in this article, that is, whenever a customer makes a decision on purchasing goods from .... For example, if a customer has not the propensity of buying a book.
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Physics Procedia
PhysicsPhysics Procedia 00 (2011) 000–000 Procedia 24 (2012) 1553 – 1559 www.elsevier.com/locate/procedia
2012 International Conference on Applied Physics and Industrial Engineering
Customer Decision Making in Web Services with an Integrated P6 Model Zhaohao Sun1, ,Junqing Sun2,Grant Meredith1 1
Graduate School of ITMS University of Ballarat Ballarat, Vic, Australia 2 Engineering Training Center Civil Aviation University of China Tianjin, China
Abstract Customer decision making (CDM) is an indispensable factor for web services. This article examines CDM in web services with a novel P6 model, which consists of the 6 Ps: privacy, perception, propensity, preference, personalization and promised experience. This model integrates the existing 6 P elements of marketing mix as the system environment of CDM in web services. The new integrated P6 model deals with the inner world of the customer and incorporates what the customer think during the DM process. The proposed approach will facilitate the research and development of web services and decision support systems.
©©2011 Elsevier B.V. Selection and/or peer-review under responsibility of ICAPIE Organization 2011Published Publishedbyby Elsevier Ltd. Selection and/or peer-review under responsibility of [name organizer] Committee. Open access under CC BY-NC-ND license. Keywords:web services, customer decision making, decision support systems, personalization, e-business.
1. Introduction Decision making (DM) is essential for the success of e-commerce and success of web services [21]. Web services are the provision of services over electronic networks such as the Internet and wireless networks [15]. Customer decision making (CDM) is an indispensable factor for web services, because customer decisions are decisive factors for successful web services. The dramatic development of web services has enabled engaged customers to have a more informed process of DM in regards to selecting and purchasing goods online and to access web services. Customers can now use web-based tools such as search engines and infomediaries to break through the traditionally physical and geographical limitations associated with an international market and to reach globally provided products and services. This provides the customer with a stronger bargaining position over prices of goods and the quality of services owing to the price and information transparency. CDM is closely related to marketing and web based marketing systems [12]. Successful marketing has usually been modelled by using the existing P6 model consisting of 6 Ps: Price, People, Place, Process, Product and Promotion [2][3]. This P6 model evolved from the original P4 model of the marketing mix introduced in 1960 [10]. The original marketing mix consists of 4 Ps: product,
1875-3892 © 2011 Published by Elsevier B.V. Selection and/or peer-review under responsibility of ICAPIE Organization Committee. Open access under CC BY-NC-ND license. doi:10.1016/j.phpro.2012.02.229
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price, place, and promotion [11]. The existing 6 Ps are the external environment for CDM in web services in this article, that is, whenever a customer makes a decision on purchasing goods from on-line or eservices, she or he (for brevity, we use he to represent she/he hereafter) must consider or “see” some if not all of these 6 Ps. However, the weakness of these 6 Ps is symptomatic of a push approach to marketing and, importantly, does not recognise the needs of customers and the intrinsic role of participation of customers. The existing models of e-business and e-services, at least to some extent, ignore what customers think when they make decisions in web services. Therefore, two issues arising from the above discussion are below: • What do the customers “think” when they make decisions on web services? • What are the inner activities of customers when they face or “see” the environment consisting of the above-mentioned 6 Ps? This article addresses these issues by proposing a novel P6 model for CDM in web services. The rest part of this article is organized as follows: Section II examines CDM in web services. Section III proposes a novel P6 model for CDM in web services. Section IV looks at each of the new 6 Ps and their relationships with the existing 6 Ps. Section V summarizes the interrela-tionships between the new 6 Ps and the existing 6 Ps and also discusses the relationships among the new 6 Ps. Final section concludes this article with some concluding remarks and future work. It should be noted that customer is a transitional concept in terms of web services, because a customer may also play the role of a provider and at other times the role of a broker. Therefore, in web services, one could always be termed as a customer. Further, e-services and web services are used interchangeably in this article [13] although there are differences between e-services, web services, and infrastructure services [16]. 2. Customer Decision Making In Web Services Generally, decision is a choice that one makes after thinking carefully [23]. Decision making (DM) in web services refers to a decision maker who chooses one of the web services from the alternative recommended web services provided by a web service support agent. DM in web services has drawn an increasing attention in the web services community. For example, Yao et al [20] discuss flexible DM strategies for web service negotiation. Denning et al [5] look at DM in very large networks and conclude that decision makers should learn how to share situation information and to make decisions locally through market-like mechanisms that focus resources on high-value activities. The key decision makers within web services are web service requesters, web service brokers, and web service providers and their corresponding intelligent agents [8][17]. A generic decision process of a decision maker in general and a customer (web service requesters) in