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Journal of theoretical and applied electronic commerce research

On-line version ISSN 0718-1876

J. theor. appl. electron. commer. res. vol.3 no.2 Talca Aug. 2008

http://dx.doi.org/10.4067/S0718-18762008000100002 

 

Journal of Theoretical and Applied Electronic Commerce Research
ISSN 0718-1876 Electronic Versión VOL 3 / ISSUE 2 / AUGUST 2008 /1-17.

RESEARCH

Exploring Relationships between Products Characteristics and B2C Interaction in Electronic Commerce

 

Karin Axelsson1

1 Linkóping university, Department of Management and Engineering, SE-581 83 Linkóping, Sweden, karin.axelsson@liu.se


Abstract

The main purpose of the paper is to explore and discuss the influence of product type on customer interaction in electronic commerce. We have conducted two qualitative case studies in distance selling companies to inductively explore how the product characteristics of garments and music-CDs influence customer interaction. We apply a product classification scheme built on product theory to characterize and classify these products. By classifying product types according to this scheme we focus certain aspects; e.g., in which situation the customer usesthe product and, thus, experiences potential satisfaction. By appiying product theory to the electronic commerce context we are expanding this theory into a new área. Knowledge about product characteristics' influence on customer interaction in various phases of electronic commerce enriches and specifies the existing product theory. In order to put this theory contribution into practice, a set of focal questions with the aim to increase product understanding in an electronic commerce setting is formulated. The questions highlight product related issuesthat are importantto considerwhen deciding communication media in electronic commerce.

Key words: Product classification, Product theory, Customer communication media, B2C interaction, Distance selling, Electronic commerce.


 

1 Introduction

Imagine this scenario; a customer wants to order a blue velvet skirt on Internet but she is not sure whether the colour is exactly the nuance she is looking for. And how about the fabric, is the textile really as smooth as it looks on the screen? Will "médium" be the right size or should she order "large" instead? A couple of blocks away, another customer is about to order a music-CD on Internet. He has found a CD of his favourite singer, which he has been searching for a long time. Now he just has to place the order and wait for the delivery.

In this simple example of two distance selling (Le., electronic commerce) settings there are of course several similarities between the customers' situations. Both might be wondering how long the delivery will take, how to return the product, if the product is kept in stock, etc. Nevertheless, the example also illustrates important differences between the two situations depending on what type of product the customer wants to buy. In this case, it is obvious that the "skirt customer" has to find answers to more product related questions before ordering compared to the "CD customer". When a company offers its producís on distance from the customers, the traditional face-to-face communication has to be replaced by other ways of communicating. The company has to decide through which communication media the customer interaction should be conducted. Such decisions might be made with several purposes; e.g., to be cost-effective and offer automated communication media, orto compete with a high degree of customer service and, thus, offer many manually handled communication media that allow personal customer contact.

Several studies indícate that satisfied customers tend to become loyal to the company, which render long-term profitability, e.g., [3], [16], [37]. Providing customer service of high quality is even more important in distance selling than in physical business settings (face-to-face), according to some studies [34]. In order to establish long-term customer relationships, companies have to communicate with their customers. For distance selling companies this means that they have to offer communication media that the customers appreciate, in order for them to become satisfied [4]. Before the Internet era, customer communication in distance selling companies was mainly performed by telephone or mail. Nowadays, these companies have much more alternatives for their customer interaction, which implies more opportunities to establish long-term relationships [19], [40]. This new situation also means that the choices of communication media has become an important issue for distance selling companies. Therefore, it is critical to learn more about different communication media, both from a customer and a company perspective.

In this paper, we explore the importance of the product type and its implications for business-to-consumer (B2C) interaction in electronic commerce. As the example above shows, different types of producís give rise to various cusíomer quesíions, boíh before, during, and after an order is placed. This is importaní to consider when deciding which communication media to offer customers and which business actions that should be possible to perform through a certain médium. Unfortunate decisions concerning which communication media a company offers its customers, could result in mismatches between the company's and the customers' preferences. Such mismatches might obviously in the long run be threatening against the company's presence. We try to confront this problem by discussing product type as an important feature when choosing B2C communication media in electronic commerce settings.

The main purpose of the paper is to explore and discuss the influence of product type on customer interaction in electronic commerce. We do this by applying a product classification scheme from Goldkuhl and Róstlinger [12] to our empirical findings. In their product classification scheme, Goldkuhl and Róstlinger propose an alternative to classical product classifications; e.g., Nelson's [29] search and experience paradigm. We use the classification scheme for classifying the studied product types and we also apply concepts from the so called product theory [12], which is further described in the next section. By applying this theory to the electronic commerce context we are expanding the theory into a new área. Knowledge about product characteristics' influence on customer interaction in various phases of electronic commerce enriches and specifies the existing product theory. In order to put this theory contribution into practice, a set of focal questions with the aim to increase product understanding in an electronic commerce setting is formulated. The questions highlight product related issues that are important to consider when deciding communication media in electronic commerce. In order to ground the questions empirically, we have conducted qualitative case studies in two distance selling companies (particularly focusing on customer orders, questions, and complaints). The studied producís are garments and music-CDs, which are íwo very common producís in elecíronic commerce and oíher disíance selling settings, such as mail order. These íwo producís have several differences, which make íhem iníeresíing ío síudy and conírasí.

The paper has íhe following disposiíion; after íhis introducíion producí íheory is iníroduced and discussed in Secíion íwo. In Secíion íhree íhe research design is explained, followed by íhe empirical case síudies in Secíion four. The findings are caíegorized by producí íype and iís implicaíions on B2C iníeracíion in elecíronic commerce. This is further elaboraíed in Secíion five, where we discuss similariíies and differences beíween íhe cases and whaí issues íhe producí classificaíion helps us ío undersíand. The paper is concluded in Secíion six where we formulaíe a seí of focal quesíions íhaí iníend ío generaíe deeper producí undersíanding in a certain elecíronic commerce seííing. Some issues for further research are also discussed in íhis lasí secíion.

