Republic of the Philippines

City of Taguig
Taguig City University
Gen. Santos Avenue, Central Bicutan, Taguig City
COLLEGE OF HOSPITALITY AND TOURISM MANAGEMENT

QUALITY SERVICE MANAGEMENT IN

HOSPITALITY AND TOURISM

MODULE 2: FINALS

LESSON 8: CO-CREATION OF QUALITY SERVICE

PROF. EVELYN P. DIGNADICE

LESSON 8: CO-CREATION OF QUALITY SERVICE

INTRODUCTION

The common concept of service-oriented business transactions involves the firm

on one end providing the resources and workforce to deliver the services and, on the
other end, the customer availing and receiving the promised service. With the new and
innovative concepts introduced by organizations to remain relevant, customers are
given active participation in creating and rendering the service to the satisfaction of the
clients. It is more important to focus on what content is more valuable and attractive for
tourists or customers than to create a high volume of information (Iglesias-Sanchez,
Correia, & Jambrino-Maldonado, 2019).

Even if most organizations recognize the transformative power of new

technologies (Marinova, de Ruyter, huang, Meuter, & Challagalla, 2017; Caic, Mahr, &
Oderkerken-Schroder, 2019), many struggle to understand customer value and how to
develop value propositions that will resonate with it. (Payne, Frow, & Eggert, 2017; Caic
et al., 2019).

LEARNING OBJECTIVES

At the end of this lesson, the students should be able to:

 Understand the role of customers in service delivery and co-creation of service

experiences;
 Differentiate and learn the concept of self-service technology and customer
participation in the delivery of service; and
 Identify the different strategies involving customers to increase satisfaction,
quality, value, and productivity.
 Self-service Technology (SST)


LESSON PROPER

 Customer’s Role in Value Co-creation

Customers, although unaware, play important roles in value co-creation and

service delivery. Authors and scholars have different ways of defining value co-creation.

Value co-creation is loosely defined as a collaboration between an organization

and its customers to deliver or create the service that would be acceptable to the latter.
The joint undertaking is expected to create new ideas, to improve products, and to
better services. The whole process of service delivery is still managed by the
organization, but the customer plays an important part in realizing the result.
 The following are the three major roles played by customers in service co-
creation and delivery: customers as extended employees; customers as
proponents to quality of service; and customers as competitors.

1. Customers as Extended Employees

Among service-oriented organizations, customers are significant part of the
organization’s ability to deliver service. Oftentimes, customers are participants in the
production process of services by means of contributing time, effort, and even
resources. Fruit farm resorts allow their clients to pick and collects farm products they
want within the premises and have theses appraised, packed, and billed upon checkout.
In this way, customers are able to get their choice produce, and the farms need not
provide staff to attend to every customer’s needs.

2. Customers as Proponents to Quality of Service

The primary objective of customers is to have their needs met by the service
organization. If the customer participation has been effectively designed, then it is likely
that needs of the customers will be met and the benefits would be attained. These
services would be realized based on the satisfaction and expected results required by
customers no less. In essence, the customers share in delivering their own satisfaction
and value for services.
Often, customers’ reactions to service delivery, including raising questions on the
process, complaining during service failures, and owning accountability to achieve
satisfaction, can contribute in the delivery of quality service.