special in web services can consist of web service need recognition, information search, evaluation, purchase and after purchase evaluation [12]: • Need recognition. The decision maker must recognize he has a need that can be satisfied through purchasing web services; • Information search. The decision maker then searches for a product or service that satisfies the recognized need, along with outlets that can provide it; • Evaluation. The decision maker uses decision heuristics to evaluate and compare the goods or services in the terms of price, quality of services and so on; • Purchase. The decision maker decides to place an order, pay for the evaluated goods or services, and possibly arrange for collection, delivery or maybe installation; • After purchase evaluation. The decision maker evaluates the purchase with a view to future decision making. More specifically, the decision making of web service requesters, web service brokers, and web service providers can be described below. A web service requester or customer makes decisions to acquire the most satisfactory web services with minimal costs throughout the demand-driven web service lifecycle [17]. For example, the customer should
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make a decision for web service use, which consists of web service identification, alternative generation and execution [9]. The decision in web services made by the service provider is to provide the highest quality web services with maximal expected benefit throughout the demand-driven web service lifecycle [15]. For example, the service provider should make informed decisions for selecting the updated standards, technologies, and tools for managing web services. The decision in web services made by the service broker is to provide the highest quality web services with maximal expected benefit from the service provider and service requester throughout the demanddriven web service lifecycle [15]. For example, the service broker should make decision for web service personalization, composition, negotiation and recom-mendation [17]. Generally, all the involved decision makers in web services should have useful information and services from web services and the database technologies to make decisions [9], they also share open decision modules on the Internet using standardized protocols such as HTTP, SOAP and WSDL [13]. Various intelligent techniques such as decision support systems [12], soft computing [21] and multi-agent systems are widely used to support CDM in web services [14]. 3. P6: An Integrated Model For CDM In Web Services This section proposes a novel P6 model which integrating the existing 6 Ps and the new 6 Ps into the CDM process in web services, as shown in Fig. 1. Product Process Perception CDM in Web services Propensity People
Price
Personalization
Promised experience
Privacy
Preference Place
Promotion
Figure 1. P6: An integrated model for CDM in web services.
In this proposed model: The core is the CDM in web services. The intermediate ring consists of the newly introduced 6 Ps: Privacy, Perception, Preference, Propensity, Personalization and Promised experience. The external ring is the existing 6 Ps: price, people, place, process, product and promotion [3], which forms the system environment of CDM in web services. These newly introduced 6 Ps play an important role in CDM in web services. For example, if a customer has not the propensity of buying a book on web services, then he does not care about price, place, or other elements listed in the existing 6 Ps. Therefore, the first step for CDM in web services is to know what the customer thinks about. Before further looking into the proposed model, we first address a common problem arising in the proposed model. • Why are these 6 Ps rather than other 6 Ps selected for CDM process in web services? Based on the literature review, we have used other P(s) to replace some if not all of the proposed 6 Ps. For example, physical evidence and presence are important elements for any CDM [3]. However, they are not most important in web services, different from that in traditional commerce or services. In fact, they
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can be considered as a part of promised experience. Planning has been applied in e-marketing [1] (p. 273). However, planning can be considered as a part of actions rather than a part of inner activities of customers for DM in web services. 4. The newly introduced 6 Ps for CDM in Web Services This section looks further into the proposed model in Section III by examining each of the newly introduced 6 Ps in some detail. These 6 Ps are the core elements of what the customers “think” whenever making decisions in web services. 4.1 Privacy Privacy is the right of an individual to control the information held about them by third parties [3]. Privacy of personal information such as IDs, credit card information and income is a major concern to most consumers in e-services. Privacy has been stipulated and incorporated into many laws related to e-business, e-services such as Privacy Electronic Communication Regulations (PECR). Generally, a customer has to make a trade-off between privacy and convenience in e-services, that is, how much private information he will allow the third parties to access and collect in order to get a returnable benefit from e-services. From the perspective of CDM, only two of the existing 6 Ps are related to privacy: people and promotion. For example, if a customer is buying an air ticket online, he thinks about the reliability of online payment system (promotion and people). 4.2 Perception Perception is a particular way of understanding or thinking about something [23]. Customers’ perceptions about e-commerce and e-services have drawn an increasing attention. In web services, customers usually perceive all of the 6 Ps except process. For example, if a customer is making a decision about which book he buys on web services, he normally goes through a DM process of: first thinking is about how much is the book (price); secondly, where is the book published (place); thirdly about the cover pages (promotion); next he may consider who is the author of the book and the qualification of the authors (people). This seems to the authors to be a very logical process to follow, and is a reason why they consider the existing 6 Ps into the environment of CDM in web services. 