Life cycle approaches to sustainable consumption, AIST

Customer satisfaction: review of literature and application to the

product-service systems
Ms. Oksana Mont
Mr. Andrius Plepys

International Institute for Industrial Environmental Economics, Lund University

oksana.mont@iiiee.lu.se

This feasibility study commissioned by the National Institute for Advanced Industrial
Science and Technology in Japan (AIST) and supported by the Sustainable
Consumption Unit (UNEP) provided an overview of approaches used in different
disciplines for evaluating consumer behaviour.
The study analysed the applicability of existing research concepts, theories, and tools
for evaluating consumer satisfaction with product-service systems (PSS). It included a
discussion over their strengths/weaknesses. This paper presents a short overview of
the study.
BACKGROUND
It has been recognised that eco-efficiency improvements at production and product
design level can be significantly reduced or totally negated by rebound effect from
increased consumption levels. In line with this problem factor 10 to 20 material and
energy efficiency improvements have been suggested (Factor 10 Club 1994; Schmidt-
Bleek 1996; Bolund, Johansson et al. 1998; Ryan 1998). The improvements, however,
if not carefully done, may still lead to rebound effects through changes in resource
prices.
As a potential solution to the factor 10/20 vision system level improvements have to
be made, contrary redesigning individual products or processes (Weterings and
Opschoor 1992; Vergragt and Jansen 1993; von Weizscker, Lovins et al. 1997; Ryan
1998; Manzini 1999; Brezet, Bijma et al. 2001; Ehrenfeld and Brezet 2001).
The product service system (PSS) concept has been suggested as a way to contribute
to this system level improvement (Goedkoop, van Halen et al. 1999; Mont 2000).
Here the environmental impacts of products and associated services should be
addressed already at the product and service design stage. Special focus should be
given on the use phase by providing alternative system solutions to owning products.
A number of examples in B2B area exist that confirm the potential of PSS for
reducing life cycle environmental impact. It is, however, increasingly evident that
business examples are difficult to directly apply to the private consumer market.
Private consumers, contrary to businesses, prefer product ownership to service
substitutes (Schrader 1996; Littig 1998). Even if accepted, the environmental impacts
of servicised products offers depend to a large extent on consumer behaviour.
To address this problem, either behavioural or service system design changes are
needed. Changing human behaviour and existing lifestyles contributes to the vision of
sustainable development, but at the same it is extremely difficult and time-consuming
process.

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 Life cycle approaches to sustainable consumption, AIST

A potentially easier way is changing the design of product-service system to reduce

behavioural pitfalls. In order to change system design, it is necessary to understand
how consumer acceptance of more sustainable solutions is formed, influenced or
changed, what are the influencing factors and what are the leverage points for best
results with lowest costs. Understanding consumer perceptions and behaviour in this
context is crucial.
CONSUMER RESEARCH IN DIFFERENT DISCIPLINES
A considerable body of literature in a range of different disciplines exists on
consumption, consumer behaviour, and consumer decision-making process. Research
in economics, business, marketing, psychology and sociology domains studies
consumer behaviour from different theoretical premises: for economists,
consumption is used to produce utility; for sociologists, it is a means of stratification;
for anthropologists a matter of ritual and symbol; for psychologists the means to
satisfy or express physiological and emotional needs; and for business, it is a way of
making money(Fine 1997).
For more than a decade now, a range of studies that address environmentally sound
consumer behaviour, e.g. car use, waste sorting, minimisation and recycling practices,
have been conducted. However, few studies evaluated consumer acceptance of the
PSS concept a consumption based on non-ownership of physical products, see, for
example, studies on car sharing schemes (Schrader 1999; Meijkamp 2000), ski rental
and washing services (Hirschl, Konrad et al. 2001).
One reason explaining the lack of studies in the area could be that, there are still not
many PSS schemes in place to serve as test grounds. Another reason could be
uniformity of research focus. Most of consumer research focused on adopter
categories, habits, attitudes and intentions, rather than on actually measuring the
satisfaction level with the service. The reason is probably that PSS ideas have been
promoted by researchers from the environmental management, marketing, design and
engineering fields, and to a lesser extent by sociologists, who hold the banner of
research in customer satisfaction.
CONSUMER SATISFACTION PROCESS
The paramount goal of marketing is to understand the consumer and to influence
buying behaviour. One of the main perspectives of the consumer behaviour research
analyses buying behaviour from the so-called information processing perspective"
(Holbrook and Hirschman 1982). According to the model, customer decision-making
process comprises a need-satisfying behaviour and a wide range of motivating and
influencing factors. The process can be depicted in the following steps (Engel,
Blackwell et al. 1995):
Need recognition realisation of the difference between desired situation and
the current situation that serves as a trigger for the entire consumption process.
Search for information - search for data relevant for the purchasing decision,
both from internal sources (one's memory) and/or external sources.
Pre-purchase alternative evaluation - assessment of available choices that can
fulfil the realised need by evaluating benefits they may deliver and reduction
of the number of options to the one (or several) preferred.
Purchase - acquirement of the chosen option of product or service.

