1. How Service Innovation influences on Customer Satisfaction?
Consumer Behavior
How Service Innovation influences on Customer Satisfaction?
Proposal for final project
Only two group
Daisy, Khanh
May 28th, 2014

2. Background & motivation
Advancements in technology, especially in ICT make service innovation possible with rapid technological evolutions*
brings business players with competence, new service challenges, => innovative services => long term relationships with customers => different from other rivals => competitiveness
Telecom provides in Vietnam:
Telecom players are trying to not only utilize the huge infrastructures invested
They are also creating new services/functions to add into the basic ones
Although the users are limited, service providers need to increase number of subscribers by launching many new value added to their services
Most researches paid attention on firm’s performance as a result of service innovation.
What are key of firm’s performance? What make customer satisfaction and retention?
* Huarng, K.H., J. of Business Research 64, , 2011

3. Background & motivation
Innovation is considered as the term to describe the development and changes resulting to new technologies in the manufacturing field*
Service innovation has strong impacts on sales**
What makes good performance of a firm? CUSTOMERS?
 Understanding the effects of service innovation on end user’s satisfaction
* Danjum, I., and Rasli, A., Procedia – Social & Behavioral Sciences 60, , 2012
** Melton, L.J., and Hartline, M.D., J. of Service Research 30, 64-72, 2011

4. Literature review Strategic management of innovation*
Service innovation has positive impacts on firm’s performance/enables the firm to provide consumers with superior and different value**
There are important differences between service innovation and manufacturing innovation***
The concept of service innovation present the evidence of influences of service innovation (interactive and supportive) on firm’s performance and competitive advantage****
* Lee, R.P., and Grewal, R., J. of Marketing 68, , 2004
** Melton, L.J., and Hartline, M.D., J. of Service Research 30, 64-72, 2011
*** Gallouj, F., and Windrum, P., J. of Evolutionary Economics 19, , 2009
**** Salunke, S., et al., Australian Marketing Journal 15, 69-75, 2009

5. Conceptual model
UC: service innovation as a combination of technology, business model, social, organizational, and demand innovation*
Service innovation in this study comprises*:
Interactive service innovation: refers to the value creating changes initiated by the service firm to the service concept...
Supportive service innovation: refers to the indirect value creating changes at the back-end that support the new value proposition
A link must be created between value propositions offered by the firm and the underlying support systems and processes to operate a new service effectively
* Christensen, C.M., et al., Center for American Progress, 2011
** Salunke, S., et al., J. of Business Research 66, , 2013

6. Research framework Interactive Service Innovation H2
Supportive Service Innovation
Interactive Service Innovation
Customer Satisfaction
Customer Retention H1 H2 H3 H4

7. Methods Measurement scales: 15 items Sampling procedures:
Find out the ways to develop innovative services and new ways for retaining customer in service competition environments
The formula how the sample size is selected:
Data is collected from respondents using 3 telecom service players (Viettel, Vinaphone and Mobifone)
* Bowerman, B.L., R.T. O'Connell, and J.B. Orris, Essential business statistics. 3rd ed. 2004, New York: McGrawHill.

8. Methods Data analysis procedures:
Confirmatory factor analysis (CFA) performed using LISREL 8.80 to evaluate the distinctiveness of the measures
CFA procedure consists two factor models*:
First order model: to examine the individual research constructs
Second order model: to examine the overall model fit of each research construct
Overall model-to-data fit for structural and measurement models:
chi-square goodness-of-fit test (χ2) and (χ2/df) < 3
RMSEA < 0.05, GFI > 0.9, and AGFI > 0.9
CFI > 0.9, and NNFI > 0.9
* Koufteros, X., et al., Int. J. of Production Economics 120, , 2009

9. Thank you for listening