When co-creation pays: stimulating engagement to increase revenues

When co-creation pays: stimulating engagement to increase revenues PurposeCustomer willingness to pay (WTP) was initially set out to estimate the perceived value from a purchasing experience. However, purchasing decisions have changed as value co-creation has been increasingly applied in the hospitality industry. In adopting a service-dominant (S-D) logic lens, this paper aims to empirically test how co-creation affects WTP through customer engagement (CE).Design/methodology/approachThe context for the empirical analysis is the Chinese market, one of the largest online purchasing markets that has been significantly transformed since the proliferation of co-creation. The study is a within-design online experiment with 488 Chinese participants. The analysis makes use of mediation models to evaluate the proposed mechanisms behind co-creation, CE and the moderated role of frequency of stay, and their impacts on WTP.FindingsThe data confirm the hypothesised positive impact of value co-creation on customer WTP. This impact is fully mediated by CE, i.e. CE is the mechanism behind a higher WTP propensity for co-created hotel rooms. Notably, the frequency of stay at a hotel, thus positively influencing WTP, does not have a moderated mediation effect on this relationship.Originality/valueLimited research to date has investigated the price effectiveness of value co-creation in the hospitality context. This study contributes to the S-D logic and value co-creation discourses by testing the effectiveness of these concepts in relation to customer pricing decisions. This study empirically confirms the hypothesised model and provides recommendations for hospitality research and practice. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png International Journal of Contemporary Hospitality Management Emerald Publishing

When co-creation pays: stimulating engagement to increase revenues

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0959-6119
D.O.I.
10.1108/IJCHM-09-2016-0494
Publisher site
See Article on Publisher Site

Abstract

PurposeCustomer willingness to pay (WTP) was initially set out to estimate the perceived value from a purchasing experience. However, purchasing decisions have changed as value co-creation has been increasingly applied in the hospitality industry. In adopting a service-dominant (S-D) logic lens, this paper aims to empirically test how co-creation affects WTP through customer engagement (CE).Design/methodology/approachThe context for the empirical analysis is the Chinese market, one of the largest online purchasing markets that has been significantly transformed since the proliferation of co-creation. The study is a within-design online experiment with 488 Chinese participants. The analysis makes use of mediation models to evaluate the proposed mechanisms behind co-creation, CE and the moderated role of frequency of stay, and their impacts on WTP.FindingsThe data confirm the hypothesised positive impact of value co-creation on customer WTP. This impact is fully mediated by CE, i.e. CE is the mechanism behind a higher WTP propensity for co-created hotel rooms. Notably, the frequency of stay at a hotel, thus positively influencing WTP, does not have a moderated mediation effect on this relationship.Originality/valueLimited research to date has investigated the price effectiveness of value co-creation in the hospitality context. This study contributes to the S-D logic and value co-creation discourses by testing the effectiveness of these concepts in relation to customer pricing decisions. This study empirically confirms the hypothesised model and provides recommendations for hospitality research and practice.

Journal

International Journal of Contemporary Hospitality ManagementEmerald Publishing

Published: Apr 9, 2018

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