Value co-creation in a
digital world
A case study on a Swedish online retailer implementing value co-creation
BACHELOR’S DEGREE PROJECT THESIS WITHIN: Business Administration NUMBER OF CREDITS: 15 ECTS
PROGRAMME OF STUDY: International Management
Acknowledgements
The authors of this research want to demonstrate gratitude to everyone that contributed and supported the accomplishment of this thesis.
First, we want to show our genuine appreciation to our tutor, Brian McCauley, who has assisted and given us support from the start with his expertise, suggestions and opinions. His commitment and involvement, in every step of this process, came to great help for us to complete this research in the best way possible.
Additionally, we want to thank Richard Lindqvist from PTS and all the participants of our study, who provided us with essential insights, information and discussions. Without them, we would never be able to complete this paper.
We also want to show great gratitude to the other members of our seminar group for contributing with advice and both positive or negative feedback that has been helpful and motivational for our thesis.
Lastly, we want to thank Anders Melander for providing us with materials during the entire process to ensure we were on the right path.
__________________ __________________ __________________ Arvid Karlefors Florian Istrefi Tim de Verdier Below
Bachelor Thesis Project in Business Administration
Title: Value co-creation in a digital world Authors: Karlefors, A., Istrefi, F., & de Verdier, T. Tutor: Brian McCauley
Date: 2020-05-17
Key terms: value creation, value co-creation, relationship marketing, marketing, mobile commerce, electronic commerce, and social commerce.
__________________________________________________________________ Abstract
Background: In the past, the majority of products were sold in the retail industry through physical stores, making it possible for customers to interact and be personal with the retailers. The development of technology has made retailers move their operations to an online environment.
Problem: The problem of this paper is how companies that operate in an online environment can create relationships with their customers in the context of value creation. There exists limited research on how online retailers can create value creation and co-creation through e-commerce and m-e-commerce.
Purpose: This research aims to investigate what actions that are influencing value creation and value co-creation between firm and customer in the online sector of e-commerce and commerce. The thesis will examine if there exists a difference between e-commerce and m-commerce in terms of value creation and co-creation.
Method: This thesis is based on a qualitative research approach, the empirical findings were collected through an interview with the CEO of Please the Swede (PTS), followed up with six semi-structured interviews with the company's customers.
Results: It is evident that PTS carries out two different value-creating actions that enable the company to co-create value with its customers in e-commerce and m-commerce. Customer service and social media were identified as the two services that co-create value. It was also concluded that it did not exist any differences in terms of how value co-creation was created through PTS e-commerce and m-commerce.
Table of Contents 1. INTRODUCTION ... 7 1.1 BACKGROUND ... 7 1.2 PROBLEM DISCUSSION ... 8 1.3 PURPOSE ... 9 1.5 DELIMITATIONS ... 9 1.7 THESIS OUTLINE ... 11 2. FRAME OF REFERENCE ___________________________________________________________________________ ... 12 2.1 TRADITIONAL MARKETING APPROACH ... 12 2.2 RELATIONSHIP MARKETING ... 13 2.3 VALUE CREATION AND VALUE CO-CREATION ... 14
2.4 VALUE-ADDING STRATEGIES IN LONG-TERM RELATIONSHIPS ... 15
2.5 INTERACTION ... 16 2.5.1 Direct interaction ... 16 2.5.2 Indirect interaction ... 17 2.6 VALUE CREATION SPHERE MODEL ... 17 2.6.1 Service-Dominant Logic (S-D logic) ... 19 2.7 ONLINE PLATFORMS ... 19 2.7.1 Electronic commerce ... 19 2.7.2 Mobile commerce ... 20 2.4.3 Social commerce ... 21 3. METHODOLOGY ___________________________________________________________________________ ... 22 3.1 RESEARCH DESIGN ... 22 3.1.1 Research philosophy ... 22 3.1.2 Research approach ... 22 3.1.3 Research strategy ... 23 3.2 PRIMARY DATA COLLECTION ... 24 3.2.1 Case study ... 24 3.2.2 Semi-structured interviews ... 25 3.2.3 Sample Selection ... 26 3.2.4 Literature review summary ... 27 3.4 DATA ANALYSIS ... 28 3.5 ANALYSIS PROCEDURE ... 28 3.5.1 Transcripts ... 28 3.5.2 Coding ... 29 3.5.3 Themes – searching - reviewing - defining ... 29 3.5.4 Trustworthiness and quality of research ... 29 3.5.5 Ethical considerations ... 29
3.5.6 Dependability ... 30 3.5.7 Credibility ... 30 3.5.8 Transferability ... 30 3.5.9 Confirmability ... 30 4. EMPIRICAL FINDINGS ... 32 4.1 PLEASE THE SWEDE ... 32 4.2 PTS VALUE MAPPING ... 33 4.2.1 Pre-Sales ... 33 4.2.2 Distribution ... 35 4.2.3 Post-Sales ... 36 4.3 CUSTOMER FINDINGS ... 36 5. ANALYSIS ... 45 5.1 RESEARCH QUESTION 1 ... 45 5.1.1 PTS - Value creation sphere ... 45 5.1.2 Provider sphere ... 46 5.1.3 Customer sphere ... 50 5.1.4 Joint sphere ... 53 5.2 RESEARCH QUESTION 2 ... 55 6. CONCLUSION ... 56 7. DISCUSSION AND FUTURE RESEARCH ... 58 7.1 THEORETICAL IMPLICATIONS ... 58 7.2 PRACTICAL IMPLICATIONS ... 58 7.3 LIMITATIONS ... 58 7.4 FUTURE RESEARCH ... 59 Table of Tablets TABLE 1: THESIS OUTLINE ... 11 TABLE 2: PARTICIPANTS AND LENGTH OF INTERVIEWS ... 26 TABLE 3: LITERATURE FINDINGS ... 27 TABLE 4: INTERVIEW SUMMARY ... 44 Table of Figures FIGURE 1: THE EFFECT ON VALUE-ADDING STRATEGIES IN A LONG-TERM RELATIONSHIP ... 16
FIGURE 2: VALUE CREATION SPHERE MODEL ... 17
FIGURE 3: DATA ANALYSIS SPIRAL ... 28
FIGURE 5: VALUE CREATING ACTION AFTER ANALYZING ... 46
FIGURE 6: PROVIDER SPHERE ... 47
FIGURE 7: CUSTOMER SPHERE ... 50
FIGURE 8: PTS - VALUE CREATION SPHERE ... 53
Appendices APPENDIX 1: SEMI-STRUCTURED INTERVIEW QUESTIONS (PTS) ... 68
1. Introduction
1.1 Background
The contact between the company and the customer has moved online with the evolution of technology and created new challenges in creating a personal relationship (Verma, Sharma & Sheth, 2016). This change has caused problems for companies to build relationships online and attract customers with a prior positive attitude towards traditional physical retailers (Verma et al., 2016).
