The Effect of Service Sourcing on Perceived Value Proposition in Servitization

Abstract

As service becomes increasingly important, many industrial firms have implemented ¡°servitization¡±. In addition, considerable research in both strategy and marketing has addressed business service. This paper focuses on the relationship between different types of service sourcing and perceived value proposition from both the supplier¡¯s perceptive and the customer¡¯s perceptive. In particular, it addresses whether service customer involvement always affects the process of servitization. Using a large sample survey and a focused interview, this study examines the relationship between two types of business service sourcing and customer¡¯s perceived value proposition in terms of economic value, technical/core value and relational/support value. It also considers the moderating effect of service customer involvement on this relationship. The context is the Chinese fine chemical industry. The results show that both of the two kinds of service sourcing can yield economic value and technical/core value to buyers, but that the relational/support value can only be achieved with the mediating role of economic and technical value if customers can acquire knowledge-centric services. The results also suggest that service customer involvement moderates the effect of knowledge-centric service sourcing on customer perceived technical/core value.