3. Customers as Competitors
This role of service customers suggests that customers can be the competitors of
the service organizations. If the customers realize that they can perform the required
service whether partially or entirely, then the service provider may not be needed at all.
In this way, the customer performs the tasks on his/her own and let’s go of the service
provider.
In cases concerning organizations as customers, thy may decide to hire
outsource services and to develop or create an in-house team to perform required
tasks. For example, a hotel may decide to end their partnership with a catering
organization and to form a team of chefs to prepare the food requirements of the
establishments.
In cases where organizations decide to produce a service by itself, they should
consider several factors such as: expertise and capacity of the firm to perform tasks
efficiently; availability of resources within reach; ability to produce the service on a
timely manner; financial costs of producing the service; psychological rewards
(satisfaction, enjoyment, and contentment); and ability to control the process and
outcome.
Self-service Technology (SST)
Self-service technology is an innovation in providing service outputs created
exclusively by customers without interaction or engagement with the employees of
service organizations.
Self-service technology is defined as “technological interfaces that enable
customers to produce a service independent of direct service employee involvement”.
(Meuter, Ostrom, Roundtree, & Bitner, 2000; Considine & Cormican, 2016). Self-service
technology (SST) adoption has been cited by businesses as a critical element in
controlling costs and improving customer experience (Considine & Cormican, 2016).
In the hospitality and tourism industry, the advancement of technology and the
onset of industrial Revolution 4.0 have made self-service technologies proliferate.
Different organizations from the different sectors of the tourism industry saw the
advantages of these advances, including savings on the costs and efficiencies of
operations, growth on sales, increased customer satisfaction, and competitive
advantage.

The following is a partial list of some of the self-service technologies:

1. Automated teller machine of banks
2. Automated and interactive voice response phone systems
3. Airline reservation and check-in
4. Airport reception and information kiosks
5. Automated and online gambling or betting machines
6. Food ordering and delivery
7. Hotel reservation, check-in, and checkout
8. Electronic blood pressure machines
9. Smart watches and gadgets monitoring health conditions
10. Self-scanning (price scanner) at groceries and retail store
11. Internet banking
12. Package and money transfer tracking
13. Online shopping
14. Online training and education
15. Online applications

The use of SST became popular due to some reasons. Organizations believe that
when they transfer from manual service to technology-based process, they could save
more from personal service. If communicated properly to customers, the method would
most likely succeed. Some organizations use SSTs in order to meet customer demand.
Clients tend to look for information, services, and products via internet. Online
purchases, deliveries, and transactions are very popular nowadays because of the
convenience and ease of doing business. Organizations that do not have online access
can be considered at a disadvantage against its competitors.

Advantages and Disadvantages of Using SSTs

Figure 8.1 Advantages and Disadvantages of SST

Advantages Disadvantages

Service organizations must understand that customers do not automatically accept

or embrace changes in procedures of doing business even when these are considered
as upgrades or for better transactions. Further, the benefits that SSTs provide should be
felt by both the organizations and customers. Different kinds of customers have different
skills of adapting to changes and even receptiveness to new technology. When
implementing SSTs, organizations should consider the following advantages and
disadvantages when introducing it.

The most common advantages are as follows:

1. Convenience. If the organizations can provide access to their services at the

most convenient time, location, or way, there is a guarantee that this will be
well-received. Convenience may include ease of use, faster transactions, 24-
hour service, and presence in strategic areas. Customers will enjoy access to
SSTs where they have the ability to pay bills anytime of the day and through
simple use of cell phones from anywhere in the country.

2. Control. Customers prefer organizations that could provide them options where
they can easily make decisions, monitor the progress of their transactions
(forwarding organizations provide global positioning system or GPS tracking), or
 personalize the service offered (banks, hotels, and restaurants readily provide
the usual preferences of their regular customers).

3. Less Cost. Customers are not just looking for cheaper prices, but also value for
money. If an organization can provide customers with the same quality of
service at a lower cost, the organization would most likely be the choice. At
present conditions, most customers are looking for possible transactions that
can provide them with alternatives that could minimize costs and yield better
returns.

4. Efficiency. Many customers who have availed of SST-aided transactions will

agree that it is faster to transact business because of the accuracy of data and
uniform process undertaken do not vary from time to time. Also, users get
detailed information and complete transactions faster than they could through
face-to-face encounters or telephone contact (Wirtz & Lovelock, 2018).