In the beginning, doing business online through electronic commerce, the industry faced a challenge to create credibility and make the customer feel safe with the new way of shopping. The new way of shopping created a need for trustworthiness for the industry in order for it to grow (Hillman & Neustaedter, 2017). The need for direct interaction and trust between online businesses and their customers are the main barriers for customers in creating value for themselves in an online environment (Qin, Chang, Li, & Li, 2014). The lack of physical integration between the parties has moved the interaction to social media channels and the company’s website (Lu, Fan, & Zhou, 2016). The potential of reaching consumers in new ways has developed a move from product-oriented strategies to a focus on creating relationships with the customers (Grönroos, 1997).
Constant mobile evolution has led more consumers to buy products and services through their phones (Shih & Kang, 2017). Mobile commerce enhances the possibility to create a personal relationship to attract and retain customers. Driven by the lower cost of mobile devices and improvement in wireless internet connections, m-commerce is now seen as a business model that will transform business communities and industries (Shaw & Sergueeva 2019; Chong 2013). The potential opportunities presented by m-commerce are supported by the growth in the number of mobile devices, and in particular, mobile phones (Shaw & Sergueeva 2019; Chong 2013).
Historically, products and services have been bought “face-to-face” by physical retailers enabling sellers and customers to be personal and interact (Ponzurick, France & Logar, 2000). The transition to e-commerce and m-commerce has created the needs of new relationship tactics since the tools are endless. Using the tools efficiently is challenging and results in strategies that are not clearly defined in the online setting (Steinhoff et al., 2019). The
companies are pressured to adapt their strategies and interact with consumers in new ways.
1.2 Problem discussion
In the last decades marketing has gotten a new face in the form of relationship marketing (RM) defined by Ravald & Grönroos (1996, p. 19) as “The core of relationship marketing is relations, maintenance of relations between the company and the actors in its micro-environment”. Creating and maintaining relationships is seen as the core of RM, but this has not been widely examined in an online environment. Steinhoff, Arli, Weaven and Kozlenkova (2019) argues RM has not been adapted to new tools and online instruments. RM is further based on value creation that consists of customers extracting value from the actions provided by the company (Grönroos & Gummerus, 2014). Further on, companies are trying to create value to customers online through various actions such as free delivery. However, the lack of empirical data in the online setting limits the previous research on the subject. A gap was identified how value co-creation is created and used in e-commerce and m-commerce.
From value creation, co-creation of value explains the two-way creation of value between company and customer (Vargo & Lusch, 2008). Co-creation of value had a significant impact in the field of marketing, indicating that the customer is co-creator in interactions with the company and not the firm alone (Vargo & Lusch, 2008). This concept was developed, and Grönroos and Voima (2013) made a theoretical framework on how and where companies and customers co-create value together.
The challenge of how to create value online relates to the direct and indirect interaction companies faces when interacting with customers. Direct interactions refer to the contact where the firm can directly communicate and affect the customer in their purchasing process, and indirect interactions are actions the firm cannot affect directly (Grönroos & Gummerus, 2014). In the traditional physical stores, the customer purchasing process involves mostly direct contact, and therefore this has not been a problem. With the transformation to a digital environment, this has created a challenge in how to implement value creation, value co-creation and RM in the online setting for firms and to what extent it works (Verma et al.,2016).
1.3 Purpose
This research aims to investigate what actions that are influencing value creation and value co-creation between firm and customer in the online sector of e-commerce and m-commerce. The vision of this research is to expand both theoretical and practical knowledge about what actions that bring value to the customer and which actions that have the potential of co-create value. Given the lack of previous research on value creation and value co-creation in an online setting with e-commerce and m-commerce in mind. The authors propose two research questions to fulfil the purpose of the research:
How can companies and customers co-create value in the online environment?
What differences exist between platforms in e-commerce and m-commerce in terms of value co-creation?
1.5 Delimitations
This research focuses on what actions provided by the company that bring value to the customer. Significantly, this research is just including the Swedish retail industry and not the global retail industry. Because of geographical aspects, a Swedish retail company operating in the Swedish market has been chosen since every country has different prerequisites in the digital front. The research is not discussing consumer shopping behaviour since the authors are interested in how the customer experiences the actions provided by the company. The main focus in the paper will be how value creation and value co-creation can be obtained through e-commerce and m-e-commerce and potential differences from a provider and customer perspective.
1.6 Definitions
E-commerce: Electronic commerce stands for transactions or purchases that are carried out online (Chaffey, Hemphill & Edmundson-Bird, 2019).
Face to Face selling: Direct selling, typically in a physical store where the product/Service is handover or purchased directly to the customer (Creswell & Poth, 2018).
Interaction: Refers to the positive/negative effects or influences that two entities have on one another (Grönroos & Voima, 2012).
Loyalty: Refers to when the consumer is pleased with the services provided by the supplier, that he or she is willing to continue its relationship with the supplier (Grönroos & Ravald, 1996).
M-Commerce: Mobile commerce refers to online purchases that are made from a mobile phone. Tablet or other wireless electronic devices (Shaw & Sergueeva, 2019).
Relationship: Is the interactional combination between the supplier and consumer (Doyle, 2016).
Relationship marketing: Relations, maintenance of relations between the company and the actors in its micro-environment (Ravald & Grönroos, 1996).
Social commerce: Forms of Internet-based social media that allow people to actively participate in the marketing and selling of products and services in online marketplaces and communities (Stephen & Toubia, 2010).
Value: The amount buyers are willing to pay for what a firm provides them. Value is measured by total revenue (Porter, 1985)
Value creation: Is the sense of satisfaction that is created in association with specific actions that are made (Grönroos & Gummerus, 2014).
Value co-creation: Stands for the creation of value produced by both the service provider and receiver during interaction and transactions (Vargo & Lusch, 2004).
1.7 Thesis outline
This thesis will consist of eight different chapters, with the following structure: Introduction, literature review, methodology, empirical findings, analysis, conclusion, discussion and future research (see table 1). The first chapter introduction will first include a background of the research topic, followed up by the discussion of the research problem and the purpose of the research. In addition to the introduction, the research question will also be presented. In the second chapter, the literature review. Research literature from related areas of the thesis will be presented and reviewed. In chapter three, methodology. The authors clarify for the reader what methods of data collection have been carried out, and the reasoning for it. In chapter four, the authors present the empirical findings from the data that has been collected. Chapter five includes an analysis of the empirical findings. In chapter six, the conclusion of the research is presented, followed up by chapter seven were the discussion and suggestions for further research is presented.
2. Frame of Reference
___________________________________________________________________________ Previous research within the field of relationship and service marketing, value creation, electronic commerce and mobile commerce will be used as the base of this paper. Relevant theories, explanation and theoretical frameworks will be applied.