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Consumption - utilisation of the procured option.

Post-purchase alternative re-evaluation - assessment of whether or not and to
what degree the consumption of the alternative produced satisfaction.
Divestment - disposal of the unconsumed product or its remnants.
Besides the information processing perspective, marketing analyses consumer
behaviour by employing a psychologically grounded concept of attitudes (Balderjahn
1988; Ronis, Yates et al. 1989; Luzar and Cosse 1998). It is consumer attitudes that
are usually named as the major factor in shaping consumer behaviour and a wealth of
studies is available on the topic of how attitudes can predict behaviour.
INTER-DISCIPLINARITY OF CONSUMER RESEARCH
Different research disciplines diverge in their presuppositions about the human nature,
factors influencing consumer behaviour, market response, etc. Therefore, they
naturally employ different research approaches. However, despite that seemingly
insurmountable abyss between disciplines, we see that many research topics and
methods overlap, and that there is no clear-cut line between different domains of
consumer research. Many consumption-related issues are being increasingly
addressed from interdisciplinary or multidisciplinary perspectives.
Many interdisciplinary concepts and factors are of interest for research on consumer
satisfaction with eco-efficient services and PSS. Contrary to the suggestions from
many traditional neoclassical theories, consumption patterns are much more flexible
and prone to various influences. Today consumer behaviour is increasingly dynamic
as the choice of alternatives increases with the growth of global markets. The
complexity of the decision-making process and a large number of influencing factors
suggest that changing consumer behaviour towards more sustainable consumption is a
challenging process, which requires coordination at individual and societal level.
The area of PSS and eco-efficient services is still developing. Further efforts are
required in order to understand relations between functional and emotional needs of
customers.
DIFFERENT LEVELS OF COMPLEXITY
When evaluating satisfaction with a product, customers initially assess tangible
features of the product. In the service context, the features, though observable, are
considerably less tangible and are thus more difficult to assess. A product service
system comprises four components (products, services, infrastructures, and networks,
see Figure 1), rendering the evaluation process of consumer satisfaction even more
complex. Here the part of the system, with which customer comes into direct contact,
is larger than in the case of a pure product or service, which has implications for
customer evaluation process. In the case of PSS or eco-services, customers are
exposed to both dimensions: product and service. In addition, due to closer relations
with the service provider customers can even become exposed to infrastructure and
networks that support PSS delivery. Therefore, in the PSS context, an evaluation of all
four PSS components becomes relevant:
Product evaluation is conducted by assessment of products or technologies.
Person-based or other types of services (technical, information and knowledge
services) that are included into PSS may be evaluated.

