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How to Manage Customer Relationships in the Age of Digitalization

An Overview of the Influence Factors on Consumers’ Participation in Firm-Hosted Virtual P3 Communities

Seminar Paper 2016 24 Pages

Business economics - Offline Marketing and Online Marketing

Excerpt

Table of Contents

Table of Contents

List of Figures

List of Abbreviations

1 Introduction

2 Definitions & Classification of Virtual Communities

3 Influences on Participation in Firm-Hosted Virtual P3 Communities
3.1 Influence of Individual Motivations on Participation
3.1.1 An Introduction to Uses & Gratifications Theory
3.1.2 Anticipated Functional Benefits
3.1.3 Anticipated Social Benefits
3.1.4 Anticipated Hedonic Benefits
3.2 Influence of Social Capital on Participation
3.2.1 An Introduction to Social Capital Theory
3.2.2 Structural Social Capital
3.2.3 Cognitive Social Capital
3.2.4 Relational Social Capital
3.3 Framework and Managerial Implications

4 Conclusion

References

List of Figures

Figure 1: Framework of the Influence Factors on Participation

List of Abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1 Introduction

As a result of the rise of digital technologies new media phenomena shape the rela- tionship between customer and company. Companies need to take the shift in rela- tionships into account when managing customer relationships in the age of digital- ization. Customers are now more involved and adopt a more powerful position as market participants. Simultaneously, companies are able to interact with their cus- tomers directly. One new media phenomenon is the emergence of virtual commu- nities which are hosted by firms for commercial purposes (Wiertz and Ruyter 2007, p. 347). Virtual communities permit companies to enhance the customer-firm-rela- tionship and promote consumer-to-consumer interactions (Homburg, Ehm and Artz 2015, p. 629). With the help of virtual peer-to-peer problem solving (P3) commu- nities, companies can complement their service support in a low-cost way (Dholakia et al. 2009, p. 209). The success of these communities is contingent on the customers’ input and their willingness to provide support to peers online (Wiertz and Ruyter 2007, p. 347). Therefore, in order to manage a virtual P3 community successfully, companies need to understand what motivates consumers to visit vir- tual P3 communities and to support other consumers online. This is particularly challenging. On the one hand, free-riders are able to benefit from the knowledge provided without contributing any resources of their own. On the other hand, users who contribute knowledge do not receive any immediate benefit. The case of firm- hosted communities exacerbates this problem of collective action (Ostrom 2014), since the host firm can also benefit from the knowledge provided. Thus, the research question of this seminar paper pertains to this issue:

What motivates consumers to participate in firm-hosted virtual P3 communities?

Literature on this topic is inconsistent. Whereas most researchers focus on general virtual communities when investigating participation behavior, literature on firm- hosted virtual P3 communities lacks consistent research methods and shows incon- sistent findings. This seminar paper makes two key contributions. First, it provides a unifying framework of the drivers of participation by applying the theories of uses and gratifications (U&G) and social capital. The former serves to identify the in- trinsic motivations which encourage consumers to participate, whereas the latter helps investigate participation drivers that result from social influences. The frame- work aims to give an overview of critical participation factors that can be influenced by the host firm. Second, the paper derives valuable managerial implications for the design and management of firm-hosted virtual P3 communities on the basis of the framework.

The paper’s analysis is structured as following: Chapter 2 is concerned with the definition of general virtual communities and firm-hosted virtual P3 communities in particular. Since the field of virtual communities is rather broad, a distinction between the different kinds of communities is important for the purpose of this pa- per. Chapter 3.1 reveals the individual motivations of consumers to participate. Chapter 3.1.1 provides an introduction into the underlying theory of U&G before the following chapters present the underlying anticipated benefits by consumers that lead to participation. Chapter 3.2 investigates the role of social capital as a participation driver. Following an introduction of social capital theory, the corre- sponding variables of interest are introduced. Chapter 3.3 combines findings from previous chapters and strives to provide an overview of the determinants of partic- ipation within a framework. Simultaneously, valuable managerial implications are derived. Eventually, Chapter 4 sums up the findings of this paper, discloses limita- tions in the approach, and discusses opportunities for future research.

2 Definitions & Classification of Virtual Communities

In order to evaluate the determinants of participation in firm-hosted virtual P3 communities and to be able to draw conclusions from research concerning other fields of virtual communities, the field of virtual communities in general and its relevant characteristics are defined in the following.