___________________________________________________________________________ The focus of the literature review is divided into two parts. The first part of the literature review, three topics in the field of marketing will be examined, traditional marketing approach, relationship marketing, value creation and value co-creation. Existing theories and concepts are reviewed and used to create a foundation to this thesis. The second part of the review will examine relevant literature of three topics within the online environment: e-commerce, m-commerce and social m-commerce. To create an understanding of how these topics can be linked together with the field of marketing theories and concepts to answer our research questions.
2.1 Traditional marketing Approach
Kotler and Levy (1969) approach marketing with the fundamentals of product development, distribution, pricing, and communication. This approach emphasizes the process of progressive companies recognizing the different needs of customers by modified and new products (Kotler & Levy, 1969). An early description of marketing is “Pervasive societal activity that goes considerably beyond the selling of toothpaste, soap, and steel” (Kotler & Levy 1969, p. 10). The four P model, Price, Position, Place, and Promotion was introduced by McCarthy in 1960 and considered to be a standardized tool in the marketing mix (McCarthy, Shapiro & Perreault, 1979). Grönroos (1990), considered the Four P model as a useful tool in marketing and that modern service marketing needed another modern approach. Customer contact has mainly been done through the marketing department and the only ones which could affect the customer’s view of the company (Grönroos, 1990).
The marketing mix management paradigm has dominated marketing in the last 40 years (Grönroos, 1997). In education, marketing has been focused upon learning how to use and manage traditional marketing tools instead of discussing marketing concepts and processes of marketing relationships (Grönroos, 1997). Traditional marketing has been seen as less effective because of the way it communicates with its customers (Trusov, Bucklin & Pauwels, 2009). Traditional marketing lacks the ability to exploring marketing relationships and understanding
the needs and desires of customers and that marketing has become a multi-faceted social process (Grönroos, 1997).
2.2 Relationship marketing
Relationship marketing (RM) is defined as “Marketing is to establish, maintain, and enhance relationships with customers and other partners, at a profit, so that the objectives of the parties involved are met. This is achieved by a mutual exchange and fulfilment of promises” (Grönroos, 1990, p. 138). The purpose of creating a relationship with a customer is to attract and build a relationship, so the economic achievements are met (Grönroos, 1994). RM differs from other marketing strategies because of its focuses on creating value for its customers rather than the core product itself (Doyle, 2016).
RM is the crucial element of establishing trust between company and customer and is described as “The resources of the firm - personnel, technology, and systems - have to be used in such a manner that the customers trust in the resources involved and, thus, in the firm itself is maintained and strengthened” (Grönroos, 1990, p.8). Keeping and building a relationship with current customers has changed the focus from the traditional marketing mix to a relationship focus (Kotler, 1991). Building a relationship with retailers will possibly reduce uncertainty and instead establish trust (Steinhoff et al., 2019). The process of maintaining and keeping existing customers is regularly cheaper than attracting new customers (Grönroos, 1990). The long-term view is essential to build customer relationships that got forgotten during the mass production age (Doyle, 2016: Gummesson, 1987, 2014, 2017: Kotler, 1991). Due to technological improvements, is it possible to build valuable customer relationships online that are closer to the customers’ preferences. The technological improvements have made it possible for companies of tracking customers behaviour online that provides them to customize their products and services instantly, so the customer’s preferences are met (Doyle, 2016).
Marketing online can create both positive and negative opportunities, with the possibility to operate globally and lower costs. However, it can threaten RM with the lack of personal interactions and brand loyalty (Steinhoff et al., 2019). Steinhoff et al. (2019) believe that building a relationship with retailers will reduce uncertainty and establish trust.
2.3 Value creation and value co-creation
Value has been discussed and researched intensively as a business concept for centuries, and the term value is defined by Porter (1985, p. 38) “The amount buyers are willing to pay for what a firm provides them. Value is measured by total revenue”. A firm is profitable if the value it commands exceeds the costs involved in creating the product. Grönroos and Gummerus (2014, p. 209) define value creation as “Value creation is the customer’s process of extracting value from the usage of resources. Value creation is the customer’s creation of value-in-use. Despite using the expression value creation, value is not always instrumentally created; it may emerge as value-in-use”. Further on, the term value-in-use was established that customer value emerges from the use of a firm's output in the value-generating process rather than from the product itself (Ravald & Grönroos, 1996; Vargo & Lusch, 2004).
Value co-creation has appeared from the process of the term value-in-use, and value creation as Vargo and Lusch (2004, 2008) argue that the firm is not the only producer of value but the customers too. Co-creation is a joint process between the service provider and customer that enables providers to affect and engage in the co-creation process (Grönroos & Gummerus, 2014). Vargo and Lusch (2004, p. 9), describes value co-creation; “Service is the application of competences (knowledge & skills) by one entity for the benefit of another”. Value is created collaboratively and by mutual exchange (Vargo & Lusch, 2004, 2008). Grönroos (2012, p. 1520) defines value co-creation as the interaction between a customer and a service provider and value creation is further on described as “The customer´s creation of value in use”. Grönroos (2012) argues that the term value creation can be understood in different ways, and so on, generally ill-defined in marketing and implies that the term value creation can be both positive and negative. First customers were viewed as producers but then defined as co-creators of value (Vargo & Lusch, 2004, 2008).
Ranjan and Read (2016) further on find the most critical elements in value co-creation to be self-service, interactions, engagement and experience. Value co-creation stretches beyond elements of customization and co-production to the delivery chain and consumption (Ranjan & Read, 2016). The service-centred oriented view in marketing shifts the focus from physical goods to providing a better value proposition to its customers than the competitors through social and economic processes (Vargo & Lusch, 2004). Value propositions can be both tangible and intangible services proposed by the firm to the customer (Sandström, Edvardsson, Kristensson & Magnusson (2008). Further on, this evolves from a customer-oriented view, and
a key aspect is to collaborate and learn from customers and their behaviours and preferences (Vargo & Lusch, 2004). Traditionally, the creation of value focuses on price and output and is the central purpose of economic exchange (Vargo & Lusch, 2017).
2.4 Value-adding strategies in long-term relationships
Ravald and Grönroos (1996) created a model in order to describe value-adding strategies a supplier can provide for its customer in order to create a mutually profitable relationship. As shown in figure 1, the first step of the model is increasing the benefits for the customer. It is here the supplier provides the customer with some form of added value beyond the core product that is viewed as something profitable by the customer, and an example of this can be a product or a service guaranty (Ravald & Grönroos, 1996). Moreover, in addition to increasing benefits, the supplier can also reduce the risks a customer may think of when making a purchase. This relates to providing additional services to the customer besides the main product and decreasing the costumer-anticipated risk of the purchase (Grönroos & Ravald, 1996). In an online business, regarding information about free shipping and returns of a product or a service can be an example of reducing the risk of a purchase.
