Industrial service design: an examination of Chinese choice preferences for shipping services
During the last three decades the Asia-Pacific region has grown rapidly. In close parallel, the reliance on maritime transport has also grown significantly to keep pace with the regions rapid economic growth. Yet, despite the steady escalation of research exploring the critical dimensions of selection criteria in shipping (Evans and Southard, 1974, Brooks, 1985, 1990; McGinnis, 1989; Foster and Strasser, 1990; Matear and Gray, 1993; Durvasula, L ysonski and Mehta, 1999) few have made an effort to identify the dimensions for selection in an Asia-Pacific context. An exploratory study by Dixon (2001) is one of the few studies to examine the choice preferences and trade-offs exhibited by shipping customers in the Asia-Pacific region. Dixon (2001) examined New Zealand shippers' selection criteria in the purchase of North Asia (Japan, Korea, North China) shipping services. In that context, variables such as sailing frequency, freight rates and specific port calls were found to be more important than schedule reliability, high flexibility and documentation accuracy. This thesis explores the other half of the equation, specifically the perspectives of Chinese shippers'. It is proposed that through examining the selection criteria of Chinese shippers alongside the New Zealand shippers' perspective, a service design strategy can be advanced that provides Asia-Pacific shipping companies with a strategic point of differentiation. However, the challenge in designing a service that creates superior value and facilitates a strong competitive edge lies in being able to accurately acquire an understanding of the web of interactions that influence customer selection and choice. In an industrial service context - like that of the shipping industry the web of interactions impinging on the customers' selection processes are generally poorly understood. Furthermore, in a Chinese context, little cross-cultural research has been conducted examining the Chinese shippers' selection criteria. The literature acknowledges that significant knowledge gaps still exist within industrial services literature in relation to the service dimensions that are of optimal importance to shippers. Methodologically, the research integrated both inductive and deductive research approaches in a multi-stage capacity. In the first stage of the research, 18 semi-structured qualitative interviews were conducted with Chinese shippers. From these interviews, the salient service attributes important to shippers were identified. Assimilating the interview results with prior freight transportation literature on service selection produced a set of 10 attributes that were deemed influential in shipping service selection. Choice modelling was employed in the second stage of the research. A discrete choice model was constructed, comprising 36 service alternatives. The choice model allowed decision outcomes and choice processes to be assessed. The research findings suggest that Chinese shippers are highly price conscious, a result inconsistent with prior empirical research in transportation selection literature (Kent & Parker, 1999). Furthermore, Chinese shippers indicated that they were opposed to a service offering that excluded New Zealand's port of Auckland as a port of call and the Chinese ports of Yantian, Xin-gang and Shanghai. Lastly, customer service, frequency and schedule reliability were also used as potential selection criteria for Chinese shippers. In conclusion, the results of this study provide shipping carriers operating in the Asia-Pacific region (specifically between New Zealand and China) with a unique dilemma. The literature would suggest that in order to provide customers with better service, firms must know exactly what the customers see as being important and design an offering to meet these needs (Kent & Parker, 1999). However, the results drawn from the present research highlight that the service dimensions that international shipping customers ask for, do not the same value. Hence, developing an optimal service design strategy in the realm of the international shipping industry presents the industrial marketing strategist with a formidable paradox. That is; is it optimal to design a service that meets the needs of only one industrial buying segment, or better to satisfy and marginalise service quality in an attempt to serve the entire international customer base? It is hoped that further research will focus on answering the above questions and obtain a better understanding of the level of flexibility and responsiveness shipping lines need m their service design strategies.
Advisor: Matear, Sheelagh; Nind, Derek
Degree Name: Master of Commerce
Degree Discipline: Marketing, Management
Publisher: University of Otago
Research Type: Thesis