On the other hand, SSTs have disadvantages as well, which are as follows:

1. Machine Failure/Breakdown. Since services are mostly assisted by machines, it is

not remote that something might happen along the way. It may be frustrating for
customers when, as least expected, the machine breaks down resulting in becoming
offline, not properly dispensing goods, and access is rejected, or simply is not issuing
receipts. Since expectation of convenience is high among these SSTs, failure to
deliver may often result in frustration more than those in normal process.

2. Poor Design/Not user-friendly. Machines are sometimes difficult to use.

Sometimes, the process is complicated, elaborate, and fixed (no flexible alternative),
and it takes several tries to get the transactions or registration process completed. In
these scenarios, customers would prefer personal transactions with company
representatives.

3. Limited Options. Most of the time, only the options that are included in the menu
page can be transacted successfully. Personal needs or customized requirements
cannot be accommodated and processed. Questions beyond the usual procedures
cannot be processed outright. Personal touch of service is eliminated.

SST may be unsuccessful when customers see that they do not benefit from it,
nor customers feel that the ability to use the system is futile. Worst, customers tend to
shy away from SST that do not properly inform them how to use the system. According
to the study conducted by Ida (2017), the service users’ activity in a value creation
affects customers’ value of the service. The activity and attitude of individuals related to
performance of an extra-role in service interaction are less favorable than the required
in-role behavior. Further, the level of involvement influences the customers’ mandatory
behavior and volunteer behavior when working on a co-creation value.

The demand for support is also important when considering investment in SST
because if demand is low, the most cost-effective option is to continue with the
traditional support representatives (Considine & Cormican, 2016).

Management should ensure that each customer segment is addressed

appropriately. That is, managers should pay close attention to what type of tasks
different customer segments are willing to perform by themselves (i.e., via self-service,
see Campbell et al., 2011; Scherer et al., 2015).

Guest Involvement and Customer Participation

The design and scope of customer participation in delivering the service affect the
organization’s productivity, the quality of service it renders, level of customer
satisfaction, and competitiveness against its rivals. Hence, the objective of customer
participation is to enhance the organization’s productivity and increase the level of
customer satisfaction and encourage efficient use of the system by customers.

In a study conducted by Shamim and Ghazali (2014), customer return on

investment, service excellence, aesthetic value, and playfulness are few of the
important factors in retailing which can significantly develop customer’s participation and
citizenship behavior toward value co-creation. Social influence in the form of
compliance, internalization, and identification can significantly play moderating roles in
further shaping customer value co-creation behavior.

Determine the Role of the Customer

Service-oriented organizations should identify the level of participation of
customers during the formulation of strategies. Different types of services may require
different levels of customer participation. Purchase of food or groceries may only require
minimal participation from clients; whereas, purchase of airline ticket or hotel booking
may ask for inputs about customers’ profile and preferences. In some cases, greater
participation in co-creating the service is needed such as weight reduction programs,
online education, or competency training.

Organizations decide on the extent of customer participation on the delivery of

service. These organizations may also have the option to decrease or increase
customer participation to make the co-creation more effective. Decisions to adjust the
level of participation should be based on the impact on both organizations and
customers. If increased participation is required by customers to enhance their level of
satisfaction and to amplify service outcomes, then organizations must take this strategy.

After the level of participation of customer has been determined, the organization
may outline the tasks and roles of the customers.

The most common task performed by customers is to provide information or

resources formerly performed by employees. With the increase participation of
customers, employees are eased out from tasks in service production. At some point,
customers perform tasks in the organization not only for themselves, but also for the
other customers. These tasks happen when fellow customers help out or assist others
who are not yet familiar with the system. New clubhouse members who are unfamiliar
with the policies and procedures are oriented by seasoned members to make them feel
welcome. Customers of theme parks help each other by sharing how best to enjoy the
different attractions and amenities of the park. In doing these, customers are somehow
helping the company heighten the level of customer satisfaction and loyalty.