2 Product Understanding

There are many studies performed within the field of electronic commerce searching for factors that make B2C interaction successful; i.e., beneficial both for customer and company. Many explanations have been given to what really influences customers to go shopping on-line. The expenence of trust and the existence of reliable security conditions, fast Internet access, safe payment arrangements, lower prices, etc. have been discussed as variables influencing presumptive customers cf., e.g., [20], [21], [25], [33]. Undoubtedly, these are all important factors to get customers to buy from distance selling companies. Another dominating factor that both [1] and [7] emphasize is product characteristics. De Figueiredo [7] proposes that companies' strategies for e-commerce success should be adjusted to their possibilities to show product quality on the web site in order for the customer to be sure about the quality before purchase.

The product, with its characteristics, has been a well-studied phenomenon in, e.g., marketing research for a long time. The seminal work of Nelson [29], [30] introduces the search versus experience paradigm for product classification. In short the paradigm implies this división between product attributes [30]: Search producís are producís where full information abouí major producí aítribuíes can be obtained by the customer before the purchase. Examples of such producís include furniture and garmenís [17]. Experience producís are producís where informaíion abouí major aítribuíes cannot be obíained wiíhouí direcí experience of íhe producí or where íhe informaíion search is more cosíly or difficulí íhan direcí experience of íhe producí. Examples of such producís are vacaíions and resíauranís [17]. Nelson's paradigm has been íhe basis for many succeeding síudies. Darby and Karni [6] added íhe credence aííribuíe ío íhe classificaíion, which is defined as aítribuíes thaí íhe customer cannoí verify even after using íhe producí; for example legal services or educaíion [17]. All producís can be placed on a coníinuum depending on how difficulí ií is ío find producí informaíion ío evaluaíe before íhe purchase. The classificaíion of search, experience (and credence) producís is made based on where on íhis coníinuum íhe producí is placed [29], [30].

Poon and Joseph [32] add íhe noíion of íangible and iníangible producís ío íhe search and experience paradigm, resulíing in a maírix where experience and search producís can be eiíher íangible or iníangible. Peíerson eí al. [31] argüe for a classificaíion scheme íhaí is supposed ío be more relevaní ío íhe Iníerneí coníexí. They disíinguish beíween íhree dimensions of producís;

• Cosí and frequency - ranging from low cosí and high frequeníly purchased producís ío high cosí and infrequeníly purchased producís

• Valué proposiíion -íangible and physical producís vs. iníangible and service relaíed producís

• Degree of differeníiaíion - high or low degree of susíainable compeíiíive advaníage íhrough differeníiaíion

Klein [22] also uses íhe search and experience paradigm in order ío propose a model of consumer informaíion search íhaí iníegraíes íhe principies of informaíion economics and goods classificaíion. The aim of her research is ío undersíand how iníeracíive media can influence consumer informaíion search before purchase. The fací íhaí Iníerneí changes some precondiíions compared ío íhe original way of disíinguishing beíween search and experience producís is iníeresíing for our síudy. In one way, Iníerneí may increase íhe customers' opportuniíies ío find pre-purchase informaíion, for example, by using search engines ío find lowesí price, customer judgmenís or deíailed producí informaíion. In our empirical examples íhis relates ío íhe music-CDs íhaí are more easily evaluaíed before purchase on Iníerneí íhan in a physical síore. The customer can lisien ío íhe music on-line, read judgmenís from oíher customers and so on. This implies íhaí an increased informaíion symmeíry beíween companies and customers would be íhe resulí [17]. Some producís would, íhus, be moved along íhe search/experience coníinuum and mighí become search producís íhanks ío íhese possibiliíies of íhe Iníerneí. In anoíher way, Iníerneí as a communicaíion médium also decreases íhe possibiliíies of searching for pre-purchase informaíion in some cases. Ií is, for example, much easierío gaíher informaíion abouí garmenís in a physical síore, where íhe garmení can be íried on, compared and evaluaíed. When íhe garmení insíead is purchased on Iníerneí ií is much more difficulí ío gaíher íhis informaíion (which íhe example in íhe iníroducíion stated). Typical search producís are íhen moving along íhe coníinuum and become experience producís insíead.

Undoubíedly, íhe search and experience classificaíion is a maíure line of íhinking which helps us ío make disíincíions and caíegorizaíions of producís. Ií focuses much on producí informaíion, i.e., informaíion íhaí íhe cusíomer mighí use for his or her purchase decisión. Producí informaíion is, as we regard ií, one imporíaní íheme for B2C iníeracíion. However, íhere is a risk íhaí we neglecí íhe cusíomer's acíions and mainly focus on íhe company's acíions (as in markeíing acíiviíies), if producí informaíion is íhe only focused íheme. This would be unforíunaíe since one-way business acíions are noí enough - we need interaction beíween cusíomers and suppliers in order ío reach elecíronic commerce siíuaíions íhaí are apprehended as successful by íhe cusíomer and íhe company.

This implies íhaí an imporíaní íhesis in íhis paper is íhaí we need ío undersíand íhe characíerisíics of íhe producí sold by a disíance selling company, in order ío design a suiíable communicaíion media portfolio for B2C iníeracíion. A common way of disíinguishing beíween producís, besides íhe search and experience paradigm, is íhe classical división between goods and services. The customer either buys a physical product (a "thing") or an immaterial "assistance" of some kind. In, e.g., service marketing, researchers study the characteristics of services in comparison to the characteristics of goods [14]. Grónroos [14] defines services to be intangible (immaterial), inseparable in production and consumption, heterogeneous and perishable (Le., having no sepárate and lasting evidence).

2.1 A Pragmatic Product Theory

Another way of defining product characteristics is introduced by Goldkuhl and Róstlinger [12]. They regard the classical división of goods and services as insufficient and, instead, they propose that the notion of action is important when characterizing goods and services. They base their objections on a pragmatic perspective, which means that actions are performed by an actor who has certain intentions [38]. Each action results in something. There are material actions which give rise to material results, other actions are of a communicative nature and many actions are social to their character. This means that the actions are directed towards other persons. Goldkuhl and Róstlinger [12] claim that we need a more detailed división of producís - it is not enough just to distinguish between goods and services. This is also in line with Poon and Joseph [32], who argüe that a more fine-grain framework for examining product characteristics is needed in order to fully understand the benefit of electronic commerce for, in their case, small companies.

Using a pragmatic perspective, as Goldkuhl and Róstlinger do, has certain consequences for information systems research. Goldkuhl [10] articúlate six aspects that distinguish pragmatic research; an interest for actions, an interest for actions in their practice context, an acknowledgement of action permeation on knowledge, an interest for practical consequences of knowledge, an interest in what works and what does not work, and an acknowledgement of the full dialectics between knowledge and action; Le., proper action is knowledgeable action and proper knowledge is actable knowledge [10]. The need for pragmatism in information systems research is also emphasized by Goles and Hirschheim [13].