The reasoning for increasing the benefits and reducing the sacrifice is to have a positive influence on the customer's decision making during their purchasing process (Grönroos & Ravald, 1996). These two values creating actions can then generate and stimulate repurchasing activity from the customer (Grönroos & Ravald, 1996). As stated by Zhang et al. (2011), in order to create a long-term relationship with a customer, the customer needs to be willing to make a repurchase.
Furthermore, the next steps of the model include developing safety, credibility and security for the customer. These elements act together intending to diminish the total risk for the customers purchasing process, that in exchange contributes as value-creating part in the relation between the supplier and customer (Grönroos & Ravald, 1996). By providing safety, credibility and security, the customer will then be able to feel safe and then trust the supplier which is another value-adding factor for the relationship between the supplier and customer (Grönroos & Ravald, 1996).
Figure 1: The effect on value-adding strategies in a long-term relationship (Ravald & Grönroos, 1996)
2.5 Interaction
The phenomena of interaction can be divided into direct and indirect (Grönroos & Gummerus, 2014). The provider creates products and services that create an opportunity to engage with its customer’s practices and earlier experiences that can thereby influence the customer’s flow (Grönroos & Voima, 2013). Interaction in service encounters is natural and can also be created in goods marketing though, e.g. logistics, order taking, call centres and problem diagnosing (Grönroos & Voima, 2012). Both direct and indirect interactions can co-create and shape the firm (Miller, Merrilees & France, 2015). However, Grönroos and Gummerus (2014) argue that co-creation only can be entailed by direct interactions. Value co-creation is created with interactions from both sides, and the involvement from both parts (Grönroos & Ravald, 2011). To create interactions, service providers use mental, physical or virtual contact to retrieve knowledge from the customer and its direct and indirect actions (Grönroos & Ravald, 2011).
2.5.1 Direct interaction
Direct interaction refers to the interaction between producer and customer in the value creation process where the producer becomes the value co-creator (Grönroos & Voima, 2012.) All actors involved in the process can influence each other's perceptions and actions resulting in one dialogical and collaborative process (Grönroos & Gummerus, 2014). Direct interactions include producers interacting with customers directly to interact and potentially co-create value by doing, e.g. online competitions (Miller et al., 2015).
2.5.2 Indirect interaction
Indirect interactions occur when the customers interact with a firm's resources that are a product or service of the firm's output (Grönroos & Voima, 2012). Furthermore, indirect interactions are visible in the early stages of the interaction with a company, e.g. visiting company’s websites (Grönroos & Voima, 2012). Moreover, indirect interactions can occur by customers sharing the brand with others to influence how the brand is perceived even though the firm does not intervene in this interaction (Miller et al., 2015). In cases where the customer creates value in use independently, the producer does not interact in the co-creation process, and no direct interaction or co-creation is produced (Grönroos & Voima, 2012).
2.6 Value creation sphere model
The value creation sphere model, see figure 2, identifies the value that has been created in a relationship between customers and providers. It highlights where and by whom customer perceived value has been created. In a value creation and value co-creation context, the customer and the provider have different functions depending on in which sphere the real and potential value has been created. The co-creation that has been created between the customer and provider is displayed in the joint sphere (Grönroos & Voima, 2012).
The companies are responsible for the provider sphere since they control the production process. The company produces products and services that are put together for the customer to utilize later on in the buying process. The company's role in the provider sphere is to serve as a value facilitator that is not part of the value creation itself. Through the production process can a potential value be generated which the customers, later on, can turn into real value. The customers may use the potential value of their value creation process (Grönroos & Voima 2012).
In the customer sphere, the customer is independent of the provider, and the customer creates value for themselves. The provider acts with a passive role since the customer sphere is closed to the provider (Grönroos & Voima 2012). Instead, the customers can independently interact with the provider’s products and services in a virtual, physical, imaginary or mental form. After that, the customers can decide if the provider's products or services have a potential value that can create real value. It requires the customer to gain a positive experience to create value in the customer sphere (Grönroos & Voima, 2013). Once the interaction with the provider has begun the co-creation of value initiate and moves to the joint sphere (Grönroos & Voima, 2012).
The customers are dominant in the joint sphere since it is where the real value can be created and the main part of the value creation process (Grönroos & Voima, 2012). Given that the provider is invited to the joint sphere, the provider can affect the customer's value creation through interactions that can be negative and positive or no impact. If the provider is not invited to the joint sphere and, e.g. calls the customer, this can have value destruction since the provider does not know in what state of mind the customer is in (Grönroos & Voima 2012; Vargo & Lusch 2016). It is only possible to create value co-creation through a dialogical process of direct interaction. The provider can then influence the customer's value creation and serve as a co-creator (Grönroos 2011; Grönroos & Ravald 2011; Grönroos & Voima 2012). The start process can as well start directly in the joint sphere if a customer is active and affects the process as a co-developer or co-designer, then the joint sphere widens (Grönroos & Voima, 2012).
Echeverri and Skålen (2011), the interaction process can be creative between customer and provider but also destructive (if not handled carefully), which means that the quality of the interaction is essential. The providers’ ability to understand the customer's value creation
process and how the customer combines the outcomes in interactions, resources, and processes makes it easier for the provider to influence the customer's value creation (Fyrberg & Jüriado 2009; Gummesson 1994, 2017; Grönroos & Voima 2012).
2.6.1 Service-Dominant Logic (S-D logic)
Vargo and Lusch (2004) have provided marketing literature with an alternative approach to the traditional “Goods-dominant logic” (G-D logic) with the “Service-dominant logic” (S-D logic). G-D logic focuses on tangible resources and transactions that the firm creates value, and the customer destroys it (Vargo & Lusch, 2014). The G-D logic framework presents the goods and unit of output as the central component in businesses (Vargo & Lusch, 2004, 2014). S-D logic indicates that customers are always co-creators of value together with service providers (Vargo & Lusch, 2004, 2008). S-D logic focuses on the value-in-use and in the value co-creation process, both producers and consumers play a role (Vargo & Lusch, 2008). The purpose of the S-D logic is to understand better individuals and groups exchanging social and economic resources (Vargo & Lusch, 2004). It consists of a service-centred view that means learning and collaborating with customers as well as adapting to their dynamic needs and individual preferences (Vargo & Lusch, 2004). S-D logic addresses intangible resources, relationships, and value co-creation as key factors (Vargo & Lusch, 2004).
