Consumers satisfaction of attributes in online product design

1.2 Research relevance

In an increasingly dynamics business environment, firms are realizing the importance of collaboration for creating and sustaining competitive advantage. A company exists because it aims to gain profit and the only source of such profit is the customers. All the sales activities, production, and marketing plans have a common objective and that is to attract customers to purchase their products or services in order to bring in money to the company.

For the last decades, companies have been soliciting the consumers input when implementing the more personalized marketing strategies in order to provide products and service that fit the consumers need. Understanding the needs of your customers will help a company define and create new market opportunities that significantly contributes to revenue growth in the organization. With the rapidly changing economy and dynamic technology, customers also observe a rapid change in personal tastes and preferences. Customer predictability is not as conventional as it used to be. A company must conduct regular market research to be updated with the latest trends and consequently will be able to generate new and broader marketing strategies needed in the various marketing programs. New product creations can even be designed as an answer to changing customer needs. Nevertheless with the arrival of a new century that traditional methods for research is enough, is hardly been challenged. This new era of marketing, where consumer’s role is shifting from being a passive spectator to an active player seems to be growing interest in the business world.

More recently, scholars in strategy and marketing have focused on collaboration with customers to co-create value. The scholars argue that interaction that enables a consumer to co-create experiences with the company is the key to unlocking new sources of competitive advantage (Prahalad & Ramaswamy, 2004; Thomke & von Hippel, 2002). Merging this concept with the rise of interest of companies of doing business thru the internet has made a challenge as well easier as well more challenging.

1.2.1 The current study and the research questions

As we enter the twenty-first century, the marketing function remains concerned with serving customers and consumers effectively. This new trend, integrating customers into the co-design process is a great competitive advantage for firms that mostly apply mass customization. The aim of the current study is to investigate in depth the impact of this process through the website and toolkit attributes for the designed product. The study also intends to extend the existing literature by exploring whether the product satisfaction derived from the process and the outcome is significant enough to influence the Willingness to pay (WTP). In summary, the main research question of this thesis is:

How does willingness to pay differ across different website or toolkit attribute levels?

Because of the large amount of the possibility to design online nowadays, it is very interesting what kind website & toolkit attributes will affect the willingness to pay for the co-designed product. There is a lot of literature about the effect of website attributes and using toolkits on co-design process. Franke & Piller (2004) proved, in a case study regarding watches, that the willingness to pay for self-designed product is higher than comparable standard models in the same market. This allows the interpretation that subjects derive benefits from the perceived uniqueness of the products. There is an untouched area in the online environment about what will influence the willingness to pay for the co-created product. In this sentence, this thesis will provide insights about which attributes, both website and toolkit, are more affected the willingness to pay and if satisfaction moderates an asymmetric affect. Although it seems very simple, co-designing is still a hardly touched area. In the academic literature, attributes are investigated mostly in subjective studies and describes this cases in a narrative style. These relationships have not been researched efficiently and when encountered they are just suppositions or conjectures. Furthermore, earlier studies mainly focus on firms implementing and using the attributes, not on users interacting with them.

In order to investigate the impact of the co-design process on the willingness to pay, the most important website and toolkit attributes had to be chosen. After a careful secondary research on the literature, website attributes (design, navigability and transaction capability) and toolkit attributes (complexity, enjoyment and control) are chosen. The following research questions aim to underline the contribution of the present study to the mass customization literature.

1. 
   What is the impact of the website attributes on customer’s satisfaction with the mass customization process?
   
2. 
   What is the impact of the toolkit attributes on customer’s satisfaction with the mass customization process?
   
3. 
   How is customers’ Willingness to pay influenced by the website attributes, toolkit attributes and the interaction of product satisfaction and transaction capability?
   

The conceptual model of the research and the methodology selected will be presented in the following chapters.

1.3 Outline of the study

The first part of this study includes the first presentation of the topic for this thesis with the main subjects and significance of the study included. Furthermore the structure of the study is explored. The aim of the second part is to observe the existent literature and to present the findings of the literature that has been used. Part two gives some general information about the online co-design, how different website attributes affect this process in turn to affect the willingness to pay of consumers with the moderating effect of the product satisfaction. The same with toolkits attributes are explored. In the second part, the theoretical framework used in this thesis and the hypotheses to be tested are discussed. The goal of the third part is to clarify the research method to test the research model of the current study and the research tools selected. The 4^th part will report the data presentation. This includes the statistical results and interpretations. The final part will discuss the conclusions resulting from this study. Also the implications and limitations are included.