Based on the pragmatic perspective, Goldkuhl and Róstlinger [12] develop a product classification scheme consisting of four main product classes and eight sub-classes:

• Provided goods

Goods for transfer Temporarily provided goods

• Treatment

Treatment of client's property Treatment of client

• Transportaron

Transportaron of client's property Transportaron of client

• Presentation

Exhibition of goods

Presentation of producer

This classification builds on the notion that both goods and services might have either a material or an immaterial character; i.e. there are material and immaterial goods as well as services. It also builds on a división between four use situations; material use, informative use, experiential use, and financial use, in order to characterize differences in anticipated customer use and potential satisfaction. Goldkuhl and Róstlinger claim these to be generic producing acts and producís. [12]

If we relate Goldkuhl's and Rósílinger's classificaíion scheme ío íhe search and experience paradigm by Nelson and oíher scholars, ií is obvious íhaí íhere can be boíh search and experience aítribuíes found in these four product classes. There are, however, more examples of search producís in the producí class of provided goods and more examples of experience producís in íhe íhree oíher producí classes. In íhe financial use siíuaíion we find many examples of credence producís [6]. The división beíween íangible and iníangible producís [32] is also applicable ío the classification scheme, where treatments, transportations, and presentations are intangible producís (Le., services). This implies that these two ways of classifying producís are not coníradicíory. Insíead, íhey are íwo approaches íhaí mighí be used ío complemení each oíher.

In íable 1, below, íhe producí classificaíion scheme is illusíraíed wiíh examples of each class. lí is imporíaníío bear in mind íhaí íhe producí classes are ideal íypes, which means íhaí in realiíy many producís are mulíi-funcíional, since íhey fulfil several purposes [12]. Laíer in íhe paperwe will reíurn ío íhis scheme when classifying íhe síudied producí íypes.

The main moíive for us ío use Goldkuhl's and Rósílinger's producí classificaíion scheme is íhaí we find íheir pragmaíic argumenís aítracíive since we agree on íhe noíion of acíions as importaní objecís ío focus on, in order ío undersíand siíuaíions and coníexís. In íhe business coníexí síudied here, acíions and iníeracíion in differení business phases are ceníral. Generic phases of a business íransacíion are; íhe proposal, commiímení, fulfilmení, and assessmení phases [11]. In Goldkuhl and Lind [11] these business transacíion phases are discussed in íerms of a generic model for business acíions. The basic síandpoiní of íhe classificaíion scheme is íhe íwo acíor roles of íhe producer and íhe cusíomer. The producer performs acíions íhaí resulí in a producí, iníended for íhe cusíomer. The customer performs actions of consumption when receiving and using the product. There will be customer effects of the product and its use; the customer might be satisfied or not. There might also be producer effects when the acts, the results, and the customer reactions retroact on the producer, which is an example of the reflexive and learning aspect of action. [12]

3 Research Design

We have performed two qualitative, interpretive case studies, e.g., [39] in distance selling companies in order to inductively explore how these companies' producís (garments and music-CDs) influence customer interaction through several communication media. These case studies were performed within a research project that was running from 2000 until 2007. The main purpose of the research project has been to identify which opportunities and hindrances customers and companies experience when using different media for business communication. The main research question in this project has been "How can distance selling companies make well-grounded decisions about which communication media to offer their customers, to improve their customer communication?". This understanding is important in order to guide companies in their efforts to explore opportunities and avoid hindrances when choosing communication media. This paper contains results in accordance with this overall purpose of the project, but it is of course accompanied by other results as well.

In order to collect data about the studied companies and their customers; the way they communicate, their experiences and opinions of customer interaction, etc. we have used several data collection methods. As we use a qualitative research approach, we performed qualitative, open-ended interviews with several actor groups within the studied organizations. We also conducted observations at the customer service departments, which were focused on customer interaction through the present communication media. In order to contrast our deep focus on a small amount of interviewees with a broader view of customer opinions, we also used questionnaires in both the case studies. The questionnaires were sent to a customer population and included both pre-defined and open-ended questions. Finally, we examined texts in different documente; e.g., company publications, marketing documents, and policy documents as well as e-mails from customers. This was done in order to get a view of official statements from the companies as well as an understanding of customer initiated questions and complaints. Data collected by different methods has been contrasted and compared during our data analysis. This method triangulation [8] has been used to get a truthful view of both the companies' and the customers' perspectives on customer communication. Method triangulation is important for validation of results, since weaknesses in one data collection method is compensated by strengths in another used method [8].

In both case studies, the data collection started with interviews with the managers of the customer service departments. These interviews were followed by interviews with the customer service employees. The interviews followed an interview guide with open questions covering several issues; e.g., time allocation between the different communication media the company offers, priorities made between the communication media, the degree of cost efficiency, time consumption, problems, etc. for each communication médium, and positive and negative aspects related to each communication médium. The interviews were held with one interviewee at a time, except for one interview where two persons participated. The interviews were taped and each interviewee was informed that the answers would be treated anonymously.

Observations were conducted at the customer service department, where employees were attending different communication media during their interaction with customers. The observations entailed listening to telephone calis from customers, observing the registration of order forms and answering of e-mails as well as letters and faxes. The researchers were possible to ask questions to the employees about observed events during the observations, but they were not participating in the customer interaction. Notes were taken during the observations. As the questions, asked during the observations, were posed in the working environment they complemented the prepared question guide used during the interviews. The observations were followed by further interviews with the managers of the customer service departments as well as interviews with employees. These, in turn, were followed by new observations and so on until saturation was reached [24], Le., a situation where new data did not add any significant further findings. We also interviewed IT personnel at the garment company. Unfortunately, we did not get the opportunity to do that at the CD company, because the IT personnel was hired from an external company in that case.

In the first case study (the CD Company) we observed the employees when they were answering e-mails, but in the second case study (the Garments Company) we wanted to perform a deeper analysis of e-mails from customers and the company's answers. Thus, e-mail conversations between customers and employees were collected and analysed in order to get a thorough understanding of what kind of problems and questions a customer might have before, during, and after the purchase, as well as how the company handles this customer-initiated communication. The Garments Company provided us with data files with all e-mail communication from a common week (without any extraordinary events; e.g., the reléase of a new product catalogue) and we randomly chose to analyse e-mails from one day in this week. This day the company got 561 e-mails, of which 142 were closer examined.

