that Dick and Basu (1994) and Lewis (1993) argue that service quality and satisfaction have been identified as key antecedents of service loyalty. Therefore, the other constructs used in the proposed model correlate to customer loyalty as well as to service loyalty.
After discussing the reasoning behind the choice of service loyalty over customer loyalty, it is time to define the concept itself. It is defined as a deeply held commitment to repurchase a preferred service consistently into the future which results in repetitive same-service purchasing, despite situational influences and marketing efforts having the potential to lead to switching behaviour (Oliver, 1999). In addition, there are three ways on how one could view loyalty. The three conceptual perspectives are behavioural, attitudinal and composite (Zins, 2001). The behavioural approach of measuring loyalty is
18 based on customer’s purchase history. The problem with the behavioural approach is with the way loyalty is examined, there is no cognitive element that may help to explain the underlying buying motives in general, and the future actions in particular. In contrast, attitudinal loyalty allows one to achieve more in depth understanding of loyalty by examining the mental, emotional and knowledge structures of the customer which act as mediators between stimuli and responses (Chaiken, et al., 1995). The composite approach combines both approaches. The authors have chosen to measure attitudinal loyalty as the mental, emotional and knowledge structures of the customer are important when examining some of the antecedents of service loyalty in the model. Behavioural loyalty has been omitted from the equation as it is identified rather as repeat purchase behaviour and not as loyalty in itself (Bloemer & De Ruyter, 1998). Furthermore, behavioural measures of loyalty have been under elaborate and fundamental criticism by some scholars (Jacoby & Chestnut, 1978). One reason for such criticism is that behavioural loyalty, in fact, cannot adequately explain the underlying reasons of loyalty itself (Bloemer & Kasper, 1995; East, et al., 1995). The reason for this is that behavioural loyalty merely represents the outcome of a decision process. Therefore, it is important to examine a type of loyalty that would account for the occurrence of certain behaviour e.g. repeat purchase behaviour. Such type of loyalty is best represented by taking into account attitudinal loyalty. It considers consumer’s preferences and intentions and plays an important role in determining loyalty (Bloemer & Kasper, 1995).
Finally, the importance of loyalty in practice will be discussed. Loyalty is a crucial factor for a service organisation as it is an indicator of a long-term viability (Chen & Chen, 2010). Service loyalty is the product of a positive attitude and subsequent behaviour towards a service and thus, prevents customer from switching to another service (Caruana, et al., 2000). Loyalty contributes to the decrease in costs, increase in sales and confidence to the business (Yang & Peterson, 2004; Dowling & Uncles, 1997). Furthermore, even a negligible reduction or increase in retention rate, which is part of loyalty, has significant effects on future revenue (Andreassen, 1995; Reichel & Sasser, 1990). Therefore, there is little dispute that loyalty is important and as such has been of enduring concerns to both academics and marketing practitioners. For these reasons and in combination with the reasoning presented in the introduction of this thesis, the service loyalty is positioned as the main focus of the proposed model.
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2.3.2 Customer Satisfaction
The authors define customer satisfaction as a customer’s overall evaluation of the performance of an offering to date (Johnson & Fornell, 1991). The initial argument on customer satisfaction, however, was that it was a transaction-specific satisfaction. Put in simpler terms, this means satisfaction that originates from a customer’s experience with a product specific episode or a service encounter (Yi, 1990). However, the more widely accepted definition of the concept, as cumulative satisfaction related to service quality (De Ruyter, et al., 1997), is better suited as the latter approach is a more suitable predictor of subsequent behaviours (service loyalty) and economic performance (Fornell, et al., 1996). The reason for this is that customers base their evaluations and decisions on their overall experience with a product or service instead of a specific episode (Johnson, et al., 2001). In addition, there is still much debate in the area of marketing and service management fields on the relationship and suitable measurement of customer satisfaction (Minser & Webb, 2010). Minster and Webb (2010) discuss that on the one side, researchers argue that satisfaction ought to be regarded as the complete outcome measure of service quality, while on the other side, it is argued that satisfaction is only a part of measuring the overall experience. In fact, there is no consensus on whether service quality determines customer satisfaction (Parasuraman, et al., 1988) or vice versa (Gronroos, 1988). The authors regard satisfaction as the outcome of service quality and perceived price and argue that it influences a customer’s likelihood of recurrent use and willingness to recommend the service to others which is supported by plenty of evidence in academic literature (Dabholkar, 1995).