Porter and Donthu (2008) describe virtual communities as “an aggregation of indi- viduals or business partners who interact based on a shared interest, where the in- teraction is at least partially supported or mediated by technology and guided by certain protocols and norms” (Porter and Donthu 2008, p. 115). This seminar paper deals with the characteristics of a type of commercially oriented online community which is hosted by a company. Firm-sponsored virtual communities provide vari- ous forms of service to consumers, ranging from online discussion forums, user design toolkits, and virtual product testing tools to online support communities. Hereby customers are involved in product ideation, product design, product testing and product support services (Nambisan 2002, p. 395; Nambisan and Baron 2007, p. 43). Comparing this type of community to virtual communities in general, two 2 main dimensions differentiate firm-hosted online communities: the community usu- ally operates under the company’s name by using name and logo on the community’s website (Porter and Donthu 2008, p. 115). Furthermore, the host firm pursues a commercial goal within that environment such as building business relationships or increasing sales (Kannan, Chang and Whinston 2000, p. 416). Nevertheless, the mode of communication and interaction remains the same among all types of communities (Bagozzi and Dholakia 2002, p. 4).

This analysis focuses on company-organized virtual P3 communities that are hosted and controlled by a commercial firm and in which customers interact to solve other customers’ problems (Wiertz and Ruyter 2007, p. 347). Hereby the host firm offers a support channel, supplementing employee-based telephone, on-site support and further support services (Wiertz and Ruyter 2007, p. 349). The provision of this service support serves to assist customers in learning about the use of the product and helping to solve problems during its use (Das 2003, pp. 416-417; Gray and Durcikova 2006, pp. 161-163). In this case it is not the company providing help to its customers: customers seek help from other customers who take over the com- pany’s service functions of solving other customers’ problems, usually without any remuneration (Wiertz and Ruyter 2007, p. 350). By exchanging intangible resources customers jointly co-produce and consume intangible resources (Wiertz and Ruyter 2007, p. 349) which consist, inter alia, of knowledge and social support (Butler et al. 2002, pp. 177-180). This kind of service support is especially in demand for products that involve complex technology and require consumers’ knowledge on how to install, use and repair an item. Typical examples are electronic devices and software products. The participants within a virtual P3 community are its members, i.e. the firm’s customers, as well as representatives of the sponsoring firm. Some companies occasionally also employ their representatives as ‘moderators’ within the community’s dialogue to ensure continuing support (Porter and Donthu 2008, p. 114).

Dholakia, Bagozzi, and Pearo (2004) stress that interactions within online P3 com- munities are aimed at achieving personal and shared goals of the communities’ members (Dholakia, Bagozzi and Pearo 2004, pp. 241-242). The following chapter investigates these underlying goals as well as social influences within the commu- nity in order to derive the determinants that motivate consumers to participate in company-owned service support communities. Participation in virtual P3 commu- nities occurs when users actively seek product support, i.e. by posting questions in a forum, and when peer customers contribute by sharing their knowledge. This means that members who are providing support need to review the support requests, choose requests that they are competent to answer and eventually find a possible solution and response to the question posted (McLure Wasko and Faraj 2005, p. 39).

3 Influences on Participation in Firm-Hosted Virtual P3 Communities

3.1 Influence of Individual Motivations on Participation

3.1.1 An Introduction to Uses & Gratifications Theory

The U&G approach is a socio-psychological theory that was originally developed by communications research to help explain why and how people consume different media (Flanagin and Metzger 2001, p. 154). Researchers have found that individu- als are often motivated based on their anticipation of the benefits they receive through the use of specific media and thus act in a target-oriented way. The U&G framework has been applied to various contexts and can also serve in detecting consumers’ motivations to participate in firm-hosted virtual P3-communities (Dholakia, Bagozzi and Pearo 2004, pp. 242-243; Nambisan and Baron 2007, p. 45). Nambisan and Baron (2007) propose four types of benefits which users can derive from participation in virtual P3 communities: cognitive benefits that relate to gaining information; social integrative benefits that help improving consumers’ relationships; personal integrative benefits that increase consumer’s status and con- fidence; and affective benefits that strengthen pleasurable experiences (Nambisan and Baron 2007, p. 44). In order to achieve a manageable overview and classifica- tion of consumers’ anticipated benefits, individual motivations are summarized as functional, social and hedonic benefits.