Besides analysing e-mails from the customers, a questionnaire was used in both cases to further explore the customers' perspective on communication. The questionnaire was sent to 100 customers at the CD Company, resulting in a 40% response rate. At the Garments Company we, therefore, decided to increase the amount of questionnaires to 200. However, the response rate turned out to be the same (40%) in this case as well. The questionnaire consisted of 20 questions about the customer's preferences regarding different communication media when communicating with the company in a certain matter (Le., placing orders, posing questions, and making complaints). Selection criteria for the questionnaire respondents were that they should have been customers for more than two years, made at least one purchase during the four months prior to the questionnaire and at least two purchases during the previous year. Some of the questions in the questionnaire had predefined options and, in order to give the respondents the possibility to express themselves more freely, some questions were open-ended [28]. The questions aimed to explore the reasons behind the customer's choices of communication media. Customers who had, e.g., used e-mail to contact the company were asked to state the reasons for this choice. For each communication médium, the same questions were posed; the favoured médium used for different communicative actions and the reasons behind this were asked for. Data from the questionnaires was analysed in a qualitative way according to our interpretive research approach [39].

All our empirical findings have been analyzed in a way that has been inspired by a grounded theory approach [35]. Interview statements, notes from observations, questionnaire results, e-mail texts, and texts in official documents have been analyzed by using the process of open and axial coding. Findings have been compared and analyzed in order to find common patterns and explanations. Besides this empirical data analysis we have also used product theory to theoretically ground and challenge our findings. Our research method can be related to Klein's and Myer's [23] principies for interpretive field research within the information systems field. We have, e.g., been iterating between parts and the whole in our case studies when analyzing data from different sources, and we have made múltiple interpretations possible by interviewing several persons at the customer service department about the same issues. We have also been aware of the importance of looking for contradictions between empirical findings and applied theories. All of this is argued by Klein and Myer [23] to be important for the quality of interpretive, qualitative studies. In table 2, below, the data collection methods and data volumes are summarized.


4 Empirical Cases

In this section we introduce the two studied companies, including the business model and the offered communication media for each company. We also classify the two product types and report on our empirical findings regarding B2C interaction.

4.1 The CD Company

The case study at the CD Company was carried out between fall 2000 and spring 2002. The CD Company is a retailer, selling music-CDs on the Swedish and the Norwegian markets. The company was founded by the present CEO some thirty years ago and is now a subsidiary in a corporation with several mail order companies in several European countries. The company has approximately 30 employees.

To purchase from the company, customers are required to register and become members of a customer club. All members receive a monthly magazine with a mandatory offer. The customers will receive the offer if they do not turn it down before a certain date. Customers can also order other producís, which are offered in the magazine and on the company's web site. The CD Company offers their customers the following communication media; telephone, fax, letter, membership coupons and order forms, e-mail, voice response system, and the company's web site.

Some of these media are offered for any business action and other media are dedicated for placing orders and turning down the offer of the month. In table 3, below, we ¡Ilústrate each communication medium's different usage possibilities in a business action matrix. This type of business action matrix was introduced by Johansson and Axelsson [18]. It builds upon the generic phase model of business actions by Goldkuhl and Lind [11]. The matrix illustrates the communication media accessible for the different studied business actions (conducted in different phases of a business transaction). It also illustrates which communication media that are preferred by customers and company as well as which media that are non-preferred (although still offered) by the company. The last alternative was not relevant in this case. The preferences result from our analyses of empirical data.


4.1.1 Product Classification of Music-CDs

The company sells music-CDs; a product that according to the product classification scheme [12] has a prime classification as goods purchased for experíential use. This means that even though the CD is a material product, it is not until the moment when the customer listens to the music that he or she gets any real use of the product. The customer experiences something when listening; he or she is either pleased or dissatisfied with the outcome. On the other hand, when reading the CD cover the customer might use the product in an informative way (answering questions such as "when was this CD produced?" and "who wrote this song?"). A very rare, valuable CD might also be used in a financial way if it is boughf as an investment (but the CD Company does not sell that kind of valuable CDs). The music-CD is a standardized product; Le., each Ítem of a certain CD is identical and there are no ways for customers to influence the product. According to the search versus experience paradigm [29], [30] CDs are classified as a search product. Using the classification scheme adjusted to the Internet context [31], CDs are low cost and high frequently purchased, tangible and physical producís with low degree of susíainable compeíiíive advaníage íhrough differeníiaíion.

4.1.2 Communication Media Portfolio

As shown in íable 3, above, customers and company share preferences regarding mosí communicaíion media. Boíh cusíomers and employees ai the CD company find the process of ordering or turning down the mandatory offer easy to perform through an automated médium (voice response system or web site). There are also some different opinions, for example, that the company prefers customers' questions posed in e-mails or answered by FAQs at the web site, while many customers like to talk to a person on the telephone when having questions. As music-CDs are a rather uncomplicated product the questions are often not so complex, which might be a reason for the company's preference in this matter. Easy, frequently asked questions can, for example, be answered by FAQs at the web site or by standardized answers if posed in e-mails, which is an effective and cost-saving way to work at the customer service department. Both employees and customers agree on the telephone as being the favourable médium for handling complaints. Customers appreciate the notion of someone listening and taking care of their claim immediately when they speak to the employees at the customer service department. Among the employees it is also considered easierto "turn" negative customers while they are talking to them.

The standardized and simple product type could also imply that it would be possible for the CD Company to use automated and/or digital media to a higher extent. Even though the company prefers automated media for some business actions (such as placing orders and turning down the mandatory offer), there are reasons for the company to offer as many different communication media as it does. The customers are, for example, a heterogeneous group where many individuáis do not have access to Internet at home. The company is aware of the benefits of automated media for its own efficiency, but cares for the customers' needs as well. They regard customer service as their main competitive characteristic. At the same time the company offers more products on the web site than in the monthly magazine, which is a way to steer the customers to this communication médium.