2.7 Online platforms 2.7.1 Electronic commerce
Chaffey et al. (2019) define e-commerce as transactions that are carried out online. Trust is one of the essential focuses of e-commerce research (Hillman & Neustaedter, 2017). Liébana-Cabanillas, Marinković, and Kalinić (2017), further supports this by indicating in their research that trust is an essential factor in e-commerce since it is a relatively new channel of commerce that demands high monetary value. Garrett (2010) states that information that is accurate and accessible is a vital factor when establishing trust. The purpose of creating a long-term relationship, the consumer needs to trust the supplier and feel content with the services provided (Zhang, Fang, Wei, Ramsey, McCole, & Chen, 2011; Grönroos, 1997). Further argued by Qin et al. (2014) trust has a significantly important role in commerce because e-commerce does not only raise productivity to improve economic operations, lower operating costs and make impossible things possible. The economic revolution, e-commerce, also affect people’s lifestyles, can change their world outlook and methodologies (Qin et al., 2014).
According to Anderson and Srinivasan (2003), it is easy to compare products and prices online, which makes it even more important with the consumers’ perceived value. Khalifa and Liu (2007), further posit that if a customer is satisfied with a single website or internet store, it is more likely that he or she will return and purchase in that store again. When an enterprise establishes a website to make the consumer satisfied it refers to three characteristics; (1) that the information is accessible easily, (2) a navigation experience that is positive, (3) perception of a well-designed website. These three characteristics have been proven that repeated satisfaction towards vendors in time results in e-loyalty (Cyr, 2008). The reason why an online business should focus on customer relationships and satisfaction is due to that the cost of maintaining current customers is five to seven times cheaper than receiving new ones (Grönroos, 1994: Doyle, 2016).
2.7.2 Mobile commerce
Mobile commerce applies to purchases and transactions that are made online from wireless electronic equipment (Clarke III, 2001; Kleijnen, De Ruyter & Wetzels, 2007). The main pillars of previous m-commerce research support that the growth of m-commerce comes from the increasing interest of being online and accessing the internet at any time (Hillman & Neustaedter, 2017). Prihantoro, Satria and Hartoyo (2018) further supports this by saying the unique attributes m-commerce creates to the consumer are the mobility and ease of use, making it possible for the consumer to be involved in commerce at any time at anyplace. McLean, Osei-Frimpong, Al-Nabhani, and Marriott, (2020), the explanation behind the rapid online-commerce growth is correlated with the growing usage of smartphones and technological access. To compete for the consumers’ screen space on their mobile devices, retailers are now adopting responsive designs to deliver their services and products to the consumers (McLean et al., 2020). In this regard, from a consumer point of view, the value m-commerce creates by excluding these monetary barriers to access these services (Prihantoro et al. 2018).
Liébana-Cabanillas et al., (2017) have indicated in their research that the consumers of mobile services are usually younger people that use their mobile phones to access the internet daily, to socialize, get information and perform other interest. Making mobility something that is highly integrated into their lifestyle and therefore adapting to the use of mobile commerce is a simple process, that decreases the importance of ease of use in the future (Liébana-Cabanillas et al., 2017). M-commerce is commonly linked to e-commerce since it can be defined as an extension of it. However, it can be argued that m-commerce creates new attributes to the consumer and
therefore, should be categorized as a distinct channel (Kleijnen et al., 2007). Ghose, Goldfarb, and Han (2013) further support this by arguing that it is anticipated that PCs and mobile devices have on common denominator; both give the user direct access to the internet.
Browsing experiences between e-commerce and m-commerce can be distinguished in three ways. Firstly, compared to PC’s, mobile phones have a smaller screen. Secondly, mobile phones are portable. Thirdly, since the mobile phone is portable, the user has access to information more frequently in comparison to a PC (Ghose et al., 2013; Jeong, Park & Kim, 2018).
2.4.3 Social commerce
Social commerce is defined by authors Stephen and Toubia (2010, p.215) “Forms of internet-based social media that allow people to actively participate in the marketing and selling of products and services in online marketplaces and communities”. Social commerce has been created because of the lack of social integration and the need for developing social technologies in e-commerce (Lu, Fan & Zhou, 2016). This has been a problem but with the capabilities of Web 2.0, bringing new features and options into e-commerce sites such as comments, recommendations, ratings, and social proof has improved the problem with interaction in e-commerce (Lu, Fan & Zhou, 2016). The emerge of user-generated content and the possibility to interact online in order to help consumers decide on products and services has caused e-commerce to move towards social e-commerce with social features integrated with the shopping experience (Stephen & Toubia, 2010).
Social commerce is viewed as a subgroup of e-commerce and the evolution of e-commerce supporting activities and transactions by social technologies (Yadav, De Valck, Hennig-Thurau, Hoffman & Spann, 2013). Social commerce has been divided by Lu et al. (2016) into three classifications: community interactions, social technologies, and commercial activities. One out of three consumers are influenced by one of these three classifications that contributes to a value of 900 billion dollars to 1.3 trillion dollars (Lu et al., 2016). The value of social commerce illustrates how identifying and offering innovative needs are essential in social commerce for companies (Yu, Tsai, Wang, Lai, & Tajvidi, 2018). These issues are addressed by creating a value co-creation circle and identifying critical factors on social commerce platforms (Yu et al., 2018).
3. Methodology
___________________________________________________________________________ This chapter will describe the selected methods used to collect and analyze data. Tools and techniques will be presented for the reader to understand the methodology process. First section includes research philosophy, approach and strategy. Second section includes data collection techniques, sample selection and data analysis.
___________________________________________________________________________ 3.1 Research design
3.1.1 Research philosophy
Research philosophy is a set of assumptions about the approach in that knowledge about a certain phenomenon should be collected, analyzed and examined to find answers to the research question (Collis & Hussey, 2014). There exist four different types of research philosophies, and each philosophy includes different beliefs on how the world is viewed (Saunders, Lewis & Thornhill, 2016). The four different types of research philosophies are positivism, realism, pragmatism, and Interpretivism. The researchers will collect and analyze appropriate data that support answers to the research problem as well as prevent the collection of irrelevant data (Saunders et al., 2016).
The authors find that the most appropriate research philosophy for this paper is an interpretive approach. Creswell and Poth (2018) describe the interpretive philosophy as a worldview view where people try to get an understanding of the environment they live and work. The goal of conducting an interpretive philosophy is to depend on the participant's views of specific situations so the researchers can develop a subjective understanding of their experience to get the complex view of things instead of narrowing the implications into a couple of ideas (Creswell & Poth, 2018). Since the primary goal of this study is to examine how companies empower value Co-creation in an online environment. The authors of this paper find that an interpretive philosophy provides greater insight into the value co-creation process (Saunders et al., 2016).
3.1.2 Research approach
This paper will use an inductive research approach. Collis and Hussey (2014) describe the inductive research method by developing a theory based on observations from empirical reality. This method refers to going from the specific to the general since it moves from individual
observations to general patterns and themes to understand a social phenomenon (Collis & Hussey, 2014). An inductive approach starts with examine individuals and understanding each case before combined and exploited (Schell & Black, 1997). Inductive research is grounded from the “bottom-up” method to build based upon patterns and themes (Creswell & Poth, 2018).