Moreover, it is important to elaborate on why it is important to incorporate this construct into the proposed model. The relationship between satisfaction and loyalty has been extensively examined in scientific literature. It is important to review this relationship because satisfied customers are more likely to repurchase, and greater levels of repurchase lead to increased sales and market share for the firm (Cronin, et al., 2000; Andreassen & Lindestad, 1998; Dick & Basu, 1994). The positive connection of this relationship was firmly established in the initial ASCI model (Fornell, et al., 1996) and later reaffirmed by the revised version by Johnson, et al. (2001) where they added and revised certain constructs but the satisfaction-loyalty relationship remained firm. In addition, Bolton and Lemon (1999) argued that customer satisfaction acts as a mediating factor between product/service quality, and perceived value from one side and loyalty on the other. This is due to the nature of the customer satisfaction concept as an overall evaluation that builds up over time. Afterwards, numerous studies have preserved and empirically proved this relationship in a number of industries such as grocery stores (Hart & Rosenberger
20 III, 2004), banking (Özkan, et al., 2019; Bloemer, et al., 1998), telecommunications (Gustafsson, et al., 2005), public transportation (Minser & Webb, 2010), couriers (Sisca, et al., 2019), intercity bus services (Wen, et al., 2005), etc. Furthermore, there has been some evidence on the existence of this relationship in access-based transportation services such as car sharing (Möhlmann, 2015) and bike sharing (Zhou & Zhang, 2019; Xin, et al., 2018). On the basis of these studies, the authors expect customer satisfaction to have a significant positive influence on customer loyalty. Thus, the authors bring forward the following hypothesis:
H1: Customer satisfaction relates positively to service loyalty.
2.3.3 Service Quality
The rapid expansion of the service sector in much of the economically developed world since the end of the Second World War motivated researchers to examine the issues that are relevant for the experience that service customers receive (Berry, et al., 1985). The authors define service quality as the perceived quality of a service dependent on the experience the customer makes when consuming a service (Seiders, et al., 2007; Parasuraman, et al., 1988; Parasuraman, et al., 1985). However, it is important to note that although the perceived quality is based on the service experience it is also dependent on the expected performance. Thus, service quality is in a sense dependent on the gap between expected and perceived performance (Anderson, et al., 1994). Traditional research on service quality has primarily focused on exchanges that are interpersonal in nature (Ayo, et al., 2016). Therefore, it needs to be stressed that service quality in the context of access-based services in micromobility is to measure service quality in exchanges that are not interpersonal in nature.
It is also important to discuss why it is needed to include service quality in the proposed model. First, it is related to some of the most important constructs in the proposed model, namely customer satisfaction and service loyalty. A highly perceived service quality will lead to repeat purchases and consequently to loyalty. Likewise, poor service quality will lead to negative word-of-mouth and consequently loss of sales and profits as the customers migrate to competitors (Zeithaml, et al., 2000; Van Riel, et al., 2001; Yang &
21 Fang, 2004; Ma & Zhao, 2012). Therefore, considering service quality as part of the proposed model is inevitable as it is expected it would have strong influence on both aforementioned constructs.
When discussing the relationship of service quality with other constructs in the proposed model it is important to see what the literature says about it. There is an established consensus in marketing literature that perceived quality is a major antecedent of customer satisfaction and loyalty (Cronin & Taylor, 1992; Fornell, et al., 1996). Cronin and Taylor (1992) conducted their studies across several service industries and demonstrated that service quality can be seen as a determinant of satisfaction. In addition, Bolton and Drew (1994) argue that customer satisfaction is based on pre-existing or contemporaneous attitudes about service quality. The same conclusions have been drawn in other studies (Bloemer & De Ruyter, 1998; Cronin, et al., 2000; Sivadas & Baker-Prewitt, 2000; Wen, et al., 2005; Minser & Webb, 2010; Ayo, et al., 2016; Arianii, et al., 2019; Özkan, et al., 2019). In access-based services there has been little empirical studies on this particular relationship. However, there seem not to be a strong logical reasoning why this relationship would not be existent in such services as well. In addition, Möhlmann (2015) has found that service quality positively effects customer satisfaction in a car sharing service. The same relationship has been observed in bike sharing services (Zhou & Zhang, 2019). Some studies have also proved a strong positive direct relationship between service quality and loyalty (Zeithaml, 1988; Bloemer & De Ruyter, 1998; Minser & Webb, 2010; Arianii, et al., 2019). On the basis of the discussion in this paragraph, the following two hypotheses were formed:
H2: Service quality relates positively to customer satisfaction. H3: Service quality relates positively to service loyalty.
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2.3.4 Perceived Price
According to Zeithaml (1988) the concept of perceived price is outlined from a consumer’s perspective, as a value that is given or sacrificed to acquire a product or a service where price falls under a “give” element rather than a “get” element. In that sense, the lower the price perception is, the lower the perception of sacrifice for the product(Susanti, 2019). Shintaputri and Wuisan (2017) define perceived price as “customer’s subjective perception of what is given up or sacrificed to acquire the product” (p. 30). Subsequently, sometimes customers lack to remember or be aware of the actual price of a product, but rather encode subjectively the price of the product or service as expensive or cheap (Zeithaml, 1988). Thereby, this implies that perceived price of a product is personal and individualistic opinion that varies among different customers. In addition, apart from being satisfied with the overall transaction, consumers are more satisfied with their perception of prices rather than actual price (Susanti, 2019). According to Lichtenstein, et al. (1993), price perception has a multidimensional base where consumers perceive price in seven dimensions; price-quality association, prestige sensitivity, value consciousness, price consciousness, price mavenism, sale proneness and coupon proneness. Perceived price attribute in this thesis is constructed around price consciousness dimension and value consciousness dimension. Price consciousness is expressed as a degree to which consumers exclusively focus on paying low prices (Lichtenstein, et al., 1993). Value consciousness depicts the consumers concern for price paid relative to the quality that is received (Lichtenstein, et al., 1993; Zeithaml, 1988). Here, the focus is only on these two dimensions because the intention was to focus on how conscious the e-scooter users are when it comes to its service pricing and when they compare e-scooter service pricing to other modes of transportation that influences their satisfaction towards the service. In addition, customers’ intention to purchase a product or use a service significantly depends on how they perceive a certain product price being high or low (Razak, et al., 2016).