Product information is often limited in many distance communication media compared to a physical store, but in the CD Company there is an example of the opposite as well. Through the voice response system it is possible for the customers to listen to music over the telephone before ordering, which is an example of richer product information than is normally possible to get. This can be related to Klein's study [22] of how Internet alters the possibilities for customers' information search and moves a product along the search/experience continuum.

4.1.3 B2C Interaction - Examples of Customer Communication

In table 4, we have gathered some examples of customers' product related questions found during our analysis of the questionnaires and observations at the CD Company. We have also characterized the type of communication according to which business action the customer performs, where this action is placed in the B2C interaction (Le., in a certain phase of the business transaction), which main aspect the customer discusses and if this aspect is product dependent or not.


As shown in table 4 above, there are several examples of customer initiated communication that can be characterized as product independent in this case. These chosen examples are corresponding with the total picture of this case study.

4.2 The Garments Company

The case study at the Garments Company was carried out in 2004. The Garments Company is a retailer, selling garments, furniture and other home articles in Sweden and in two other countries in northern Europe. The company was founded about 50 years ago and is now a subsidian/ in a corporation with several mail order companies in Europe. The company has approximately 250 employees.

The Garments Company started as a traditional mail order company and is still exposing its products in two large product catalogues published in the spring and autumn seasons every year. The company has, however, adopted

Exploring Relationships between Products Characteristics and B2C Interaction in Electronic Commerce new communication possibilities and offers their customers the following communication media; telephone, fax, letter, orderforms, e-mail, voice response system, and the company's web site.

All communication media can be used to place orders whereas posing questions and making complaints is only possible through some of them. In table 5, below, we ¡Ilústrate each communication medium's different usage possibilities in a business action matrix [18]. The matrix illustrates the communication media accessible for the different studied business actions. It also illustrates which communication media that are preferred by customers and company as well as which media that are non-preferred (although still offered) by the company. The preferences result from our analyses of empirical data.


4.2.1 Product Classification of Garments

The company sells garments; a product that according to the product classification scheme [12] has a prime classification as goods purchased for material use. The garments, a pair of jeans, for example, are used in a material way in orderto keep the bearerwarm. Nevertheless, there can also be an experiential aspect of this product, e.g., if the customer wears jeans of a certain brand. The experiential side can have several expressions; the jeans indicates that the customer knows what is the latest fashion, that he or she is wealthy enough to buy a certain brand, that he or she belongs to a special group of people, and so on. This means that the pair of jeans that keeps a person warm was bought for material use, but they might also satisfy other, experiential goals. This is an example of the several use dimensions that a product may have, according to product theory [12]. The customer might be satisfied with the material function of the garments ("these clothes have the right size and I don't freeze"), but he or she can also be satisfied with the experiential use ("these clothes really make me look fabulous"). If the customer instead buys a celebrity's worn boots, it could be regarded as a financial use aspect, in case it is a valuable object for collectors that might be sold with profit later on. This case is, however, not applicable on the Garments Company. Garments as producís are standardized, but they come in several sizes and colours, which makes it necessary for customers to make several decisions based on product information, besides whether they want to buy the Ítem or not. According to the search versus experience paradigm [29], [30] garments are classified as a search product. As stated by Klein [22] garments is an example of a product which is more difficult to gather purchase information about when offered on Internet compared to a physical store; Le., it moves on the search/experience continuum when offered via this médium. Using the classification scheme adjusted to the Internet context [31], garments are low cost and high frequently purchased, tangible and physical producís with low degree of susíainable compeíiíive advaníage íhrough differeníiaíion.

4.2.2 Communication Media Portfolio

In íhe Garmenís Company employees and cusíomers ío a high exíení share íhe same opinión regarding preferred media. Telephone is, for example, preferred by many respondenís for all síudied business acíions. This mighí seem odd for a company in íhe elecíronic commerce markeí. Thus, íhis musí be undersíood in íhe lighí of íhe producí íype as well as íhe cusíomer group's characíerisíics. Cusíomers pose many quesíions abouí colours, sizes, fabrics, efe. íhaí are relaíed ío garmenís as a producí íype. These quesíions are apprehended by íhe employees as easier ío answer over íelephone íhan íhrough oíher media. The cusíomers are a more homogenous group compared ío íhe cusíomers ai íhe CD Company. There are a loí of women in íhe age beíween 30 and 50, and many of íhem síaíe íhaí íhey are more comforíable íalking on íhe íelephone íhan using oíher communicaíion media. The same fací is valid for íhe employees ai íhe cusíomer service deparímeni, who also like ío íalk on íhe íelephone. Some of íhe iníerviewees ai íhe cusíomer service deparímeni sírongly emphasize a negative aííiíude íowards answering e-mails, for example. The same employees regard íalking on íhe íelephone as one of íhe mosí appreciaíed aspecís of íheir Job.

Besides íelephone, íhe company also prefers quesíions ío be solved by íhe voice response sysíem. There are, however, only a few quesíions which can be answered íhis way (e.g., informaíion abouí reíurned producís and lasí conducted payment). This médium does not provide any feedback to the customers, which is another reason why customers do not appreciate the voice response system compared to the other offered media. Placing order through the web site is appreciated by both the company and some customers (Le., customers with Internet access).

Even though the employees do not prefer e-mail conversations if they may choose, the company still offers this communication médium. There are several reasons for this; first of all the reluctance towards e-mails is expressed by the employees at the customer service department, not by the managers. The employees express their negative attitude towards e-mail communication in relation to their work situation, while managers might appreciate the efficiency in IT orthe higher level of customer service more. The company also acknowledges that some customers are used to e-mail and expect it to be an option when communicating with the company.

To summarize, there seem to be two factors, both the product type and reluctance towards the use of e-mail among both customers and employees, that together result in this opinión. Another mentioned reason for the company to prefer telephone communication is the opportunity for increased extra selling that the telephone implies. Many customers who cali the company to order one product accept additional offers while taiking to the employee, for example, an offer to buy a T-shirt to reduced price when ordering a skirt. This behaviour can be related to the product type; it is rather usual to buy more than one garment at the same time when shopping in physical stores, but much more unusual when buying a journey, for example. The employees do not experience that this opportunity to extra-selling is apparent to the same extent in the other communication media.