Hence, researchers may interact with participants in the study to form and affect the themes that result from the process. Followed by working back and forth between the collected data and theories, as well as the selected themes, to gather and establish an understanding of the complex themes (Creswell & Poth, 2018). This approach suits our mission to observe individuals in groups and their actions to identify general patterns within our research. From our literature review, we found a gap in how value co-creation is created and used in an online environment and therefore allows us to explore and differentiate new general patterns that follow existing theories. A qualitative approach can be motivated as the most suitable for this research. The thesis aims to study a social phenomenon by collecting empirical data through interviews (Saunders et al., 2016).
3.1.3 Research strategy
Since our research purpose is to examine how value co-creation can be created through an online environment, and if there exist a difference exist between platforms in e-commerce and m-commerce in terms of value co-creation. Our research necessitates an in-depth understanding of the company and customers, for us to interpret why and how specific actions are made over time. For that reason, the authors have concluded that the most relevant research strategy for our thesis is a case study.
Saunders et al., (2016), a case study research strategy is described as a qualitative approach when the researcher conducts in-depth data collection from numerous different sources when investigating a real-life case or multiple cases, over a period of time. Creswell and Poth (2018) elaborate that in order to develop a well-done qualitative case study, the research requires to have an in-depth understanding of the case. To achieve this, the authors of the research need to collect and analyze several types of qualitative data, varying from academic articles, interviews, and observations. One source of data is not sufficient to develop an in-depth understanding (Creswell & Poth, 2018).
3.2 Data collection
The literature for this thesis is mainly derived from the ABS list, Google scholar, JU library, DIVA, and SAGE. In order to find relevant literature, keywords were applied throughout the research process. The keywords applied where, value creation, value co-creation, relationship marketing, marketing, mobile commerce, electronic commerce, and social commerce. All these keywords were applied in various combinations together. Throughout the process of finding relevant literature, the authors have focused on two factors. Top journals in the ABS list and literature with a high amount of citations were prioritized. To prevent data and articles that were out of date, more recent published articles were also precedence.
3.2.1 Case study
Benbasat, Goldstein, and Mead (1987, p. 370) define case study as, “A case study examines a phenomenon in its natural setting, employing multiple methods of data collection to gather information from one or a few entities like people, groups, or organizations.”. A case study is preferable if the research (1) aims to answer a “how” and “why” questions; (2) cannot control the behaviour of the involved in the study; (3) the study is contemporary (Yin, 2017). A single instrumental case study involves multiple sources of information with interviews, observations, and documents to get a detailed, in-depth understanding, as well as a case theme and a case description (Creswell & Poth, 2018). A case study needs to be bounded, meaning it can be described within certain parameters such as a specific place and time frame (Creswell & Poth, 2018).
A case study can be divided into a single case study, a multiple case study, and an intrinsic case study (Creswell & Poth, 2018). In a single case study, an investigator addresses a concern or issue within one case, and a multiple-case study includes multiple cases to explain and illustrate an issue (Yin, 2017). Hence, an intrinsic case study focuses on the case itself, e.g. evaluating a specific program (Creswell & Poth, 2018). Yin (2017) divides the study into a holistic or embedded design. A holistic design approach studies the entire case from a single-unit perspective where an embedded design divides the case into multiple subunits (Yin, 2017). A single instrumental case study is preferable for a subject or problem that has not been particularly researched upon before. If a holistic approach had been chosen, it would have resulted in the whole organization being analyzed, which is not the purpose of this thesis (Yin, 2017).
This study will be a single instrumental case study with an embedded approach, to get a general understanding of the issue by studying a specific case (Creswell & Poth, 2018). The single case study will be managed together with a Swedish retailer company that has a developed e-commerce webshop, and that has focused on m-e-commerce before. The company that will be our main focus in this research is Please the Swede (PTS). There are several types of case studies that are determined and guided by the study purpose. An exploratory type of case study generates a deeper understanding of the context which is preferable in this thesis (Baxter & Jack, 2008). Using a single case study reduces the possibility of generalizing the results that are conducted throughout the study (Yin, 2017). This thesis will be an exploratory research with chosen techniques including the CEO of PTS value actions, interviews with PTS previous customers, and overall observations. By focusing on one company (PTS) and interviewing both the company and its customers obtains it to be suitable for a case study.
3.2.2 Semi-structured interviews
Collecting our primary data from interviews will be in line with our exploratory study and conducting interviews will enable us to obtain and understand our phenomena in-depth and by observing and interacting with the interviewee will provide us with new aspects and knowledge (Creswell & Poth, 2018). During interviews, it is important to create an ambience and develop the questions in order not to ask any intriguing or intrusive questions. Secondary data from the interviews will be collected through PTS website.
The interview technique we used will be the semi-structured approach that has the strength of promoting open-ended answers. The authors have come up with a fixed topic, and our questions are going to be flexible throughout the interview but also have predetermined questions, so none of our questions is missed (Blumberg, Cooper & Schindler, 2008). An advantage of semi-structured scripts is the possibility to ask to follow up questions outside the predetermined questions and reformulate questions if necessary. In the interviews, we will start by asking general questions about the participant and the company to create a comfortable atmosphere. The first questions will be related to our research purpose to attain a general understanding of our subject. The following parts will be made upon our frameworks of relationship building and value co-creation and the areas included in the respectively model (Creswell & Poth, 2018).
webshop via their computer, and they will be mentioned as E1, E2 and E3. The second interviews were held with three customers that had purchased in PTS webshop via their mobile device, and they will be mentioned as M1, M2 and M3. Because of Covid-19, interviews have been processed through Zoom to ensure the safety of everyone involved. A face to face interview is naturally favourable to interact better and observe the interviewee than digitally. Conducting the interviews online will improve the adaption in time and place for the participants and keeping their schedule in focus to make the persons feel comfortable (Creswell & Poth, 2018).
Saunder et al., (2016) in order to create value to the research, the interaction between the participants and the interviewer is an essential feature. The moderator or “facilitator” has an important role not to lead the participants to specific opinions while encouraging involvement and also maintaining an open discussion with the participants within the chosen topic. Table 2 shows the participants of the interviews and the length of the interviews.
Table 2: Participants and length of interviews
3.2.3 Sample Selection
The selection of the participants has been chosen through a non-probability sampling design which is proven to solve qualitative problems while gathering data. For this study, a purposive sampling method been applied since the participants in the semi-structured interviews will provide the authors with valuable knowledge that can contribute to answering the research question (Merriam & Tisdell, 2015). Purposive sampling is preferable for research where the authors want to understand, gain insight, and discover a subject and the sample selection is where the most can be learned. It is concentrating on people with predetermined characteristics that can assist in the research (Merriam & Tisdell 2015; Etikan, Musa & Alkassim 2016; Creswell & Poth 2018).
