LIST OF ABBREVIATIONS
CHAPTER 1: INTRODUCTION
2.7. Organizational Arrangement
This section of the literature review is focused on the organizational arrangements in order to clarify the role of the business entity in the context of the service marketing and VCC. This understanding provides foundation for the investigation of research of the VCC in the case of hotel organizations in the present research. Works by authors including Bendapudi and Leone (2003), Vargo and Lusch (2016), Rathore, Ilavarasan and Dwivedi (2016), are employed in the discussion.
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In recent years, most marketing studies have concluded that organizations play a role in service providers (Kotler et al. 2009). This is because services are considered to be factors that contribute to the reconceptualization and repositioning of (Vargo & Lusch 2016).
SDL theory is still in its infancy. “As with all meta-theoretical frameworks, the uniform paradigm and meta-theory of SDL strategy may never be complete. On the contrary, the future development of SDL strategy may follow an iterative process that involves the refinement and expansion of meta-theory, which is inspired by midrange theory and evidence-based research. From a philosophical point of view, as well as ontology, epistemological and methodological assumptions, we should find well-equipped SDL strategy to provide further guidance for the development of
“more specific, empirically tested and practically applicable midrange theories” (Vargo & Lusch 2017).
In this case, the organization acts as a service provider while treating the customer as society. This is because customers have the ability to bring about significant economic change and guide many marketing factors. This is the main reason why many organizations are customer-centric (Brodie, Löbler & Fehrer 2019).
Therefore, an organization can be considered in a good shape only if it is able to capture the value generated by the customer (Kuzgun & Asugman 2015). Such an ability shows that the SDL strategy is best suited to the organization, helping it get into a state of promoting its market and economies of scale. In short, the exchange of services between customers and organizations helps the companies obtain information about the economic and marketing strategies that they can use.
Vargo and Lusch (2008) point out that the SDL allows one participant to use their knowledge and other resources to benefit another participant in the process. According to Healy and McDonagh (2013) the experience shared by customers is important to the organization because it provides
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feedback and suggestions that can be used to further enhance products and services. For instance, social media provides a platform for customers to connect with their organizations, which allows the entities to track the changing needs of their clients (Rathore, Ilavarasan & Dwivedi 2016).
In addition to this, co-creation is an important concept identified in extensive SDL literature that promotes the relationship between customers and organizations (Grönroos 2012). Co-creation is an important part of the value acquisition process, which identifies the customer’s role as a value creator (Priem 2007). Due to the strategic role of co-creation, external factors affecting the process of value acquisition are included in the theoretical approach of the study.
Forward-thinking organizations often serve individual customers in the form of customized bundled goods or services, which increase the “value provided” to the customers and therefore improve their competitiveness (Bendapudi & Leone 2003). These complications mean that services created to support one customer’s value proposition, may not necessarily be applicable to the results of another customer. Therefore, the challenges and moral hazards associated with the context provided by the service still need a mitigation approach (Schiavone et al. 2020). Forward- thinking or advanced services also mean greater and better service. However, this adds to the increasing complexity and challenge of delivery, therefore a focus on supporting the functionality and efficiency of the product offering. In short, advanced services focus on helping customers achieve the desired results. As a result, advanced services require closer relationships with customers and a higher degree of customization, with a focus on enhancing the customer’s value co-creation process and ultimately creating value together (Vargo & Lush 2008; Schiavone et al.
2020). Therefore, understanding the meaning of value co-creation in the service and identifying the capabilities that are critical to helping the social media processes within the organization, provide the organization with a deeper understanding of the marketing strategy.
115 2.8. Value Capture:
The organizational arrangements discussed in the above section emphasize the critical role of the relationships between the organization and its customers for effective value co-creation.
Nevertheless, in order to benefit from their VCC efforts, business entities need advanced capabilities to capture the value created. The problems of value capture are covered in an inseparable relationship with value creation in the works of scholars like Agafonow (2014), Bowman and Ambrosini (2000), Pitelis (2009). Furthermore, Lepak, Smith and Taylor (2007) present a multi-level perspective towards value capture, emphasizing the complex nature of this concept. Therefore, the present section is aimed at the concept and present knowledge related to value capture. Sjödin et al. (2019, p. 161) define value capture as “the process of securing profits from value creation and the distribution of those profits among participating actors such as providers, customers, and partners”. According to the authors, this definition is grounded on the works of Chesbrough, Lettl and Ritter (2018) and Dyer, Singh and Hesterly (2018).
The topic of value capture in social media has captured the research interest of authors like and Wamba and Carter (2013). On the one hand, Agafonow (2014) presents the economic perspective toward value capture focused on the ways in which business organizations capture value through social media, sales, profit generation, quantitative economic value and network economy. On the other hand, Wamba and Carter (2013) present the technological perspective towards the focal concept, aimed at the value co-creation and social network through social media. This perspective is connected to technology related development, the likes of search engines, better interfaces, peer- to-peer communication tools, and social networks, all of which improve marketers’ ability to communicate and engage the customers through these new point of interest (Shankar et al. 2011).
Previous studies on social media supporting co-creation activities place the focus on content
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sharing, organization and collaborative works among customers (Agafonow 2014; Bashir, Papamichail & Malik 2017). Therefore, the social media are seen as the medium for value creation (Majchrzak et al. 2009). However, besides the user generated content and communication, there are also other forms of value creation through the application of social media like electronic commerce (Culnan, McHugh & Zubillaga 2010; Grönroos 2012). In the light of the SDL theoretical logic, scholars describe customer as value co- creators (Vargo & Lusch 2008; Brodie, Löbler & Fehrer 2019). In contrast, Rashid et al. (2019) present a platform approach towards the study of VCC. The authors emphasize the impact of the specific social media platform employed by the business organization for its VCC activities, which provides a meaningful rationale for a study with a specific focus on individual social media platforms.
This relationship between the customer and the organization in social media allows customers to become more motivated to use the social media platforms for developing value, providing self- discovery, maintaining interpersonal interconnectivity, and providing social enhancement and entertainment value (Rathore, Ilavarasan & Dwivedi 2016). To satisfactorily maintain these benefits, however, marketers need to become adept at ensuring a relationship adjusted to the specific characteristics of the consumer behavior. Nadeem (2015) advises business organizations to provide a better offer as the “core set of motivation” for customers’ delight, or “exceeding customer's expectations to create a positive customer experience with a product or brand.”
It is important for organizations to cope with the updated technology to both increase and motivate customers (Fischer & Reuber 2011). While the social media platforms are central enablers, their ultimate power is presented by the co-creation opportunities in the organization’s internal sales, service, marketing and its customers (Gouillart 2011; Curtis 2013). The awareness of the organization to use social media leads to increases in customer participation such as word-of-
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mouth, user generated content and social commerce (Liang et al. 2011). These advantages allow organizations to improve their potential for value capture.
This study proposes that social media not only works for providing resources for the organization through customer contribution, but also as platform for value creation. The presented review emphasized the positive impact of social media on the value capture based on the interactive relationships between the business organization and its customers. Nevertheless, the presence, type and direction of the relationship between the social media and the value capture through social media based on the collaboration between business and customers has not been studies in the context of the UAE hotel industry. This leads to the identification of another research gap that can be addressed through the present research. Based on the findings drawn from the available literature basis, we can define another research proposition that social media is positively related to value capture through collaboration with customers.