Customer Satisfaction in the First and Second Moments of Truth
Research scholars suggest that firms now compete with services rather than goods (Rust, 1998;
Grönroos, 2000a; Vargo and Lusch, 2004a). Goods are appliances, i.e., tools for service provision
according to the new servicedominant logic (Vargo and Lusch, 2006). The fact that IBM and other
manufacturing companies are making greater profits from the services than from the goods they
provide is an indication of this trend and also of the maturity of the service economy (Pine and Gilmore,
1998). Today 50 % of IBM’s revenue is directly service related.
It is, however, important to remember that any given offering is often a combination of both
goods and services (Gustafsson and Johnson, 2003). A consequence of this logic is that new product
development is extensively encompassing more than the products’ core attributes which results in ‘offer
development’ (Normann and Ramírez, 1994a; Normann and Ramírez, 1994b; Johne and Storey, 1998).
For example, computer manufacturers and food retailers create customer value through a combination
of goods and services (Berry et al., 2002b), e.g., the combination of a hard disk and the service ‘storing
information’, or ready-cooked food and the service ‘saving time’. The type of competition and economy
presented above has been described as service-dominated, with the offered good being an important
part of the service, rather than the opposite (Rust, 1998), i.e., manufacturing companies are developing
service offerings to create competitive advantages (Gustafsson and Johnson, 2003).
Scania, for example, does not manufacture trucks but offers a ‘transportation function’, and
McDonalds delivers ‘a service and an experience’ not just fast-food (Echeverri and Edvardsson, 2002). In
this respect, goods can be viewed as distribution mechanisms for services (Vargo and Lusch, 2004a), i.e.,
the trucks and hamburgers Scania and McDonalds provide are physical manifestations of the offered
services. The focus from this perspective is on what products1 can do and not necessarily on what they
are (Oliver, 1997). This means that customers do not buy goods or services; they buy the benefits goods
and services provide them with (Grönroos, 2000a).
The perspective on products as doers that provide benefits is often described as ‘value-in-use’
(Vargo and Lusch, 2004a). It represents a shift from the traditional goods-dominant logic of exchange to
a servicedominant logic. A central part of this change is the shift from operand resources (goods) to
operant resources (skills and knowledge) (Levy, 2006; Vargo and Lusch, 2006). In the area of packaging2,
little research has investigated the development from product requirements to value-in-use as
previously described. Packaging has traditionally been viewed as an important compliment to the
physical product (Brown, 1950) and it is still common to conceive of packaging as a nonproduct-related
attribute (Underwood, 2003). The traditional approach denotes packaging as an aspect of the purchase
and consumption process but most often not related to product performance (Ibid.).
A review of the marketing literature reveals relatively little empirical and theoretical work in the
area of packaging (Underwood et al., 2001), even though consumer and industry trends suggest an
increasingly important role for packaging as a marketing vehicle (Olsmats, 2002). In fact, while industry
focus on packaging as a strategic tool has grown over the last two decades, academic attention to
packaging has been sparse over that same period (Underwood and Klein, 2002). Considering that
virtually every product today has some form of packaging, this is a bit remarkable. Exceptions in the
marketing literature are investigations of packaging and brand communication (Underwood et al., 2001;
Walczyk, 2001; Wansink and Huffman, 2001; Underwood and Klein, 2002; Underwood, 2003),
advertisement-package coordination (Garretson and Burton, 2005), and packaging size and shape
(Wansink, 1996; Raghubir and Greenleaf, 2006). In contrast to the traditional approach that views
packaging as a complimenting non-product-related attribute, Underwood (2003) suggests that
packaging is a powerful product-related attribute often critical to the creation and communication of
brand identity. We agree with this view on packaging as a product-related attribute that does affect the
customers’ experiences of product performance. We also recognize the lack of packaging related
research within marketing, especially from a value-in-use perspective.
Given the development from product requirements to value-in-use and the lack of interest for
packaging in academia previously described, two main problematic areas in need of further investigation
can be identified. First, although the majority of researchers agree on the service infusion in
manufacturing companies, most theories are presented in ‘pure’ service contexts such as banking or air-
line industries (Grönroos, 2000a). To be able to expand on the elaboration of the service perspective,
there is a need for developing and testing concepts and theories that apply to both goods and services
as suggested by Rust (1998). Second, since the marketing research is sparse in the context of packaging,
more knowledge is needed about how packages are experienced by customers and what they feel is
important about packaging.