To get a better understanding of the company’s actions, the authors have applied two different approaches. The first approach was to analyze and get a deep understanding from an interview with PTS of the taken actions that possibly could generate value creation and value co-creation.
The second approach was to develop six semi-structured interviews to get the customer's point of view. The CEO asked the customers of PTS if they wanted to participate in this research. After the CEO got approval from the selected participants, we were able to get in contact with them. One criterion in our interviews is that the participants need to be at least 18 years old. Due to this thesis research question, the authors have chosen to use existing customers to PTS since they have already tried the provided service. According to the determined minimum of age, the authors wanted to secure so the participants could test all offerings by PTS such as payment systems.
3.2.4 Literature review summary
Our research method started with the interest of relationship building between companies and customers regarding the technological improvements in the last 20 years. In the journals, the concept value co-creation was frequently discussed and used in connection with RM to explain the importance of creating relationships with customers but as well let the customers interact and co-create value. Journals within the subject were reviewed then a gap was identified. The lack of RM and co-creation of value in e-commerce and m-commerce. After going through and analyzing the literature, critical findings in the literature shown in table 3 were selected to set the ground of the paper: marketing, value-creation, m-commerce, e-commerce and social commerce.
Table 3: Literature findings
Value creation sphere model (Grönroos & Voima, 2012) is one model that emerged from RM, value creation and value co-creation that the research will be based on. This model is suitable since it describes the joint value creation both firms and customers interact in when co-creating
value. Inserting this model in an online environment helps us to find essential factors in the firm and customer contact and what value is.
3.4 Data analysis
The data analysis spiral seen in figure 3 will be used as a base to manage the data, that describes the general steps to approach the collected data (Creswell & Poth, 2018). To analyze and structure our data from the interviews, we organized the data, forming and labelling codes to construct themes (Creswell & Poth, 2018). A content analysis method is used in combination with the data analysis spiral to analyze the data that starts with the study of collected data, dividing it into smaller samples and then convert it into codes (Collis & Hussey, 2014). Coding is referred to as the central part of qualitative research that consists of making sense of the data collected and further connecting it to themes. (Creswell & Poth, 2018).
First, in the analysis, we read through the data to find the most relevant information regarding our research question and topic. To divide the data and to label the codes, we recognized the knowledge of the participants and the parts they focused on. Then codes were described and transformed into themes as pictured in figure 3. Further on the data were analyzed and visualized to interpretant in the findings.
Figure 3: Data analysis spiral (Creswell & Poth, 2018)
3.5 Analysis procedure 3.5.1 Transcripts
Each interview was audio-recorded and then transcribed to use the words of the participants in the findings section. The content was reviewed by each author separately, where the most
useful parts of the interviews were highlighted individually. Then the authors reviewed all the data together and then categorized and divided the information into codes to easily find resembling themes. The themes made it convenient to find relevant information when interpreting it into findings, as seen in figure 3. The benefit of audio-recording and transcribing are the advantage of not missing any value bringing aspects to the study.
3.5.2 Coding
The process of coding all the interviews was made after the transcription process. The codes that we were looking for was all information that has something to do with our research question. In order to know if the codes were relevant and delineate in a valuable way, the setup codes were first gathered. Afterwards, a discussion regarding the gathered codes and potential improvements, the coding process continued to notice what codes were missing.
3.5.3 Themes – searching - reviewing - defining
The authors of this research identified ten themes that are suitable for this paper after dividing the codes into themes that are connected to the literature review and the gathered data. The themes that are chosen are Information accessibility, safety, trust, credibility, personal connection, direct interaction, indirect interaction, transparency, and communication tools.
3.5.4 Trustworthiness and quality of research
Our work in being as transparent and trustworthy as possible towards participants, permission, and consent was established before interviews and publication. Creating a trustworthy study, four terms will be used, authenticity, transferability, credibility, and dependability (Lincoln & Cuba, 1985). For successful research, these factors are essential for every person involved to feel safe and that the content is not misused or wrongly interpreted.
3.5.5 Ethical considerations
These guidelines have been followed in order to conduct this research according to ethical considerations and to assure quality. All participants were asked before the interview to approve their consent of audio recording. Interviewees got the chance to revise the quotes for the chance of changing if necessary. A checklist by Creswell (2016) guides the authors in conducting ethical qualitative research:
• Information from manuscripts are correctly quoted and storage accordingly • Participants and others have been confidently protected
• No copyrighted material has been used without permission
3.5.6 Dependability
Dependability is a criterion that relates to how precise and organized the research focus is outlined (Collis & Hussey, 2017). When conducting interpretive research, the research focus is expected to change along with the process of the thesis due to consistent changes in the research environment, which might drive changes in the method being used in the thesis (Saunders et al., 2016). The interviews conducted were transcribed right after to make sure what was said. In order to ensure dependability as well as have proper data well-documented.
3.5.7 Credibility
To obtain credibility, it is essential to establish a relationship with the company and customers by explaining the aim of the study (Saunders et al., 2016). By explaining and informing the participants of the study regarding their entitlement anonymity, demonstrates a clear responsibility from the researchers (Saunders et al., 2016). The information from each interview was transcribed and then provided to the participants to ensure that the data has been gathered correctly. All six customers requested to be anonymous. However, the CEO of PTS did not require any anonymity.
3.5.8 Transferability
Transferability relates to what degree the finding of qualitative research can be suitable, applied, or transferred to other settings or situations (Saunders et al., 2016). By supporting the thesis with detailed explanations of the research question, literature, design, data, and analysis, the researcher gives the reader the possibility to evaluate the transferability of the research to other situations the reader has an interest in further research (Saunders et al., 2016). For this reason, the authors of this paper have chosen to clearly explain our research context by providing the reader with detailed explanations of the collected data and analysis process.
3.5.9 Confirmability
Because of the biases of the researchers, when conducting qualitative research, the paper involves interviews, issues with trust of objectiveness can be developed (Saunders et al., 2016).
Therefore, it is crucial to guarantee that all the data that has been collected are not from the researcher but are persistent with the participants’ words (Saunders et al., 2016). The researcher of this paper made sure that the interviews were developed and ready before, to ensure that the questions in the interviews were not aimed to guide the participants to specific objectives but rather give them the possibility to elaborate on their own experience about the subject in matter.
4. Empirical Findings
_________________________________________________________________________ In this chapter the authors will present the empirical findings. The data that has been gathered from an interview with the CEO of Please the Swede, along with six previous customers, three which have made at least one purchase from their computer and the other three from their mobile device. The outline of this section will start with the presentation of the marketing actions from Please the Swede and then the interview findings from the six customers.