4.2.3 B2C Interaction - Examples of Customer Communication

In table 6, below, we have gathered some examples of customers' product related questions found during our analysis of e-mails, the questionnaires, and observations at the Garments Company. We have also characterized the type of communication according to which business action the customer performs, where this action is placed in the B2C interaction (Le., in a certain phase of the business transaction), which main aspect the customer discusses and if this aspect is product dependent or not.


As shown in table 6 above, there are many examples of customer initiated communication that can be characterized as product dependent in this case. These chosen examples are corresponding with the total picture of this case siudy.

5 Analysis of Product Characteristics

The main question to discuss here is in what way an increased product understanding might help us decide how a distance selling company's customer interaction should be performed. As we stated in the beginning of the paper, there are many aspects that may influence decisions about which communication media to offer the customers. What we are emphasizing here is that the product type affects what kind of communication that will take place between the customer and the company; customer questions will be more or less complex to answer, asked in different phases of the business process, and reflecting different feelings of the customer.

What do we distinguish by using product theory to characterize producís? Product theory draws our attention towards certain aspects of producís and product use; e.g., levéis of producí síandardizaíion, mulíi-funcíionaliíy of producí use and durabiliíy of consumpíion [12]. We will now use íhese íheoreíical concepís ío discuss our empirical findings. We will also discuss íhe explanaíion forcé of producí íheory and, finally, examine íhe imporíance of producí undersíanding in B2C elecíronic commerce.

5.1 Levéis of Product Standardization

lf we look ai íhe íwo síudied producí íypes, music-CDs and garmenís, boíh are goods íhaí cusíomers purchase. Boíh CDs and garmenís are síandardized, buí CDs are (normally) fully síandardized, Le., íhere are no varianís of a certain CD. An excepíion from íhis is in cases when a musician or a band bring ouí limiíed ediíions of íheir laíesí CD, ai a higher price buí wiíh addiíional maíerial (music DVDs, for example). Garmenís, on íhe oíher hand, always come in differení sizes and are often available in several colours. Thus, íhere are normally varianís of garmenís wiíhin a síandardized producí íype (Le., colours, sizes). This means íhaí a customer has ío make several judgmenís before íhe purchase decisión. Some judgmenís are relaíed ío íhe specific producí (Whaí kind of íexíile is ií made of? Does ií have íhe righí qualiíy? Can I afford ií?), some quesíions are relaíed ío íhe customer (Which size should I order? Can I wear íhis kind of garmeni?), and some quesíions are relaíed ío oíher producís (Does ií fií wiíh íhe oíher colours I use ío wear?). In íhe CD case, íhe customer only has ío make íhe decisión ío buy íhe producí or noí (Do I like íhis music? Can I afford íhis CD?). As we have shown in íhese examples, íhe differing producí íypes and levéis of síandardizaíion influence íhe customer decisions.

The communicaíion media íhaí íhe disíance selling company offers iís cusíomers are very importaní when ií comes ío easing or complicaíing íhe customer decisions. Ií would, for example, probably be appropriaíe for íhe Garmenís Company ío offer media íhaí enables richness in pre-purchase producí informaíion. This could be anyíhing from showing all offered colours ai íhe web site, and give íhorough informaíion abouí how ío find íhe righí size, ío offering personalized mulíi-media models ío visualize íhe cloíhes. This can be relaíed ío íhe discussion, above, on search and experience producís [29], [30] and Iníerneí's influence on íhe coníinuum beíween íhese íwo íypes of producís [22]. The fací íhaí garmenís is a less síandardized producí, compared ío music-CDs, can also explain our findings íhaí boíh cusíomers and employees ai íhe Garment Company prefer íelephone communicaíion ío a higher exíení.

5.2 Multi-functionality of Product Use

Producí íheory makes us focus on use siíuaíions; íhe producí is aimed for maíerial, informaíive, experieníial or financial use [12]. This also indicaíes íhe mulíi-funcíionaliíy of producís; a producí mighí be used for several reasons by one cusíomer. This implies íhaí a producí can have a prime classificaíion, buí also one or several secondary classificaíions. Even íhough mosí producís relate ío a main use siíuaíion, differení cusíomers mighí use ideníical producís for differení reasons. In íhaí case, íhey buy íhe producí wiíh differing purposes. A certain garment would, e.g., be boughí for maíerial use by one cusíomer and for experieníial use by anoíher cusíomer. The differing use siíuaíions imply íhaí íhe same producí has differení meanings for íhese cusíomers. A common example of íhis is íhaí a producí's funcíion and design mighí be regarded in differení ways depending on wheíher íhe producí is used in a maíerial way ("ií is impossible ío run in íhis skirt") or for experieníial reasons ("íhis skirí was made by a famous designer and cosí me a fortune"). The degree of saíisfacíion regarding a certain producí mighí differ radically depending on íhe iníended use siíuaíions differení cusíomers envision when buying íhe producí.

A disíance selling company needs ío undersíand how íheir producís are regarded and used by íheir cusíomers. This undersíanding musí be reached over disíance since íhey do noí normally meeí íheir cusíomers face-ío-face. The company has ío undersíand íhaí a certain producí mighí be boughí for differení use siíuaíions, which resulí in differení demands on íhe cusíomer iníeracíion. This makes íhe noíion of mulíi-funcíionaliíy of producí use importaní in B2C elecíronic commerce.

5.3 Durability of Product Consumption

When discussing use situations, product theory also directs the attention towards the fact that products will be more or less affected by time [12]. Some products are permanent over time while other products are worn after usage. This is a fact that also influences the business interaction, as we can see in the Garments Company where a customer is complaining about a sweater that has lost its printing after two washes. In product theory this is mentioned as the product's durability of consumption [12], where reuse is a critical dimensión. Customers have different expectations regarding how long a certain product will last, depending on what type of product it is, its quality and price, etc. The use situation affects most products, but products might be more or less robust. It is important to be aware of such customer expectations in order to be prepared for customer interaction about these issues and, thus, use feasible communication media for this interaction. The level of a product's standardization also influences how complaints about unfulfilled expectations of a product's durability might be solved. It is easier to replace a product by another as a substitute in some cases than in others.