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 Life cycle approaches to sustainable consumption, AIST

Infrastructure can be evaluated when the customer comes into contact with
enabling supporting technology, or by evaluation of ambient conditions, spatial
layout or by evaluating signs and artefacts of the PSS.
Networks, usually are not exposed to the eyes of the customer, but in some
cases may be evaluated when they come into contact with the customers.
Product Service
Person-based
Products services
Technologies technical,
knowledge,
information
services

Infrastructure Networks

Support Partners and

technology suppliers of
Ambient conditions service provider
Spatial layout
Signs, artefacts

Figure 1 PSS dimensions that can be exposed to customer judgement

RESEARCH FRAMEWORKS AND METHODS
A great variety of methods and frameworks for understanding and evaluating
consumer acceptance and satisfaction are used in different disciplines. The study has
discussed the following frameworks: Kano model of customer satisfaction, the
Innovation diffusion of Rogers, the service quality model of Grnsroos, and
SERVQUAL model by Parasuraman.
The study has also surveyed a range of tools used for evaluating and measuring
consumer satisfaction. These included surveys, in-depth interviews, focus group
interviews, observations, mystery shopping, and psychographic portrait of customers.
A number of drawbacks and benefits pertaining to the tools have been pointed out and
discussed. Both the research models and the tools, while diverse to different extent,
were found to be useful for application in the PSS research area.
CONCLUSIONS
The environmental impacts of ever increasing consumption throughout the world have
been recently recognised. Many solutions have been proposed to combat the raising
levels of consumption. One of the concepts suggested as a potential solution to reduce
consumption levels is the concept of product-service systems (PSS).
The concept proved to be viable in the business-to-business context. However, in the
private consumer markets, it has been less successful, both in terms of economic
viability and environmental impact reduction. User behaviour has been named as the
primary reason for this situation.
To address this problem, either behavioural or service system design changes are
needed. Changing human behaviour and existing lifestyles contributes to the vision of
sustainable development, but it proves to be an insurmountable task over a short
period of time.
Contrary, changing the design of product-service system to reduce the behavioural
pitfalls could a potentially easier way towards sustainable development. Changing
system design requires understanding how consumer acceptance of more sustainable

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solutions is formed, influenced or changed, what are the influencing factors and what
are the leverage points for best results with lowest costs. Understanding consumer
perceptions and behaviour in this context is crucial.
However, the consumer decision-making process is much more complex and intricate
than just a simple decision about shifting from owning a product towards paying per
use of it. Throughout this study we demonstrated that products are not seen purely for
their functional features, but rather products are complex combinations of various
attributes, which, together with functionality, also bring status, serve as a key to a
certain social class, reinforce once self-esteem, and much-much more.
Therefore, the goal of this study make a step towards a better understanding the
complexity of the phenomena we set to change. We did that by looking at how
different disciplines perceive the consumption process in general and consumer
decision-making process in particular. We saw the wealth of theories and frameworks
being developed trying to solve this puzzle. We then looked closer at potentially most
promising models, which could prove useful understanding the consumer decision-
making process in the context of ownerless consumption.
We also found some useful tools, which can be employed for collecting information
about and from consumers. Identified frameworks and tools are then being evaluated
for suitability in the PSS context. We also provided some suggestions and examples
for how several presented models could be operationalised in the PSS context.
Some important lessons were learned from this study:
Consumer is a moody creature swinging between rationality and emotions.
All disciplines we looked at address consumption from some perspective. This
perspective may be unique to this discipline, or may share common premises
with one another. Cross-fertilisation and learning is the key to success.
The challenge is not in the availability of analysis tools, but in analysis
frameworks, which would allow us to speak the same language as our system
and understand it better.
We can probably employ just one tool to measure customer satisfaction with
our system. But it is multifaceted and thus a combination of tools is more
promising.
PSS is a system, comprised of products, services, infrastructures, and networks.
The criteria we want to evaluate this system against should include attributes
of each dimension.
PSS is a multi-disciplinary area and initiating system level change will require
system level effort. Researchers with various backgrounds need to be involved
in developing ideas and methods for measuring customer satisfaction with PSS.
Non-social PSS practitioners should learn methods of social sciences.
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