The change towards value-in-use may imply that certain functions of the package are modified or
intensified, compared to the package’s previous main task of protecting the merchandise and facilitating
storing and transportation. Companies consequently need to develop, design, and provide packages
with high customer-experienced quality. In this doctoral thesis, it will be argued that the total offer and
value-in-use should also be in focus when it comes to packaging. This means to start with the customers’
wants and needs, and end with solutions to customer problems and desires.3 We would like to point out
that customer here means the consumer and it is exclusively the consumers’ experiences that are
investigated in this thesis.
For a comprehensive view of packaging handling in a traditional supply chain, see, e.g., Dominic
et al. (2000). To study packaging from a service perspective is relevant for several reasons. First,
packaging is something that can have several functions which includes more than the physical package.
Second, packages are carriers of information that are interpreted by customers, i.e., the physical
package is a distribution mechanism of the service information. Third, to study packaging from a service
perspective allows for a theoretical investigation that applies both to the service sector and the goods
sector, by viewing something (in this case packaging) as service rather then developing theories about
what services are. It is argued in this thesis that the combination of packaging functions and
information, the physical package, and its content create the total customer experience. We define the
total customer experience as the result of the customer’s cognitive and emotional evaluations of an
offering (in line with the Edvardsson et al., (2005a) definition of a service experience). In this thesis
Kano’s theory of attractive quality and customer satisfaction modeling is used to investigate the role of
packaging in the total customer experience.
Almost everything we as consumers buy in a store has a package. One of the more interesting,
and at the same time difficult aspects of packaged consumer products, is that point of purchase and
consumption are usually separated. At the point of purchase, or as we call it the first moment of truth,
the purpose of the package is to get the customers’ attention and function as a silent salesman that
helps to sell the product. This is a difficult task as customers make choices between products within
seconds when they are shopping (Judd et al., 1989). Nevertheless, it is an important task since it is
estimated that 73% of all purchase decisions are made at point of sale (Rettie and Brewer, 2000). Once
the purchase is made, the product is then consumed in the second moment of truth and there may
actually be multiple second moments of truths because the whole package may not be consumed on
one occasion. This second moment of truth is a process that deals with use, handling, and actual
consumption post purchase.
References
Alvesson, M. and Sköldberg, K. (1994). Tolkning och reflektion. Lund, Studentlitteratur (in Swedish).
Alvesson, M. and Sköldberg, K. (2000). Reflexive Methodology. London, Sage Publications.
Amundson, S., D. (1998). "Relationships between theory-driven empirical research in operations
management and other disciplines." Journal of Operations Management 16: 341-359.
Anderson, E., W, Fornell, C. and Lehmann, D., R (1994). "Customer satisfaction, market share, and
profitability: Findings from Sweden." Journal of Marketing 58 (July): 53-66.
Armstrong, J. S. and Overton, T., S. (1977). "Estimating nonresponses in mail surveys." Journal of
Marketing Research 14 (August): 396-402.
Baker, J., Parasuraman, A., Grewal, D. and Voss, G., B. (2002). "The influence of multiple store
environment cues on perceived merchandise value and patronage intentions." Journal of
Marketing 66 (April): 120-141.
Bech-Larsen, T. (1996). "Danish consumers' attitudes to the functional and environmental
characteristics of food packaging." Journal of Consumer Policy 19 (3): 339-363.
Berger, C., Blauth, R., Boger, D., Bolster, C., Burchill, G., DuMouchel, W., Pouliot, F., Richter, R., Rubinoff,
A., Shen, D., Timko, M. and Walden, D. (1993). "Kano's methods for understanding
customer-defined quality." The Center for Quality Management Journal 2 (4): 3-36.
Bergman, B. and Klefsjö, B. (2003). Quality - from Customer Needs to Customer Satisfaction. Lund,
Studentlitteratur.
Berry, L., L., Carbone, L., P. and Haeckel, S., H. (2002a). "Managing the total customer experience." MIT
Sloan Management Review (Spring): 85-89.
Berry, L., L., Seiders, K. and Grewal, D. (2002b). "Understanding service convenience." Journal of
Marketing 66 (July): 1-17.
Bitner, M. J. (1990). "Evaluating service encounters: The effects of physical surroundings and employee
responses." Journal of Marketing 54 (April): 69-82.
Bitner, M. J., Booms, B., H. and Stanfiel Tetreault, M. (1990). "The service encounter: Diagnosing
favorable and unfavorable incidents." Journal of Marketing 54 (January): 71-84.