3.1.2 Anticipated Functional Benefits

Functional benefits deal with the cognitive aspect of U&G which focuses on the use of information acquisition through participation, i.e. giving or receiving infor- mation. They relate to learning benefits as described by Nambisan and Baron (2007) (Nambisan and Baron 2007, p. 44). By visiting virtual P3 communities and actively seeking help from fellow customers, users can acquire information and conse- quently increase their product-related knowledge and solve usage problems. Koh et al. (2007) find significant positive effects of informational value on “viewing ac- tivity” (Koh et al. 2007, p. 71). This suggests that when users regard an online forum and the provided knowledge as useful they visit the community more frequently. Functional benefits within virtual P3 environments are not only expected by users who are receiving knowledge, but also by customers who share their knowledge and may be able to gain insights into others’ opinions (Dholakia, Bagozzi and Pearo 2004, p. 252). In consequence, a better understanding of technologies can be achieved (Rothaermel and Sugiyama 2001, pp. 304-305). Additionally, an instru- mental value can be fulfilled by accomplishing specific tasks such as solving prob- lems and influencing other consumers through virtual social interactions (Hars and Ou, p. 9; McKenna and Bargh 1999, pp. 264-265). The idea of the importance of available informational content within virtual P3 communities is shared by relevant literature. Research findings support the learning aspect, i.e. the acquisition of in- formation, as a determinant for both posting questions and sharing relevant knowledge in virtual P3 communities (Dholakia et al. 2009, pp. 217-219; Dholakia, Bagozzi and Pearo 2004, pp. 254-257; Nambisan and Baron 2007, p. 53; Wiertz and Ruyter 2007, p. 370). By this means, research confirms that customers’ percep- tion of functional benefits influences the participation in virtual P3 communities positively.

3.1.3 Anticipated Social Benefits

The aspect of social benefits summarizes benefits that are sought from and relate to social interactions among individuals. These interactions shape social relationships and an individual’s status within a group and thus influence the type of interactions. Social benefits are subdivided into social integrative benefits and personal integrative benefits (Nambisan and Baron 2007, pp. 44-45).

Social integrative benefits primarily relate to the strength of consumers’ social re- lationships which are developed in the course of time among the community’s members (Nambisan and Baron 2007, p. 45). By participating in a virtual commu- nity members are able to establish a feeling of belonging and to enhance their social identities (Smith and Kollock 1999, pp. 9-10). Research findings in the field of brand communities stress the importance of these aspects for consumers (McAlex- ander, Schouten and Koenig 2002, pp. 46-50; Muniz and O'Guinn 2001, pp. 418- 420). Studies on general virtual communities have demonstrated that individuals participate in online forums in order to get to know kindred spirits and gain social support and friendships (McKenna and Bargh 1999, pp. 255-256; Wellman and Gulia 1999, pp. 344-345). In this context, Dholakia, Bagozzi and Pearo (2004) in- troduce the value of “maintaining interpersonal connectivity” (Dholakia, Bagozzi and Pearo 2004, p. 244). They find significant effects on participation for social benefits that evolve from contact with peers such as social support and friendship (Dholakia, Bagozzi and Pearo 2004, pp. 258-259). Nambisan and Baron (2007) find that the more a customer identifies with peers, the stronger the resulting rela- tionships become. Similarly, the greater the established relationship, the stronger the anticipated social benefits and thus the greater the impact on participation in the community. In this context, Nambisan and Baron (2007) further elaborate that the more profound the community’s interactions, the stronger the possibility to create greater ties and a mutual comprehension of problems among peer customers (Nam- bisan and Baron 2007, p. 47). Product-related interactions are thus essential to cre- ate an identification among the members and a strong social identity within the group (Algesheimer, Dholakia and Herrmann 2005, p. 20; Nambisan and Baron 2007, p. 47).

The second facet of social benefits are personal integrative benefits. This aspect concerns the behavior of information-providers rather than information-seekers, i.e. users who ask for product support within virtual P3 communities compared to the former who provide knowledge. Personal integrative benefits meet an individual’s need for self-esteem: According to U&G theory, people use media to enhance their credibility, status and self-confidence (Katz, Blumler and Gurevitch 1974, p. 22). In the case of virtual P3 communities, interactions within these environments serve participants as a source for obtaining personal integrative benefits. The communi- ties provide a venue for experienced customers to display their product-related ex- pertise and problem-solving know-how. Sharing of product-related content allows community members to build and augment their expertise-based reputation within the P3 community. Consequently, by contributing knowledge users perceive they can enhance their social status within the group and receive approval of other users (Dholakia, Bagozzi and Pearo 2004, pp. 256-257; Harhoff, Henkel and Hippel 2003, p. 1756; Hars and Ou, p. 6; McLure Wasko and Faraj 2000, p. 166, 2005, pp. 49- 50).

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Details

Pages
24
Year
2016
ISBN (eBook)
9783668566484
ISBN (Book)
9783668566491
File size
716 KB
Language
English
Catalog Number
v378480
Institution / College
University of Münster
Grade
1,3
Tags
manage customer relationships digitalization overview influence factors consumers’ participation firm-hosted virtual communities

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Title: How to Manage Customer Relationships in the Age of Digitalization