5.4 Explanation Forcé of Product Theory

As the discussion above has shown, product classification and product theory according to [12] has helped us focus on certain aspects and concepts which have increased our product understanding in the studied cases. The levéis of product standardization, multi-functionality of product use, and durability of product consumption are three aspects that we have examined. Product theory acknowledges the co-existence of several product use situations in the same product. This is the reason why we have characterized the studied products as belonging to a prime use situation. The fact that there is no existence of a one-to-one relationship between a certain product and a use situation could be regarded as a weakness of the product classification scheme. One could assume that the theory should consist of clear-cut categories. Instead, we argüe that this is in correspondence with the complexity of the product concept in itself. A product needs a user, and since users are human beings with different intentions and interpretations there will always be a complexity regarding how different individuáis apprehend a certain product. The product theory recognizes this complexity. The search and experience paradigm [29], [30] handles this complexity by using a continuum instead of classes when classifying products.

We do not see product theory [12] as an opponent to the search and experience paradigm [29], [30]. As we have discussed in this paper, these different theoretical constructs offer complementing understanding to the product context. They focus on different aspects and should, thus, be possible to use together. There is, however, an important issue that needs to be understood before using these theories as complements. Products with high degree of experience attributes [29] and products intended for an experiential use situation is not equivalents. Experience products are products where information about major attributes cannot be obtained without direct experience of the product or where the information search is more costly or difficult than direct experience of the product. Related to product theory [12] most products in the classes of treatment, transportation, and presentation have high degree of experience attributes. Products that are intended for experiential use, according to the four use situations stipulated in product theory [12], could be either search products (e.g., a detective story) or experience products (e.g., a holiday at the Maldives). These two theoretical concepts are unfortunately cióse to each other, but are used with different definitions in the theories.

5.5 The Importance of Product Understanding in B2C Electronic Commerce

lf we return to the two cases, we can compare the main aspects that customers discussed. In the CD Company customers' questions reflect the business process in general; what products there are to order, how long the delivery time will be, and howto return products. These are all questions that are common in any distance selling setting and most of them are product independent. In the Garments Company, on the other hand, the customers' questions concern more product dependent aspects; such as product information before an order as well as complaints on product quality and size after delivery. These are examples of the more demanding business decisions that the garment customer has to make and the consequences of making wrong purchase decisions. When deciding which communication media to offer customers it is, thus, important to estímate how much product dependent versus product independent customer interaction there will be.

Another interesting issue in the CD Company is that the business model itself, which implies that a mandatory offer each month has to be turned down in due time (otherwise it will be regarded as accepted), causes questions and complaints. Internet-based companies have the opportunity to design various innovative business models [36]. The business model should be designed in a way that fits the offered product type, of course, but it is also important for the company to understand what kind of customer interaction the business model in itself will result in.

In both our two cases, the companies have chosen to offer their customers a wide range of communication media. We have studied three types of business actions; placing orders, posing questions, and making complaints. As shown in tables 3 and 5 above, the two companies offer the same communication media to their customers even though they sell different types of products. Does this imply that the product does not make any difference when deciding what communication media to offer? We argüe that the answer is no. As we regard this circumstance, it is instead an example of how companies do not focus on product characteristics when choosing communication media.

The two studied companies offer a rather "standardized" variety of media for this kind of distance selling companies. They started as mail order companies and still they use product catalogues and telephone a lot, but the media portfolio has been complemenfed with some "modern" IT communication artefacts such as e-mail, the web site and the voice response system. Our findings indícate thatthis has been done more as a consequence of the availability of these media, and the fact that other companies offer them, than as a result of any deeper analysis of the coherence between these media and the offered product type.

As a reaction to this finding, we argüe that when a company is about to decide which media to include in the communication media portfolio and which media to leave out, it is vital to analyse not only which media that are available for a certain business action but also to investígate what kind of business interaction the product type might result in. This will help companies to design their customer interaction in a way that meets both the customers' expectations and the company's needs.

All the examples discussed above can be used by companies to get prepared for different customers' situations, needs, and problems. By increasing the product understanding and the notion of how product type influences the B2C interaction, companies are able to make reflective decisions about how to handle and interact with their customers. Such decisions should not only be made on basis of what is technically possible or what other distance selling companies do. The communication media portfolio should also reflect what kind of producís the B2C interaction will be about.

6 Conclusions and Further Research

Several theories focus on communication channels when trying to explain business interaction in electronic commerce. Media richness theory [5] is one example. Its purpose is to explain managers' choice of communication media and explore howto make communication more effective by choosing the appropriate communication médium. There are similarities between this theory and our work when it comes to the notion of making feasible choices of communication media. Media richness theory has, however, been criticized for neglecting the fact that there is not one effective way to communicate for all people or in all contexts, e.g., [2], [26], [41]. Instead, the richness of a certain communication médium depends on the user and the use situation. Mattila and Wirtz [27] as well as Fulk et al. [9] show that customers chose communication médium very much depending on their personality, which is in line with our empirical findings. This is important criticism of the media richness theory which we share. In this paper we have argued that an important aspect of the context, in which the business interaction takes place, is the product itself. By using product theory [12] we focus on producís instead of media and, íhus, avoid being íoo narrow and coníexí independení in our perspecíive on choices of communicaíion media.

There are many issues íhaí mighí influence íhe design of a communicaíion media portfolio; economy, cusíomer íargeí groups, perspecíive on cusíomer service, eíc. In íhis paper we argüe íhaí producí undersíanding should be added ío íhis lisí. Our coníribuíion ío producí íheory [12] is íhaí we have specified producí characíerisíics for íhe elecíronic commerce coníexí. Producí íheory has been adopfed and validaíed in íhis síudy, buí also complemeníed wiíh íhe noíion of differení íypes of business acíions (orders, quesíions, and complainís) in íhe various business phases (proposal, commiímení, fulfilmení, and assessmení).

6.1 Focal Questions on Product Characteristics

In íhis secíion we presení a seí of quesíions for companies ío answer in order ío increase íheir producí undersíanding when designing a feasible portfolio of communicaíion media for B2C iníeracíion. The quesíions have been formulaíed based on core concepís from íhe producí íheory [12] as well as empirical findings from our case síudies. These quesíions are, íhus, bofh empirically and íheoreíically grounded and should be regarded as indicaíors of aspecís íhaí, according ío our síudy, seem ío be relevaní for B2C iníeracíion in elecíronic commerce seítings. The seí of quesíions, which is íhis paper's pracíical coníribuíion, can be used in several ways; for example, as discussion íhemes in a design or re-design process or as evaluaíion criíeria when assessing íhe ouícome of a certain business model.

What product type(s) do the company offer their customers? How can the producís be characterized?