4.3 Preference Preference refers to the set of assumptions relating to a real or imagined “choice” between alternatives and the possibility of ranking the order of these alternatives, based on the degree of happiness, satisfaction, gratification, enjoyment, or utility they provide [22][23]. In web services, the customer’s preferences are related to all the existing 6 Ps: product, price, place, promotion, people, and processes. On some occasions a customer could be happy with the preferable price of an e-service; on other occasions he could be simply satisfied with the preferable product. Place is still playing some role in web services. For example, if a customer buys a book on web services using amazon.com with much less transportation fee in USA than in Australia. 4.4 Propensity Propensity is a natural tendency to behave in a particular way [23]. The propensity of customers engaging within e-commerce and web services has been changed dramatically in the Internet era. For example, the propensity of customers to purchase products using traditional channels such as phone or in store has gradually reduced [3] (p.463). More and more customers like to use the Internet to buy air-tickets
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and books and so on. Further, propensity is directly related to perception of customers. The propensity of customers is still affected by all the existing 6 Ps. In particular, promotion, one of the existing 6 Ps, through advertisements and other media including online social networks have been always influencing the propensity of customers and their DM in web services. The intermediaries (people) have also been using various tools, systems and strategies to affect the propensity of customers and their DM in web services. 4.5 Personalization Personalization has drawn increasing attention with the dramatic development of web services, because the customers currently want personalized products or web services [18] (p.343). In fact, personalization has been an indispensable element of customer relationship and of web strategies in e-business and web services [6]. The key idea behind the personalization of web services is to treat customers based on their own personal preferences. Personalization is considered as a toolbox of technologies and applications used to design the end-user experience from a viewpoint of system development. It is a consumer-centric infomediary that acts on behalf of users to perform online shopping, searching and information gathering services from a viewpoint of computer science [6]. Personalization as the customization of information is requested by a site customer at an individual level [3] (p.528). Personalization of customers can be achieved through several dynamic variables including customers’ preferences, date or time, particular events and location, and the existing 6 Ps. 4.6 Promised Experience Promised experience is a kind of online customer experience. Further, it is strategically important for CDM in web services, because only promised experience can really influence CDM in web services. Promised experience can be direct experience [14] or sometimes it is presence [3], and sometimes it can be the indirect experience, which is more popular in web services. Promised experience is associated with trust. For example, if agent A trusts agent B closely, then agent A tells agent B what he experienced when buying a book from amazon.com, which can be considered as a promised experience from a viewpoint of agent B. Agent B will decide if he also wants to buy a book from amazon.com based on the obtained promised experience from agent A. In this case the promised experience is a decisive factor for agent B’s DM on web services. 5. Interrelationships Between New 6 Ps And Existing 6 Ps This section summarizes the interrelationships between the existing 6 Ps and the newly introduced 6 Ps in the context of CDM in web services, as shown in Table 1. In fact, the discussion in the previous section shows that there are a number of interrelationships between the newly introduced 6 Ps (listed in the first column of Table 1) and the existing 6 Ps (listed in the first row of Table 1) of marketing mix, as illustrated in Table 1. For example, customer personalization is strongly affected by product, place, pricing and promotion. Personalization can also enhance promotion and product [1]. Table 1. Relationships between the existing 6 Ps and the new 6 Ps 6 Ps
Product
Price
Place
Privacy
People
Promotion
X
X
Preference
X
X
X
X
X
Perception
X
X
X
X
X
Process
X
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X
X
X
X
X
X
Personalization
X
X
X
X
X
X
Promised experience
X
X
X
X
X
X
Further, the newly introduced 6 Ps are not independent to each other. They are closely interrelated to each other. For example, the preference of customer is determined by the customer’s promised experience. They both influence the perception and propensity of a customer on a web service. Personalization requires detailed information on preference, perception, and propensity, promised experience of customers. 6. Conclusion This article examined customer decision making (CDM) in web services and proposed an integrated P6 model for CDM in web services consisting of the 6 Ps: Privacy, Preference, Propensity, Perception, Personalization and Promised experience. Then the article examined interrelationships between the newly introduced 6 Ps and the existing 6 Ps as well as the relationships among the newly introduced 6 Ps. The proposed approach will facilitate research and development of e-business, web services and decision support systems. In future work, we will elaborate the proposed P6 model into a strategic framework for CDM in web services. We will also apply the proposed model to a few real-world cases to test its efficiency and explore its added value to CDM in web services. References [1]
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