In an access-based service context, it is also important to discuss the role of potential non-ownership advantages in some of the constructs. For instance, perceived price would contain an additional dimension related non-ownership advantages that might come with using access-based services. Möhlmann’s study (2015) indicated that cost savings that arise from the usage of such services are an important driver of customer satisfaction. The paper supports earlier findings that cost benefits of sharing are key determinant for usage (Lamberton & Rose, 2012; Hawlitschek, et al., 2016) and that the cost of sharing is usually lower than non-sharing option (Moeller & Wittkowski, 2010) which again effects the
23 usage of such services. Therefore, it is logical that potential cost savings that could arise from using an access-based service in micromobility ought to be included in the perceived price construct.
Bei and Chiao (2001)suggest that perception of fair prices is one of the significant factors of customer satisfaction, since consumers relate service received to the price sacrificed. Moreover, Fornell, et. al. (1996) established the necessity of a perceived price construct as price index through their ACSI model to evaluate price relative to a variety of benchmarks such as comparisons and expectations. Furthermore, satisfaction is an attitude-type evaluation where the effect of perceived price is considered to be an antecedent of customer satisfaction and loyalty (Fornell, et al., 1996). Therefore, perceived price construct is considered as a part of the proposed model as it is expected to have a significant effect on customer satisfaction especially in the context of access-based services. This is essentially important for the thesis because the authors aim to gain insights from the users of e-scooter service on how they perceive the price of the service which in turn influences their satisfaction. In access-based services there is very little empirical studies on the relationship between perceived price and customer satisfaction that in turn influences service loyalty. Usually, in access-based services, renting (non-ownership) is cheaper than buying (ownership) and consequently, Moeller and Wittkowski (2010) highlight price consciousness with respect to non-ownership aspect as a dimension that enhances customer satisfaction. Based on the gathered background research discussed in this paragraph, the authors formed the following hypothesis: H4: Perceived price relates positively to customer satisfaction.
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2.3.5. Relative Advantage
The concept of relative advantage has traditionally been connected to innovation (Rogers, 1995). Rogers (1995) defines it as the degree to which an innovation is perceived as superior to the idea it supersedes. It is closely associated to similar concepts such as perceived usefulness (Wang, et al., 2012) and utility (Möhlmann, 2015). The latter is used to model a worth of value and thus, the consumer’s preference over a choice set. In addition, Sivadas and Baker-Prewitt (2000) discuss relative attitude which was introduced by Disck and Basu (1994) as “a favourable attitude that is high compared to potential alternatives” (p. 100). Furthermore, Wu (2011) uses an analogous concept called alternative attractiveness. It is designed to indicate the likely satisfaction available in another relationship (Ping, 1993). Therefore, it measures the attractiveness of alternatives instead of the attractiveness of the current option compared to alternatives. Thus, the perspective is reversed when compared to the aforementioned concepts.
The concept of relative advantage was chosen due to its relation to innovativeness and the fact that access-based services in micromobility present a novel and innovative way of urban mobility (Møller, et al., 2020). In addition, one could argue that relative advantage contains in itself the concept of utility as the latter is still used to measure the perception of advantage of one option over another (others). In regard to why is it important to discuss this concept in relation to access-based services in micromobility, currently there are multiple urban transportation options available to the consumer. Thus, evaluation of the alternatives and the advantages that an access-based service has over similar or traditional methods of transportation such as public transportation, taxis or even walking, would be an important factor that would drive consumer behaviour.
Relative advantage can be considered a driver of service loyalty because if there are high relative advantages of access-based services in micromobility over traditional transportation modes, customers would form a preference towards the former way of transportation. This would consequently result in recurrent usage or service loyalty. There is not much research on the relationship between relative advantage and service loyalty but there is enough to say that such connection exists. Leckie et al. (2018) find an indirect positive relationship between the two constructs in an empirical study based on Uber. Furthermore, Bloemer and Kasper (1995) argue that one should “explicitly take into account the degree of a consumer’s commitment to a brand when (s)he rebuys a brand. Thus, repeat purchasing behaviour alone does not imply a consumer is loyal to a brand. True loyalty implies commitment towards a brand and not just repurchase due to inertia” (p. 312). Therefore, they argue that customers who chose a brand or a service due to inertia might be easily attracted to alternatives that offer advantages compared to the