The producí classificaíion scheme [12] helps ío characíerize íhe producí íype in deíail. Compared ío íhe raíher bluní, common división of goods and services [14], íhis gives a much more íhorough undersíanding of íhe offered producí's characíerisíics. A producí can be more or less complex in many aspecís; e.g., regarding producí variaíion, use siíuaíions, producí choices, eíc [12]. A complex producí will probably resulí in more demanding and disíincíive cusíomer quesíions before, during or after íhe business íransacíion. Such quesíions are mosí likely more difficulí ío answer íhrough auíomaíed media. Thus, íhere is a need for more personal (synchronized) coníací wiíh customers (wiíhouí íhe delay beíween quesíions and answers as in e-mail communicaíion, for example) íhan in cases wiíh less complex producís. Our empirical findings have, e.g., shown íhaí garmenís, as being a less síandardized producí íhan music-CDs, íend ío genérate more producí dependení quesíions in all business phases.

Are there aspects of several product classes in the producís, and ifso, in what way?

Even though a product can be placed in a certain product class in the classification scheme, there might be aspects of other product subclasses in this product [12]. This is an example of the sometimes very complex nature of a product. Many producís of today are a mixture of goods and services, which indicates that a reflective characterization is needed. Buying a certain music-CD could, e.g., give access to the artist's community on the Internet. A garment could be bought as a present, where the company delivers the garment, wrapped as a gift, to another person than the buyer. These are two examples of services connected to the studied producís.

How do the customers use the product and what is the role of the product in this use situation? Are there multi-functional use situations for a certain product?

The notion íhaí a producí mighí be boughí and used for several reasons is importan! Different customers might buy a product for various purposes, but a customer might also see several use situations for one product [12]. Different use situations give rise to different customer questions. Thus, understanding what kind of situations the offered producís can be used in is imporíant when designing how íhe B2C iníeracíion should be conducíed. Quesíions regarding íhe use siíuaíions of íhe producí as well as complainís abouí íhe producí or business process mighí be handled more easily íhrough certain media than íhrough oíhers. A complicaíed íechnical aríefací íhaí needs ío be insíalled before ií can be used, mighí, for insíance, cause complex cusíomer quesíions íhaí need ío be answered íhrough a dialogue on íelephone or by using a web-based help sysíem.

Does the business model in coordination with the product type(s) genérate any specific problems that customers might contact the company about?

Analysis of facíors íhaí resulí in a B2C iníeracíion íhaí meéis boíh íhe expecíaíions of íhe customers and íhe needs of íhe company, has ío be made wiíh several objecís in mind. An isolaíed criíical review of íhe business model could give us some answers, buí when reflecíing on íhe business model in relaíion ío íhe offered producís íhe ouícome would probably be more comprehensive. The resulí of a certain business model is depending on iís coníexí, where íhe producí is one importaní factor ío consider as well as íhe offered communicaíion media. In íhe CD Company íhe business model coníains a mandaíory moníhly offer, which has ío be íurned down in due íime if íhe cusíomer does noí waní ío buy íhe producí. In íhis case, íhere were many cusíomer quesíions and complainís regarding íhis model, which had ío be handled by íhe cusíomer service deparímenf.

What kind of customer interaction (questions and complainís) do the producís mainly genérate? Where lays íhe complexiíy in íhe B2C iníeracíion?

The eníire business seíting mighí be more or less complex depending on several íhings; íhe disíance beíween cusíomer and seller, producí íype, cusíomer íargeí groups, íhe business model, eíc. Each company has ío consider iís specific condiíions, howíheir customers usually reací in differení siíuaíions, and so on. The soluíion is noí always ío avoid complexiíy, buí ío undersíand íhe complex challenges and decide howío handle íhem in an appropriaíe way. In our íwo case síudies, mosí complexiíy was found in íhe producí variaíion (íhe Garmenís Company) and íhe business model (íhe CD Company).

Whaí communicaíion media do íhe company offer íhe cusíomers and whaí business acíions are possible ío perform íhrough each médium?

Besides reaching a good undersíanding of íhe producí íype, íhe use siíuaíions of íhe cusíomers, íhe complexiíy of íhis certain business interacíion, eíc, ií is also importaní ío explore which business acíions íhe cusíomer performs and íhrough which communicaíion media íhese acíions could and should be performed. Common business acíions ío perform are, e.g., posing quesíions, ordering a producí, cancelling an order, paying for íhe producí, and making complainís [11]. The quesíion is noí which possible media íhere are ío use, buí which media íhaí are boíh possible and feasible ío use ío perform a particular business acíion in a certain siíuaíion. When making íhis decisión ií is viíal ío boíh íake íhe cusíomer and íhe company perspecíive inío accouní. The communicaíion portfolio needs ío be consírucíed in a way íhaí boíh meéis íhe expecíaíions of cusíomers and íhe needs of íhe company, as síaíed earlier. Using a business acíion maírix [18] ío analyse íhe preferences of cusíomers and company is one way of geííing íhis broad view of relaíionships beíween communicaíion media and business acíions.

6.2 Further Research

The quesíions above are inducíively derived from our íwo qualiíaíive case síudies and íheoreíically grounded in previous producí research. In order ío further explore íhe importance of producí undersíanding in B2C iníeracíion, íhe quesíions need ío be pracíically íesíed in several disíance selling seítings. There would, for example, be iníeresíing ío use íhese quesíions as evaluaíion criíeria in a number of elecíronic commerce companies in order ío find ouí more abouí how B2C iníeracíion is influenced by producí íype.

Even íhough we have focused on producí íype in íhis paper, we are aware íhaí producí íype alone cannoí judge which communicaíion media íhaí would be successful in a certain siíuaíion. We agree wiíh Poon and Joseph [32] in their statement that electronic commerce companies also need to consider other aspects besides product characteristics in order to gain benefit from electronic commerce. Thus, it would be interesting to extend the scope and relate our theoretical contributions regarding product type to theories of other identified aspects. One such issue is discussed by Gutek [15] in his taxonomy of service interaction, where service relationships and service encounters are distinguished. By viewing this classification of different types of linkage between customers and companies, and relating this to the product type, one could maybe expand the notion of product understanding in electronic commerce further.

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Received 21 January 2008; received in revised form 21 April 2008; accepted 15 June 2008.

 

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