Customers also perform promotional activities for organization. The

recommendations or good reviews shared by some customers to their fellow customers
are ways of putting customers as promoters or sale people for the company. Some
customers either look for referrals or word-of-mouth endorsements in deciding which
restaurant, catering group, or events management organization to choose.

Find, Inform, and Reward the Right Customers

After the tasks of customers have been defined the organization can start enabling
the role. The customers would be considered as partial employees of the organization,
and at some point, the organization must come up with strategies to make their efforts
worthwhile.
First, the organization must be able to attract the right customers to fill the roles.
These roles to be performed by customers should be clearly communicated by the
organization through promotions and marketing.
Second, customers need to be informed or educated so that they perform their roles
properly. Educating the customers can be in different ways, including orientation
programs, information collaterals, interactive demo materials, and sharing of feedbacks
from employees and other customers. With proper learning, the customers can have a
better appreciation of the company understand what is expected of them, and learn the
skills and knowledge necessary to interact with fellow clients of the organization.

And finally, customers would perform tasks effectively and actively if they are
rewarded for their efforts. When customers feel that they are appreciated and their
efforts are reciprocated, they would be valuable assets of the organization. Rewards for
customers may come in different forms, such as better access and control in the
process, rebates and monetary rewards, ease and speed of transaction, product or
material rewards, and recognition or citations.

SUMMARY OF LESSON

This chapter dwells on the concepts of value co-creation and service delivery.
Likewise, the self-service technology concept was discussed. Further, the chapter
identifies the different strategies used in value co-creation and productivity.

SELF-PROGRESS ACTIVITY

1. Discuss the general importance of customers in the successful creation and delivery
of service experiences.
2. Why might customer actions and attitudes cause the service performance gap to
occur?
3. Discuss the customer’s role as a productive resource for the organization.
4. Discuss the customer’s role as a contributor to service quality and satisfaction.
5. Discuss the customer’s role as a potential competitor.

GRADING RUBRICS

PASS FAIL
Exceed Expectations Meets Expectations Somewhat Meets Below Expectations
Expectations
1. Class Engages other students; Provides meaningful Only asks questions in the Does not participate in
Participation Encourages more insights; responds to other discussion forum; Only discussion forum
participation students engages with the instructor
PASS FAIL
Exceed Expectations Meets Expectations Somewhat Meets Below Expectations
Expectations
Initiates discussions to link Keeps discussions active Tries to dominate discussion Is argumentative and off-topic
lessons to the workplace forum
2. Weekly Demonstrates a mastery of Demonstrates an Submits a completed Does not understand the
Written the concepts understanding of the assignment with conceptual concepts presented
Assignment concepts errors
/ Project
3. Essay Essay responses are well Essay responses include Essay responses include the Essay responses provided are
thought-out and presented all elements in the main point but do not include all simplistic
in a compelling fashion questions elements
4. Laboratory Exceeded the objectives of Met the objective of the Met a few of the objectives of Did not meet the objectives of
Observation/ the task or lesson (can task or lesson (know how the task or lesson (still need the task or lesson (don’t
Demonstration teach others to do the task) to perform in his own) help) understand the lesson)
5. Oral Answer question with Answer the question with Responses to the question but Did not answer the question
Question mastery of the concepts understanding do not include all the elements (don’t give correct or relevant
answer)
SUPPLEMENTARY MATERIALS/RESOURCES

REFERENCES

Sparks B, Mok, C and Kandampully J. ( 2010). Service Quality Management in

Hospitality, Tourism and Leisure. The Haworth Press, Inc.

Robert C. Ford, Michael C. Sturman & Cheril P. Heaton. (2000). Quality Service
Management for Hospitality and Tourism Management

Marzano, G. (2008), "Marketing Leadership in Hospitality and Tourism: Strategies and

Tactics for Competitive Advantage (4th edition)

Cornell D., Mansano, R. Cruz R. (2020). Quality Service Management in Tourism and
Hospitality. Rex Bookstore, Inc,