_________________________________________________________________________ 4.1 Please the Swede
The data has been gathered from an interview with the CEO of PTS, mapping out company value-creating actions the company provides for its customers and how PTS works both with e-commerce and m-commerce in this area. Please the Swede (PTS) is an online retail company in the underwear industry based in Sweden. Their business idea is to offer quality underwear boxer shorts in several designs that will convey a sense of being a gentleman. PTS strives to be part of the comeback for the classic boxer shorts to become the most popular underwear, once again. In the last years, PTS has gained market shares in the boxer shorts industry and have increased their turnover by 150 per cent (Allabolag, 2020).
The company was eager to get started and did not ensure the quality and fit in the beginning, which resulted in a tough first half-year. In the start-up phase, the company did not spend any considerable money on marketing because they did not have an adequate amount of money to spend on marketing actions. Instead, by word of mouth the company gained success in the start-up phase and by ensuring the quality and fit of the boxer shorts they have found the right products, price, and design.
Additionally, PTS has over time changed the appearance around the brand to have a broader and stylish approach to the niche products so it can suit anyone. PTS believes that their success appears in what they did poorly in the beginning, has turned out to be their success today. In 2018, PTS entered a partnership with an influencing person in the clothing industry that resulted in higher credibility for the products and a massive increase of the traction to the website. The recent rise has contributed to invest more resources online and makes this
company interesting for this type of research.
4.2 PTS value mapping
During the interview that was carried out with the CEO of PTS, it was clear that PTS are providing value-creating actions outlined in figure 4. PTS has numerous actions that are carried out to constantly better the experience for the customers. Throughout the interview with the CEO of PTS, actions that PTS provides to its customers could be derived and then divided into three separate categories: Pre-Sale, Distribution and Post-Sale. These three categories contain all the phases that a customer crosses during the entire purchasing process through their website and mobile website.
Figure 4: Please the Swede Value creating actions, (PTS, 2020)
4.2.1 Pre-Sales
This stage starts with the first interactions the customer experiences with the brand such as ads, visiting the website, or hearing about the company. The Pre-Sales stage is particularly important due to it seeks to catch the interest of the consumer to continue to, e.g. their website. Further on their blog inspires the reader to personalize with the brand and as well writes about other related topics to create something more than just selling boxers to attain and retain customer interest.
“For us (PTS), is it important to have enough content as pictures, blog posts, slideshows, etc. so the curious customer can get to know the brand and not least, understand what we do” –
CEO
Entering the website through a mobile device, the content is adapted and customized to a smaller screen for the visitor to not miss out on any information or troubling navigating. The ease of use is crucial, so the customer does not get impatient and frustrated. Browsing the website on the computer, PTS tries to make the website clean and inviting. Moreover, PTS easily displays the different collections and qualities and the discount steps for buying more pairs. Every boxer has a unique name, so it is easily recognized.
“Many customers come through our social media channel Instagram and therefore adapting the shop to a mobile device is important because most people use it on their phone” – CEO Additionally, The CEO further states that selling underwear online creates value for the customer due to two factors. Firstly, people are more comfortable buying underwear online compared to a physical store. Secondly, the purchasing process of finding the right size of the underwear, buying underwear in a physical store does not give the customer the possibility of trying on the underwear. Therefore, the customer has to guess the right size.
“Today we have a size chart, but we are working on developing it, so customers feel even more comfortable buying our products online” – CEO
Concerning customer service, PTS answers the question by email, and people also use Instagram to contact PTS. The CEO states that the choice of not using a customer service that can be reached through calls is to lower costs and the email function and people contacting on social media have worked well so far. An issue brought up can be if the customers have a question during the purchase and then have to wait for the answer. By providing as much information as possible on the website, PTS tries to keep down the level of customers contacting the company.
“Our customer service policy is to answer customers within three hours to provide a positive experience” - CEO
PTS strategy is to provide a calm, safe, and luxurious ambience around the brand that does not push the consumer as other big e-platforms tend to do. To attract customers, PTS has profiled
themselves through various social channels, e.g. podcasts and the co-owner and head of products have a significant influence in the menswear industry. Additionally, the CEO mentions that Instagram is their primary marketing channel for social media. PTS social media strategy consists of two to three posts per week and two to three sponsored posts per month.
“Collaborating with a heavy profile in the menswear industry has increased transaction and sales, I believe using key people in the industry to provide a more credible and serious
image” – CEO
Furthermore, the shopping cart remembers function keeps the product in the shopping cart when the customer returns to the page. PTS tries to offer a variety of payment options for everyone to feel safe, making a purchase together with an encrypted and secure shopping cart.
“We try to offer everything from Klarna to Paypal to not exclude anyone from buying our products, but also to be perceived as credible and reliable” - CEO
4.2.2 Distribution
Distribution relates to the process from that the underwear is package in the company's storage house than shipped and delivered to the customer. Since Please the Swede is focusing mainly on the Swedish market, they offer free one to three days shipping within Sweden. The CEO motivates that the Swedish online retail business is a competitive market where most of the online retailers offer free shipping, which has led to online retail customers to expect that shipping is free.
“We announce on our first page that the shipping (within Sweden) is free, so the potential customer does not have to search around the page for the information as well as expected
delivery time on each product page” – CEO
Therefore, it is essential to provide customers with free shipping to stay competitive in the Swedish market. Please the Swede has also customized their packages so orders that have a maximum of six pair underwear, that can fit into a mailbox. The CEO motivates that this gives value to the customers since being able to deliver the packages direct to the consumer mailbox, the customer does not need to put in the extra effort on having to pick it up at a postal
regarding the response time within three hours, the customer can get help quickly if questions arise during the buying process.
“We sell our underwear in packages up to six pairs so it can fit into the mailbox, so our customers do not need to go to a postal office and get them, and the feedback has been
positive” – CEO 4.2.3 Post-Sales
Continuing to the stage after the customer has received the product, much of the work from the company will set the ground for a positive experience and increasing the chance of finding loyal and returning customers. A personal greeting card upon delivery is received a personal relationship between PTS and the customer. A frequent social media presence inspires the customer to interact and find inspiration for future purchases. The CEO continuous, a newsletter is usually sent out to the existing customer’s once a month and before single release drops. The reason behind the newsletter is to provide content and build trust with existing customers actively.
“To stand we out send a handwritten greeting card in the package to generate a personal approach, we hope people appreciate the extra work that's been put into it” – CEO If the customer needs to change size or in need of contacting the customer service, it is important to have a quick response. PTS has considered implementing a question and answer page for customers to easily see frequently asked questions and decrease the level of people contacting the customer service.
4.3 Customer Findings
Our customer findings consist of empirical data that was gathered from six interviews with existing customers of PTS. In setting up our empirical findings, we started with analyzing the answer from the CEO with mapping out company value-creating actions and how PTS works both with e-commerce and m-commerce in this area. The interviews with the participants will be outlined to compare their opinions about PTS view on value creation and the difference, to find evidence on how companies and customers can co-create value in an online environment. In order to identify what differences exist between platforms in e-commerce and m-commerce in terms of value co-creation. The participants were divided into two groups E and M that
